To: Board of Supervisors
From: Federal D. Glover, District V Supervisor
Report Title: APPROVE Process for Distributing Funds from the Marathon and Phillips 66 Community Benefits Agreements, as recommended by Supervisor Glover.
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
ACCEPT report on public outreach and input regarding expenditure of the community benefits funds generated by the Marathon Martinez Renewable Fuels Project and the Phillips 66 Rodeo Renewed Project; and ADOPT the report’s recommendations for administering and allocating the funds.
FISCAL IMPACT:
There is no impact to the County’s General Fund. The Community Benefits Agreements are funded by the Marathon and Phillips 66 refineries pursuant to their 2022 Land Use Permits. Costs for DCD staff time to support the fund distribution process are provided through the agreements.
BACKGROUND:
In 2022, the Board of Supervisors (Board) approved the Phillips 66 Company land use permit (LUP) for the Phillips 66 Rodeo Renewed Project (Phillips 66 Project) and the Tesoro Refining & Marketing Company LLC LUP for the Martinez Renewable Fuels Project (Marathon Project). Each LUP contained a condition of approval (Phillips 66 Project Condition #10 and Marathon Project Condition #38), which provides that Contra Costa County and the applicant enter into a Community Benefits Agreement providing for certain payments to Contra Costa County upon certain conditions being satisfied relating to the respective Project. Both agreements were entered into on May 3, 2022.
The CBA with Phillips 66 requires Phillips 66 to pay a total of $10,000,000 to the County according to the milestones and time intervals set forth in the CBA over the course of approximately 13 years. The CBA with Marathon requires Marathon to pay a total of $10,000,000 to the County according to the milestones and time intervals set forth in the CBA over the course of approximately 10 years.
As of November 2024, Phillips 66 has paid $2 million pursuant to the agreement, and an initial allocation of $392,700 from the Rodeo Renewed Community Benefit Fund has been approved by the Board to provide expanded services and benefits to the Rodeo and Crockett areas. Marathon has paid $2.06 million pursuant to the fund and no allocations have been made.
The CBAs state that the County will use the funds, in its sole discretion, for projects and programs that benefit the communities near the Phillips 66 Rodeo Refinery and Marathon Martinez Refinery. These initiatives will focus on improving residents’ health, well-being, and quality of life, and supporting a robust local economy and workforce. This includes developing and implementing workforce development and training programs to prepare residents for careers in renewable and clean energy.
District 5 Supervisor Glover worked with the Department of Conservation and Development (DCD) to establish a community engagement process to provide ideas and input on how the Community Benefits Agreements funds are spent. DCD engaged in a community listening sessions, held two open public forums for each CBA, and conducted two online surveys for each CBA. That process is described in detail in the attached report.
The attached report recommends a process for distributing funds from the CBAs, including eligibility to apply for funds; scoring criteria; and a process for generating and evaluating proposals for projects to be funded by the CBAs.
CONSEQUENCE OF NEGATIVE ACTION:
If the recommended process for distributing CBA funds is not approved, there will be no adopted Board policy or direction to staff regarding the evaluation of recipient-projects or distribution of community benefit funds generated by the refinery projects.