Benicia’s Budget Crisis

Benicia & Beyond – Our Daunting Deficits

The Benicia Herald (no online presence), by Stephen Golub, April 9, 2023. About Steve Golub, below.

Benicia’s budget is in dire straits. As former City Manager Erik Upson, Interim City Manager Mario Giuliani and others have emphasized, our heads are financially below water. We face mounting deficits, stretching for years.

At the risk of being Davey Downer, here’s some daunting data, courtesy of Assistant City Manager Bret Prebula (though any mistakes in presenting or analyzing the figures are most certainly mine):

For Benicia’s current fiscal year, which ends on June 30, the estimated deficit is $2.2 million. That is, our expected expenditures are $2.2 million more than our revenues.

That figure is elevated somewhat by one-time costs of about $1 million for operating and legal expenses linked to the city-owned marina. But…

The city staff anticipates budget deficits of $3-6 million per year for both the 2023-24 and 2024-25 fiscal years.

To put this in context, the anticipated annual city expenditures (excluding water and wastewater, which are budgeted separately) amount to $55-60 million.

Therefore, unless Benicia makes adjustments, we’re looking at an annual deficit of 5 percent to 10 percent of the budget for the next two years and beyond.

Though it’s split into separate categories, the city’s reserve/general fund totals about $22 million. According to my rudimentary math, we could exhaust it in as few as four years unless action is taken.

Finally, unlike the federal government, the city has to balance its budget each year. When I write of expected or anticipated deficits, I’m discussing gaps that must be closed by reduced costs, additional revenue or drawing down the reserve fund.

How Did This Happen?

So how did we sink to this state? Our costs have increased while our revenues have remained relatively flat. More specifically…

The problem partly flows from gradual increases in the costs of city services (whether delivered by employees or contractors), materials Benicia buys and city employee benefits (such as health insurance). In addition…

Revenues are not rising enough to match the increasing costs. Why’s that? First, our population has barely increased since 2000. Also, while our industrial park businesses contribute to Benicia’s economy, they generate less city revenue than a more service/retail-oriented mix of firms would.

What to Do?

Proponents of Measure R, narrowly defeated in November, argue that the ¾ percent sales tax would have gone a fair distance toward addressing our road repair needs.

More broadly, some contend that it’s not just road repair, but also police, fire protection, parks and other city services that will face cuts unless we right the fiscal ship through greater revenues – be they through taxes, fees or other approaches.

Conversely, others maintain that we can in fact make cuts that eliminate or at least decrease the need to rely on new or expanded taxes and fees. In contemplating one kind of cut, though, we might bear in mind former City Manager Upson’s warnings that city employees’ salaries are lower than those in many other Bay Area localities, which can make retaining them difficult.

Another approach prioritizes limiting hikes in taxes and fees mainly to the town’s largest businesses.

Then there’s a perspective that contends that we should rethink whether Benicia should remain a full-service city. That broad blend of services is something most of us like about Benicia. But we could consider whether and to what extent we can afford all this, and what the potential alternatives might be.

My point here is not to provide or promote certain solutions. Far from it. I need to be better educated on these and other options myself.

Instead, I’m just offering a bare-bones account – and it’s admittedly barely even that – of a few potential directions. Benicians who understand municipal finances far better than I do can address this matter far better. Hopefully, though, this column takes a small step toward illuminating the issue.

How to Learn More

So, some food for thought. Here are a couple of ways to start chewing on all this:

On April 11, “Benicia’s Budget Crisis: The Problem and Potential Solutions”, a public forum, will be held in the Benicia Public Library’s Dona Benicia Room. Starting at 7 p.m., and organized by the Progressive Democrats of Benicia, it will feature Mayor Steve Young, Assistant City Manager Bret Prebula and Solano County Supervisor Monica Brown. The presentations will be followed by a Q&A session.

Since some Benicia residents remain especially vulnerable to Covid, masks will be required. Due to the complexity involved, Zoom will not be used for the session.

Again, all are welcome; you don’t have to be a PDB member to attend. You don’t have to be a progressive, a liberal, a moderate, a conservative or whatever. You just have to care about Benicia.

Then, on April 25, the City Council will convene a study session on the issue, starting at 6 p.m., in the Council Chambers. As usual, this Council meeting will be both an in-person and Zoom event.

We Can Get Through This

Crises can bring out the best or worst in folks. They can unite or divide. This one could include tough conversations and decisions in the months and years to come.

I’m optimistic that this challenge will see Benicia responding well. We are a resourceful, resilient community.

I also take heart from the calm, civil Council discussions about the indoor mask mandate back in 2021. (I can’t speak to social media.) Admittedly, the meetings were not warm and fuzzy affairs; they saw sharp disagreements. But, for the most part, they aired diverse perspectives in respectful ways.

Let’s hope the upcoming budget debates take the same path.


Stephen Golub, Benicia – A Promised Land: Politics. Policy. America as a Developing Country.

Benicia resident Stephen Golub

A version of this piece first appeared in the Benicia Herald, as part of my weekly Benicia and Beyond column for the Herald. At my blog, A Promised Land, I also write about national and international affairs, including lessons that America can learn from other countries.

My blog: A Promised Land: America as a Developing Country apromisedland.org.

Candidate Ariana Martinez racks up more high-profile endorsements before April 11 Special Election

Local Labor Council Endorses Ariana Martinez for Area 5 School Board Race

April 7, 2023

Ariana Martinez, LCSW, candidate for Benicia Unified School District Board of Trustees, Area 5

The Napa-Solano Central Labor Council (NSCLC) has joined the Benicia Teacher’s Association in endorsing Ariana Martinez for the special election to be held on this upcoming Tuesday, April 11, 2023, for the Area 5 Special School Board Race.

Ms. Martinez has also been endorsed by the following organizations and officials:

  • California State Senator Bill Dodd
  • Benicia Mayor Steve Young
  • Benicia Vice-Mayor Terry Scott
  • Benicia City Council Member Kari Birdseye
  • Solano County Board of Supervisor Monica Brown
  • Benicia Unified School Board President Sheri Zada
  • Benicia Unified School Board Member Mark Maselli
  • Benicia Unified School Board Member Dr. Gethsemane Moss
  • Former Benicia Unified School Board Member Andre Stewart
  • Former Benicia Unified Board Member Gary Wing
  • Former Benicia Unified School Board Member Gary Wing
  • Former Benicia City Council Member Dan Smith
  • Solano County Office Associate Superintendent of Human Resources and Educator Effectiveness Michael Minahen
  • Fairfield-Suisun Unified District School Board Member Jack Flynn
  • California School Employee Association Benicia Chapter 1096
  • Benicia Independent 

Ms. Martinez is a Bay Area native, Benicia High School graduate, and Licensed Clinical Social Worker with hands-on experience in the areas of cognitive psychology, social sciences, organizational development, and education. Read more about Ms. Martinez at www.ariana4busd.com.

Why is Benicia having a special election?

As previously reported, this special election is the result of a vacancy that the Board was required to fill after no one ran to represent Area 5 in the November election. Any interested, eligible candidate could have applied for the post. Four candidates applied, including Ms. Martinez.

In November, the Governing Board interviewed the four applicants in open session for the position. After comparing the needs of the district with the experience and backgrounds of each of the candidates, the Board chose by a majority vote to appoint Ms. Martinez.

In response to the Board’s appointment, the unsuccessful applicants chose to gather at least 62 signatures and submit them to the County to rescind the appointment. The special election must be paid for by Benicia Unified School District, taking roughly $60,000 to $80,000 from school budgets that must also support students, teachers, school staff, and school facilities.

The two other candidates in this race are Ms. Amy Hirsh and Dr. Ali Mansouri.

How to vote

According to the Solano County Registrar of Voters, voters can drop off ballots in drop boxes at the following locations:

Benicia Pedrotti Ace Hardware (830 Southampton Rd., Benicia)

  • Monday through Friday —  8 am to 6 pm
  • Saturday — 8 am to 7 pm
  • Sunday — 9 am to 6 pm

Solano County Registrar of Voters (675 Texas St., Fairfield)

  • 24-hour drop box on Union Ave.

On Election Day, ballots can be dropped off at any location listed above plus the poll place location listed below, from 7 am to 8 pm:

Matthew Turner Elementary (540 Rose Dr., Benicia)

Only residents of Area 5 may vote in this special election (see map below).


BUSD Area Map (click to enlarge)
*BUSD Area 5 includes: Mathew Turner School, Lake Herman, Water’s End areas.  Click on map to enlarge. Area 5 is in purple.

More information on this matter can be found by searching online for “Important Message From BUSD Governing Board re: Trustee Area 5 Appointment and Petition“.

Valero hit with $1.2 million penalty for toxic flaring in Benicia

[BenIndy Contributor Nathalie Christian – Texas-based Valero raked in about $11.5B of profit in 2022 — and that’s pure profit. While this fine represents progress, it also represents less than 1 hour of Valero’s 2022 profits. That’s right — in 2022, Valero made more than $1M just in profit per hour, 24 hours a day, for 365 days (Valero doesn’t stop profiting just because it’s a holiday or weekend). It’s clear Valero treats fines like these as fees; they represent just another minor cost of doing business in Benicia. Examples of fines from recent years: Valero Benicia Refinery was fined $266,000 in 2018, $122,500 in 2016  and $183,000 in 2014. It is rare for fines like these to actually financially benefit Benicia. The full text of the EPA News Release is available below this article from the Chronicle.– N.C.] 

U.S. EPA hits Valero’s oil refinery in Benicia with $1.2 million penalty for two toxic flaring incidents

San Francisco Chronicle, by Julie Johnson, April 5, 2023

A picture of Valero's Benicia Refinery
Incidents at the Valero refinery in Benicia in 2017 and 2019 forced people to shelter in place because of the risk of exposure to harmful chemicals, according to the U.S. Environmental Protection Agency. (Samantha Laurey/The Chronicle 2022)

Oil refining giant Valero must pay a $1.2 million penalty for major flaring incidents at its Benicia facility that spewed dark plumes of pollutants into neighborhoods, the U.S. Environmental Protection Agency announced Wednesday.

The “significant chemical incidents” occurred in 2017 and 2019 and forced people, including schoolchildren, to shelter in place because of the risk of exposure to harmful chemicals, according to the agency.

Following a federal investigation, Valero executives agreed to make specific changes to their Benicia operations and pay a penalty totaling $1,224,550 in a settlement reached with the EPA. Martha Guzman, regional administrator for the EPA in California, Nevada and New Mexico, said the changes will help protect Valero workers, Benicia residents and the environment.

The EPA’s announcement is the latest investigation into problems at the Bay Area’s oil refineries. Earlier this year, health officials in Contra Costa County warned people living near the Martinez Refinery run by PBF Energy to avoid eating foods grown in surrounding neighborhoods, four months after the facility sent 20 tons of dust into the community that coated cars, homes and backyards in a mysterious fine white powder.

Last year, the Bay Area Air Quality Management District announced it had found Valero had been releasing unlawful and potentially harmful amounts of hydrocarbons from its hydrogen stacks — undetected — from 2003 to 2019. Valero said it also hadn’t detected the releases and took steps to end them.

On Wednesday, Valero didn’t immediately respond to requests for comment about the federal fines.

Benicia Mayor Steve Young said the city wasn’t notified by the EPA about its investigation or the findings. The city has been pushing for greater transparency from oil refineries and the agencies that oversee them, especially after finding out last year that local air-quality regulators failed to tell the community about harmful releases until three years after the problems were discovered.

“We have concerns that we’re being left in the dark and only find out well after the fact,” Young said.

Oil refineries sometimes burn off flammable gases through tall stacks to keep careful equilibrium within pipes and other equipment and avoid disasters like explosions. But flaring is a highly regulated activity meant to be used sparingly because of the risks those burned gases and other pollutants pose to people nearby.

One major pollutant generated by these flares is sulfur dioxide, which can harm human respiratory tracts, exacerbating problems like asthma, and worsen pollution from particulate matter and acid rain.

On May 5, 2017, Valero stacks began shooting flames and churning out dark plumes of pollutants when the facility unexpectedly lost power. The emissions coated cars in an oily substance and sent employees at a nearby musical instrument factory to the emergency room, according to the EPA. More than 1,000 people were evacuated, including staff and students at both Robert Semple and Matthew Turner elementary schools. Ultimately, more than 10,000 pounds of flammable materials and 74,420 pounds of sulfur dioxide were released from the facility, according to the EPA.

Valero reported the flaring caused more than $10 million in damage to its facility, according to EPA records. The company later sued Pacific Gas and Electric Co. for the outage.

Then on March 11, 2019, another flaring incident led Solano County health officials to warn residents with respiratory issues to stay indoors. Some businesses sheltered in place. An investigation revealed more than 15,000 pounds of sulfur dioxide were released.

The EPA inspected the facility following both incidents and in 2019 found “several” cases where the company was violating the law.

“Valero failed to immediately report releases of hazardous substances, update certain process safety information, adequately analyze certain process hazards, and develop and implement certain written operating procedures,” the EPA said.

The agency found the company had violated the federal Clean Air Act’s regulations for preventing chemical accidents.

Valero is based in San Antonio and operates 15 petroleum facilities in the United States, Canada and the United Kingdom.

In a press release, Larry Starfield, with the EPA’s enforcement division, said the settlement “sends a clear message that EPA will prosecute companies that fail to expend the resources needed to have a compliant, well-functioning Risk Management Plan to the fullest extent of the law.”

Reach Julie Johnson: julie.johnson@sfchronicle.com; Twitter: @juliejohnson

 

Letterhead image for Environmental Protection Agency Newsroom

EPA Orders Valero Refining to Improve Chemical Safety at Benicia, CA Refinery

Settlement Also Requires Company to Pay $1.2 Million Penalty for Clean Air Act Violations

SAN FRANCISCO (April 5, 2023) – The U.S. Environmental Protection Agency (EPA) announced a settlement with Valero Refining-California to resolve violations of the Clean Air Act’s Chemical Accident Prevention regulations at their Benicia Refinery. The company will pay a $1,224,550 penalty and make changes to improve process safety at the refinery.

“This settlement sends a clear message that EPA will prosecute companies that fail to expend the resources needed to have a compliant, well-functioning Risk Management Plan to the fullest extent of the law,” said Acting Assistant Administrator Larry Starfield for EPA’s Office of Enforcement and Compliance Assurance.

“Failure to properly manage hazardous materials can pose serious risks to our California communities,” said Martha Guzman, Regional Administrator of EPA Region 9. “This settlement will help protect Valero workers, the Benicia community, and the environment more broadly.”

After significant chemical incidents at the Benicia Refinery in 2017 and 2019, a 2019 EPA inspection at the facility identified several areas of noncompliance, including that Valero failed to immediately report releases of hazardous substances, update certain process safety information, adequately analyze certain process hazards, and develop and implement certain written operating procedures.

Under the terms of the settlement, Valero has agreed to make significant chemical safety improvements at the Benicia Refinery. The company has already made several of these changes, related to chemical safety, in response to EPA’s inspection. These improvements include updating and modifying process hazard analyses, modifying operating procedures, modifying reporting policies, and improving employee training. The settlement also requires Valero to modify several pressure-relief valves and update process hazard analyses to consider hazards of power loss at the facility. As part of the settlement, Valero will continue to implement safety improvements through June 2025.

The Benicia Refinery is one of thousands of facilities nationwide that make, use, and store extremely hazardous substances. Reducing the risk of accidental releases at industrial and chemical facilities like the Benicia Refinery is one of EPA’s National Enforcement and Compliance Initiatives. Catastrophic accidents at these facilities can result in death or serious injuries; impacts to the community, including orders to evacuate or shelter-in-place; and other harm to human health and the environment. The Clean Air Act requires that industrial and chemical facilities that store large amounts of hazardous substances develop and implement a Risk Management Plan to reduce the risk of accidental releases.

For more information on the Clean Air Act’s Risk Management Plan Program, please visit EPA’s Risk Management Program (RMP) Rule webpage.

For more information on reporting possible violations of environmental laws and regulations visit EPA’s enforcement reporting website.

SEE ALSO:

Benicia Drinking Water Emergency – City working on a temporary bypass line

Water Transmission Line Incident Update

April 5, 2023

Benicia Proclaims Local Emergency; Announces Testing of Bypass Line for Damaged Water Transmission Pipeline

The City of Benicia proclaimed a local emergency following the break in its water transmission line when a hillside in Fairfield collapsed during recent rain storms.

The declaration of a local emergency will enable the city to use all resources necessary to repair the damaged water transmission pipeline. “It’s important for us to take this action so that the city can receive funding through the California Disaster Assistance Act and any other State and Federal funding that may be available,” said Mario Giuliani, interim city manager.

Benicia Public Works and various contractors are working on a temporary bypass line to regain access to the city’s primary water sources which are delivered via the damaged line. Designing the bypass began last week upon notification of the damage. Construction for the bypass line began on Tuesday, April 4, 2023 and is expected to be ready for testing on Friday, April 7. If testing is successful, then water transmission from Cordelia to the City of Benicia will be partially restored. While testing is scheduled to begin on Friday, it could take several days to fully assess the viability of the temporary system. Construction is now underway 24-hours a day until testing is complete.

“This is a highly complex project,” said Public Works Director Kyle Ochenduszko. “The bypass line is unique to the pipeline system and ever evolving circumstances. While we are confident that the bypass line will be successful, this is a situation with many variables,” he explained.

The bypass line is a temporary solution that will provide the community water while the primary pipeline is being repaired.

The bypass line will deliver water at a lower capacity than the main line. Benicia’s water source will still be coming from Lake Herman until the bypass line has been successfully tested. Benicia residents and businesses are still under 40 percent mandatory water conservation until further notice.

A special webpage has been established to provide a one-stop source for information about this incident. The site can be found at www.ci.benicia.ca.us/WaterTransmissionLine.

Social media posts, email notifications and other communications materials are being regularly distributed to residents and businesses as information becomes available. To sign up for emergency alerts, visit AlertSolano.com. To sign up for email notifications, visit www.ci.benicia.ca.us/announcements.