A “Bridge to the Future Fund” for Benicia

By Stephen Golub, Benicia resident and author, “Benicia and Beyond” column in the Benicia Herald, May 11, 2025

The May 5 fire at Valero’s Benicia refinery was yet another reminder of the price Benicia has paid for a facility that, despite the fine work of its personnel, can loom like an accident (or explosion) waiting to happen. The refinery’s presence has often seemed like a trade-off between health and safety on the one hand and employment and economic conditions on the other. Many  of us have  deep concerns (which I share) about what its planned closure will mean for Valero workers and local businesses.

Many of us have also told ourselves that we’re stuck between a financial rock and a health-and-safety hard place: If Valero somehow stays, we face the ongoing threat of toxic emissions, fires and even huge blasts at a facility that processes roughly 20,000 tons of flammable fuel per day and that may reduce costly investments in upkeep as its presence sooner or later comes to an end. If Valero goes, we lose perhaps $10 million of Valero-generated revenue from our annual $60 million budget.

But we’re not stuck. We’re not powerless. Right now, the Bay Area Air District (BAAD)  is starting to consider how to spend the $56 million Benicia-specific portion of the $82 million fine it negotiated with Valero because, as former Benicia Vice Mayor Dirk Fulton astutely puts it, “For at least 16 years, the Valero refinery secretly polluted us with cancer-causing toxins such as benzene, toluene, and xylene—all known to cause cancer, reproductive harm and other negative health effects.” We can help influence the Air District’s decision if we act fast – as I explain at the end of this essay.

Here’s one possibility that helps Benicia build a bridge to a clean, prosperous future: Negotiate with BAAD (what an acronym!) to establish a fund that allows the City to allocate the fine  to help close the looming $10 million annual budget gap over the next eight years. Unless we can address that gap properly, it could devastate City police, fire or other services. (Note: The fine isn’t simply handed over to Benicia; the decision on how to spend it rests with the Air District.) This Bridge to the Future Fund – or Transition Fund, Sustainability Fund, Clean Air Fund, or whatever we might call it – could narrow or close the gap.

Presumably, in order to be consistent with the Air District’s mission, the Fund would focus on those parts of the City budget that fall under the rubrics of clean air or  public health – or perhaps even sustainability or related priorities.

Here’s how the admittedly crude and very preliminary math for the Fund would work out in what, at this point, is but a rudimentary sketch rather than an actual  plan:

In Year One, Benicia begins to prepare for Life After Valero but doesn’t yet draw extensively on the Fund, as revenues should remain relatively steady. In Years Two through Eight, it devotes $8 million annually toward closing the budget gap (totaling $56 million over that seven-year period), while either cutting $2 million per year or raising part of that through new fees or taxes. Obviously, the figures and time period could be adjusted due to various circumstances.

During those eight years, the City would move toward replacing the Valero revenue gap with new sources of income. The oil giant itself could conceivably help in this regard, via its current arrangement with the Signature Development Group, a major Bay Area real estate firm, to explore alternative uses of the land. Those uses could include residential, commercial and industrial developments. (Bear in mind here that portions of Valero’s 900 acres of land could host residential development without extensive clean-up, in that much of that land is open space beyond where the refinery operates.)

Now, there’s the possibility that contracting with the developer is just a temporary tactic Valero is using to negotiate with California to extract concessions favorable to keeping the refinery open. But we can’t operate on that assumption.

A few questions flow from the Bridge to the Future Fund idea:

First, is there even $8 million in the annual City budget that could be devoted to regular expenditures relevant to the Air District’s clean air and public health priorities? I’d guess the answer is yes. Recreational expenses, for starters. In addition, the  Air District’s recent public survey asking how to spend fines (not just Valero’s) – unfortunately, the survey was underpublicized and is now closed to comment – contemplated fire services as one potential use. So, there may well be considerable flexibility in using the Fund as a source for 13 percent ($8 million) of our $60 million annual budget.

Next, would the Air District even go for this? Well, why not? I understand that it is sounding flexible. And whatever policies it currently has in place – and remember, BAAD is in the process of defining or refining them – could be interpreted or revised to allow the Fund as a recipient of the $56 million fine. Benicia Mayor Steve Young sits on the BAAD board. And while he’s just one voice among many in that large body, it could well be that other Bay Area officials belonging to the Board would favor a flexible policy for the use of other fines benefiting their own localities.

What if Valero decides to stay? Even if that’s the case, we can’t remain dependent on the calculations, whims and winds emanating from its San Antonio headquarters. It could still close the facility whenever it wants. For example, if the country and world sink into a recession this year, as many economists predict, that itself could lead Valero to leave.

Finally, do we want Valero to stay? That’s a much larger discussion. But, briefly for now: Bear in mind that Benicia must  prepare for Valero to depart because it’s inevitable, whether next year or whether five or ten years down the line. And if we establish the Fund, it will not only sustain crucial City services; it will prevent the layoffs of numerous City employees who contribute to our town through their hard work and spending here.

Furthermore, if Valero goes, and Benicia employs the Fund to maintain the services that make this such a wonderful place to live, real estate values could climb: Many folks who would never consider moving here because of the refinery could well reconsider this as an excellent option. Tourism could also flourish as we transition to a post-Valero economy.

More broadly, we must start to build a more diversified economy now, rather than simply wish for Valero to remain here. For a thoughtful deeper dive on how Benicia can manage the financial transition, check out Dirk Fulton’s Benicia Independent piece that I previously mentioned.

The fire has affected my thinking about whether we want Valero to stay. Apparently, it occurred in a furnace related to a Fluid Catalytic Cracking Unit, which has had repeated problems over the years. (Very useful information on the fire and the unit can also be found here, at The Benicia Independent.) When I contemplate the words “fire” and “repeated problems” together, I don’t feel  confident about our community’s health and safety – especially in view of the refinery’s myriad issues.

Moreover, this incident had a number of worrisome ramifications: It put “elevated levels of pollutants, including fine particulate matter, hydrogen sulfide, sulfur dioxide, and alkanes” into our air, according to news outlets; prompted a shelter-in-place announcement by the City; resulted in social media reports of negative health effects as well as numerous complaints of delays in folks finding out about the danger; and triggered several BAAD violation notices to Valero.

In any event, the point here is that we’re not powerless. We have a possible way of reducing or eliminating cuts to vital services even as we emerge from Valero’s lucrative but hazardous shadow. Ironically, the very facility that has put our health and safety at risk has also provided a potential bridge to a brighter future, via the $56 million fine.

I’m not saying that a Bridge to the Future Fund is necessarily the best or only way of spending that money. Maybe portions of the Valero fine could be used to help affected employees, businesses and nonprofits, for instance. Moreover, there are many other, worthwhile ideas afloat to help the City address the budget gap. There will be community-wide discussions about utilizing the fine and closing the gap in coming months.

In the meantime, you can still weigh in to urge BAAD to allow Benicia flexible use of the Valero fine funds by contacting the Air Districts’ Community Investments Office at communityinvestments@baaqmd.gov – preferably as soon as possible. And you can offer your thoughts on the proposed Fund or other uses of the Valero fine by contacting Mayor Young and the other City Council members via their emails at the City website.

Again, the notion of a Fund is only a sketch, not yet a plan. But we should  consider it as we contemplate the inevitability, the potential and the promise of Life After Valero.