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Benicia mayor: impending Valero closure could cost city $10–12 million a year; city seeks transition planning
Summary
Benicia Mayor Steve Young told the joint hearing that Valero’s announced planned closure would be an immediate shock to the city’s budget and economy. He and city staff are pursuing multiple task forces to measure fiscal and secondary impacts and pressing state agencies for mitigation and redevelopment support.
Benicia’s mayor told the June joint hearing that a probable Valero refinery closure would be an acute fiscal and employment shock for the small port city and requested state support as the community plans for a long‑term transition.
Mayor Steve Young said Valero is the city’s largest employer and taxpayer; while the company pays no sales tax, the refinery provides property tax revenue, utility user tax receipts and purchases more than half the city’s water. “The closure … will result in losses to the city directly of about 10 to $12,000,000 a year,” Mayor Young said, and the city has hired an economics firm to refine those estimates.
What the city is doing: upon Valero’s April announcement the Benicia city council formed four task forces to study (1) the direct municipal revenue impact, (2) secondary impacts on industrial‑park businesses that rely on Valero, (3) effects on community beneficiaries (nonprofits, sponsors, youth sports and cultural events), and (4) land‑use and redevelopment options for roughly 900 acres of refinery‑owned land. Young said remediation and equipment dismantling will take years and that productive redevelopment likely will not generate meaningful revenue for five to ten years.
What the city fears: Young told lawmakers he is concerned that if Benicia becomes a terminal for imported refined product, the community would gain little economic benefit while bearing ongoing emissions and constraints on redevelopment. He asked that if terminals or long‑term tankage are established to receive imports, the city receive compensation or funding to offset the lost tax base and air‑quality burdens.
Context and state responses: state agency witnesses said they were engaging with local officials; the Energy Commission acknowledged Benicia’s concerns and included the city manager in roundtable conversations. Agencies reiterated that their recommendations are intended to stabilize supply and investor confidence statewide, but they also said detailed mitigation and transition funding mechanisms were still being developed. Several legislators pushed agencies for concrete timelines and funding commitments to help the workforce and municipal budgets.
Ending note: Mayor Young framed the problem as balancing environmental goals and municipal fiscal health. He urged state and agency leaders to include local officials in decisions that will affect land reuse, tax revenue and community health as closure and remediation timelines are resolved.
