El Segundo has struck a tentative $425 million Community Benefit Agreement with the Chevron El Segundo Refinery, a deal city officials say would more than double what the refinery contributes to the city over 15 years. The proposal includes an immediate $5 million donation, then annual payments that start at $23 million and climb over time. It still needs a final nod from the City Council before the year is out.
The agreement was reported by the Daily Breeze, which says Chevron would pay $23 million per year for the first five years. The annual figure would rise to $28 million in year six and to $33 million in year 11. When taxes Chevron already pays are counted, the city says El Segundo would collect about $557 million from the refinery over 15 years.
The council directed the city attorney to draft the agreement at a special meeting, and the proposal is expected to return for final approval at a future meeting before the end of the year, per the same report. The current El Segundo-Chevron agreement ends on September 30.
What City Leaders Say the Money Is For
City Manager Darrell George said the deal would help “reduce projected near-term budget deficits and provide important funding for capital projects and expanded services.” He also said the agreement would provide long-term stability to the city's general and water funds. Mayor Chris Pimentel described the proposal as delivering predictable cash flow for capital improvements and services and creating a financial legacy.
The pitch lands against a backdrop of budget worries. City staff presented a tentative 2026-27 budget that was balanced and preserved a 25% reserve, but CitizenPortal reports that staff also warned of “expenditures growing faster than revenues and a structural deficit emerging in later years.”
Staff floated other ways to close that gap, including a sales tax measure and a hotel transient occupancy tax increase, according to the same account. A larger, guaranteed check from the refinery offers a different route.
Chevron Calls It a Balanced Outcome
Chevron El Segundo Refinery Director Bryon Stock said the proposal “more than doubles Chevron's contributions under the prior agreement with the city.” He added that the council's action builds on a longstanding relationship and reflects a collaborative, balanced outcome. Stock noted that the refinery and its employees have been part of the El Segundo community for more than 115 years.
How It Compares to Past Deals
The numbers dwarf the last time the two sides were close to a deal. In 2012, the Daily Breeze reported that a tentative agreement projected $134 million in net new revenues over 15 years, averaging $8.9 million per year.
Chevron has also been cutting checks to a city up the coast. CBS News reports that the Richmond City Council accepted a settlement that will bring that city more than $500 million over 10 years. Chevron pays Richmond $50 million annually for the first five years and $60 million annually for the final five, and the settlement came as Richmond pulled a proposed ballot measure that would have taxed refined feedstock at $1 per barrel for 50 years.
El Segundo's deal remains tentative, and the final terms will not be locked in until the council votes on the finished agreement.
