The City of Carson has reached a landmark $370 million settlement with Tesoro/Marathon Petroleum, securing significant immediate and long-term funding for the community while strengthening the City’s financial position without imposing a new tax on Carson residents.
Under the agreement, Carson will receive $120 million upfront and $250 million over 15 years, providing both immediate funding and a predictable long-term revenue stream of approximately $16.67 million annually beginning in January 2027. This settlement not only bolsters the city’s coffers but also resolves years of litigation, allowing the city to move forward with clearer financial stability.
The agreement strengthens Carson’s finances without a new tax on residents. Following the settlement, Carson withdrew its proposed oil refinery tax measure from the November 2026 ballot. Tesoro/Marathon will also continue paying the City’s existing Measure C Oil Industry Business License Tax, with no credit against the settlement payments. This ensures that the city retains all existing revenue streams while gaining additional funds.
The settlement ends years of litigation and creates opportunities to invest in community priorities. Tesoro/Marathon will seek dismissal of the tax litigation and will not pursue attorney fees or litigation costs from the City. Settlement proceeds will go through Carson’s public budgeting process, with infrastructure and deferred maintenance already identified as potential priorities. This allows residents to have a say in how the funds are allocated, ensuring that the community’s needs are met.
The financial impact of this settlement is substantial for a city like Carson, which has faced budget challenges in the past. The upfront payment provides immediate relief, while the annual payments offer a stable revenue source for future planning. This is particularly important as cities across California grapple with rising costs and limited revenue options.
By withdrawing the proposed tax measure, the city avoids a contentious ballot fight and instead secures a negotiated settlement that benefits all parties. This cooperative approach with Tesoro/Marathon could set a precedent for how cities and corporations resolve disputes, emphasizing dialogue over confrontation.
The settlement also underscores the importance of civic engagement in budgeting. As the funds are allocated through the public process, residents will have the opportunity to influence how the money is spent, ensuring that it reflects community priorities. This transparency is crucial for maintaining public trust.
In a broader context, this settlement demonstrates the potential for municipalities to achieve favorable outcomes through negotiation rather than prolonged litigation. It highlights the value of persistence and strategic decision-making in local governance.
For Carson, this settlement marks a new chapter of financial resilience and community investment. With a clear revenue stream and a commitment to public input, the city is poised to address long-standing infrastructure needs and enhance the quality of life for its residents.
