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. The agreement provides a $120 million upfront payment and $250 million distributed over 15 years, ensuring a predictable revenue stream of approximately $16.67 million annually starting in January 2027.
This settlement resolves years of litigation between the City and Tesoro/Marathon, which operates a refinery in Carson. In exchange, Tesoro/Marathon will seek dismissal of the tax litigation and will not pursue attorney fees or litigation costs from the City. The agreement also confirms that Tesoro/Marathon will continue paying the existing Measure C Oil Industry Business License Tax, with no credit against the settlement payments.
The financial boost comes without a new tax on residents. Following the settlement, Carson withdrew its proposed oil refinery tax measure from the November 2026 ballot. This decision alleviates the need for voter-approved tax increases while still securing substantial revenue for city services and projects.
The settlement proceeds will be allocated through Carson’s public budgeting process, with infrastructure and deferred maintenance identified as potential priorities. This investment is expected to address long-standing community needs, including road repairs, public facilities, and other essential services. Mayor and City Council members have emphasized the importance of using these funds to improve quality of life in Carson, aligning with the city's vision of being "a thriving, diverse, destination city."
The agreement strengthens Carson’s financial position by providing both immediate liquidity and a steady long-term income stream. This financial stability allows the city to plan for future projects and services without relying on volatile revenue sources. The predictable annual payments will support sustainable budgeting and may improve the city's credit rating, reducing borrowing costs for future capital improvements.
Key stakeholders have praised the settlement as a win-win for the community and the company. Tesoro/Marathon benefits from legal certainty and the ability to focus on its operations, while Carson secures essential funding for community improvements. The settlement also demonstrates the effectiveness of collaborative negotiation over prolonged legal battles.
Residents of Carson can expect to see tangible benefits from the settlement, as the city embarks on a transparent process to determine how the funds will be used. Public input will be solicited to ensure that the priorities reflect the community's needs. This settlement marks a significant step forward for Carson, ensuring a brighter future without the burden of new taxes.
