Tom Butt for Richmond City Council The Tom Butt E-Forum About Tom Butt Platform Endorsements of Richmond Councilmember Tom Butt Accomplishments Contribute to Tom Butt for Richmond City Council Contact Tom Butt Tom Butt Archives
  E-Mail Forum
  Poor Chevron
December 19, 2003

The following letter was published in the West County Times on December 19, 2003:

Incorrect allegations


In a Dec. 4 Times story, Richmond Councilman Tom Butt cited ChevronTexaco as a factor in the city's inability to bridge its budget gap. Butt reportedly said: "ChevronTexaco has refused to ante up its projected utility user tax increase, roughly $1.2 million." This allegation is incorrect.


ChevronTexaco has paid in full and on time all of the utility user tax it owes to the city of Richmond.


ChevronTexaco prides itself on being a good corporate citizen wherever we do business.


In Richmond, where we have been operating for more than 100 years, we have always been a faithful citizen and the company pays its full share of taxes.


The utility user tax increased from 8 percent to 10 percent in January 2003, increasing ChevronTexaco's tax bill by $2 million per year above the $12 million that ChevronTexaco already pays annually to the city.


In fact, the total of all taxes ChevronTexaco pays to Richmond funds more than 20 percent of the city's budget.


Perhaps Butt might better spend his time working on positive solutions to the city's financial crisis rather than playing the blame game with false information.


Gary K. Fisher


Fisher is the general manager, external affairs, at ChevronTexaco Richmond Refinery.


My response is as follows:


In a letter to the West County Times published December 19, 2003, Richmond Refinery External Affairs Manager Gary Fisher attempted to refute a statement attributed to me in a December 4 Times article that ChevronTexaco stiffed Richmond $1.2 million in utility user taxes. This is not just my allegation; it reflects the opinion of the majority of the City Council and the City Manager, and it is just the latest chapter in a long history of Chevron exploitations of Richmond taxpayers


In 1983, the Richmond City Council adopted a utility user tax based on a percentage of utility costs by users. Under political pressure from Chevron, the City Council created a special loophole, which allowed the company to pay an arbitrary lump sum, called the “maximum tax payable,” instead of the percentage paid by all other taxpayers. This was the same time that Chevron was “inspecting its own construction” and didn’t pay for building permits like other Richmond property owners.


The utility tax loophole has allowed Chevron (now Chevron Texaco) to save tens of millions of dollars over the last 20 years. The lack of that tax income is tangible in the potholes in Richmond streets and the deterioration in City parks and buildings.


The utility tax ordinance states that the maximum tax payable “… shall be effective only if the service user elects to avail itself of such maximum tax liability provision and enters into an agreement with the Tax Administrator prior to the commencement of the tax year to pay the maximum tax liability directly to the City during the tax year.”


In June 2002, like every previous year, ChevronTexaco apparently notified the City that it would pay the “maximum tax payable” based on the “base amount of $1,148,137.54 for each percent of tax imposed for any tax year, which base amount shall be adjusted annually by that percentage which is ninety (90%) percent of the total percentage of change in the United States Department of Labor, Bureau of Labor Statistics' Gas (piped) and Electric Consumer Price Index For All Consumers Urban for the San Francisco/Oakland/San Jose Area calculated on the basis of the two consecutive and most recent completed years for which data is available from the United States Department of Labor” (RMC 13.52.100).


In the above paragraph, I use the word “apparently,” because the City of Richmond has refused, following Chevron’s admonition, to release the fiscal year 2002-2003 maximum tax payable agreement letter to me or anyone else. This information is so top secret that even a City Council member cannot see it!


Shortly after the beginning of the 2002-2003 fiscal year, several City officials, including Isiah turner, Malcolm Hunter, Anna Vega, Irma Anderson and I met with ChevronTexaco management to ask if they would oppose an increase in the utility user tax. They said they would not, and that they understood the necessity for the increase.


When the “percent of tax imposed for any tax year” was increased by the voters in November 2002 from 8% to 10%, Chevron refused to pay the increase for the second half of fiscal year 2002-2003, which runs from January 2003 to June 2003. The net loss to the City has been estimated at $1.2 million. Every other taxpayer in the City of Richmond paid the increased amount. Chevron used the same loophole they created to avoid taxes as the basis for refusing to pay the increase.


ChevronTexaco has continued to use its vast power and money to play the City Council for concessions unavailable to common taxpayers. In the late 1990’s, Chevron was able to successfully reduce its property taxes downward by millions, and in a token gesture to the City, provided $1 million that was largely blown by a Chevron contractor to conduct endless touchie-feelie sessions with City employees intended to spark a “cultural change” that would enable Richmond to learn to live on less.


Fisher’s complaint that ChevronTexaco pays over 20% of Richmond’s taxes is like a BMW owner complaining that he pays more taxes than the owner of a Honda Accord. ChevronTexaco owns some 3,000 prime waterfront acres in Richmond, nearly 14% of the City’s land area. The company pays about $0.14 per square foot of land in taxes, including property tax and utility user tax – probably the lowest tax rate of any property in the City. If those 3,000 waterfront acres were paying what other Richmond taxpayers pony up, the City wouldn’t even have a budget crisis.


It must be tough being a $100 billion multinational company, and being expected to give a little back to a City that ends up with endless pollution, sirens, fires and explosions.


Tom Butt


Incidentally, because I have refused consistently to dutifully kiss ChevronTexaco’s posterior lower extremity as expected by a Richmond official, I can say with considerable pride that I am the first Richmond City Council member in 100 years to be excluded from the traditional Chevron Christmas party guest list. I guess they showed me!