Roll on, Big Oil.
In the 30 years since California voters limited property tax
increases by passing Proposition 13, the Chevron oil refinery in
Richmond has negotiated a lower tax rate at least a half-dozen times -
rolling over any opposition from local government.
To this day, the oil company has always gotten its way, said Gus
Kramer, the tax assessor in Contra Costa County.
"They do a $150 million addition and we run the numbers, calculate
the added value and send them a bill - and in November they file an
appeal," he said of the company's practices. "Heavy industry has the
best lobbyists money can buy, and over the years they have changed
the tax codes and made it harder to assess the value of a modernized
The company has used the tax appeals - and legal system - to argue
that replacing obsolete systems is more akin to replacing a crumbling
garage with a new, upgraded structure, Kramer said.
Consequently, the tax windfalls that some county officials had hoped
to reap from the upgrade were not to be.
"There will be a slight increase in their tax base, but it's not
going to be anything to write home about," Kramer said.
After negotiating its tax rates with county officials in the past,
Chevron for the first time has gone to a county tax appeals board,
which is scheduled to hear the case next month.
At the same time, the company is seeking Richmond's approval of its
latest upgrade, which would allow the refinery to produce about 5
percent more gasoline. The company cleared its first hurdle last
week, with the city's approval of the project's design.
The next step is the approval of a permit from the city's planning
commission, which is expected to list the item on its agenda next
month. If the commission approves the project, only an appeal to the
City Council - a near certainty - can derail it.
Historically, council members have been a bunch of pushovers for the
oil company, which has done everything from entering sweetheart deals
with them to buying them off individually to win their support.
In one county tax appeal case, Chevron officials cut a side deal with
Richmond city officials to keep paying the portion of property taxes
that went directly to the city - if city officials would stay out of
the county tax fight. They did.
In 1994, the city's planning commission approved another retrofit at
the plant, with a requirement that the company put $50 million into a
fund to pay claims from a refinery disaster. Chevron appealed the
decision and picked off individual council members with $6 million to
pay for pet projects.
Nearly 14 years later, the council has new leadership and a messy
recent history with the company that has left some council members
fed up with Chevron dictating the rules to the city.
A little more than a year ago, Chevron officials told the city that
the company had recalculated its utility-user tax rate - and began
paying the city about $4 million a year less.
"Things have changed - they have angered everyone on the council,"
said longtime Councilman Tom Butt. "If we can just hold the council
together, we have an opportunity to get the absolute maximum in
mitigations to the community."
Meanwhile, state Attorney General Jerry Brown has notified the city
that any Chevron project it approves will also require a reduction in
greenhouse gases emitted by the plant, Butt said.
Dean O'Hair, a Chevron spokesman, says the company is only acting
within the law to protect its rights just as any citizen would. But
that doesn't place the issue in proper context. The difference
between most citizens and Chevron is that most citizens don't have an
unlimited legal war chest belonging to one of the most profitable
companies in the history of the world.
It's just tough to watch Chevron, which posted a record profit of
$18.7 billion last year, pulling the purse strings tight at a time
when it's doing so well and its host city is in such dire straits.
Richmond's homicide rate is already so high this year that officials
have called in officers from the California Highway Patrol to help
patrol the city at night.
Chevron isn't responsible - or accountable - for the social ills in
Richmond or any other city where it operates facilities, but finding
tax loopholes while making more profit than ever just looks bad.
From every viewpoint other than that of the corporation, such tactics
can't help but promote the notion that giant companies make the rules
and anyone without the spirit, resources or organization to fight
back is an easy target for manipulation.
Over the century that the plant has operated on the city's
waterfront, it has spewed emissions, spilled toxic substances that
require people to evacuate their homes and presented an environmental
challenge to everyone living around it.
In order for Richmond citizens to finally receive their fair share of
funding from Chevron - something like a community mitigation fund
would be a good start - the council needs to stand up to the pressure
like it's never done before.
"The question is whether the council will hang together, hang tough,"
Butt said, "or just sell out individually like the council has in the
Chip Johnson's column runs Tuesdays and Fridays. E-mail him at