Chevron, Richmond end dispute over taxes

David R. Baker, Chronicle Staff Writer
Wednesday, May 12, 2010

Richmond officials and Chevron Corp. have reached a deal to settle tax disputes that created some - but not all - of the tension between the hard-scrabble city and its largest private employer.
Under a deal approved Tuesday night by the City Council, Richmond and Chevron agreed to halt a potentially expensive duel over competing ballot measures in the November election, measures that would have affected the tax bill for the company's local oil refinery.
"I wish we'd gotten more, sure," said Councilman Tom Butt, who served on the city's negotiating committee. "But I think under the circumstances, it's a fair settlement."
Richmond officials had sponsored a ballot measure that would have changed the city's tax on utility usage, wresting more money from the refinery. Chevron, in response, drafted its own ballot measure that would have kept the refinery's utility tax the same while lowering it for everyone else. Both measures will now be dropped.
Chevron, based in San Ramon, will continue to pay roughly the same utility tax bill that it does now - about $20 million a year. The company also will pay an additional $114 million in taxes spread over the next 15 years.
Chevron will install ground-level air quality monitors at the refinery's edge as well as give Richmond an easement to help complete the Bay Trail, a path that will eventually encircle the bay.
Finally, Richmond officials will no longer appeal a judge's decision that struck down Measure T, a separate attempt to raise Chevron's taxes. Richmond voters approved Measure T in 2008, imposing a new manufacturer's tax on the refinery. But a judge later invalidated the measure, prompting the city to appeal.
"This is an important step toward moving toward a more cooperative relationship that will benefit everyone," said Chevron spokesman Brent Tippen. "We've come to an agreement that is providing certainty on so many issues in such uncertain times."
The agreement did not, however, settle every argument between the company and the community.
Chevron wants to upgrade the refinery, built more than a century ago. But those plans were put on hold last year after a judge threw out the project's environmental impact report. The company last month lost an appeal of that decision and is now deciding whether to participate in settlement talks.
E-mail David R. Baker at dbaker@sfchronicle.com.
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