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Richmond Reluctant To Pressure Chevron
April 10, 1999
Fire highlights city's dependency on giant firm
Benjamin Pimentel, Chronicle Staff Writer

Friday, April 9, 1999

The news rattled Richmond Mayor Rosemary Corbin two years ago: Chevron was pushing for lower property taxes, which would cut millions from the city's tight budget.

But the City Council persuaded the company to soften the blow by hiring consultants to teach Richmond how to become leaner and more efficient -- in other words, to survive with less of the oil giant's money.

``Either they helped us or they left us in a lurch,'' Corbin said. ``Chevron and the city have always had a complicated relationship.''

The relationship has come into sharp focus since a fiery explosion rocked Chevron's Richmond refinery two weeks ago. The accident has prompted calls for Richmond to work more closely with Contra Costa County, which has a say in regulating three other refineries through a safety ordinance that does not cover Chevron.

Chevron's safety record is the second-worst among the four Bay Area refineries, after Tosco's.

The most recent accident underscores Richmond's bittersweet ties with Chevron, its most dominant industry.

Chevron, which moved to Richmond in 1902, pours more than $15 million a year in various tax revenues into the city's coffers, about 20 percent of its general fund.

The company employs more than 200 residents in the greater Richmond area, and by by doing business with Richmond companies and shops, it creates hundreds of additional jobs in the community, said company spokesman Terry Swartz. In 1998 alone, the company pumped about $25 million into Richmond's economy, he said.

Chevron also gives generously to charities and nonprofit groups in Richmond and West Contra Costa, more than $6 million in the past five years.

However, many residents and city leaders complain that the city is too dependent on the oil giant, highlighted by Chevron's appeal for a lower property assessment on the 2,900-acre refinery.

The 2-year-old request, which the Contra Costa County Assessor's Office is supposed to rule on in June, asks for an average 40 percent reduction in property value, said Kent Rose, the county's principal appraiser. Chevron paid about $28 million in property taxes in 1997-98, the most in Contra Costa County, said Paul Abelson, the county's property tax manager.

Chevron's is not the only refinery in Contra Costa County to request property tax reductions. Shell's tax was lowered last year. Tosco lost an appeal for its Rodeo refinery in January, Rose said.

If Chevron's request is approved, Richmond could lose up to $4 million a year in revenues -- 7 percent of its general fund. That could mean sharp cuts in the city's library and parks and recreation budgets, Corbin said.

``We've got a potential new crisis coming,'' she said.

To deal with the crisis, Richmond turned to Chevron in 1997.

The City Council approved an agreement with Chevron in which the company agreed to pay the same amount in taxes to the city for five years from the time its appeal is approved. Chevron is also spending $1 million on consultants who are helping the city find ways to save and raise money.

At seminars and workshops, city employees, with Chevron's consultants, have been studying such steps as raising fees for business permits and slashing overtime costs, said Jim Braden, a Chevron manager in charge of the program.

The program also hopes to create a new ``culture'' at City Hall by training city officials and staff to become more responsive and team-oriented, he said.

``If we had cut our taxes without providing this bridge to the future, it would have been devastating,'' Swartz said. ``We're trying to work with our friends in the city of Richmond to get to a more efficient place.''

Councilman Tom Butt calls the program a cynical gesture from a company that has enjoyed decades of tax breaks and other privileges.

``They could have cut it off cold turkey -- that's much more cynical,'' counters Dennis Spaniol, executive director of the Council of Industries of West Contra Costa County, which represents 34 companies including Chevron.

Corbin agrees and has been so impressed with the company that she nominated Chevron for a civic award from the U.S. Conference of Mayors in January. It got an honorable mention.

Critics argue that despite the millions of dollars Chevron brings into the city, the company has not paid its fair share, given all its problems.

``Sure they pay taxes, but have consistently for years done everything they can to reduce the amount they pay in taxes,'' Butt said. ``(The refinery) perpetuates the image of Richmond as a dirty, grimy, dangerous industrial city. . . . It blows up, it pollutes.''

Although no comprehensive study has ever been done on the refinery's effects on the health of Richmond residents, informal surveys have found high rates of asthma and other respiratory illnesses in some neighborhoods near the refinery, said Richmond environmental activist Henry Clark.

There were no major injuries at the March 25 explosion, but the fire sent hundreds to hospitals with health complaints including nausea and eye irritation.

The accident jangled the nerves of many residents, especially because it happened just weeks after the deadly Tosco incident.

``This keeps happening around here,'' Malika Sanders, 19, said on the day of the explosion as she stood outside Doctors Medical Center in San Pablo. ``I'm getting out of this area.''

The accident led to a unanimous City Council vote to consider a safety ordinance. The proposal is likely to be the most critical issue in this year's Richmond City Council elections. Five seats are up for grabs.

However, many city leaders and community advocates say approving a new safety ordinance won't be easy.

Before the vote, Councilwoman Donna Powers recalled that in 1997, the council tabled a proposed Good Neighbor Ordinance in the face of what she described as intense opposition from Chevron.

``When I introduced the good neighbor ordinance, man, it was bad,'' Powers said at the council meeting. ``Do you know what a buzz saw these politicians go through (when they go up against Chevron)? They don't make it pretty for you.''

Chevron's Swartz dismissed Powers' speech as ``political rhetoric in an election year.''

``I think our influence is overstated,'' he said. ``It's clear by the last vote of the City Council, which was unanimous against us, that there's not as much control as is intimated.''

In fact, the company has lost some key privileges in Richmond over the past 15 years.

In 1984, the council passed an ordinance imposing a utility users tax on Chevron. In 1987, the council required the refinery to submit to city building inspections, ending an eight-decade exemption.

Such changes met with stiff opposition from Chevron, and the company's critics say it has often found a way to dilute or derail city policies.

After requiring building inspections, the company used a loophole: the person assigned to conduct inspections was a Chevron employee. This changed in 1997 when the council mandated independent oversight by an outside contractor.

Chevron also opposed the utility users tax before agreeing to a compromise that put a cap of $2.5 million on yearly payments, said former Councilman Dave MacDiarmid. Chevron pays about $1 million a year, Swartz said.

``We thought (the tax) was a disincentive to do business in Richmond,'' he said.

Chevron's critics say the company has used its tremendous economic clout in political battles.

MacDiarmid, who was a councilman for eight years, said Chevron lobbyists pushed hard to persuade him to oppose the utility users tax, making it clear that ``they're your friends, and there will be donations.'' He voted for the compromise proposal.

The company, MacDiarmid said, also got a big boost from community nonprofit groups that receive donations from the company and whose leaders came forward to support Chevron's position on the utility tax.

``We had all the executive directors saying that they were going to fall off the end of the earth if we didn't do what Chevron wanted,'' he said.

Records show that Chevron has been a key contributor in past City Council races, sometimes giving several thousands of dollars to individual candidates during election years when most contributions were only in the few hundreds of dollars. The company has given to most of the current council members, except for such critics as Butt.

Chevron employees also sit on the boards of many of the nonprofit groups they give money to.

A director from one such group declined to comment on its relationship with the company, saying it's ``a very peculiar situation.''

But the company's other supporters reject the portrayal of Chevron as a sinister puppet master.

``Everybody uses their own influence to whatever degree they have to -- Chevron is no different,'' said Councilman Nathaniel Bates. ``They don't control City Hall.''

Fred Jackson, a director with the Neighborhood House of North Richmond, praised Chevron for supporting his group's programs to deal with such problems as alcohol abuse and lack of jobs.

``The community needs Chevron, and Chevron needs the community,'' he said. ``Chevron has not been afraid of our community partnership. I would say that even if they didn't give us a dime.''

Councilwoman Irma Anderson said Richmond without Chevron simply would not be a pretty picture.

``What you would see is a massive lack of jobs and a massive lack of tax support,'' she said. ``Then people would know what a dead town is.''

Butt said he, too, does not want to kick Chevron out, saying the refinery is part of the landscape and ``will probably be here forever.''

``But it has had a negative impact on Richmond as a good place to live and work,'' he said, ``and I have always believed that Chevron should work more to minimize that impact.''