RICHMOND (CBS SF) — Contra Costa County supervisors unanimously approved an agreement with Chevron Tuesday that will put an end to property tax lawsuits against the county and should save the county millions of dollars and boost strained relations between the county and the oil giant.
The settlement agreement comes after nearly a decade of legal battles between the two entities over the taxable value of Chevron’s Richmond refinery between the years 2004 and 2013.
Under the agreement, the local refinery’s taxable value for 2012 will drop from $3.87 billion to $3.28 billion, according to county documents.
Chevron also agreed to forgo an $8 million refund that would normally be awarded because of that decrease, relieving local agencies from having to repay the tax revenue, county administrators said.
The agreement came after 18 months of negotiations, which took a turn when a new round of Chevron staff came to the table and with retired Contra Costa County Superior Court Judge Coley Fannin mediating, according to county assessor Gus Kramer.
Kramer said the settlement was “tantamount to Galileo and the Pope coming to an agreement on gravity.”
“We’ve been light years apart…and there’s been a lot of give and take, but I think it’s going to be a good thing for the taxpayers of Contra Costa County,” Kramer said.
Over the past decade, Chevron has sought hundreds of millions of dollars in tax refunds from the county, according to the company’s own estimates. In 2009, it was awarded $17.8 million in property taxes paid for the years 2004 through 2006.
The company also has three pending separate court cases challenging the county’s assessment of the refinery’s taxable value, which it agreed to drop as part of the settlement.
“(Chevron) is waiving its claims to hundreds of millions of dollars in tax refunds and has agreed not to pursue its past tax appeals,” oil company spokeswoman Melissa Ritchie said in a written statement. “(Chevron) believes this process has fostered a better relationship with the county assessor and will help bring the assessed value for the Richmond refinery in line with other refineries in the Bay Area and the United States.”
Ritchie said the settlement would also “bring greater fiscal stability to Contra Costa’s local communities, including the city of Richmond, and will preserve funding for essential services and the county’s schools.”
The settlement does not prevent Chevron from filing future litigation against the county about the refinery’s taxable value. However, the agreement holds that company representatives will meet with the county assessor’s office each year to confer about the value.
Chevron came under increased scrutiny for its ongoing tax appeals after a massive fire broke out at the facility last August, sending toxic smoke over Richmond and sending 15,000 people to hospitals with respiratory ailments.
Last month, the company pleaded no contest to six misdemeanor criminal charges related to the fire and agreed to pay the state $2 million in fines.
The agreement approved by county supervisors is up for a vote at Tuesday night’s closed session meeting of the Richmond City Council, which has the last word on dismissal of some of the court cases.
(Copyright 2013 by CBS San Francisco and Bay City News Service. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)