Chevron files intent to petition in Richmond for tax measure to counter city's plan

By Katherine Tam
Contra Costa Times
Posted: 04/02/2010 11:37:12 AM PDT
Updated: 04/02/2010 05:54:12 PM PDT

RICHMOND — Chevron's bid to counter the city of Richmond's utility tax measure would cut fees across the board, potentially appealing to the average taxpayer.
Under a notice of intent to circulate a petition filed Thursday, Chevron proposes a ballot measure in which businesses and residents would pay half what they do now. Low-income residents and people over the age of 60 would be exempt. Ratepayers would not pay taxes on energy they generate from alternative sources.
"Richmond citizens are having a difficult time in this economy and the current high utility users tax imposes an additional burden," the filing reads.
Chevron would pay $20 million a year, roughly what it pays now.
If most customers' payments were halved under Chevron's proposal, the city would receive $8.1 million less annually, according to Jim Goins, city finance director.
City Councilman Tom Butt fears revenue losses will lead to layoffs and prevent officials from funding road repairs, park upkeep and other services.
"It could drive the city into bankruptcy or reduce services to the extent Richmond could no longer function effectively," Butt wrote in his e-forum. "Chevron's ploy, of course, is to convince voters to act selfishly to reduce their own taxes while taking care of Chevron."
Chevron spokesman Dean O'Hair said the measure asks people to consider whether the way Richmond operates now is working. He points to high unemployment, which state records show is at 18.7 percent.
"It gives voters the opportunity to decide the path they think the city can begin to take," O'Hair said. "Encouraging businesses to come creates jobs and lowers unemployment, and that's a good thing."
Chevron has until summer to collect signatures to qualify the measure for November's election.
It would compete with a city utility tax measure that supporters say would require the refinery to pay at least $10 million more annually.
Under the city measure, voters will decide whether to limit ratepayers to one method for figuring out what they owe. They would continue to determine payments by calculating 10 percent of the amount charged for utilities, but the proposed measure eliminates an alternate flat-rate formula that is allowed now. Under the flat-rate method, Chevron says it pays $19.3 million this year.
The refinery used the flat-rate method until 2006, when it began using the 10 percent formula. City officials noticed Chevron's payments were $4 million a year less than before. Unsure which numbers were right, the city hired a law firm to obtain and analyze the refinery's data and verify whether its payments were accurate from 2006 to 2008. The confidential audit resulted in a settlement last year in which Chevron agreed to pay the city $28 million.
The city measure is fair, supporters say, because everyone would pay using the same formula. Chevron has argued that it could hurt the refinery's ability to compete.
Katherine Tam covers Richmond. Follow her at Twitter.com/katherinetam.
ONLINE
To view a copy of Chevron's eight-page notice of intent to circulate a petition, go online to www.contracostatimes.com/richmond and click on the link with this story.