Are Chevron’s Taxes Too High? – Letter to the El Segundo Herald by Michael D. Robbins

The following letter to the editor was published in the El Segundo Herald newspaper (HeraldPublications.com) on Thursday, January 5, 2012 in the Letters section on page 2. The El Segundo Herald has a strict 250-word limit, including the title.

Are Chevron’s Taxes Too High?

The City Manager’s Chevron Shakedown must stop, including efforts to extort large “gifts” of money under threat of a $10 million annual tax hike. The City will suffer long-term damage to its reputation as a good city to locate a business.

Doug Willmore used false premises to construct a deceptive one-sided analysis for the Chevron property, rather than a true cost-versus-benefits analysis. It is unfair and dishonest to compare tax revenues generated per acre by the Chevron refinery with that of other local businesses. Land use in other South Bay cities is mostly residential and not three-quarters commercial/industrial as in El Segundo.

In his one-sided analysis, Willmore ignored the cost for the City to provide and maintain infrastructure and services for residents and businesses that would otherwise exist on the massive Chevron refinery property.

If the refinery never existed, that land would be mostly residential and some commercial. Tax revenues would be much less, and the City would have to provide and maintain infrastructure and services for twice as many residents at great expense that Willmore failed to include in his seriously flawed and biased analysis.

Willmore excluded some Chevron tax revenues. And he increased the number of acres and reduced the calculated tax revenue per acre by failing to account for the area of all the public streets, alleys, parks, and schools that would otherwise exist on the Chevron property.

If an accurate analysis shows Chevron is paying excessive taxes, will the City Council reduce Chevron’s taxes and apologize?

Michael D. Robbins

Note: Although this letter to the editor is a short 250 words, it does a good job towards refuting the news media propaganda hatchet jobs against Chevron and Councilman Carl Jacobson by KCET SoCal Connected producer Karen Fochet (March 2, 2012 TV show, “Small Town Big Oil”) and L.A. Times writer Jeff Gottlieb. This letter pre-dated the KCET hatchet job by nearly two months.

(This note was not part of the letter.)

Here is some additional information separate from the above letter to the editor.

Fired City Manager Doug Willmore gave a PowerPoint slide presentation at the December 20, 2011 regular meeting of the El Segundo City Council. He claimed that Chevron was not paying enough taxes, was not paying it’s fair share of taxes, and that the other businesses in the City were paying higher taxes than Chevron and were subsidizing Chevron.

However, Slide 7 of Willmore’s presentation, titled “General Fund Revenues by Segment”, exposes Willmore’s biased and deceptive one-sided benefits-only analysis rather than a true and complete cost-versus-benefits analysis.

As you can see in the aerial photograph, no city infrastructure and services are provided within the outer boundary of the massive 951-acre Chevron property, but the rest of the business and residential areas in city are provided with large amounts of city infrastructure and services that cost the city a fortune in taxpayer money.

However, Doug Willmore omitted all information about what the city has paid over the years and continues to pay to provide and maintain city infrastructure and services within the massive Chevron oil refinery property (zero), the remaining business properties (very large), and the residential properties (even larger) in El Segundo.

The City does not pay to provide the many miles of streets, curbs, gutters, sidewalks, alleys, storm drains, water pipes, sewer pipes, parks, recreational facilities, trees, landscaping, street sweeping, residential trash collection, and police patrols that it pays to provide for the other business and residential areas in the city.

Why should Chevron be forced to pay for massive amounts of city infrastructure and services that it does not receive?