Monthly Archives: January 2012

Special Contract – Payment in Lieu of Taxes Agreement Between El Segundo and Chevron

Posted on January 9, 2012 by Mike

PAYMENT IN LIEU OF TAXES (“PILOT”) AGREEMENT
BETWEEN
THE CITY OF EL SEGUNDO AND
CHEVRON CORPORATION

    This AGREEMENT is entered into this ____ day of January, 2012, by and between the CITY OF EL SEGUNDO, a municipal corporation and general law city (“CITY”) and the Chevron Corporation, a California corporation (“CHEVRON”).

1. RECITALS. The Parties enter into this Agreement with reference to the following facts and objectives:

A. The CITY’s general fund expenditures exceeded the CITY’s incoming general fund revenues by approximately $6.9 million in fiscal year 2008/2009. The CITY’s fiscal condition has been negatively impacted by the unprecedented challenges in the worldwide and national financial markets and the chronic economic recession in the national, state, regional and local economies.

B. The on-going economic recession has significantly decreased the CITY’s revenue sources and negatively impacted expenses requiring the CITY to institute various austerity measures including expenditure curtailments for equipment and capital projects and deferred maintenance of CITY infrastructure.

C. The CITY’s general fund expenditures were projected to exceed the CITY’s incoming general fund revenues by approximately $10.4 million for fiscal year 2009/2010 requiring that the CITY utilize various one-time monies to balance its budget for fiscal year 2011/2012 and beyond.

D. The CITY general fund expenditures were projected to exceed the CITY’s incoming general fund revenues by approximately $ 9.2 million for fiscal year 2010/2011 causing the City to continue to implement cost savings measures. .

E. The CITY has decreased its unreserved/undesignated General Fund balance by 25% and has decreased its Equipment Replacement Fund balance by 10% since fiscal year 2008/2009.

F. The region, state, and nation are undergoing one of the worst economic downturns in the history of our Nation and financial forecasts are that it may worse, or at best, take several more years before the economy begins to strengthen.

G. The negative impacts of the current economic downturn are expect to take several more years before the economy begins to strengthen enough for local government agencies to see any significant restoration of revenues.

H. The California Constitution prohibits the CITY from enacting new taxes without voter approval which prevents the CITY from generating new revenues to offset

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losses.

I. CITY’s city manager is recommending that CITY’s City Council consider placing a ballot measure on the April 2012 election that would increase the amount of taxes paid by oil production companies including, without limitation, CHEVRON to CITY (“TAX”). If approved, the TAX would generate an anticipated $_____ in revenue for the CITY. Such revenue would help replenish the CITY’s capital improvement project (“CIP”) budget to help ensure the CITY’s infrastructure does not fall into disrepair. … Continue reading →

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Proposed Tax Increase On Chevron – Letter to the El Segundo Herald by Ron Murray

Posted on January 5, 2012 by Mike

The proposed tax increase is flawed. The tax proposed is on land ownership, not on the business. The County taxes property— land and improvements of which El Segundo receives a “slice”. Taxes should be uniform and consistent; so the tax should be applied to all unimproved land in the city—parking lots, unimproved commercial zoned property, empty storage lots, etc., not just on Chevron.

Most business in El Segundo pay a business tax based on commercial building footage plus number of employees/contractors. This formula is good as it is tied to services provided by the city to the business. … Continue reading →

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Good Neighbors – Letter to the El Segundo Herald by Chris Powell

Posted on January 5, 2012 by Mike

Many who work closely with the City on fiscal issues were surprised when a proposed tax increase on Chevron showed up on the Council’s agenda with no warning. … Continue reading →

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Chevron Tax – Letter to the El Segundo Herald by Joe harding

Posted on January 5, 2012 by Mike

It’s disappointing that a majority of the City Council feel compelled to raise taxes on El Segundo’s oldest business without taking the time to consider the consequences not only for Chevron but for other businesses here.

Why, in a last-minute agenda addition just five days before Christmas, would the Council vote to draft an initiative for millions in new taxes, with a deadline of January 13 to decide whether or not to place it on the ballot? … Continue reading →

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

Posted on January 5, 2012 by Mike

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. … Continue reading →

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