Category Archives: Doug Willmore’s Great Chevron Shakedown

Fired City Manager Doug Willmore’s Great Chevron Shakedown for $10 million per year in additional taxes.

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

-1-

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 →

Posted in El Segundo Chevron Public Records Act Request | Tagged Chevron, document archive, Doug Willmore, El Segundo, gas, local government, oil, Public Records Act request, shakedown, special document | Comments Off

Special Email – FW: Note attachment – Email from Doug Willmore to L.A. Times writer Jeff Gottlieb about the threatening note.

Posted on January 8, 2012 by Mike

From: Willmore Doug
Sent: Sunday, January 08, 2012 6:54 PM
To: jeff.gottlieb@latimes.com
Subject: FW: Note attachment
Attachments: Willmore 12-0063.pdf

Hi Jeff,

FYI – someone left this on the windshield of my car on Friday night.

Doug

From: Bermudez, Jaime (Patrol Lieutenant)
Sent: Saturday, January 07, 2012 6:28 PM
To: Willmore, Doug
Cc: Tavera, Mitch (Chief of Police)
Subject: Note attachment

Doug,

I attached an electronic copy of the note for your records. The number (12-0063) is the report number in our records. Let me know if you need anything else.

Jaime Bermudez, Lieutenant
El Segundo Police Department
348 Main St., El Segundo, CA 90245
(310) 524-2253 Office
E-Mail: JBermudez@elsegundo.org
www.elsegundo.org/depts/police … Continue reading →

Posted in Doug Willmore's Great Chevron Shakedown, El Segundo Chevron Public Records Act Request, El Segundo News | Tagged Chevron, Doug Willmore, El Segundo, email archive, gas, Jeff Gottlieb, KCET, local government, Los Angeles Times, oil, Public Records Act request, shakedown, Small Town Big Oil, SoCal Connected, special email, Vince Gonzales | Comments Off

Special Email – FW: Chevron Chamber Package – 1-4-2012.pdf – Adobe Acrobat Standard

Posted on January 7, 2012 by Mike

From: Willmore Doug
Sent: Saturday, January 07, 2012 4:49 PM
To: MGIORDANO@TorranceCA.gov
Subject: FW: Chevron Chamber Package – 1-4-2012.pdf – Adobe Acrobat Standard
Attachments: Chevron Revenue Analysis.pdf

Mary,

This is an email I sent to my Council and I’m sending it for background. Please don’t forward the email on or quote it in any way.

Doug

From: Willmore, Doug
Sent: Wednesday, January 04, 2012 6:58 PM
To: Busch, Eric (Mayor)
Subject: FW: Chevron Chamber Package – 1-4-2012.pdf – Adobe Acrobat Standard

All,

Attached is a comparison of Chevron’s refinery in El Segundo to the other five largest refineries in municipalities in CA. The ES refinery is the largest (by volume) in the state of CA. As you can see, by almost any useful measure or ratio or method of comparison, the tax revenue we receive from Chevron is far below those of other refineries in other cities in CA.

You should know that before I had decided to present revenue per acre as one of the ways to evaluate Chevron’s tax burden, I spoke to a couple of people who I trust who are knowledgeable about local tax structures. They were my brother Brad, an investment banker in the SF Bay area, and Darrin Casper, my CFO at Salt Lake County. Brad used to do energy deals for Solomon Brothers on Wall Street and has done more than 15 utility or oil and gas mergers or acquisitions of up to $5B and knows the business inside and out — especially how they pay their taxes. Darrin used to do energy financing for oil and gas deals for the firm Lewis Young in the investment banking world before becoming a CFO. Both Brad and Darrin suggested to me to use revenue per acre as not just one way to analyze Chevron’s local tax structure, but as THE best way. Brad and Darrin both said comparing one refinery to another is useful, but not as useful as comparing this refinery to other land uses in your City.

As you know, when constructing a revenue collection system for any public entity, the fundamental criteria has to be fairness and equity. That is the reason that both Brad and Darrin suggested the revenue per acre comparison. I’ll get into the additional reasons why they said so in the next paragraph. … Continue reading →

Posted in El Segundo Chevron Public Records Act Request | Tagged Chevron, Doug Willmore, El Segundo, email archive, gas, local government, Mary Giordano, oil, Public Records Act request, shakedown, special email, Torrance | Comments Off

Special Email – Re: Mickie’s Blog checked out by Chevron, SR too… – Snyde remarks

Posted on January 6, 2012 by Mike

From: Willmore Doug
Sent: Friday, January 06, 2012 8:46 PM
To: mickie.tagle@gmail.com
Subject: Re: Mickie’s Blog checked out by Chevron, SR too…

Mickie – that is spooky – why don’t you take it down for a little while? No telling what these freaks will
do.

Sent from my iPhone

On Jan 6, 2012, at 7:18 PM, “Mickie Tagle” wrote:

http://mickietagle.blogspot.com/

Continue reading →

Posted in El Segundo Chevron Public Records Act Request | Tagged Chevron, Doug Willmore, El Segundo, email archive, gas, local government, Mickie Tagle, oil, Public Records Act request, shakedown, special email | Comments Off

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 →

Posted in Doug Willmore's Great Chevron Shakedown, El Segundo Herald Letters, El Segundo Tax and Fee Increases, Letters to the Editor | Tagged Chevron, City Manager, Doug Willmore, El Segundo, El Segundo Herald, hatchet-job, Karen Foshay, KCET, Letter to the Editor, local government, media, oil, propaganda, revenue, Small Town Big Oil, SoCal Connected, tax | Comments Off

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 →

Posted in Doug Willmore's Great Chevron Shakedown, El Segundo Herald Letters, El Segundo Tax and Fee Increases, Letters to the Editor | Tagged Chevron, Chris Powell, El Segundo, El Segundo Herald, Letter to the Editor, local government, oil, revenue, tax | Comments Off

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 →

Posted in Doug Willmore's Great Chevron Shakedown, El Segundo Herald Letters, El Segundo Tax and Fee Increases, Letters to the Editor | Tagged Chevron, city council, El Segundo, El Segundo Herald, Karen Foshay, KCET, Letter to the Editor, local government, oil, revenue, SoCal Connected, tax | Comments Off

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 →

Posted in Doug Willmore's Great Chevron Shakedown, El Segundo Herald Letters, El Segundo News, El Segundo Tax and Fee Increases, Letters to the Editor | Tagged Carl Jacobson, Chevron, City Manager, Doug Willmore, El Segundo, El Segundo Herald, hatchet-job, Jeff Gottlieb, Karen Foshay, KCET, Letter to the Editor, local government, Los Angeles Times, media bias, news media, oil, propaganda, revenue, SoCal Connected, tax, UUT | Comments Off

Special Email – Doug Willmore tried to convince the next City Treasurer Chris Powell to support his proposed $10 million tax hike on Chevron

Posted on January 4, 2012 by Mike

[ NOTE: This released email was missing the preceding text. ]

them more and having them subsidize Chevron’s obligation to pay a fair share for the operations of the City).

For a variety of reasons, CA tax structures for many cities are all over the map. Cities across CA have created all sorts of different taxes to compensate for Prop 13’s impact on commercial property. As a result, you end up with taxes that inversely impact some businesses and not others. That’s what we have here in El Segundo.

According to the analyst I spoke to at Oppenheimer, CA refineries as a whole are the most profitable in the US, and this one is the highest volume and, in their opinion, the most profitable refinery in CA. I don’t buy at all the pulling up stakes and moving or shutting down argument. The CA market is a huge market and Chevron will be a player here regardless of whether their tax burden in El Segundo is $5M or $15M. The business model here in El Segundo, given the marine terminal and given the pipeline to LAX among other things, can’t be beat. The same threats of closing were made in Richmond 2 and 3 years ago. And yet, despite being the highest volume refinery in the state, their taxes here in El Segundo, by almost any meaningful measure or ratio are half of the next lowest refinery, and in some cases ¼ of other large refineries. Rod’s response to me is that he can’t verify the numbers.

I have not yet heard any argument from anyone that sincerely makes a case that the tax burden shared by Chevron and the rest of our business community is a fair split. If there is an argument that someone has to make supporting the current arrangement, I’d love to hear it. All I have heard is that we need more time to talk. Which is fine if there is a commitment to a resolution. However, Eric never heard back from Frank if there was a commitment to a resolution from Chevron on this. If there is no commitment to a resolution, where does that leave us? It takes two to tango.

Doug

From: Chris Powell [mailto:CPowell@washingtoniron.com]
Sent: Wednesday, January 04, 2012 3:01 PM
To: Willmore, Doug
Subject: RE: How does this look?

Thanks Doug. I will take a look at it. This is definitely a better comparison than comparing different general plan zones within the city. Have you also been comparing M 1 zone acreage rates in various surrounding tax jurisdictions? I wasn’t sure if that was a valid comparison as well.

Chris J. Powell, CFO
Washington Iron Works
310-217-9130

From: Willmore, Doug [mailto:dwillmore@elsegundo.org]
Sent: Tuesday, January 03, 2012 7:16 PM
To: Chris Powell
Subject: FW: How does this look?

Chris,

Attached is a summary of the five largest refineries in municipalities in CA and their resulting revenue ratios. As you can see, El Segundo lags far behind the rest when you look at their relative contribution to the city. … Continue reading →

Posted in El Segundo Chevron Public Records Act Request | Tagged Chevron, Chris J. Powell, Deborah Cullen, Doug Willmore, El Segundo, email archive, gas, local government, oil, Public Records Act request, shakedown, special email | Comments Off

Special Email – FW: Chevron Chamber Package – 1-4-2012.pdf – Adobe Acrobat Standard

Posted on January 4, 2012 by Mike

From: Willmore Doug
Sent: Wednesday, January 04, 2012 6:58 PM
To: L Segundo/cn=Recipients/cn=cityhall/cn=Contacts/cn=EricBusch; L
Segundo/cn=Recipients/cn=cityhall/cn=ALLCOUNCIL; ekbusch@aol.com; allcouncil@elsegundo.org
Subject: FW: Chevron Chamber Package – 1-4-2012.pdf – Adobe Acrobat Standard
Attachments: Chevron Revenue Analysis.pdf

All,

Attached is a comparison of Chevron’s refinery in El Segundo to the other five largest refineries in municipalities in CA.
The ES refinery is the largest (by volume) in the state of CA. As you can see, by almost any useful measure or ratio or
method of comparison, the tax revenue we receive from Chevron is far below those of other refineries in other cities in CA.

You should know that before I had decided to present revenue per acre as one of the ways to evaluate Chevron’s tax
burden, I spoke to a couple of people who I trust who are knowledgeable about local tax structures. They were my brother
Brad, an investment banker in the SF Bay area, and Darrin Casper, my CFO at Salt Lake County. Brad used to do energy
deals for Solomon Brothers on Wall Street and has done more than 15 utility or oil and gas mergers or acquisitions of up
to $5B and knows the business inside and out — especially how they pay their taxes. Darrin used to do energy financing
for oil and gas deals for the firm Lewis Young in the investment banking world before becoming a CFO. Both Brad and
Darrin suggested to me to use revenue per acre as not just one way to analyze Chevron’s local tax structure, but as THE
best way. Brad and Darrin both said comparing one refinery to another is useful, but not as useful as comparing this
refinery to other land uses in your City. … Continue reading →

Posted in El Segundo Chevron Public Records Act Request | Tagged Brad Willmore, Chevron, Darrin Casper, Doug Willmore, El Segundo, email archive, gas, local government, oil, Public Records Act request, shakedown, special email | Comments Off

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