HomeMy WebLinkAboutMINUTES - 02152005 - D5 TO: BOARD OF SUPERVISORS
FROM: Supervisor Gayle B. Uilkerna, District 11 FROM:
ilk ft 0 Costa
DATE: 2/15/2005
County
SUBJECT: PROPERTY TAX REVENUE SHARING FROM CONOCOPHILLIPS MODERNIZATION DI
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)& BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
APPROVE and AUTHORIZE the SHARING OF 50%of the County General Fund property tax increment revenue resulting from
the construction of the ConocoPhillips Ultra Low Sulfur Diesel Fuel Project with the unincorporated Communities of Rodeo,
Crockett, Port Costa and Tormey as recommended by the District 11 Supervisor.
BACKGROUND:
In 1993, the Board of Supervisors adopted the method to share increases in property taxes as a result of the construction of a
new industrial plant as a means of financing economic development in the surrounding impacted communities. On
September 12, 1995, the Board authorized sharing 21.5%of the property tax increment resulting from the UNOCAL
Reformulated Gasoline Project with the Crockett and Rodeo communities. On October 17, 1995, the Board approved
increasing the percentage from 21.5%to 43%.
ConocoPhillips estimates that it will spend $180 million in the construction of the Ultra Low Sulfur Diesel Fuel Project and that
the facility will be operational in the Spring of 2005. Of that amount, the company and the Assessor are reviewing the extent
to which some construction costs would not result in increased tax assessments. Typically, the type of construction costs not
subject to property taxes are:
1. Costs incurred by the company not on the construction site;
2. Administrative and public relations costs;
3. Rework and redesign costs;
4. Abnormal or unforeseen costs resulting from floods,fire, etc; and
5. Construction reserves.
The County Assessor's staff is estimating that the new construction will result in an increased valuation of$61 million. One
percent of that amount, $610,000,would constitute the total increase in property taxes for the company. The County General
Fund Share of that amount would be approximately 19%or$116,000. This proposal will generate approximately$58,000
annually for replacement of return to source revenue from diminishing proceeds of the Reformulated Gas Project which is
being phased out because of the MTBE discontinuance.
As a substantial amount of the valuation is predicated on depreciating assets, the assessed value of the new construction will
decline each year, thus resulting in a decline of property tax revenues in subsequent years.
Funding would be designated for economic development and policing needs in the impacted West County unincorporated
communities of Rodeo, Crockett, Port Costa and Tormey.
CONTINUED ON ATTACHMENT: YES SIGNATUR
RECOMMENDATION OF COUNTY ADMINISTRATOR
RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ,2Gf APPROVED AS RECOMMENDED WR
This item was referred to the Finance Committee,
to be returned to the Board in March 2005.
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS (ABSENT fg0tt- AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED Ow-L/1 ,J
John Sweeten,Clerk of the Board of
Supervisors and County Administrator
BY EPUTY
Contact Person:
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