HomeMy WebLinkAboutMINUTES - 04192005 - C65 TO: BOARD �•.-- �_��.� r OF -_�.,+
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FROM: FINANCE COMMITTEE, f90110
Costa
Supervisor John Gioia Chair �. `'-rT :of'
• .y1
Supervisor Mary N. Piepho
Co
unty
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DATE: April 19, 2005 ce&!50
SUBJECT: PROPERTY TAX REVENUE SHARING FROM CONOCOPHILLIPS
REFINERY MODERNIZATION PROJECT
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.
DIRECT the County Administrator to administer the property tax sharing proposal for the
ConocoPhillips "Ultra Low Sulfur Diesel Fuel Project" so that revenues derived from the property tax
sharing agreement arising from the original Unocal "Reformulated Gasoline Project" are gradually
replaced by the revenues from the "Ultra Low Sulfur Diesel Fuel Project" and there is no duplication of
revenue.
FISCAL IMPACT:
The "Reformulated Gasoline Project" yielded $60,886 in property tax revenue for the communities to
share in FY 2004-05. The expected revenue from the property tax increment generated from the new
project, approximately $58,000, would replace the revenue derived from the first "Reformulated
Gasoline Project."
BACKGROUND:
On September 12, 1995, the Board of Supervisors authorized sharing 21.5% of the propertytax
increment resulting from the Unocal "Reformulated Gasoline Project" with the communities of
Crockett and Rodeo. On October 17, 1995, the Board approved an increase in the percent from
21.5% to 43%. This formula has provided, on average, $79,513 to the communities for economic
development projects. The funding, however, has been declining due to depreciation of the assets
and obsolescence of the equipment.
CONTINUED ON ATTACHMENT: YES SIGNATURE: L' � /Q - �
-----------------------------------------------------------m----------------------------- ---------------------- - ------------ ---------------------
RECOMMENDATION OF COUNTY ADMINISTRATOR r
�RECOMMENDATIO O BOARD COMMITT
a-�PROVE THER
SIGNATURE(S):
J H GIOIA, Chair RY N. PIEPHO
---------------------------------- ------- ------ --------------------------------------------------------------------------------------------------------------------- --------
ACTION OF BOARD ON APPROVE AS RECOMMENDED O R
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
UNANIMOUS(ABSENT �Yr.uJ } AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AYES: NOES: SHOWN.
ABSENT: ABSTAIN:
ATTESTED: APRIL 19,2005
JOHN SWEETEN,CLERK OF THE BOARD
OF SUPERVISOYS AND COUNTY ADMINISTRATOR
CC: FINANCE COMMITTEE STAFF
BOARD OF SUPERVISORS
COUNTY ADMINISTRATOR'S OFFICE B. /�o�_ / TY
Property Tax Revenue Sharing from ConocoPhillips Modernization-2
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, $010,000, 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 to share 50% with the communities wouldgenerate
approximately $58,000 annually for replacement of the diminishing revenue from the Reformulated
Gasoline Project, which is being phased out because of 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, resulting in a decline of property tax revenues in
subsequent years.
Funding would be designated for economic development and policing needs in the impacted
unincorporated communities of Rodeo, Crockett ,Port Costa, and Tormey. The funding allocations
would be approved by the Board of Supervisors, upon recommendation by the District 11 supervisor.
The Finance Committee reviewed this matter at its March 7, 2005 meeting and recommended that
the administration of the property tax sharing proposal by the County Administrator's Office be
accomplished in a manner that prevents duplication of payments for the two projects at the refinery.
CONTRA COSTA COUNTY BOARD OF SUPERVISORS
MEETING, TUE.., APRIL 19, 2005
CALL TO ORDER, 10:30 A.M.
THE HONORABLE CHAIR UILKEMA AND MEMBERS OF
THE BOARD OF SUPERVISORS:
GOOD MORNING:
Consent Items which I wish removed and considered under Short
Discussion Items
Ralph Hoffmann
60 Saint Timothy Court
Danville, CA 94526,w5329
(925)837-4498
Consent Items to be removed & considered under Short Discussion Items, CCC BOS
Meeting, of Tue., April 19, 2005.
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C.71.