Contra Costa cities and special districts billed for a share of Chevron's $17 million 2004-06 property tax refund -- despite having never received any of the money in the first place -- have lost their legal challenge.

Superior Court Judge Barry Goode sided with Contra Costa Auditor-Recorder Robert Campbell, who argued he was required to follow state law that established a broad refund apportionment formula in 1949.

Calling the math unfair, nearly 30 cities and districts asked the court to mandate that the refund to come only from the taxing entities where the refinery is located and actually received the money.

Thousands and sometimes tens of thousands of property tax valuation adjustments to prior assessments are made every year, the judge noted.

That "one large refund has unusual financial consequences does not mean the system is fundamentally unfair," Goode wrote in the Jan. 9 decision. "It means that once, in decades, there is a potential for a painfully anomalous result."

Those same cities benefitted when the county property assessment appeals board subsequently found Chevron underpaid its property taxes in 2008-10 by $25 million.

The agencies saw a net gain of $7 million they would not have received if their legal argument in the 2004-06 refund had prevailed.

Chevron has paid up, Contra Costa Treasurer-Tax Collector Russell Watts confirmed.

Initially, the county established a four-year, interest and penalty-free payment plan under a process available to qualifying taxpayers.


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But the county's legal team challenged the oil giant's eligibility and the company was required to settle in full its past due bill by the end of December, Watts said.

The story's not over yet, though.

Chevron has filed legal challenges in Superior Court to both decisions, arguing that the $17 million refund was too small and the $25 million bill too large. It has also appealed its 2011 and 2012 assessments.

Contact Lisa Vorderbrueggen at 925-945-4773, lvorderbrueggen@bayareanewsgroup.com, politicswithlisav.blogspot.com or Twitter.com/lvorderbrueggen.