RICHMOND -- Faced with the sudden loss of millions of dollars from the budget they passed in late June, Richmond officials are scrambling for information and to come up with a plan to bridge the shortfall.
"We're still in the fact-finding phase," said City Manager Bill Lindsay. "We're still trying to understand the reasons for the magnitude in the property tax drop."
Lindsay sent Contra Costa County Assessor Gus Kramer a public information request July 3 seeking all public documents related to " ... why the city's tax roll assessment has decreased and what constitutes that reduction."
Meanwhile, the city stares at a 14.61 percent decline in the assessed value of properties in Richmond, amounting to an estimated $6.1 million reduction in tax revenues this fiscal year. The news came days after the city passed a $144 million budget.
The decline in assessed value was driven mostly by a roughly $1 billion drop in the valuation of the Chevron refinery after an Aug. 6 fire knocked out its No. 4 crude unit and hammered the refinery's business income, according to Kramer, who said the drop should have been expected.
But city leaders disagreed, saying Kramer kept them in the dark before dropping the disheartening news.
"It really surprises me," said Councilman Tom Butt. "It doesn't seem consistent with common sense. They rebuilt the refinery, so it ought to be worth more, not less."
Barring an unforeseen change, Richmond faces the daunting task of shaving $6 million from an already lean budget. Fewer than 800 people work for the city today, down from more than 1,100 a few years ago. The city as a whole was given a net assessed value of $10.89 billion, a decline of more than $1.86 billion, while every other city in the county saw an increase in assessed value.
"I don't know how we balance the budget without laying people off," Butt said. "We could gut programs, like shut down the library and the recreation programs to get there, but I think the better way is to look for a little bit of savings everywhere, including public safety."
Whether to look for cuts in police or fire services is expected to draw fierce discord. While public safety comprises more than 60 percent of all local spending, Richmond has been hailed for significantly reducing crime in recent years, a development many in the city link to a fully staffed police department augmented with pricey technologies like cameras and gunshot audio-detection systems.
"I'm not cutting the police department, that's a given," said Councilman Nat Bates. "(Safety) is the public's top priority. We're finding the cuts somewhere else."
Bates, who along with Councilman Corky Boozé warned of looming deficits when they dissented from passing the original General Fund budget, said the city needs a comprehensive audit to determine where cuts should be made.
But Bates already has a few targets.
"I know there is duplicative work in the City Attorney's Office, so we can get some savings there," Bates said. "And Code Enforcement, too. It's a joke; we subsidize them to go after poor people."
Some residents have expressed dismay in recent weeks, echoing Kramer's contention that the city should have expected the fire to affect revenues. Chevron's tax bills account for about one-third of the General Fund.
"After the fire, one of the first questions I ever asked our elected officials was about the impact on annual tax revenue, and we were told it wouldn't be a problem," resident Felix Hunziker wrote on his Facebook page.
Butt hopes the shortfall could be bridged in a settlement with Chevron. The city has threatened to sue the oil giant for damages from the fire, which investigators determined was precipitated by poor maintenance of old pipes and "willful negligence." Butt said he and several other city officials are in ongoing negotiations with Chevron officials.
But with the deficit still looming, Lindsay said the onus was on Kramer to brace the city for the news that taxes would plunge.
"The short answer is we didn't know the assessments would be so far down because (Kramer) didn't tell us," Lindsay said. "We were flying blind."
Kramer said last week that anyone who didn't anticipate the drop in the refinery's valuation stemming from the fire was " being delusional."