MARTINEZ -- Ending years of wrangling with Contra Costa County's largest taxpayer, county supervisors unanimously approved a deal with Chevron on Tuesday that halts several property tax lawsuits related to the energy giant's Richmond refinery, reduces the facility's valuation and promises the company the county's ear when determining future tax assessments.
"This puts this decade behind us and puts us in a better position going forward," Supervisor Mary Piepho, of Discovery Bay, said.
Contra Costa Assessor Gus Kramer said the deal eliminates the risk of a court judgment against the county and reduces the chances of future disputes with Chevron.
Kramer said the agreement signals rosier relations between Chevron and local governments.
"We're dealing with a new group" of Chevron leaders, Kramer said. "I think we're going to be in good shape going forward."
Chevron last year challenged in court a Contra Costa County property tax appeals board decision that found the Richmond refinery was under-assessed by as much as $25 million in 2007-09. Chevron also sued over the Contra Costa Assessment Appeals Board's 2004-2006 decision.
The refinery had sought a $73 million tax refund for that period but was awarded $17 million. Chevron also appealed its 2010-12 refinery fair-market values as set by Kramer.
Under the terms of the agreement, the taxable value of Chevron's Richmond refinery in 2012 will be reduced from $3.87 billion to $3.28 billion, but the energy giant will not collect the $8 million in taxes it overpaid that year, according to a county staff report. In exchange, Chevron and the Assessor's Office would annually confer regarding the value of the Richmond refinery, as was the custom before 2004.
Backlash against Chevron's tax disputes had intensified in the past year, particularly in the aftermath of a major fire at its No. 4 crude unit in August 2012. Investigators determined that the company ignored warning signs for years and failed to replace a corroded pipe that ultimately failed, triggering the fire. State regulators slapped the company with a $2 million fine.
While the fire and tax disputes weighed on the company's image, efforts to undertake a massive modernization project at the century-old facility have stalled. But Chevron officials have said they hope to present a new modernization plan in the next year, and the plan will have to clear numerous hurdles in the courts, county and city.
Chevron spokeswoman Melissa Ritchie released a statement Tuesday extolling the tax deal and characterizing it as a step toward healing frayed relations with local governments.
"(Chevron) is waiving its claims to hundreds of millions of dollars in tax refunds and has agreed not to pursue its past tax appeals," Ritchie wrote. "This process has fostered a better relationship with the County Assessor and will help bring the assessed value for the Richmond refinery in line with other refineries in the Bay Area and the United States.
"This agreement will also bring greater fiscal stability to Contra Costa County's local communities, including the city of Richmond, and will preserve funding for essential services and the county's public schools."
While the county and Chevron have agreed to drop the litigation and settle on the valuation figures, Kramer said final dismissal of at least one tax case requires approval of the Richmond City Council, which is a party to that case.
Contact Robert Rogers at 510-262-2726. Follow him at Twitter.com/roberthrogers.