In our story "Small Town, Big Oil", SoCal Connected investigated why the Chevron refinery in El Segundo, the city's 100-year-old namesake, has failed to pay its fair share of taxes for decades. The result has been the loss of hundreds of millions of dollars in utility and commercial acreage tax revenue for the cash-strapped city, according to recently dismissed city manager Doug Willmore.
Mr. Willmore concluded his own investigation, per Mayor Eric Busch's request, and found that not only had the big oil company failed to pay an equitable rate of commercial acreage and utility taxes, but that the city had agreed to cap the yearly amount paid by Chevron to the city for use of natural gas.
The documents below obtained by our producers show that in 1994, the City of El Segundo signed an agreement with Chevron that would require the company to pay a maximum of $150,000 a year in user utility taxes, forgiving over $3 million in back taxes. In the city's agreement with independent auditor MRC, Chevron actually asserted it had overpaid and was owed a refund, an agreement signed by current councilman and then-mayor Carl Jacobson, the only member initially opposed to the tax hike and one of the three who voted to oust Willmore.
Above, you can see slides from Mr. Willmore's presentation of his analysis and his tax hike proposal to city officials. This and his questioning of the 1994 agreements, he says, are what ultimately got him fired as city manager.