West Contra Costa USD Presentation to the Facilities Subcommittee Chevron Update March 17, 2012

Chevron Appeal West Contra Costa Unified School District Facilities Subcommittee | page 1  On Monday, April 2nd, the Contra Costa County Assessment Appeals Board ruled on Chevron’s appeal of its , , and , property tax assessment.  The County had assessed the property at an average of $3.3 billion per year during this period, and Chevron paid roughly $43 million per year in property taxes.  Chevron sought to reduce its assessed value to approximately $1.4 billion per year, which would have reduced its property tax liability by approximately $19 million per year.  The Assessment Appeals Board ruled that Chevron’s actual value should have been $4.0 billion per year, increasing its property tax liability by $9 million per year.

Impact of Ruling – One-Time Payment West Contra Costa Unified School District Facilities Subcommittee | page 2  As a result of the Appeals Board ruling, Chevron will make a one- time payment to the County of approximately $27 million.  The one-time payment will be allocated by the County to public agency accounts throughout the County and to debt service funds of public agencies levying special taxes in the area.  The portion allocated to the District should be approximately $3.6 million, approximately $2.6 million of which is a result of the special bond levy (KNN estimate).  This amount will be allocated by the County across four bond measures based on formula.  The District will meet with the County to determine how much of each measure-specific allocation should be applied to reduce the need for tax levies in and how much should be held in reserve for future years.  To put this figure in context, the District will levy for approximately $54 million in bond debt service in

Impact of Ruling – Future Assessment West Contra Costa Unified School District Facilities Subcommittee | page 3  The Appeals Board ruling has the potential to impact the assessment of the refinery in future years.  Prior to 2010, the County had consistently assessed Chevron at more than $3 billion per year.  In spring 2010, the County reached a settlement with Chevron with regard to the company’s property tax assessments in tax years through , inclusive.  Not only did the settlement reduce Chevron’s assessed value to an average of approximately $2.5 billion per year for the period covered by the settlement, but it also ushered in a period in which the County’s assessment of Chevron was significantly lower than it had been in prior years.  The Appeals Board ruling may have the opposite effect on the Assessor’s calculation for future years.

Assessed Values West Contra Costa Unified School District Facilities Subcommittee | page 4  The County is in the process of establishing assessed values for tax year  Assessed values for properties are determined as of January 1st of each year with preliminary figures released on July 1st.  For properties that have not changed hands, assessed values are typically assessed at their prior year assessed value plus an inflation factor not to exceed 2% per year.  Values for properties that have been re-assessed under Proposition 8 to values below their Proposition 13 ceiling, however, are assessed at their current market value as established by the County Assessor (this includes more than 80% of residential parcels county-wide).  The County Assessor has indicated to us that he expects assessed value growth to be flat on a county-wide basis, with East County areas continuing to see some decline.