Chevron, Posco sue Contra Costa over hazardous materials fees

0 Comments | Oakland Tribune, Oct 8, 2008 | by Matthias Gafni

Chevron and USS-Posco, two of Contra Costa's biggest hazardous- waste producers, have sued the county, arguing it has illegally charged them more than $600,000 in inspection fees in two years.

If the two facilities win, the county may have to reimburse $1.34 million to seven facilities. It would also lose about $642,000 annually.

Such cuts could jeopardize public safety because the county most likely would not have the money to continue inspecting the facilities, one county supervisor said.

In the lawsuits, Chevron and Posco contend that because they have state hazardous waste generator permits, the county cannot also charge them fees.

"Basically, it's double taxation," said Chris Conkling, Posco's general counsel. "We're exempt from the fee under state law."

The Pittsburg steel mill sued the county in June for almost $175,000 -- its 2006 and 2007 payments. Chevron sued in August for $233,906 for the same two years at its Richmond refinery. Both suits ask the court to permanently bar the county from charging them.

The county has its sights set on collecting back fees dating to 2002 for Posco, totaling $345,000, said Randy Sawyer, Contra Costa's hazardous materials director.

The county argues it can charge the facilities because the state Department of Toxic Substance Control permit fees only cover portions of the facilities. The county uses its fees to pay for inspections of hazardous material operations on the other portions.

On its face, the state agency agrees with the county.

"Counties have the authority to charge generator fees for enforcement," said Carol Northrup, spokeswoman for the state agency.

However, Contra Costa's case is complicated. Chevron and Posco say the county rescinded its ordinance allowing the collection of such fees in the 1990s. The county argues it merely stopped enforcing it. The county and Chevron will argue the point in court next month.

Chevron's suit has angered, again, Supervisor John Gioia, whose district covers the company's Richmond refinery.

"This is nickel and diming the county," Gioia said. "One has to ask oneself why they're being so aggressive in fighting their taxes and fees at a time when their profits are at the highest level they've been."

Chevron turned an $18.6 billion profit in 2007.

In addition to suing the county, the San Ramon-based energy giant has appealed its property tax assessment, which could cost Contra Costa and its cities $59.7 million in refunds and almost $2 million annually. Chevron has argued that the county has incorrectly assessed its land since 2004. The assessor's office hopes to complete those hearings by Thanksgiving.

"Chevron is committed to public safety," said Brent Tippen, Chevron spokesman. "We just want the same rights as any other business or citizen in the county."

If the county can no longer charge the seven facilities a hazardous waste generator fee, it may have to stop inspecting them. The county would have trouble finding replacement funds, Gioia said.

"Clearly, the county needs to be in a position to protect the public and have an appropriate level of oversight," Gioia said.

Even if it wins the case, Chevron would still pay more than $200,000 annually to the state.

Last year, Chevron generated 5,515 tons of waste and 7,982 tons in 2006. Posco collected 639 tons last year and 1,058 tons the previous year. All Contra Costa facilities generated 142,131 tons of hazardous waste in 2007, according to the hazardous waste division.

Reach Matthias Gafni at 925-952-5053 or mgafni@bayareanewsgroup.com.Hazardous waste generator fees

The county charges seven Contra Costa facilities a fee. Two lawsuits, by Chevron and USS-Posco, could jeopardize more than $600,000 annually to the county. Here are the facilities and their 2007 hazardous waste generator fees:

Chevron Richmond Refinery $116,953

*USS-Posco $57,613

Tesoro Golden Eagle $116,953

Dow Chemical $116,953

Shell Oil Products $116,953

ConocoPhillips $116,953

Gen Chem Bay Point Works $2,305

*Paid $116,953 in 2006

Source: Contra Costa Hazardous Materials division