HomeMy WebLinkAboutSupplemental Communication from Greg Kirste1
Gloria Harper
From:Greg <greg.kirste@cox.net>
Sent:Tuesday, March 31, 2020 2:22 PM
To:Jill Ingram; Craig A. Steele
Cc:Gloria Harper; Jeannette Andruss; rgoldberg@live.com
Subject:External Email : Forward - Comments for Tuesday 3/31/20 Closed Session
Good Afternoon (Councilmember);
MPA is the City’s Oil Revenue consultant. MPA and the City Attorney are working to amicably collect tax debt from California
Resources Corporation (CRC). Item B on this evenings Closed Session Agenda concerns possible litigation. If this item
concerns CRC, I would like to offer the following:
The State Constitution empowers California cities to impose a business license tax. The Seal Beach City Charter empowers the
Council to impose that tax on CRC. The City’s Municipal Code empowers the City to set CRC's tax rate. This matter is an
attempt of a duly authorized governmental entity to demand a city-business obtain a business license and to collect all past and
future taxes and penalties owed based on the following established facts:
- On June 23, 2005 CRC began producing oil within the City of Seal Beach
- A business license to produce oil is a condition of the City’s Municipal Code, CRC’s Offshore State Lease, and CRC’s State
Drilling Permits
- CRC never obtained a business license
- Since it first started producing oil from wells located within the City, CRC has produced over 6.4 million barrels of oil (271
million gallons)
- CRC has not paid the City's oil production tax on any of the 6.4 million barrels of oil it's produced
- The City has sole statutory authority to require CRC obtain a business license, impose a business license tax and penalties, and
collect all amounts owed
- MPA estimates the amount CRC owes exceeds $13.4 million in mandatory taxes and penalties*
* notes on amount owed:
- An oil producer pays tax on each barrel of oil produced. The per-barrel tax rate is set by the City. The City charges a penalty
for late payments. Taxes and penalties are mandatory (Municipal Code)
- MPA and the City stipulated CRC’s per-barrel tax rate on September 26, 2018. This rate is the exact rate paid by all of the
City’s other oil producers (DCOR, Hellman & Breitburn)
- On September 26, 2018 the estimated amount owed by CRC was $9,341,353. On June 25, 2019 the estimated amount owed
was $13,485,297. The amount CRC owes accrues daily
- CRC operates without a business license. CRC is not subject to the City’s statutory $0.01 per barrel tax (Municipal Code)
2
- CRC does not pay City-taxes. CRC’s City-debt is not limited by any Statute of Limitation
Thank You,
Greg Kirste
MPA
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you
recognize the sender and know the content is safe.