TEXAS CITY — The city, county, school district and College of the Mainland will have to repay Valero about $4.8 million after a Galveston County jury agreed with the oil company’s argument that its Texas City refinery was overvalued on the tax rolls.
In 2011, the Galveston Central Appraisal District assessed three of Valero’s properties, which include the refinery, to have a taxable value of $526.8 million. Valero argued that appraisers did not fairly compare the refinery with other industrial properties in the city and that the value of the facility was actually $333.4 million.
Late Thursday, a jury in Judge Lonnie Cox’s 56th District Court ruled in Valero’s favor and lowered the company’s assessed value by $189.4 million for the 2011 tax year.
Because Valero already had paid its property taxes, the Texas City school district, the city, college and county might have to refund the difference. The taxing districts had just finished paying off an agreed settlement with Valero over values on the same properties for the 2006 through 2009 tax years.
The appraisal district is considering appealing the decision, Chief Appraiser Ken Wright said.
Because of the possible appeal, Valero spokesman Bill Day was limited in his response to the jury’s decision.
“Valero is pleased with the jury’s decision,” Day said. “We feel that it affirms Valero’s method for equalizing value.”
Texas City’s big bill
If the ruling holds up, Texas City school district will have the biggest check to write Valero, $2.45 million.
District spokeswoman Melissa Tortorici said the payback wouldn’t have a significant affect on the district’s budget.
“We have been able to put a plan in place that would allow us to not become dependent on the value that was in question,” Tortorici said. “Our business and finance department has been anticipating this lawsuit, so we have been planning our budgets based on a 95 percent tax collection rate. Any money that we have collected over that 95 percent has been put in reserves to be used in case the ruling went in favor of (Valero).”
‘The citizens don’t deserve this’
Texas City schools paid Valero $2.38 million as part of the 2009 settlement.
Texas City Mayor Matt Doyle said the $804,000 the city might have to pay back won’t cause much belt tightening either, but he doesn’t appreciate having to write a check.
“Any kind of impact would be on our reserves,” Doyle said. “The citizens of Texas City don’t deserve this. They are good citizens who support industry. We are as friendly to industry as we can be.
“We provide them with a good working environment with skilled labor, and (Valero) shouldn’t go about it this way.”
Doyle, who is pushing for an appeal, said that based on a pattern of filing lawsuits over its appraised property values, the company was not acting “as a good corporate citizen.”
“This is about good business for the city,” Doyle said. “You’ve got to keep your gloves up with these guys.”
Still a good neighbor
Noting Valero’s contributions to charities and its safety awards, Day insisted the company is a good corporate neighbor.
“Valero used the proper methods provided under the law to accurately dispute its assessment,” Day said. “While (the mayor) wants to make sure all the citizens pay their fair share of taxes, I’m confident he would not want any of his citizens to have to unfairly overpay — in this case, by a very large amount — on their taxes.”
Wright said given the 2009 lawsuit, the recent decision and the fact that Valero has already filed a lawsuit over its 2012 taxes based on the same argument, it might be time to re-evaluate how industrial properties are assessed.
“I’m not satisfied,” Wright said. “I’d only be satisfied if we had won. It is easy to point the finger at one person (for the defeat). I think it would behoove my board of directors if we put together a document showing what happened ... and then I would expect a plan to address our deficiencies.”
What the taxing bodies owe Valero
Texas City ISD: $2,453,057.24
Galveston County: $1,160,803.80
City of Texas City: $804,870.94
College of the Mainland: $439,402.72
By the numbers
Original Assessed Value: $526,796,990
Jury ordered value: $337,415,593
Editor’s note: Based on 2011 tax rates. Taxes are paid based at rate per $100 of assessed property value.
SOURCE: Galveston Central Appraisal District