HomeMy WebLinkAboutP.R. 15002: PREMCOR REFINING GROUP, INC.interoffice
MEMORANDUM
To: Mayor, City Council, and City Manager
From: Mark Sokolow, City AttoY~ney /~-/~ ~'~~'`
Date: December 12, 2008
Subject: P. R. No. 15002; Council_ Meeting December 16, 2008
Attached is P. R. No. 15002 authorizing the City Manager to
execute an Industrial District Agreement with Premcor Refining
Group, Inc. The exhibits are still be accumulated and vaill be
forthcoming. We need to discuss Exhibit "B" prior to the Ordinance
being adopted.
MTS:ts
Attachment
cc: Director of Finance
Mike Eaves
Carl Parker
z.pr15002 memo
P. R. No. 15002
12/09/08 is
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE CITY MANAGER TO
EXECUTE AN INDUSTRIAL D]:STRICT AGREEMENT WITH
PREMCOR REFINING GROUP, INC.
WHEREAS, the City Council of the City of Port Arthur deems it
in the best interests of the citizens of Port Arthur to enter into
an "In Lieu of Tax" Agreement witYi Premcor Refining Group, Inc.
NOW THEREFORE, BE IT RESOLVEI) BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR:
Section 1.
That the fact: and opinions in the preamble
are true and correct.
Section 2. That the City Council hereby authorizes the City
Manager to execute an "In Lieu of Tax" Agreement with Premcor
Refining Group, Inc., in substantially the same form as attached
hereto as Exhibit "A", with changers as delineated in Exhibit "B".
Section 3.
That Premcor Refining Group, Inc. shall sign and
return the Agreement by December 23, 2008, or this Resolui~ion is
null and void and the property described herein is annexed,
effective December 31, 2008 at 11:!59 p.m., as further delineated in
P. O. No. 5925.
Section 4.
That a copy of the caption of this Resolution be
spread upon the Minutes of the City Council.
READ, ADOPTED AND APPROVED on this day of
z.pr15002
A.D., 2008, at a N[eeting of the City Council of
the City of Port Arthur, by the following vote: AYES:
Mayor
Councilmembers
NOES:
MAYOR
ATTEST:
TERRI HANKS, ACTING CITY SECRETARY'
APPROVED AS TO FORM:
~~~
CITY ATTORNEY
APPROVED FOR ADMINISTRATION:
CITY MANAGER
z.pr15002
EXHIBIT "A"
r ~
STATE OF TEXAS ~
COUNTY OF JEFFERSON ~
INDUSTRIAL DISTRICT AGREEMEtQT
WITH REGARD TO THE PREMCOR REFINING GROUP INC.
WHEREAS, the City of Port Arthur (hereinafter referred t.o
as the "City"), The Premcor Refining Group Inc.,- d/b/a Valero
Port Arthur Refinery, formerly known as Clark Refining &
Marketing, Inc. (hereinafter referred to as "Premcor" or
""~~z-~ "Company") Port Arthur Coker Company L.P., and Chevron
U.S.A. (hereinafter referred to as "Chevron") have entered into
the following Industrial District Agreement.. as they relate to
industrial projects on land owned by Premcor:
(1) 1998 Industrial District Agreement with Clark Refining
and Marketing, Inc. for the refinery with existing
improvements as of 1998, approved per Resolution 98-
288, with such agreement providing for the payment to
the City of Port Arthur of $1,825,000 per year until
October 15, 2008, with an inflation factor being added
for the years 2004 to 2008 with the expectation that
the City will continue to be paid a negotiated "in
lieu of tax" payment thereafter.
(2) 1998 Industrial District Agreement with Clark Refining
and Marketing, Inc. for Heavy Oil Upgrade Project .
Rev. 12.10 1
approved per Resolution 98-289 with such agreement
providing for the payment of $698,000 per year from
2001 to 2004 and the payment of $87'2,000 per year from
2005 to 2008 with the expectation that the City will
continue to be paid a negotiated "in lieu of tax"
payment thereafter.
(3) 2003 Industrial District Agreement with Chevron U.S.A.
for the ethylene plant with existing improvements as
of 2003 approved by Resolution N~o. 03-355 which is
leasing a portion of the property described in
Attachment "A" from Clark Refining and Marketing,
Inc., now known as The Premcor Refining Group Inc. arld
affiliates, and whereunder Chevron. has agreed to pay
the City $l, 185, 000 per year until the year 2008 with
the expectation that the City will continue to be paid
a negotiated "in lieu of tax" payment thereafter.
(4) 2003 Industrial District Agreement with The Premcor
Refining Group Inc. for the Premcor (Hydrotreater)
Refinery Expansion (50,000 BP:>D gasoline hydro
processing unit) approved by Resolution 03-297 with
such agreement providing for Premc:or's yearly payment
° of amounts to the City equal to 75% of the amount of
taxes it would have paid with respect to the project
as if the project had been con:atructed within the
Rev. 12.10 2
City's corporate limits and had the City entered into
a property tax abatement agreement. with Premcor with
the same terms and conditions as those contained i.n
the December 23, 2002 agreement, which Premcor reached
with Jefferson County for that same: project, with such
payments being made by Premcor to the City from 2003
through 2010, with the expectation that the City will
continue to be paid a negotiated, "in lieu of tax"
payment thereafter. Payments have been received for
the years up to 2008 based on reports by the Company
to Jefferson County of percentage:> of Direct Hire of
Local Labor (Schedule A) and Local Subcontractors
(Schedule B) that the Company has retained. The
Company has paid the City $0 in 2003, $0 in 2004,
$364,561 in 2005, $526,304 in 2006, $354,110 in 2007
and $ 288,912 in 2008.
(5) 2005 Industrial District Agreement with the Premcor
Refinery Group and with the Port Arthur Coker Company,
L.P. for the Refinery's Feed Rate Expansion Project
and Decoker Expansion approved by Resolution No. 05-
164 with such agreement providing for Premcor's and
Port Arthur Coker Company's yearly payment of amounts
to the City equal to 750 of the amount of taxes it
would have paid with respect to the project as if the
Rev. 12.10
3
project had been constructed within the City's
corporate limits and had the City entered into a
property tax abatement agreement with Premcor and wit;h
Port Arthur Coker Company with t;he same terms and
conditions as those contained in the November 30, 2004
agreement which Premcor and Port P.,rthur Coker Company
reached with Jefferson County for that same project;,
with such payments being made b;r Premcor and Port
Arthur Coker Company to the City from 2005 through
2014 with the expectation that the City will contirnle
to be paid a negotiated "in lie=u of tax" payment
thereafter. Payments have been received for the years
up to 2008 based on reports by the Company to
Jefferson County of percentages of Direct Hire of
Local Labor (Schedule A) and Local Subcontractors
(Schedule B) that the Company has retained. The
Company has paid the City $0 in 2005, $0 in 2006,
$968,962 in 2007 and $ 832,776 in 2008. The City has
relied on Jefferson County and the Company as to these
calculations. Payments have not been received for
2009 to 2014, which is due on October 15th of each
year.
(6) 2005 Industrial District Agreement with the Premcor
Refinery Group for the Tier II Diesel Project for the
Rev. 12.10
4
years of 2005 through 2009 as approved by Resolution
No. 05-165 with such agreement providing for Premcor's
yearly payment of amounts to the City equal to 750 of
the amount of taxes it would have paid with respect to
the project as if the project ha.d been constructed
within the City's corporate limit: and had the City
entered into a property tax abaternent agreement with
Premcor with the same terms and conditions as those
contained in the November 30, 2004 agreement which
Premcor reached with Jefferson County for that same
project, with such payments being made by Premcor t:o
the City from 2005 through 2009 with the expectation
that the City will continue to be' paid a negotiated
"in lieu of tax" payment thereafter. Payments have
been received for the years up to 2008 based on
reports by the Company to Jefferson County of
percentages of Direct Hire of Local Labor (Schedule 7~)
and Local Subcontractors (Schedule B) that the
Company has retained. The Company has paid the City
$0 in 2005, $0 in 2006, $370, 748 in 2007 and $265, 717
in 2008. The City has relied on Jefferson County and
the Company as to these calculations. Payments have
not been received for 2009, which is due on October
15th' 2009; and
Rev. 12.10 5
WI~REAS, the City has approved the partial assignment of
the Clark Refining and Marketing, Inc. "in lieu of tax"
agreement as it pertains to the Coke Handling Facility to Trans-
Global Solutions, Inc. pursuant to Resolution No. 01-93, wherein
Clark Refining and Marketing, Inc. and affiliates, remain liable
for the "in lieu of tax" payments to be paid,, but only until the
expiration of that specific agreement; and
WHEREAS, the City has approved the partial assignment of
the "in lieu of tax" agreement as it pe:rtains to the HOiJP
Industrial Agreement to Port Arthur Coker Company, L. P. and t:o
Air Products and Chemicals, Inc., pursuant to Resolution No. 99-
1'74, wherein Clark Refining and Marketing, Inc. and affiliates
remain liable for the "in lieu of tax" payments to be paid, but
only until the expiration of that specific agreement; and
el}n e € aeilit. ~-~haz
"
::as-t h2-se~jeet e€ the In ~iet~ e€ Taxag~•eeate ~l~ e~lteFe ~i~ti~
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and -
Rev. 12.10 6
WHEREAS, the City Council is concerned as to the
unemployment rate of Port Arthur residents; and,
WHEREAS, the City Council is interested in maximizing job
opportunities and contracting opportunities for Port Arthur
residents and Port Arthur businesses and contractors. The
Council is interested in working with industry and Lamar State
College-Port Arthur to obtain sound information on current
hiring and procurement efforts, including results, and working
with industry and the Port Arthur City Council to try t:o
increase employment opportunities for Port P.rthur residents arld
procurement for Port Arthur companies; and
WHEREAS, the Council also believes improved opportunities
for minority and women-owned businesses is important; and
WHEREAS, Company hiring and procurement experience and
efforts to increase Port Arthur resident hiring and Port Arthur
procurement opportunities will be considered by the Council in
future in-lieu of tax contractual agreements; and
WHEREAS, the Company,~~~ will provide written reports
annually and at such other intervals as rea:aonably requested by
the City during the term of this Agreement; and
WHEREAS, the Company, `.'a~a owns the property described :in
Attachments "A", "B", "C" and "D", and
WHEREAS, the City and the Company, :~~e desire to enter
into an Industrial District Agreement with respect to the
Rev. 12.10 ~
property described in Attachments "A", "B'".
"C" and "D" that is within the extraterritox-ial jurisdiction of
the City; and
WHEREAS, the City and the Company,--T'~e~e agree that there
has been full and adequate consideration for this Agreement; and
WHEREAS, this Agreement is authorized under Sections 42.044
and 212.172 Local Government Code, Vernon's 'Pexas Code Annotated
and Article 1, Section 5 of the City's Ch<~rter, and that the
parties agree that the following terms are reasonable,
appropriate, and not unduly restrictive of lousiness activities;
and
WHEREAS, all parties find that this Agreement, as
delineated herein, is beneficial to each party.
NOW, THEREFORE, in consideration of tl-1e promises and the
mutual agreements of the parties contained herein, the City and
the Company, Valero agree with each other as follows:
Section 1-Payments by the Company
(a) Refinery and HOUP: As to the 1998 Industrial District
Agreement with Clark Refining and Marketing, Inc. for
the refinery with existing improvements that was
approved per Resolution 98-288 and the 1998 Industrial
District Agreement with Clark Refining and Marketing,
Inc. for Heavy Oil Upgrade Project ghat was approved per
Resolution 98-289, these agreements will expire on
Rev. 12.10 8
December 31, 2008. The Company shall pay to the City of
Port Arthur $6,000,000 on January 1, 2009. In addition,
on October 15th of each year, the company will pay
amounts equal to sixty-five percent (65%) of the amount
of taxes that the Company would have paid to the City
••= th - -•-^` '.= based on the taxablEa value of the land,
improvements, units, equipment, inventory and all other
property located on the land, described in Attachment
"A" and "B", as if they had been located within the
corporate limits of the City of Port Arthur. These
payments will be reduced by 20% of the January 1, 2009
payment ($1,200,000). These annual payments will be
further reduced by a credit for into=_rest on the January
1, 2009 payment, calculated as described below, at 6°s
per year. Therefore, the payments will be as follows::
Date Company payment to City
(Refinery and HOUP)
January 1, 2009 $6,000,000
October 15, 2009 65~ of taxes as if the
property was within the City
less $1,485,000
October 15, 2010 65$ of taxes as if the
property was tivithin the City
less $1,488,000
October 15, 2011 65$ of taxes as if the
property was within the City
less $1,416,000
October 15, 2012 65~ of taxes as if the
property was within the City
less $1,344,000
Rew. 12.10 9
October 15, 2013 65~ of taxes as if the
property was within the City
less $1,272,000
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(c) Hydrotreater As to the 2003 Industrial District
Agreement with The Premcor Refining Group Inc. for the
Premcor (Hydrotreater) Refinery Expansion (50,000 BPSD
gasoline hydro processing unit) which was approved by
Resolution 03-297, said agreement f=xpires on December
31, 2010 and the Company shall conti~zue to make payments
thereon in accordance with the term; of that agreement:.
Nevertheless, from January 1, 2011 to December 31, 2013,
the Company shall pay to the City of Port Arthur amounts
equal to sixty-five percent (65%) of the amount of taxes
that the Company would have paid to the City with
based on the taxable value of the land,
improvements, units, equipment, inventory and all other
property located on the land, described in Attachment
Rev. 12.10 10
"C", as if they had been located within the corporate
limits of the City of Port Arthur. The "In Lieu of Tax"'
payment shall be paid by October 15tH of each year, as
follows:
Date Company payment to City
(Hydrotreater)
October 15, 2009 The Company pays based on the
75~ and with the Jefferson
County Tax Abatement
percentages as further
delineated in the agreement
as approved by Resolution No.
03-297
October 15, 2010 The Company pays based on the
75~ and with the Jefferson
County Tax Abatement
percentages as further
delineated in the agreement
as approved by Resolution No.
03-297
October 15, 2011 65~ of taxes as if the
property was within the City
October 15, 2012 65~ of taxes as if the
property was within the City
October 15, 2013 65~ of taxes as if the
property was within the City
(d) Decoker As to 2005 Industrial District Agreement with
the Premcor Refinery Group and wii~h the Port Arthur
Coker Company, L.P. for the Refinery's Feed Rate
Expansion Project and Decoker Expansion approved key
Resolution No. 05-164, said agreement expires an
December 31, 2014 and the Company shall continue to make
Rev. 12-10 11
payments thereon in accordance with the terms of that
agreement.
(e) Tier II Diesel As to the 2005 Industrial District
Agreement with the Premcor Refinery Group for the Tier
II Diesel Project as approved by Resolution No. 05-165,
said agreement expires on Decembel: 31, 2009 and the
Company shall continue to make payments thereon in
accordance with the terms of that agreement.
Nevertheless, from January 1, 2010 to December 31, 2013,
The Company shall pay to the City of Port Arthur amounts
equal to sixty-five percent (650) of the amount of taxes
that the Company would have paid to the City w~h
respee~~e based on the taxable value of the land,
improvements, units, equipment, inventory and all other
property located on the land, described in Attachment
"D", as if they had been located within the corporate
limits of the City of Port Arthur. ':the "In Lieu of Tax"
payment shall be paid by October 15th of each year as
follows:
a
Rev. 12.10 12
Date Company payment to City
(TIER II Diesel)
October 15, 2009 The Company pays based on the
75$ and with the Jefferson
County Tax Abatement
percentages as further
delineated in the agreement
as approved by Resolution No.
05-165
October 15, 2010 65~ of taxers as if the
property was within the City
October 15, 2011 65~ of taxers as if the
property was within the City
October 15, 2012 65~ of taxers as if the
property was within the City
October 15, 2013 65~ of taxes as if the
property was within the City
(f) Fluctuations in Value In the portions of the Company's
property wherein the Company is paying sixty-five
percent (650) of the amount of taxes that the Company
would have paid to the City, and starting with a basis
of Tax Year 2009, if there are €~tic:~••~ changes :in
taxable value and/or tax rate, there shall be a cap of
plus or minus 10 0 ~~sed en }'_^= ~~~- ~ ^••~
r _ _ _ _ _ ~ -
year~ ~ of the Company's payment from the previous
year. If, for example, the value of the property is
Deleted:
assessed at 15~% less in the next year 's valuation (and.
the City's tax rate remains the same=_), the Company wi:11
still pay sixty-five percent on 90 percent of last
year's value times the tax rate due to the cap. If, for
Deleted:
example, the value of the property is assessed at 1.5~%
Rev. 12.10 13
more in the next year's valuation I;and the City's tax
rate remains the same), the Company will still pay
sixty-five percent on 110 percent o:E last year's value
times the tax rate due to the cap.
(g) The City shall not refund or credit any monies
previously paid by the Company prior to the date of the
execution of this Agreement, either directly or
indirectly, to the City. Except as delineated i.n
Section 15, once monies are paid to the City of Port
Arthur, the City shall not refund or' credit any of said
monies.
Section 2. In working with the City Council, the
Company shall also do the following:
(a) The Company will notify the City Council and post jab
openings with the Texas Workforce i.n Port Arthur. TYle
Company will also request that i.ts contractors arld
subcontractors notify the City Council and post it:s
job openings with the Texas Workforce in Port Arthur.
(b) The Company will notify the following of job openings:
• City of Port Arthur
• Official newspaper of the City
• Texas Work Force Commission
• Lamar State College of Port Arthur ,
Rev. 12.10 14
• Port Arthur ISD
• Sabine Pass ISD
• Port Arthur Labor Unions
• Digital Work Force
• Associations representing historically
underutilized segments of the population in
Port Arthur who seek to b~= notified of job
opportunities
The Company will also request that its contractors and
subcontractors notify the above nine entities of job
openings.
(c) The Company will make reasonable e:Eforts to b-reap
divide up contracts to allow Port Arthur contractors
the opportunity to bid on projects.
(d) The Company will include a provision in the Company':
contracts with its prime contractors, which require:
the prime contractors to read and comply with the
terms of this Agreement relating to the use of Port:
Arthur vendors, suppliers, subcontractors,
professionals, and historical=Ly underutilized
businesses and segments of the population.
(e) The Company and its contractors will pay at least the
prevailing wage, as reasonably set: by the City, in
Rev. 12.10 15
accordance with Chapter 2258, Tex<~s Government Code,
V.T.C.A.
Section 3. If requested orally or in writing by the
Company, the City's Fire Department shall provide back-up Fire
Suppression Support as determined by the City's Fire Chief, and
the City's Police Department shall assist in providing an
evacuation route and traffic control in the case of a fire or a
chemical release at the Company's facilities located in the
City's extraterritorial jurisdiction. Nevertheless, the Company
shall abide by and shall take such precautions as to prevent (1.)
fires, explosions and chemical releases and (2) the imprudent
discharge of storm water that contribute to f=looding on adjacent
property. The Company shall also provide an evacuation as i.s
expected in the industry, and as is required by applicable
federal and state laws, and the health and safety laws of the
City. The Company shall employ or provide sufficient primaz-y
fire suppression response, as well as contro]_ and abate chemical
releases. The Company shall provide the City's Fire Chief ar~d
Police Chief with Emergency Response Plans for any plantar,
refineries, chemical operations or other hazardous operations
that take place on the land, described in Attachments "A", "B",
"C" and "D". If there is a fire and the City is requested t:o
provide initial and primary fire suppression services or if a
clean up is required, the Company will pay to the City the costs
Rev. 12.10 16
and expenses incurred by the City and any of` its departments or
of any of its affiliated providers, i.e. ambulance companies
ghat are called to the scene.
Section 4. The Company shall immediately notify the
central dispatch office which serves the City's Fire Chief,
Police Chief, and the City's Emergency Manage=_ment Coordinator of
all incidents involving fires, serious injuries, deaths,
chemical releases and flooding that create a health and safety
hazard to the community or that exceed OSHA, TNRCC or EPA
permissible exposure limits.
Section 5. Annexation for Health, Safety and Welfare
Reasons. It is specifically stipulated that nothing in this
Agreement will in any manner limit or restrict the authority of
the City to annex all or part of said hands and facilities
during the period of the Agreement if the Clty should determine
that such annexation is reasonably necessary to promote and
protect the general health, safety, and welfare of the persons
residing within or adjacent to the City, provided however, that
the City agrees that such annexation for the land described in
Attachments "A" , "B" , "C" and "D" prior to October 1, 2013 wi:11
not be made for revenue purposes only.
Section 6. Annexation due to Legislative Action.
Notwithstanding the provisions of Section 5, the parties agree
and consent that the City may annex if a bill is adopted by the
Rev. 12.10 17
State legislature which limits or restricts the authority of the
City to annex all or part of said land and improvements. In the
event of annexation, the Company will not be required to make
further payments under this Agreement for any calendar year
commencing after annexation with respect to the property so
annexed, but shall nevertheless be obligated to make full
payments for the year during which such annexation becomes
effective if the annexation becomes effective after January ]'St
of said year. The Company shall not be required to pay .ad
valorem taxes to the City for the same period of time they have
already paid an "in lieu of tax" payment, with respect to the
property described in Attachments "A", "B","C" and "D" to this
Agreement. If for any reason, the City cannot annex the
property of the Company and if the parties cannot reach pan
agreement on a new payment schedule or on a .new "in lieu of tax"
agreement, the Company agrees that it will continue to pay to
the City the "in lieu of tax" payments delineated in Section 1
until December 31, 2013, and it will thereafter continue to
annually pay the City an "in lieu of tax" payment of seve~~
€~ve~e~eent} sixty-five percent (65$) of its taxable value
times the City's tax rate for so long as it or its assignees and
successors or affiliates own the property, as described :in
Attachments "A", "B" "C" and "D". Payments will be due on
October 15th of each year. Pursuant to ;Sections 42.044 and
Rev. 12.10 18
212.172 Local Government Code, the Company agrees and consents
that the City has the option, in the City' s sole discretion, t:o
extend this contract and. that the Company will continue t:o
annually pay the City "in lieu of tax" payments at the ~-
f}ve~~S~T- sixty-£ive percent (65$) rate, as denoted above, for
successive periods not to exceed 15 years each, for a total
duration not to exceed 45 years, or the maximum period allowed
by law, whichever is longer. "Taxable value" is the value as
determined by the Jefferson County Appraisal District i_n
appraisal rolls after the completion of all litigation arLd
appeals (if any), of all property, land, industrial realty,
improvements, units, equipment, inventory, and all other
property, excluding the value of exempt pollution control
devices, owned or leased by the Company and located within tYie
e:~tra-territorial jurisdiction of the City, as described i_n
Attachments "A", "B", "C", and "D". The "taxable value" also
includes the assessed value of any property ghat is located in a
foreign trade zone or in any other type of federal, state, or
local zone.
Section 7. The parties agree that the City has the sole
discretion, after October 1, 2013, to annex the property i_n
Attachments "A", "B", "C" and "D" or to enter into negotiations
on the payment by the Company of additional "in lieu of tai:"
payments.
Rev. 12.10 19
Section 8. The present owners and lessees of the land,
improvements, units, equipment, inventory, and all other
property located on the land in Attachments "A", "B", "C" and
"D" are described in Attachment "E". The City reserves the right
to annex that tract or parcel with the minimum required adjacent
area, as per Chapter 43 Local Government Code=_, if the owners or
the lessees do not pay an "in lieu of ta:K" payment for its
interest in the land, improvements, units, equipment, inventory,
and all other property located on the property, as described in
Attachments "A", "B", "C" and "D". The City does expect for
Chevron to pay additional "In Lieu of Tai:" payments on the
property that it is leasing that was the subject of the "In Lieu
of Tax" agreement approved pursuant to Resolution No. 03-355 or
that property will be annexed. Nothing contained herein shall
be construed to prohibit or prevent the Company from paying the
oi~her owners' or lessees' "in lieu of tax" payment to prevent
annexation by the City. If the City annexes a tract or tracts,
the total "in lieu of tax" payment will be reduced by the same
percentage as the assessed value of the tracts under the
contract are reduced.
Section 9. If the Company shuts down, closes or
permanently ceases operation of its Port Arthur refinery during
the term of this Agreement, then Company shall have the right,
at its sole option, to cancel this Agreement in which case the
Rev. 12.10 20
Company shall be relieved of all its obligations under this
Agreement.
Section 10. If the Company desires to assign all or a
portion of this Agreement to any person, the Company shall
provide written notice of such assignment anal shall receive the
written consent of the City Council, by a duly adopted
Resolution, which will not be unreasonably withheld. The
Company shall provide the description of the new Company and
such other information as is reasonably requested to indicate
that the new Company will safely operate the facility, act as a
good corporate citizen, and will fully abide by the terms of
this agreement. If the assignment is approved by the City
Council, the Company shall be relieved of it:s obligations under
this Agreement to the extent that an assignee expressly assumes
the Company's obligations. Subject to the preceding, this
Agreement shall inure to the benefit of and be binding upon the
parties hereto and its respective successors and assigns.
Section 11. It is agreed by the parties to this
Agreement that the Company and the City have the right to seek
equitable relief, including specific performance of this
Agreement.
Section 12. The Company shall allow a reasonable number
of authorized employees and/or representatives of the City who
have been designated and approved by the City Manager, City
Rev. 12.10 21
Council, or Mayor to have access to the Company land and/or
plants during the term of this Agreement to inspect the plants
and any improvements thereto to determine compliance with the
terms and conditions of the Agreement. All inspections will be
made at mutually agreeable times and will only be conducted in
such manner as to not unreasonably interfere with safety
standards and security standards and rules. All inspections
will be made with one or more representatives, of the Company and
irl accordance with industry safety standards.
Section 13. The Company shall participate in the Port
Arthur Industrial Group during the life of this Agreement, and
_
as long as the Port Arthur Industrial Group is a viable
organization, in order to assist in the' establishment c>f
~prenticeship, internship, and/or educat:ion programs and
projects_for__the training of Port Arthur residents for permanent
jobs in the_Port Arthur area. The Company further hereby agrees
to request and encourage its contractors and subcontractors t:o
establish and fund their own apprenticeship, internship, and/or
education programs and projects for the training of Port Arthur
residents. ~er~e~aaaent
Section 14. The City reserves the right to hire or
contract for a monitor as to inspect the Company' s records acid
hiring practices in accordance with this Agreement as to verify
Rev. 12.10 22
whether the Company has complied and will continue to comply
with this Agreement.
Section 15. The Company certifies that they have not_,
and will not, knowingly employ an "undocumented worker" which
means an individual who, at the time of employment, is not
lawfully admitted for permanent residence to the United States
or authorized under law to be employed in that manner in the
United States. The Company acknowledges that it has reviewed
Chapter 2264, Texas Government Code, and hereby affirmatively
agrees to repay the amount of any incentive with interest at the
rate of ten percent (10%) per annum, not later than the 120th day
after the date the City notifies the Company of a violation.
The Company acknowledges the City may bring <~ civil action as t_o
recover any amounts owed under this Ch<~pter, and further
acknowledges that the City may recover court costs and
reasonable attorney's fees incurred in bringing an action under
Section 2264.101, Texas Government Code. The Company will also
promptly report to the City any "undocumented worker" that .Ls
improperly retained by its contractors or subcontractors on its
facility.
Section 16. Information on property values.
The Company shall €}fie, }rt '.th th~Bireeter ~f
~te~-ems rend}t}en bra€~'}davit t~~-the Ee~~pan ----- -.---- ----
Rev. 12.10 23
de€€esse~ Eet~~ir~}n t3~e same €e-anQ-~=3e~ as
St-ate •, €er amend}t}en a€--~~epert}~-~e~~-vale~e~ ta*
. .
, seal,
~i~ed: provide to the City a copy of the non-privileged/non-
confidential rendition which the Company files with the
Jefferson County Appraisal District. The Company shall provide
to the City a copy of all non-privileged/non-confidential
pleadings and discovery filed in any litigation or protest that
the Company has with Jefferson County Appraisal District:.
Pending final determination of any tax protest filed by the
Company with the Jefferson County Appraisal Review Board, or
appeal thereof, the Company shall pay to City, on October 15th of
each year, the amount calculated based upon the value of the
property reflected on the most recently adopted appraisal roll
prepared by or for Jefferson County Apprai:~al District and as
further delineated in Section 1 of this Agree>_ment. If the final
determination of a protest or an appeal reduces the value of the
property after Company has tendered payment to the City
hereunder, the Company's liability hereunder shall be
recalculated based on the final determination of value, and City
shall in its discretion, after the final determination of such
protest or appeal, either credit toward future "In Lieu of Tax"
agreements or refund to Company, the difi=erence between the
Rev. 12.10 24
amount actually paid hereunder and the amount for which the
Company is determined to be liable, without interest. Under no
circumstances, shall there be a refund or a credit of more than
ten (l00) of any "In Lieu of Tax" payment made'.
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Section 17. Notice of Default. Notwithstanding anything
herein to the contrary contained, in the event of any breach key
the Company of any of the terms or condition: of this Agreement:,
the City shall give the Company not less than ~i~e--rsT ten (10)
business days' written notice, specifying the nature of tYie
alleged default, and manner in which the alleged default may be
satisfactorily cured. Thereafter, the Company will be afforded
a reasonable time within which to cure tYie alleged default:.
Nevertheless, time is of the essence on the payment schedule for
the "in lieu of tax" payments on October 15th of each year as
well as the payment of $6,000,000 on January 1, 2009. If tYle
Company does not pay the "in lieu of tax" payment on October 15th
o:E each year and does not pay $6,000,000 on ~7anuary 1, 2009, the
City can immediately commence annexation proceedings and sue for
Rev. 12.10 25
all damages. In case of litigation for breach of the Agreement
and to encourage timely payments, the City can seek 100°s of all
monies that the City would have received from the Company if it
been within the corporate limits, which include 100°s of all
taxes, building permits, sales or use taxes, and all franchise
fees on electrical usage, interest and penalty thereon.,
attorney's fees, and court costs. Also, if the Company
intentionally discriminates against Port Art=hur companies, the
City can seek the direct and indirect damages that the City
would have accrued, if the discrimination did not occur.
Section 18. Entire Agreement. Thi:~ Agreement
constitutes the entire agreement of the parties with respect to
the Projects described herein and supersede~o any and all prior
understandings or oral or written agreements between the parties
respecting such subject matter, except as otherwise provided i.n
the instruments referenced herein. This Agreement may f>e
amended only by written instrument signed by all of the parties
hereto.
Section 19. Severability. If any term or provision i.n
this Agreement, or the application thereof to any person or
circumstance, shall to any extent be held to be invalid or
unenforceable by a court of competent jurisdiction, such
invalidity or unenforceability shall not affect any other
provision of this Agreement or the application thereof, whit:h
Rev. 12.10 26
can be given effect without the invalid or unenforceable
provision or application, and the parties agree that the
provisions of this Agreement are and shall be severable.
Payment of the "in lieu of tax" payment is an essential part of
this Agreement.
Section 20. Remedies Cumulative. Except as other-
wise expressly provided herein, all rights, privileges, and
remedies afforded the parties by this Agreement shall be deemed
cumulative and not exclusive, and the exercise of any or more of
such remedies shall not be deemed to be a waiver of any other
right, remedy, or privilege provided for hel-ein or available at
law or in equity.
Section 21. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Texas. This Agreement is to be pe:rformed in Jefferson
County, Texas.
Section 22. Counterparts. This Agreement may be
executed in counterparts, each of which :shall be deemed an
original, and all of which taken together, ;hall constitute but
one and the same instrument, which may be sufficiently evidenced
by one counterpart.
Section 23. Authority By acceptance of this
Agreement and/or benefits conferred hereunder, the Company
,-
represents and warrants that its undere~igned agents have
Rev. 12.10 27
complete and unrestricted authority to enter into this Agreement
and to obligate and bind the Company to all of the terms,
covenants and conditions contained herein.
Section 24. Notice Any notice provided for in this
contract shall be given in writing to the parties hereto by
certified mail, return receipt requested, addressed as follows:
TO CITY: TO PREMCOR:
City Manager Refinery Manager
CITY OF PORT ARTHUR THE PREMCOR REFINING GROUP INC.
444 4th St. 1801 South Gulfway Drive
Port Arthur, TX 77640 Port Arthur, TX 77642
(409) 985-1000
(409) 985-1799 (facsimile)
WITH A COPY TO:
WITH A COPY TO:
City Attorney. Property Tax Department
CITY OF PORT ARTHUR Valero Energy Corp.
444 4th St. P.O. Box 696000
Part Arthur, TX 77640 San Antonio, Texas 78269-6000
(409) 983-8126 (210) 345-2000
(409) 983-8124 (210) 345-2495 (facs~.mile)
Section 25. This agreement is effective the 1st day of
Deleted: _ _
January, 009, and shall .expire on the 31St day of December, ;
Deleted:
X013, unless extended by the City of Port Arthur, as delineated ~_~
in Section 6. As to the decoker facility, that agreement
expires on December 31, 2014 unless extended by the City of Port
Arthur as delineated in Section 5 of the df=coker agreement as
approved by Resolution No. 05-164.
Rev. 12.10 28
SIGNED AND AGREED to on the day of
Deleted: ¶
2008._ .'
THE PREMCOR REFINING GROUP INC.
BY:
STATE OF TEXAS
Deleted: ¶
ACKNOWLEDGMENT
•- - §-
COUNTY OF JEFFERSON ~
BEFORE ME, the undersigned Notary Public, on this day
personally appeared
known to me to be the person whose name :is ascribed to the
foregoing instrument, and acknowledged to me that he
executed the same as the act and deed of The Premcor
Refining Group Inc., formerly known as Clark Refining and
Marketing Inc., for the purposes and cone;iderations therein
expressed, and the capacities therein staged.
GIVEN UNDER MY HAND AND SEAL OF OF]?ICE, THIS THE __
day of A.D., 2008.
NOTARY PUBLIC, SPATE OF TEXAS
Rev. 12.10 29
SIGNED AND AGREED to on the day of ,
2008.
CITY OF PORT ARTHUR, TEXAS
BY:
Stephen Fitzgibbons
City Manager
ACKNOWLEDGMENT
STATE OF TEXAS ~
COUNTY OF JEFFERSON ~
BEFORE ME, the undersigned Notary Public, on this day
personally appeared Stephen Fitzgibbons,. City Manager of
the City of Port Arthur, known to me to k~e the person whose
name is ascribed to the foregoing instrument, and
acknowledged to me that he executed the game as the act and
deed of the City of Port Arthur, for the purposes and
considerations therein expressed, and the capacities
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE __
day of A.D., 2008.
NOTARY PUBLIC, STATE OF TEXAS
Rev. 12.10 30
LIST OF ATTAC~IIKENTS
• "A" Area of
Refinery
• "B" Area of
Oil Upgrade Uni
• "C" Area of
Hydrotreater
• "D" Area of
land owned by Premcor/Valero-
land owned by Premcor/Valero-Heavy
is
land owned by Premcor/Valero-
land owned by Premcor/Valero-Decoker
• "E" Description of owners of pz-operty
Rev. 12.10 31
ATTACHMENT "E"
PREMCOR OWNS ALL THE LAND AND IMPROVEIMENTS AS
DELINEATED IN ATTACHMENTS "A", "B", "C" AND "D"
Rev. 12.10 32
EXHIBIT "B"
(Insertions into Industrial District Agreement with Premcor)
(1) Premcor shall also pay to the City of Port Arthur amounts
equal to sixty-five (65 a) of the amount of taxes as if the
property of Trans-Global (Co}ce Handling Facility) was a part
of their property that was the subject of this agreement.
(2) Premcor shall also pay to the City of Port Arthur amounts
equal to sixty-five (65 0) oi= the amount of taxes as if the
property of Air Products and Chemicals (Hydrogen Plants) was
a part of their property that; was the subject of this
agreement.
(3) Premcor shall abide by the Port Arthur Local Business
Enterprise Program, with sucYi similar language as referenced
in Section 12 of the proposed Chevron Phillips Industrial
District Agreement (P. R. No. 15000).
(4) Section 9 of the Agreement will be modified as to reflect
that the Company shall still be required to pay the In Lieu
of Tax payments for the year that the plant shuts down,
closes or permanently ceases operation.
(5) Section 13 shall include Ment:oring programs of the PAIG.
(6) Section 16 shall include providing information on the
following:
* Copy of Jefferson County Notice of Value covering the
assets for the Industrial District Agreement.
* Copy of any protest of t:he value listed in the Notice
of Value
* Copy of any informal settlement or final ARB ruling
* Copy of any petition challenging the ARB ruling filed
by the Company or the County
* Copy of any settlement of lawsuit or final judgment by
court
* Copy of any appeal of th.e ruling by the court
* Copy of final dispositive appeal order
(7) Premcor will provide the City with information as to the
electrical consumption from Entergy or from any other
electric utilities, transmission and distribution utility,
municipally owned utility, electric cooperative, or from any
other source as well as all metering locations that se=rvice
all of their property. The information by the Company to
the City regarding such electrical consumption and metering
locations shall be held confidential by the City.
(8) If the Agreement is extended as per Section 6 in the Valero
z.pr15002
Agreement and Section 5 in th.e DeCoker Agreement, Premcor
shall also pay at the percentage rate.
z.pr15002