PA industrial agreements topic of special meeting

Published 5:26 pm Saturday, November 29, 2008

By Sherry Koonce

The News staff writer

With a Dec. 31 deadline looming, Port Arthur’s City Council is still trying to forge incentive agreements with about 12 companies whose existing industrial or in lieu of tax agreements expire at the end of year.

During a special meeting scheduled for 4 p.m. Monday, the City Council in closed session plans to discuss the incentives, and a proposal to annex property located in the city’s extraterritorial jurisdiction.

If an agreement is not reached, the city has the option of annexing property where the industries are located. If that occurred, the industries would be taxed at the same rate as other property owners inside city limits.

“The companies do not want to be annexed, and we don’t want to annex them,” John Beard, District 5 councilman, said.

Industries included in the proposed annexation are: Atofina, BASF/Fina, Chevron Phillips, Chevron USA, Clark, Premcor, Valero, Equilon, Great Lakes Carbon, Oxbow Calcinaing, LLC., Huntsman, Flint Hills, Flint Hills Resources, Praxair and Entergy will expire by Dec. 31.

The companies, which are located inside the city’s extraterritorial jurisdiction, typically pay a flat rate to the city in lieu of taxes. That rate is normally less than that paid by industry located within city limits.

If annexed, the city would have to provide infrastructure — police and fire protection, and utilities — within a certain time period.

At a previous public hearing, representatives from Valero’s Port Arthur refinery said the city’s proposed rate was too high.

The city has proposed that Valero pay 75 percent of the city’s 57 cent effective tax rate,

Valero has proposed paying 55 percent of the effective tax rate.

Beard said it is critical that the agreements be reached, and that they be fair to industry, while generating enough money to help fund the city’s newly adopted $83 million budget.

Beard said he was concerned that some of the industries were not hiring as many Port Arthur residents as they should be — especially considering the city’s high unemployment rate.

“I believe there has not been enough done to hire Port Arthur citizens. The companies are not doing as much as they can, nor or the general contractors, or subcontractors,” Beard said. “They are also not using enough Port Arthur subcontractors.

Beard said Valero has hired a Beaumont legal firm to represent the company’s interests.

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