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HomeMy WebLinkAbout1947-07-21MINUTES BOARD OF EQUALIZATION Council Chamber, City Hall, Huntington Beach, California Monday, July 21, 1947 Pursuant to adjournment of Monday, July 14th, the Board of Equalization of Huntington Beach was called to order at 7:30 P.M. by Chairman Bartlett. Members present: Grable, Terry, Langenbeck, Bartlett. Councilman #awes arrived at 7:34 P.M. Members,absent: None. The Chairman asked the Clerk if any letters had been filed in protest since the last meeting. The Clerk informed the Chairman that no communications or verbal protests had been received. Meeting . The Chair announced that the pending meeting of the sound- Board of Equalization would be -sound -scribed and microphones scribed had been set up at the Board of Equalization table for the convenience of those who were to appear before the Board. - Dr. Hawes arrived at this time, 7:34 P.M. The Clerk swore in Dave Wilson, public accountant, representing 37 oil companies as listed in the document read by Mr. Wilson. The Clerk swore in James H. Kindel, Jr., a legal representative of oil companies protesting taxes. Transcrip- The entire proceedings before the Board were sound- tion of scribed and a transcription from.the recording was made and proceedingare on file in the City Hall records. The records of the on file recording are 50 cycle and also on 60 cycle and also are on file in the records at the City Hall. Protest And on motion by Langenbeck seconded by Grable,, the denied protests, as filed, were denied. Roll call as follows: AYES: Councilmen: Grable, Terry, Hawes, Langenbeck, Bartlett. NOES: Councilmen: None. ABSENT Councilmen: None. .On motion by Langenbeck seconded by Hawes, the following motion was passed and adopted: "That the assessment roll, as prepared and presented by the Assessor for the year 1947-1948, be approved." There being no further business to come before -the Board, on motion by Langenbeck seconded by Grable, the Board adjourned. ATTEST: i ylerk Lv� C k 'of the Board of Equalization* 4v M Chairma_rT the oard CITY OF HUNTI NGTON PROCEEDINGS OF THE BOARD OF CALIFORNIA TZATION AS_TRANSCRIBED HELD JULY 21. 1947 Mayor Bartlett: Mr. Henricksen, have any letters been tiled since the last meeting: Mr..Henricksen: No, there haven't. Mayor Bartlett: No correspondence? Mr. Henricksen: No Mayor Bartlett: Is there anyone in the audience, at this time, who would li.le to make a statement or file any protest? ---- All right, Mr. Wilson, if you will step up to the microphone we will - anyone that is making any state- ments or any protests, will have to be sworn in this evening - and if you will step up to the microphone - within four feet of that and give your name, etc., why, ----- Mr. Henricksen.: Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth before this pending meeting of the Board of Equalization? Mr. Wilson: I do. I have here a verification to file, of the various oil companies, as a representative, as filed previously and a memorandum cov- ering some of the additional matters that have come up. I am going to summar- ize this and save time. Last Monday-, as you will recall, we met with one purpose to ascertain the basis used to arrive at the factors in effecting the mineral rights tadc. We were informed by Mr. Waite at thattime and I will read from the quotation, from the stenographic notes. "Mr. Wilson: Do I understand that 950 is the lowest cost factor that has been used"2 "Mr. Waite: Yea, up to $1.16 on the weighted average of the value of oil. 95J is an absolute minimum.". When we reviewed that - 250 to $1.16 - it seemed a fairly reason- able basis but when we started to check the figures we found numerous wells that had lower cost factors than 950 - ' some down in the 70s, and when we tried to ascertain how those figures were arrived at, we were unable to get any In- formation. We therefore assumed that the cost factor was made.'tbe amount of pertinent fact in the - in the - valuation of the wells'.._..and it proceeded on another basis. It appears, although we don't admit that the wells other than the tideland wells, are satisfactorily adjusted. We can't be sure be- cause in the limited time we have been given to do it, it has.been impossible .to check all of these figures when we had no co-operation and no basis on which to work...... so we have taken the so-called tideland wells which were the ones that seemed to be most out of line. In the case of the people who I represent, there is 26 - a total of 26 wells of various gravities from 19 to 24, and these show various averages of tax -'in other :words, taking the num- ber of barrels, net barrels of.oil pro duced.and dividing it into the actual tax that has .beenassessed,.we get a basis of how much tax per barrel was invol- ved, so far as the City is.concerned. Of course, that doesn't include the County, and only includes such portions of the tax as applied against the min- eral rights on the crude Itself, without taking into consideration the gas or the equipment and we find that there is. a variation there. For instance, in 19 gravity there only happens to be one well. That is .0122 per barrel. In 20 gravity, there is only one well. That is .0165 per barrel. On the 21, we have numerous wells. It varies from *0119 to .0163 per barrel. On the 22' gravity, from .0119 to .0274 and on the 23 gravity, .0153 to .0267 and on the 24 gravity, from .0172 to .0260 per barrel; of tax. We assume that all 22 gravity oil has the same basis. It is listed in the tidelands, the property that the city does not own, taxable when it reaches the surface and 22 gravity oil, no matter where it comes from, is worth 22 gravity oil price* We feel that the tax - the assessment - should be based on the gravity of oil at the time it reaches the ground and all 22 gravity oil wells should be on the same -2.. basis of tax. Now, there is one thing I'A like'to mention, that we have not appeared before the Board of Supervisors, sitting as a Board of Equalization for the reason that we have sufficiently definite assurance that there is going to be a substantial reduction in tax rate which will equalize the amount of dollars -- in other words., my client is not interested in whether 1t is an increase in assessment or decrease in rate of what it might be. They are interested in the number of dollars of tax they have to pay. They realize that there should be an increase over the previous year because of the fact that prices have increased, expenses have increased, but they donf't feel that the increase should be equal to the amount of increase in assessment acid tax should ...... I will show. you what I mean. Take one well here that I have worked out. It has a production of 40016 barrels. Its present assessed value on the crude oil alone - now we are dealing with - is $51,613. We ask that these taxes be adjusted to the basis where all tideland wells will have an expense factor of $1.00, which will give you an average price all the way through for each specific gravity - the higher the gravity, of course, the larger the factors Using that as a basis, we would have an adjusted value of $8,603 against the $51,613, leaving a difference of $13,000. If we take that well and figure its value,as most practical oilmen figure values, by taking its average daily production at so much per barrel, this being 23 grav- ity oil.. We figured 23 gravity oil Is worth $1200 per barrel. I think some of you practical oil men will agree with me that this is a high figure. We figured the valuation on that well on that basis - take 40% of it, we get to a basis of $5,2020. The, present assessed value of that well on the rolls of the city is 75,050, less the correction that we suggest above, brings that down to $62,000 which would be $10,000 higher than the estimated .... based on the estimated selling price of the well. Now the total tax on this well, if it was'adjusted to'the basis we suggest would be $992964. Last year $881.12 tax was paid on that well making the increase of $111.00 or 12.7%. The tax is paid this year of $1200.80 as. against last year of $881.12 making an in- crease of $319.-00 or 36.3%. From the best information available it appears that your assessment roll increases this year 19.3%. I took one piece of property, the only piece I could get any infor- mation on which was my own house, and I find that the assessment on that from the County has increased 7.8%. We request that this be put on an equal basis •- on a cash basis - and we go back to the City Tax Ordinance, No. 425, Section 291, which states: "The assessor shall prepare an assessment roll In which shall be listed all property within the city which it is the Assess- orts duty to assess. This local roll shall be separated to show the name and address, if known, of the Assessee; description of the property; all possessory interest &A personal property showing the number, kind, amount and quality. A failure to enumerate personal property in detail does not invali- date the assessment and shall be based on the cash value of real estate, ex- cept Improvements; the cash value of improvements assessed to the owner of the land; the cash value of improvements assessed to any person other than the owner of the land; the cash value of money; the cash value of all other personal property.* We maintain that the assessment on mineral rights is not the cash value of the well, of the mineral rights at all. It is a theo.• retioal figure taken from some basis that is not known ,either to myself and I.dontt think to you gentlement sitting for the Board of Equalization. Mayor Bartlett: Is there anyone else in the audience ..........., Mr. Wilson: May I ask one other question? I would like to have the last.yearis rolls and this years°s rolls brought up for comparative purposes. Mayor Bartlett: Is there anyone else in the audience who, at this time, would. like to appear before the Board of Equalisation? If there any member ''o>f the Council or anyone in the audienoe who would like to ask Mr. Wilson any question? Mr. Henricksen:. This document that.you just read. The particular well that you have discussed certain figures on, doesn't agree .....That might be a mistake in your office or the figures may be Mr. Wilson: That might be. I meantt to qualify that statement before : � 3 _3- Mr..I enr �oksen' T2%e assessed value there is Mrruilsont The }assessed, vue althat is.shown there is the assessed ©f . "the ; orud® ®il al©rye.. It d©e s not include th® gas' nox" ... Msr. Henreks:en s TY`at down°t quiae agree with tYie ......... Mr. Wilson,: That could. be gn error bec;ause;, as I explained, some of the information tba t I should have: `had°, I Was unable to get and had to work these,Y 'gures. out`' "from the:.beat i-x formation I had. Mr. E6hrickeeh: PTo:, t3see,e ;f 1gure& were given your man the other day, when h W was up. Mr :Wilson,: On, that.particular well? Well, 1t may be a typographical error: - Mr. -Waite : Mr.. Rayon - Cauncliaen: there is nothing I can add, . be- yond what I said last,koriday night. We have to take into consideration many other items In,other words, the location of the well, if it is a tideland wellti, what -their dr'a:iaage .is and a lot of other things*. We have endeavored to e. best of our ability to take -all of those. various items into account in arriving at our asse:snment of each .well and it is true that, very few of them. will come out on exxactly the same basis. The .Assessor's* office is not interested in or involved in takes or tax rates. We are interested in value- tiods only and we have, nothing whatsoever to do with taxes. Mr. Wilson,* son Mr. Kindel is an attorney and alao, a C. P. Ae represent. . inn the same Inter6dits,4, Mr. Cree and Mr. Mize were not able to be here to- night .Mr.' Henricksehlo. Do you solemnly swear to tell th-e truth, the whole truth, and ot'ang but the truth .before this pending Board of Equallzation4. Mr. Jos. -x. Kindel, Jr. s I do`. Gentlemeb.: My, position in appearing before you tonight is. more or Ness in the po�s tioh of an equalizer.myselY because th® frictors that you are trying to consider Were new to me until, just a few x hours..ago. I review, briefly sole of the .daatai„Mr. Wilson..outlined to ,you this evening and it appeared to me rrom the elgAlhation of his figure's and some other .datawhich he showed, to- ma that the .equalization that we are trying to achieve: in , as°�s.esement . ©f taxes $lack x:g . Now it -:may be that the factory, have: be®n explained by .the Deputy �1sse'ss©r-and ar,e :those that -should be tak®r .; into account., cad. the:so are duffle 011t to j.ustiYy the assessment as it has been:rmade. However, from Mr. Wilsonts .p®sition; and the Position of his elirz. . ents , they aria unable, to Bete' twine that the assessment is equitable.: I can l understazxd how there °#00 be data, available to the use of the Assessor:ts. Of - 'that that should no.t_ be made available to the public, but that data. should be available . to. someone wham you might appoint to make aA . examminati oa to mine if the factors taken into account- are reasonable Arid equitable. Tn so Yar as the lifting Yac'tor is coniserned, if it should be 75¢ or 90¢ 1 or.0d. I frankly dontt know, but if that is to be the factor it' ehotal.d be ollp,®� uniformly. If. you are going to use a.. ten year. valuation bass,. that also;' -sh-'6'U ,be followed uniformly.. If.', the :.other thingsc are to be taken into count shah as the area t6 be covered, ;sour ea of the oil ' or other Yactorlp,s, that,+ the Assessorts office is wail in ,a position to judge:. But inamueh'; , there is a substantial dispute and a great deal of money, involved to' assessed people of tuntington. Beach, I feel from the. br`1eY examination ti�4 W I have made that it 1='s so *thing that merits a further examination by so „llt that: is eatisfaetory to you and' satisfactory to the. Asaessort s oi'fiee:, purpose of examining these so-called unknown factors. Mayor Bartlett: I discussed this tax situation with a number of o11 0Qzgp�gbll and all of them, all that I have discussed the matter with, all .agroed a the tau rate, as. the asse' admont cam's on the last figures, has been fai7,+ equitable and *&ether we can make any adjustments from a standpoint of well, then we would have to reoonsider' every well in the, fi®ld, and if?: i - 4- are perfectly satisfied, I don't know what our position would be then. Mr. Wilson: . Might I suggest th4t we get the assessment rolls for last year so that we could see how much increase there is. Remember, we have no benefit of any decrease in the,tax rate as far as the city is concerned such as we have in the County. If the increase in rates on the mineral rates, etc. is equitable to the increase in rates on other matters then we have nothing further to argue about. Mayor Bartlett: I might add, Mr. Wilson, in the matter of real estate rates, some of them have increased from 50 to 90% and we have had no partic- ular protest on them.. I also might add that in our budget -- our budget will have to be raised at least $150,000 if we. expect to meet it. : We have a large budget; we have a lot of work to do; we have raised our wages two or three times; our cost of operation has gone up. We have got.to have more money to meet our'budget, so consequently, it would be quite a problem to lower the rates on a few wells without lowering the rates on all of the wells. Mr. Wilson: I agree with you that there will probably be some increase in the budget because, as I.say, everything has gone up, but then the raise should be equal all around. Now, this. letter that I have doesn't quote any 1947-1948 rates. It only deals with 1045--191+6 and 1946 1947 rates. It doesn't give -any rates on the current assessment - the one that is under discussion. This is 1947-1948 that is going on the rolls today, is it not? Mr.Henricksen As of March the lots this year. Not 1947-1948. Mr. Wilson.- That is right you differ from the County in.that respect, ,Mr. Henricksen:' And our assessments are based on prior to March ist,1947• We didn't even use the new increased price of oil. Mr: Wilson: That is right, you used an average price,to arrive at it. Mr. Henricksen: As of March lot of this year. Mr. Wilson: That is right. Well, of course, you couldntt go beyond March lst and they got the increase on.the 19th of March. One on the 19th of March and one on the lot of July. You say the value of real estate has increased 100%. Well, now, that of course, can be in some oases. All I can do, as I say, is judge on' what I had. I have a house up there that has in- creased 7%. The actual value of the house, if you went out to sell it today, I would say would be in excess of that. Mr. Henricksen: That is true in oil wells also, isn't it? Mr. Wilson: There has been some increase in oil wells too, but.not to the basis on which they are set... You take the little oil wells that have been adjusted and most of those as far,&s.I can see from going gilekly through them are on a satisfactory basis* You see, you take --- Here is the thing that throws this whole thing of'f. Now you take your factor, your expense factor. Every time you make a penny change, you change your.final factor four pennies. You have got progressive'arithmetic in that and whe.you cut them down, it raises that just four times the amount of change you make. That same thing will apply when you come to next year, when you increase the price of oil. :Every 100,inerease in the price of oil is going to change that.final factor 40.¢. You get to a point where your total coat I mean your total tax,, would-be way in excess of any justified tax for the Moues of business that has been done. Mayor Bartlett: In other words, it win be hard for these boys with thef whipstock wells to operate if.the price of oil goes #p Mr. Wilson: No, I don't say.it will be hard for them to operate. Bu' then, the fact of how many wells a man -'has and how much money he, himself, ,O -5- has no relation to what his property tax should be. The property is of a value whether he is a poor man or a rich man. Mr. Overacker: Mr: Wilson, how do you determine the cost factor on your computation? Mr. Wilson: How did I determine the cost factor? I took the cost f actor as it related to the actual cash value of the well. Mr. Overacker: Did you take the total production or did you take just the oil that came to the producer? Bar. Wilson: Just, the oil that come to the producer, not the total production. Mr. Overacker: You didn't distribute the total cost of production over the entire production? Mr. Wilson: Now, wait a minute now. You ........ We are talking about two different things. You are talking about the factor.... the cost factor.... in the thing. You would determine it by the total cost of production. Mr. Overacker: Do you take the total barrel or the barrel after the ..... 000 . . . . . . . . . Mr. Wilson: The total barrel. I.was referring just now when I said the net barrels to the producer as the method we used to arrive at the value of that well to the producer. We took the net barrels,' multiplied by what we:figured the well was worth per barrel. I used the net figure. You see your cost factor as it is set up, in any of these tideland wells, is entirely as theoretical figure as we said,. in the assessment. They are all different. They are not the same in any. Now you understand that these factors have been worked out from what information was. available. They may not agree absolutely with what the Assessor's office has shown.. I.couldntt get his figures. I just had to take what figures c staf&gtvr,-s- there 'from toletts start with $1.01 on differ- the 24.gravit You have ent wells. On your 23 gravity, it varies from a low of 82¢ to a high oP1:02. On your 22 gravity, it varies from' 7.9¢ :to $1.03. On your 21 gravity, it . varies from 95¢ to $1.02. That is the way I have taken the new assessment that has. been given us and figured it down to a per barrel. basis. -'Mr. Overacker: Well, how did you arrive at $1.00? Mr. Wilson: How did I arrive at $1.00? I said, by figuring what the cash- value ......._. what we consider the cash value of that well, and using a dollar,,brought it up to'about where it belongs .....-:.. and under your ordi -n anee, it states that the cash value is what shall be used for assessment: purposes no theoretical values. It doesnrt say anything about any theoretical values or anything else. It says the cash value. Mayor Bartlett: Mr. Waite, what do you consider the cash value of a wells' I.s it the sales value, or the Mr. Waite: We do not consider it at all. We do not take into consido• eration, at any time, the sales value'of that property. Mr..Wilson: Yes, but we are not dealing with the tax ordinance of the County of Orange. We are dealing with the tax ordinance of the City of Hunt- ington Beach. That is what it says in here. Mr. Henricksen: Mr. Waite represents the City: He is our City Deputy Assessor, and he ......... Mr. Wilson: I understand. -6- Mr,Henricksen: And we are using.'the sleeper method as they hand,it. down to.us. In other words, we would either have to go by the sleeper method or else we would have. to revise ours and have our own method. Now, Mr. Wilson: Or change your tax ordinance. Mr.::Henricksen,: Mr. Rood agreed that the sleeper method was very equit. able, dt`t, he? Mr. Wilson: I agree; that the .sleeper. method is .all right providing it Is.handled right all the way through, but then unfortunately, I never saw your tax ordinance until today - I happened to look at 1t and this doesntt say anything about the sleeper method. It says the cash ....-the cash value. Mr. Overacker: The cash value can be determined by the sleeper method just as well as different methods of determining it. Mr. Wilson: I guess it can be determined by the sleeper method and that is what I attempted to do when I set up a cost factor of $1*00 on these tideland wells.'` Mr. Overacker: In that, did you take into consideration the location of the well where these wells were bottomed or whether bottomed near or over ano the r. well . Mr. Wilson: No, that is information that can only be supplied by the Assessorts office or somebody from the State of California. That Informa- tion isn't available to us. Mr. Overaoker: You do have a water out. Mr. Wilson: We have a water out - yes. The water out is small. Mr. Overacker:, You have the age of the well, don r't you? Mr. Wilson: Well, it can be gotten. Mr. Overacker: Well, don't you think that that information which you .state is .confidential in the hands of the Assessor's office may have an ef•- feet upon the computations that were taken into consideration is making the assessment? Mr. Wilson: I donrt believe it should. For this reason. You are assessing the mineral rights on property that does not -belong to the city at all.It, belongs to the Federal government. -.,.under a recent Supreme Court ruling. Prior to that time it supposedly belonged to the -State government.. All you have got to assess is what comes above the grounds` Mr..Overadkere We have, aright to assess a possessory interest. Take for nstance.......the courts have upheld a mining claim. A man goes up into the mountains and stakes a mining claim.` His possessory'intereet canbe assessed. That is true on Federal land and it is true on State land, Mr. Wilson: That is true, but is that the value of that well and property.. Mr. Qveracker: It is :the assessed value of the possessory interest. The law give the privlege'of assessing that property,: Mr. Wilson: The law only .. .... gives him the privilege here of.assessing that property on its cash value. Letts assume that we are not entitled. to certain information but we -are still entitled to know whether that assessed valuation is anywheres near to the tax value of that particular property, are we not? -7- Mr. *Overacker: of course, he may assess upon what his idea of the cash value of a well is. I will bet you could get the advice of ten engineers in here as to the cash value of a well and all of them will disagree on the cash value. This assessment is not necessarily an appraisal. It is an assess- ment based upon what the assessor believes the cash value to be - he doesntt have time to go out and make an appraisal of all those wells. Mr. Wilson: IQuite true. But what I am concerned with here is that you are entitled to assess on the cash value of those wells. Mr. Overacker: No two people would have the same idea on the cash value. It doesnf`t indicate' that one is right and one is wrong The cash value of a well differs in different peoplets. opinion of the cash value. Mr. Wilson: That is right - it is a matter of expressed opinion. Mr. Overacker: It is.a matter of difference of opinion and a matter that is within the discretion of the Assessor. It becomes his opinion what is the right assessed valuation to be placed upon the rolls. Mr. Wilson: That might be true but if that varied very materially to what the selling price of that well was, then his assessed valuation is wrong on the basis of your ordinance. dr. Overacker: The effect .is the same thing but for the state law, they are ,supposed to assess it upon the cash value. They attempt to arrive at a cash value but with an assessment there is an attempt to get at it'in a more or less scientific way. Mr. Wilson: Yes, but when the scientific method that is used is detriment. al to the taxpayer, well, then he is entitled to some redress, is he not? Mr. Overacker: He has a right to come in here and present v.at he thinks the assessed value of a particular well should be and state his reasons for it. Mr. Wilson: I would still like to see the comparative rolls 8br last year and this year on some of these wells. I think that you will find that your assessed valuations have increased very materially. Mayor Bartlett: You may ask that question of the City Assessor; he does the oil well assessing -.our sheets are available at any time. Mr. Henricksen: You can see. them at any time your office wishes. I might inject.though - that this -letter I just gave you a copy of, our figures, the percentages, are taken . from the tax roll, will be reported to the State Board of Equalization and it does show here that the assessed valuation: of the min- eral rights on the secured roll is 21% over the previous years - these are actual - and your real estate, in the city, on this present tax roll, in- creased 28%. In other words, the real estate valuation increased 7% over the. assessed valuation of the mineral rights. That is the report that goes in to the State Board of Equalization. That is the over all figure - of course, you can pick out a well here and a piece of property there for.the purpose of the.Assessor is to equalize, in his.best judgment, to arrive at the correct assessed valuation. Mr. Wilson: Well, that is it. These wells -are not equalized. That ' s . the point'I am trying to bring out. Mr. Henricksen: The same thing is true of the wells. One well has.a differ*. ent.position to -a group of wells than another well over here, and it is up to the Assessorrs judgment whether he thinks the value is fair. The same is true with a piece of property - the location of it, what street it is on, the developments, whether it is on Main Street or out in the residential sedtion. There are several -areas .here in the city that have been raised 100%, many of them 50%. a Mr. Wilson: . That can be true, of course ......but you, of course, have a condition herein your mineral rights that every well involved that was in operation for all of.last year would show a lower production this year than it did last year so your actual barrel of oil produced was smaller. The price, of Course, has gone up. Mr. Henricksen: On your sleeper method, as your barrels of production goes down, your assessment valuation goes down. -provided your factors are more or less: constant. Well, that hasn't changed any up to the present time. In Mr. Waite'Ua talk last week, he explained very. well how the sleeper method worked and he also said that in February there will be a meeting by ,Assessors and other groups to rehash this formula to seethat it doeentt run away and they are looking ahead to see that there will be no injustice. Mr. Wilson: -,But has the formula actually been used? Last year we had most of our wells on a more or less theoretical basis. Now we have the theo- retical basis. We don't have the formulas that were set up. They have been out back on what adjustment has been made until we donut have any definite formula as near as I can figure. Mr. Henricksen: Well, in the figures that you gave, that I saw, before the adjustment, on some wells, you showa cost of 360 per barrel and on others you got up as high as $1.56. I didn't agree with your method of arriving at it. Mr. Wilson: 'No two accountants ever agree anyway. Mr. Henricksen: That's right. One sharpens his pencil different than the other one. If you use the adjusted basis of 950 to $1.16 as we used, and figure on the cost of production, I would be ashamed to say what the increased taxes to some of the oil companies, would be. Mr. Wilson: If we had of gotten 950 to $1.16 as Mr. Waite told us last week we were getting, we probably .wouldntt have been back here tonight, but we didn't get it. Mr. Henricksen: I know, but this example on this one oil company that you gave me - I won't name it - I have the figures here from the records. That particular 23 gravity well was not taxed nearly as much as other,23 gravity wells of'the other=companies. Mr. Wilson Let's see here. No, there are some others on there that got a higher tax. Mr. Henricksen: Quite a few that got a higher tax. There are also some that got quite a bit lower. If a well has 95% water out and they take their figures as they reported it and another well has.1%. It makes .............. Mr. .Wilson: There are two wells that had 2%. Let t's see, there are 10 23 gravity wells that I have here. Two of them have 2% water cut; two of them have none and the rest have 1%. Mr, Henricksen: Those are tideland wells. Mr. Wilson: Yes,, tideland wells. Mr. Henricksen: The other 37 companies that you have there are small produc. ers and they have anywhere from 19% to 90% water cut. They are not in the same class of well Mr. Wilson: In other words, it is the desire of the Council, as I un- derstand, to differentiate between the tideland wells and other wells, Mr. Kindel: These tideland wells are very free from water, is that cor,� rest? Mr. Henricksen: . According to the reports we have received, WE Mr. Langenbeck: That cuts production costs. Mr. Henricksen: Oh yes, the production cost is considerably lower. Others have a high maintenance, and high pumping cost. Mr. Wilson: But you cant' t compare production costs, Mr. Langenbeck, of Ste4ndard 'a.nd Southwest and ,the rest of them .with the production cost of small operators. It is an entirely different picture that you run into. It is true they are more efficient and it is probably due to better methods of operating and they get a distinct.advantage on the allowance of production costs that is made against what it actually costs them. Some of the smaller men are rather severely penalized on the same basis and naturally I understand that an average is an average. If we took, an average it would apply to every- body, not to one individual well. We take the position that the average is too low. Mr. Langenbeck: Would you repeat those figures again about the Ancreased assessed valuation of the oil mineral rights as compared with real estate? ........28% against 21%? Well, that sounds fair to me. Mayor Bartlett: Yes, Mr. Waite. Mr. Waite: As to the production costs of the -major companies and the so-called smaller operators. The information which we have on file in the office would contradict Mr. Wilsonio; statement. It shows that their operat.• ing costs are higher than it is for the average smaller operator and we have information furnished us on practically 65% of the wells here in the County. Now, this again, is a matter of bookkeeping. If everybody kept their books in the same way, you might get the same answer but they all have a different method of distributing their head office overhead, their field overhead and everything else. The average out of 65% of the wells in the County was higher in the major companies than it was in the smaller operators. Mayor Bartlett: Is there anyone in the audience who would like to appear before the Council at this time ........before the Board of Equalization? Mr. Langenbeek: Ear. Mayor, I move that the protest of the assessed valua- Lion be denied. Mr. Grable: I second it. Mayor Bartlett: It was moved by Mr. Langenbeck and seconded by Mr. Grable that the protest of Mr. Wilson representing the various oil companies be denied.. All in favor, signify by saying ...........Lett`s take a roll call vote, Mr. Henricksen: Grable, Yes;` Terry, Yes; Hawes, Yes; Lanbenbeck, Yes; Bartlett, Yes. 'Noes - None Absent None Mayor Bartlett: Before we close the Board of Equalization, is there any party in. here that would like, to be heard on any other protest, property or otherwise? Mr. .Wilson: Before the council adjourns, may I make a statement? or make one request? I would like to have this made a matter of record that I was denied the opportunity of comparing last year is rolls with this . year t s rolls before the Council: Will that be made a matter of record, please? Mr. Henricksen: You have your copies of past years. Bar. Wilson: I have copies of some of them - some of the copies that were sent out by the city of the assessment rolls were sent back and do not have the calculations on there wherein they arrived at the taxes. Those were requested and denied me. -10-- Mr. Henricksen: Mr.. Wilson: dr. Henricksen: By which office? By yoself. No. Mr. Wilson: I called you on the telephone and asked to have those copies. I sent McCallen and McVicar-Rood reports down to the office and asked that they be filled out in accordance with the rolls and they were only partly filled out when they came back and I didnt't get all of the information I required. Mr. Henricksen:7 All of the information your representative asked for, was given. Mr. Wilson: The fact is, it was not shown on them. That is neither here nor there. What I would like to have is to have that made a record. Mr. Henricksen: The fact is, those records were available. Mr. Bartlett: I dontt think you have been denied that right though, have you, Mr. Wilson? Mr. Wilson: They said that the records were down at the office and if I wanted to see them, I could.go and seethem. Mr. Henricksen: They can't leave the office. Mr. Wilson: The Council, however, has bolted and denied the objection, so............0.. , Mr. Grable: Well, the records were available in the office if you had come down to look at them. They are here for anybody who wanted to see them. Mr. Wilson: IWell, what I wanted ..... what I.thought should be done was for those records to be reviewed by the Council - before the Council, I. mean, the Board of Equalization. Mr. Grable: Oh, you thought they ought to be reviewed here. Mr. Wilson: Yes, I wanted to see, and.for your gentlemen to see, how much increase there was in some of these taxes. You take this particular well that we are talking about there, last year your taxes were $881.00; they year they are $1 200JO on that wells ,Mr. Grable: Well, what you want, you want us to look at these records. That is what you want. Mr. Wilson: I think that you will convince yourself that those rates are too high in comparison to what goes ono' Mr. Langenbeek: Mr. Mayor, I move that the roll as equalized be approved.` Dr. Hawes I second. Mayor Bartlett: It has been.moved by Mr. Langenbeok and seconded by Dr, -Haves that, the, roll, as equalized, be approved. All in favor signify by say ing Aye ....... Let's have a roll call vote. :Efr. Henricksen: Grable, Yes; Terry, Yes; Hawes, Yes; Langenbeck, Yes; Bartlett., Yes. Noes - None Absent - None