SANTA FE SPRINGS — Mobil Oil Corp. has sued the city for relief from "costly" annual fire and oil well operating fees that are designated to clean up 500 deserted wells and pay for specialized fire services.
Mobil claims that the fees--a $1,885-per-well fire fee and a $1,000-per-well annual operating fee--are unfair and illegal. Mobil does not need the city's specialized fire protection because it can provide its own and should not be held responsible for cleaning up other oil companies' deserted sumps, according to the suit and Mobil officials.
"The fees grossly exceed any benefit" Mobil will receive, according to the suit filed in Los Angeles County Superior Court. Mobil claims in its suit that it was unfairly singled out to pay the "vast bulk" of the fees. Mobil owns 304 of the 400 operating oil wells in Santa Fe Springs. Independent companies own most of the remaining wells.
City officials deny singling out Mobil, and say the fees are justified.
Debate over the annual oil well fee started two years ago when the city's Redevelopment Agency increased annual fees by 300%, to $1,000.
"The fee increase is a result of what's taken place in the last couple of years in realizing that there has been a lot of contamination of the soil . . . which has really come about because of the oil field," Richard Weaver, former planning and development director, told the Redevelopment Agency at the time. "A source of funds is needed to deal with these problems."
City officials estimated that it would cost at least $50,000 to clean up each well. On large parcels with many abandoned wells, the costs could total millions of dollars. Recently, Santa Fe Springs spent $4.1 million to clean up 61 acres on an abandoned oil field before the Heritage Corporate Center, an office and recreation complex, was built in the center of the city.
In August, the city proposed tripling the annual fee to $3,000 per well, which would have made well fees in Santa Fe Springs among the highest in Los Angeles and Orange counties. Again, city officials said more money was needed to clean up the oil companies' legacy of contamination and change the image of the city from an aging oil town to a community with attractive shopping centers and office buildings.
But city planners, fearful that the 200% increase was not legally defensible, dropped the idea and proposed the $1,885 fire fee instead.
Robert C. Wilson, the city's fire chief, said 22% of the Fire Department's $6.5-million budget is spent for special equipment, training and other services needed to battle a fire or hazardous chemical leak at the oil fields and refineries.
The money the city normally allocates to the Fire Department for protecting the oil industry could be placed in a fund for cleaning up the old sumps, a roundabout way to solve the environmental problems.
The fire fee was passed by the City Council in November and was expected to generate about $917,000 annually. The city's two refineries, Powerine and Golden West Refining Co., were each ordered to pay an annual fire fee of $81,500.
Wilson said all but two small oil companies have paid the fire fees that were due Dec. 7. Mobil paid $400,000 and agreed to pay the remaining $173,000 later. All the fees have been deposited in a special bank account until the suit is settled, according to Leigh DeSantis, assistant director of planning and development.
John Mueller, an attorney for Mobil, said the oil company paid the fee so it could show the court that it complied with the city rule, even though it does not agree with it.