Kern County supervisors, presented with a mid-term review of their current budget and plans for next year's spending plan, wanted to talk about the $11 million hit they expect to take next year from the devaluation of Occidental Petroleum's Elk Hills field.

"Unfortunately, we do know that the county assessment roll will be reduced by at least $2.5 billion for a direct reduction to the general fund discretionary revenues by $8 million and $3 million for the fire fund," said Assistant County Administrative Officer Nancy Lawson, who oversees the county's budget development.

Assistant Kern County Assessor-Recorder Tony Ansolabehere told supervisors that his office struggled for months -- last year -- to make sense of incomplete, inaccurate valuation reports being received from Occidental.

"This year we had some problems with the filing on Elk Hills. It was filed multiple times, rejected multiple times. Finally ended up taking the assessed value from last year and the information we had from last year and rolling it forward," he said. "It wasn't until this fall until we really got complete information about what was going on out at Elk Hills."

"When did we become aware that the value of the reserve was less than it was expected to be?" asked Supervisor Mike Maggard.

"Over the months from May to September we got the pieces of the puzzle," Ansolabehere said. "It wasn't until November that we had an accurate number."

Supervisor David Couch asked how Occidental could have such a dramatic decrease in valuation not long after it made the major oil and natural gas find known as "Gunslinger."

"That discovery isn't proved (revenue) yet," Ansolabehere said.

In developing the tax assessment rolls for the current year, he said, the county used past valuations for the property because it didn't have good data from Occidental to prepare the tax roll that the assessor is required to file in June.

Since then, Ansolabehere said, Occidental has filed an appeal of the tax assessment for the 2012-2013 year.

Maggard said the hard thing for people to understand is how the county deals with such a sweeping claim of change from one of its biggest taxpayers.

"When I talk to just Joe Six-pack out there on the street and they tell me that the county told them that their house was worth a certain amount of money," Maggard said, "if the taxpayer says I don't think it's worth that, I think it's worth half that, it's hard to get the county to say, 'OK, it's only worth half that."

Now one big taxpayer is asking the county to cut its tax bill.

Before the county says it will reduce Occidental's tax burden, Maggard said, he wants to make sure there is an objective analysis of whether that reduction is justified.

Ansolabehere did say his office has hired a consulting firm to independently review the valuation.


Also Tuesday, supervisors approved annual contribution rates for the county employee pension system -- another increase in the amount they invest in the program,

For new supervisors, it was a bit of an education.

Supervisor Mick Gleason wondered why the Kern County Employees' Retirement Association board doesn't reduce the actuarial rate of investment return it expects to get from 7.75 percent to something lower.

According to KCERA top executive Anne Holdren, the system made that goal only twice in the last 10 years.

Actuarial Paul Angelo of the Segal Company said that dropping the expected rate of return by .25 percent, in general, leads to an increase in contribution rates governments and employees pay of about 2 to 3 percent of pay.

Supervisors and speakers from the public said they are interested in changing one part of the plan -- a supplemental benefit that diverts part of the KCERA earnings in good years into increases in retirement pay for already-retired employees.

Jenifer Pitcher of the Kern Citizens for Sustainable Government said the benefit must be reformed.

Supervisor Maggard said existing retirees, who have already received the benefit, cannot be stripped of it. But he is interested in seeing whether it can be changed or removed for future retirees.