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Felix Adamo/ The Californian

Occidental of Elk Hills office at 10800 Stockdale Highway is seen in file photo.

County officials settled Occidental Petroleum's property tax assessment challenge Tuesday, costing state and local governments $31 million in property tax money.

Seventeen agencies including schools, special districts and the county of Kern will have to send refund checks to the oil company.

Among the major agencies to see a drop are the Kern County Water Agency, Kern High School District, Taft City School District, Kern Community College District and Kern County Superintendent of Schools office.

Kern County has already absorbed the blow.

Assistant County Administrative Officer Nancy Lawson said the county's $11.3 million share of the loss has already been accounted for in the current year's budget.

As part of the settlement deal, Occidential agreed not to claim interest that has been earned on the money since Dec. 2012, according to Kern County Counsel Theresa Goldner.

Lawson said that comes to $450,000 the taxing agencies will retain.

In February, when news broke that the cuts were coming, many of the taxing agencies said they would struggle through the impact from the change.

Margy Tims, manager of the West Side Mosquito and Vector Control District, said the district is used to weathering the extreme swings in property valuation driven by the oil and gas markets.

"The bulk of our tax revenue is oil. It's going to affect us. But we'll still be able to operate. It's not going to cripple us," she said.

The district exterminates pests that endanger public health in the west-side communities of Taft and Maricopa.

Jim Fitch, Kern County's assessor-recorder, who made the decision to reduce the tax assessment to Occidental, said the economics of Oxy's Elk Hills property has changed dramatically in the recent past.

A significant portion of the value of Elk Hills, Fitch said, is in natural gas. But the market value of that fuel has plunged as production in other areas of the country has increased. Add to that Occidental's falling production levels and the value of the property has seen significant reductions in assessment value.

In approximate numbers, that value has plummeted from about $9.3 billion in 2011 to $6.8 billion in 2012, Fitch said.

But it gets worse. The assessed value for 2013 is $4.8 billion, nearly half of what it was two years ago.

That means county coffers and local school will continue to be affected into next year.