LyondellBasell, the parent company of Equistar Chemicals LP in Corpus Christi, has filed for Chapter 11 bankruptcy protection.
The chemical refining company sent notices to taxing jurisdictions Jan. 28 to inform them of the filing, particularly since it meant property taxes would not be paid. In the letter, written by director of public affairs David Harpole, four entities are listed as filing for Chapter 11 protection: Lyondell Chemical Co., Equistar Chemicals LP, Basell USA Inc. and Houston Refining LP.
"Unfortunately, because of the status of the Chapter 11 cases, these taxpayers have determined that they are unable to make the property tax payments due on Feb. 2," Harpole wrote. "Whether these taxpayers will be able to timely make property tax payments that become due later in the year is unknown at this time."
The biggest loss to a taxing entity in Nueces County will be bore by the Calallen Independent School District, to which Equistar owes a $3.6 million tax bill. The refinery was the district's largest single taxpayer, school officials said.
Edith George, director of finance for the CISD, said the full impact won't be known until September, when the state distributes its funding to districts based on property taxes collected. The CISD's new fiscal year begins Aug. 31
"State funding formulas being what they are…they've set a floor on how much money the district will be left with," George said. "As we collect less in (property) taxes, the Texas Education Agency will give us more in state funding, so they will make up a large portion of that ($3.6 million), but not until September."
The state funding may help to offset all but $200,000 to $250,000 of the $3.6 million Equistar owes, she added.
The $3.6 million from Equistar is usually divided up, with $600,000 going into the district's debt service fund, George said, which is used to make payments on the district's curren bond debt. The other $2.9 million goes into the district's general operating budget.
George said the district may be looking at different options to cut back on finances, such as project cuts or seeking short-term loans, but that nothing has been decided as of yet.
"We're just now in the evaluation stage, of what to do," George said, adding that the district also has a "rainy day" fund balance of about $4 million.
Equistar Chemicals LP Levy Loss 2008*
Nueces County: $1 million Farm to Market: $12,920 N.C. Hospital District: $431,214 City of Corpus Christi: $20,600 Bishop CISD: $201 Calallen ISD: $3.6 million Corpus Christi ISD: $188,411 Del Mar College: $826,350 Tuloso-Midway ISD: $264,921 West Oso ISD: $978 N.C. Drainage District No. 2: $790 N.C. Emergency Services District No. 1: $1,781 Total Loss: $6.4 million
*Source: Nueces County Tax Assessor-Collector