BARBARAELLEN KOCH FILE PHOTO
The ConocoPhillips off-shore platform in Northville.
In 2010, ConocoPhillips ranked sixth on the Fortune 500, with reported annual revenues of $139 billion and profits totaling $4.85 billion.
But the Houston-based energy company recently asked Riverhead Town to waive a $167,727 penalty levied on the company because it failed to pay $899,101 in taxes owed to the Community Preservation Fund that were assessed to the company’s tank farm and off-shore platform in Northville.
Town Board members rejected that idea at Thursday’s work session.
Deputy Town Attorney Ann Marie Prudenti said that when Phillips Petroleum and Conoco merged, the company did not realize it was required to pay the 2 percent land transfer tax that goes into the Community Preservation Fund, and is used to preserve open space and farmland in the five East End towns.
The two companies merged in 2002.
ConocoPhillips did pay the tax about eight months ago, according to Ms. Prudenti, but it was assessed the additional penalty for missing the payments in the past.
The oil giant asked for a waiver on the penalty, saying it didn’t realize the CPF tax was required, according to Ms. Prudenti, who said town law permits the Town Board to waive tax penalties by resolution if the board seeks to.
Supervisor Sean Walter, who has said the town has a deficit of more than $5 million, said the $167,727 is needed.
“This money goes right into the CPF,” he said. “The debt service in the CPF fund is $6.5 million. We need to maintain an income of $3.5 million a year to continue to pay it off before it comes out of general fund, because we have some reserves there. Last year I think (the CPF revenue) came in at $2.5 million, and we’re not there yet this year.”
The supervisor wasn’t alone in his thinking.
“I know they have a corporate attorney, and they didn’t know they had to do this when they merged?” Councilman Jim Wooten said. “Sorry, you gotta pay the tax, or fire your top legal staff.”
“I don’t want to set a precedent,” Councilman John Dunleavy said. Councilwoman Jodi Giglio also opposed waiving the fine.
Councilman George Gabrielsen was absent from Thursday’s work session.
ConocoPhillips spokesman John Roper declined comment for this story.