Lowest or not, the city of Loudon no longer will
consider fuel bids submitted by Pilot Oil, unless and until Pilot pays the city an agreed,
negotiated settlement amount that's considerably past due, according to officials.
Acceptance of fuel bids usually is a routine matter for officials, requiring little
discussion, but Loudon City Council members took a second look Monday, Aug. 16, during the regular
After a motion by Lewis "Charlie Brown" Garner and seconded by Michael
Cartwright, to award the bid to Pilot, the lowest of two bidders, Councilman Lynn Millsaps said that
he opposed the motion.
"I will tell you why," Millsaps said. "Last meeting, I
asked about the lawsuit and whether they had paid us the debt, and Ed Arnold (city attorney) looked
Millsaps said Arnold had learned the settlement debt had not been paid. "I don't
care if the low bid is from Pilot, if they cannot pay their debt, we should not vote to pay them
Garner, agreeing, said, "I withdraw my motion." Cartwright added, "And I
withdraw my second."
In July 2007, Pilot Travel Centers LLC of Knoxville had sought to
construct a travel center on Highway 72, near the Interstate 75 exit, but stopped the project and
filed suit against the city in the wake of zoning issues and local dissent.
At issue was
whether the proposed facility was a permitted use under the city's zoning regulations. In 2004, the
City of Loudon Planning Commission had recommended to City Council an amendment to the C-2 and C-4
zoning districts that removed a permitted use called "motor vehicle transportation," aimed to
prevent large truck stops within city limits. The city adopted the amendment and deleted motor
vehicle transportation as an allowed use in 2005.
Developers countered that the
disallowance did not apply; the travel center was not a truck stop, but more like a large
convenience store. The Board of Zoning Appeals voted against a variance that would have allowed the
project to proceed.
Brad Butcher, Pilot's senior real estate manager, had estimated the
centers would bring in 300-350 cars and 500-550 trucks per day.
In 2008, the lawsuit was
settled. As part of the settlement, Pilot agreed to pay the city of Loudon's legal fees totalling
$44,000, according to Lynn Mills, Loudon city manager. Mills said the company had not paid the debt,
nor a part of it.
"There was a verbal agreement between the mayor (Bernie "Inky" Swiney)
and Jimmy Haslam (Pilot chief executive officer) that they would pay $25,000, but they haven't paid
that either," Mills said.
At the suggestion of city attorney Ed Arnold, the council
followed with a motion to exclude Pilot from consideration as a bidder until the settlement debt is
paid. The motion was approved without dissent. Councilman Gene Lambert was not present for the
Swiney said, "We appreciate (Pilot's bid) being there, but we don't feel
obligated to honor any bids they might present." The bid of Rogers Petroleum was then
When Pilot was contacted about the matter, Jimmy Haslam, CEO, issued the
"Pilot will continue to work with the City of Loudon and is cautiously
optimistic we will reach an agreement. We look forward to working with them in the future."
In other financial matters, the council voted, after an executive session discussion for
legal matters, to utilize two letters of credit secured for a subdivision development toward
completion of the Hampton Creek subdivision infrastructure. The letters of credit provided by United
Community Bank were for $25,000 and $110,000.
Mills said the company that was
responsible for the development has since declared bankruptcy. The project was started in 2005.
Letters of credit are secured to insure that development projects are completed to the
specifications approved by city officials.
The subdivision, renamed Hampton Place,
has been annexed into the city, but the streets have not been accepted, Mills