LCUB weighs fuel tank options

Stephanie Myers-News-Herald

Discussions on switching fuel sources for Lenoir City Utilities Board vehicles ultimately ended in a shelved decision last week.

The board heard from Exxon representative Tommy Hunt about using a fleet card for fuel purchases for vehicles, meaning LCUB could switch from an on-site gas tank to off-site retail stations. Board members seemed hesitant on the card's feasibility.

Hunt said the utility company would save 5 cents a gallon off the street price, and the card could be used at Exxon/Mobil stations across the nation.

The sheriff's department is using a similar arrangement, Hunt said.

The LCUB tank is currently utilized by many government entities, including Lenoir City Schools buses and city government vehicles.

Hunt said schools, the sheriff's office and highway department in neighboring Blount County have recently joined the program.

The highway department and the sheriff's department said it actually drove their overall fuel costs down because it got a better control over it for one, Hunt said. He said we never knew as long as somebody had a key, he could be filling up lawn mowers, motorcycles and boats, and they would never know. With the card they have to go to our store, and they're out visible in the public.

You're only getting it as you need it and not having to stockpile it, he said. You also don't have liability of an underground tank or above ground tank.

Board member Eddie Simpson raised concerns.

We beat this thing to death in the purchasing committees, Simpson said. What we've wanted to do is establish the need. We, and me in particular, question the fact that we have trucks with poles behind them and everything else having to get into these service stations to get their fuel, and they can't do it.

Then you've got four or five men on a crew out there fueling up, sitting out there waiting, he said. I don't think we've looked at it enough to know whether it's feasible. There are a lot of pros and cons, but there are a lot more cons to it than meets the eye when you first think about it.

The board voted for LCUB General Manager Shannon Littleton to explore options.

In other business, the board:

- Postponed approving a contract with Proton Power, which developed a system that converts wood chips to a hydrogen-rich gas stream to produce heat and/or power. The board unanimously agreed to postpone for 90 days to see results from Wampler's Farm Sausage, which has a similar contract that will go online in January.

I'm in favor of doing it, but I think if we're not under the gun then we need to wait and see the Wampler plant in operation, board member Harry Wampler said.

Littleton said receiving a $100,000 Tennessee Department of Environment and Conservation grant enticed the utility company to consider the alternative energy source. We saw an opportunity to have an investment that pays off very quickly, and we can save the ratepayers a lot of money on electrical costs, he said.

- Approved an application for an Economic Development Administration grant to relocate a water main from the Norfolk Southern Railroad site in Lenoir City to C Street. Littleton predicted construction would start next year in late spring.

- Approved a contractual agreement between Community Development Partners, LLC and LCUB to administer a $500,000 Community Development Block Grant.

- Approved a contract with Fulghum, MacIndoe, & Associates, Inc., for engineering services related to CDBG projects, such as sludge heaters for the sewer department.

- Requested authorization from Lenoir City to install the water line main under C Street.

- Appointed members Pat Beasley, Harry Wampler, Jim Shields and Mike Henline to the budget and salary committee. Beasley will chair the committee.

- Appointed members Joel Garber, Eddie Simpson, Buddy Hines and Bobby Johnson Sr. to the personnel committee. Garber will chair the committee.

- Authorized a resolution that will authorize the issue of a capital outlay debt, not to exceed $10 million, to finance anticipated electrical expenditures.

This is for capital purchases only, Littleton said. We do not anticipate having this debt at the end of three years. It's my opinion it's going to make us healthier and speaking to some of the consultants we've talked to, they agree as well. We're able to probably more than likely put some cash back as we go, which will make it a healthier process.

- Authorized opening an account at BB&T for facilitating the new capital revenue anticipation notes.

- Canceled the December board meeting.