Keeping jobs in Stanfield seemed to be the deciding factor in recent negotiations between Pilot Corp. and the City of Stanfield. The council voted 5-1 Tuesday in favor of accepting Pilots offer of $10,000 per month in lieu of paying the citys two-cent fuel tax.
I dont want to put nobody out of work, Councilman Chuck Gaede said following the vote.
According to Gaede, jobs at the fuel station, which includes two fast-food chains, and city employee positions were at risk if Pilot moved to a location outside of Stanfield.
I think for the council as a whole that was a big factor, City Manager Scott Pingle said. We knew it wouldnt be just the fuel tax we would be losing.
The city was receiving approximately $24,000 per month from the fuel tax. That money was used for street maintenance and upgrades.
The $10,000 per month flat payment wont be tied only to street maintenance, but most of it will likely be applied to that area. Pingle said the net loss of approximately $14,000 per month will impact the street maintenance schedule.
I dont think we got the outcome we would have liked, Pingle said, adding that keeping the station in town was important to the community.
The city passed a one-cent fuel tax in 1999, and the council increased the tax in 2009 to two cents ahead of a statewide moratorium on municipal fuel taxes.
We dont just rely on property taxes, because we cant, Pingle said of the councils motivation to pass the fuel tax.
In 2010, Pilot, through intermediary Gary Hall, kicked back against the tax hike, claiming the company couldnt compete with other local fuel stations with the city-imposed tax in place.
Pilot threatened to move to a piece of land near the junction of Interstates 84 and 82 if the tax was not repealed.
We just could not continue to do what was being done, Hall said, calling the in-lieu payment a token of the lesser of two evils.
The new agreement, according to Hall, allows Pilot to pull the payment only from gasoline sales, leaving Pilot in a better position to compete for diesel customers, especially big trucks.
Were not accounting any of that toward the diesel side, Hall said.
Having a deal in place, pending a formal contract, is a relief for city officials, who accepted the deal despite frustrations over losing close to $14,000 in tax revenue.
Weve been hassling back and forth long enough, said Councilman Jack Huxoll. We got the best we could get.
As a condition of the pay-in-lieu agreement, which will generate slightly less revenue for the city than the original one-cent tax, Pilot will agree to a one-time $2,500 payment to the citys Fourth of July fund. Pilot also agreed to pay the $10,000 even if the fuel station moves to another location in Eastern Oregon between Arlington and Pendleton.
The agreement will be binding for 20 years, at which time it will be subject to renegotiation. That time frame caused the only dissenting vote. Lynn Weathermon felt the city should have negotiated for 10 or 15 years instead of 20.
I think the way the economy is right now, 20 years is a little too long, Weathermon said. I would have gone 15.
Locking the fuel station into a 20-year deal could be good for the city, however. With plans to run municipal sewer and water to Pilot as part of the upcoming water system revamp, Pilot will be paying city rates.
Theyre huge water users, Pingle said, adding that large utility users help provide revenue stability for the city. Having them come onto our water system will be a huge help.