Auditor: Fuel Contractor Owes Fishermen $41K

by Alan Pollock

            CHATHAM — Talks are underway between a group of local fishermen and representatives of Whiteley Fuel Company, Inc., after an auditor's report confirmed that the company overcharged the fishermen by $41,629 over the course of about a year ending in June.

            The company sells fuel at the Chatham Fish Pier under a contract with the town.  Under the provisions of the contract, the vendor is required to offer fuel at a price no higher than 35 cents per gallon over the Boston Journal of Commerce weekly base price.  In June, Waterways Committee member Peter Taylor, a commercial fisherman, announced that it appeared Whiteley Fuel had overcharged customers, prompting the town to hire an auditor to review the records.  In a draft report dated Sept. 15, the auditor confirmed the overcharge, which represents about 6.1 percent of the total actual sales.

            Whiteley Fuel has been operating the fuel concession at the fish pier for about a decade, and the contract has always contained a provision linking the prices to the Journal of Commerce rates, Town Manager William Hinchey said this week.  It remains to be seen whether any overcharging took place in previous years, but Hinchey said he doesn't think it did, “because the overcharging started to take place when the gas prices were coming down.”  It appears Whiteley Fuel set its prices using traditional market standards when its own fuel purchase costs were higher, Hinchey said.

            A spokesman for Whiteley Fuel Co., referred questions to company President Tom Whiteley, who could not be reached for comment. 

            Taylor said he had a meeting with Mr. Whiteley, who indicated that the company would reimburse fishermen for the $41,629, but only if fishermen agree to hold the company harmless from claims from previous years.  Taylor said he planned to meet late this week with the other fishermen who were overcharged, and the group would decide whether to accept the payment or seek an audit of previous years' transactions.

            Hinchey said Whiteley Fuel has agreed to pay the cost of the audit, about $7,000.  If the fishermen decide to seek an audit of previous years' transactions, the town will support that request, Hinchey said.  In that case, the town and the fuel company would need to hash out which party would pay for the additional accounting work, he said. 

            Under the contract, the town receives revenue from a 7 cent per gallon surcharge, and all of that money has been paid, Hinchey said.  There is no indication that Whiteley Fuel has violated any of the other terms of the lease agreement; the company is required to staff the concession seven days a week from 8 a.m. to 8 p.m., dispatching a truck to the fish pier within 15 minutes of receiving the call, and must provide fuel to the U.S. Coast Guard and to the town on a 24-hour on-call basis, 365 days a year.  In 2008, the company paid $16,443.38 to the town.

            While Taylor said he is pleased with the town's decision to support fishermen in the dispute, he faulted town officials, and Hinchey in particular, for not more carefully enforcing the price protections it wrote into the contract.

            “This whole thing should've been handled differently,” he said.  Taylor also criticized town staff for keeping the results of the audit private for more than a month, and faulted selectmen for discussing the matter in an executive session last week.  Taylor was nearly ejected from the selectmen's meeting after a heated exchange with board Chairman Ronald Bergstrom over the matter.

            “I question whether I would've gotten that thing [the auditor's report] the next day if I hadn't made a stink at the selectmen's meeting,” Taylor said.

            Taylor has lobbied the town to publicly post the Boston Journal of Commerce's daily pricing sheets so that fishermen can guard against future overpricing.  While Hinchey said Whiteley Fuel took this step shortly after the overpricing was alleged, Taylor said he is unaware that the daily sheets are being posted.  Hinchey said the posting requirement is included in the fish pier fuel concession contract, which is currently up for renewal.  A request for proposals has been issued, and bids will be coming in to the town shortly, Hinchey said.  It is not yet known whether Whiteley Fuel has submitted a bid.

11/5/09