WILKES-BARRE – The state Department of Revenue has slapped the city with a nearly $26,000 bill after investigators could not account for more than 67,000 gallons of fuel dispensed over a two-year period.
The probe, which was prompted by a Times Leader investigation in June, determined a total of 37,272 gallons of gasoline and 29,894 gallons of diesel missing from the city's pumps at the Department of Public Works building from July 2010 to July 2012.
That's roughly 3½ times more than the 17,880 gallons the newspaper's investigation initially uncovered based on a review of seven months worth of records from December 2011 to June 2012.
The state determined the city owes $23,018 in taxes, plus $2,301 in penalties and $599 in interest, according to documents The Times Leader obtained Friday under the state's Right Know Act.
The city also voluntarily released additional records, even though they may be exempt from the Right to Know Act, that detailed how the Department of Revenue arrived at that figure.
Those documents indicate the department calculated the missing fuel by comparing log books filled out by employees to computer generated tank readings that showed how much fuel was dispensed from the tanks – the same methodology the newspaper employed.
The state calculations show the city could not account for 9,858 gallons of diesel and gasoline dispensed from July to December 2010; 36,746 gallons dispensed from January to December 2011 and 20,562 gallons dispensed from January to June 2012, for a total of 67,166 gallons.
The largest monthly discrepancy in gasoline occurred in May 2012, when 2,678 gallons were missing. For diesel, the largest discrepancy was in March 2011, when 2,087 gallons were missing.
The Department of Revenue looked at two years of data because state law requires municipalities to keep fuel records for that period of time, said Maia Warren, a spokeswoman for the department.
The monetary penalties are based on the city's inability to show the fuel was used only for official city business, which is required for it to receive fuel tax-free.
The state determined the city owes $11,628 in taxes on gasoline, at 31.2 cents per gallon, and $11,389 in taxes for diesel, at 38.1 cents per gallon.
City attorney Tim Henry on Friday said the city plans to appeal the citation, arguing the amount assessed is too high.
We think the fine was excessive, Henry said. Although record keeping was poor, we believe we can show the majority of fuel that's unaccounted for was used for legitimate city business.
Henry said he could not detail the city's defense as officials are still working on framing out that argument.
In a previous interview, City Administrator Marie McCormick said she believes the city can estimate the amount of fuel used by vehicles to show the amount of fuel dispensed matches what would have been expected to be used on a given day.
City officials have said they're confident no theft of fuel occurred. Luzerne County District Attorney Stefanie Salavantis opened an investigation into the matter in July.
Salavantis said Friday the investigation is continuing. She plans to meet with detectives next week to get an idea when it might be complete.
Since the story was published the city has taken steps to improve record keeping.
Officials met with department heads to stress the importance of properly filing out the gas logs. It also recently announced a contract with Johnson Control Systems to install a new system at the DPW pumps that would require employees to insert a key, allowing the pump to monitor how much gasoline is dispensed.