Johnstown official calls for state police probe of missing fuel

PHOTOGRAPHER: Erica Miller

Town Council member Timothy Rizzo speaks during Monday's meeting.

The New York State Comptroller has determined the Johnstown Highway Department can’t account for nearly $50,000 worth of gasoline pumped between 2018 and May 2019 — and Town Council member Timothy Rizzo on Monday night said he wants the issue investigated by the state police.

“I think the state police should be further looking at any details they can come up with,” Rizzo said. “I think it’s suspicious.”

Rizzo made his statement after a brief Town Council meeting during which few issues were discussed, but the board did not vote on any new resolutions. Town Supervisor Jack Wilson, Rizzo and Town Council member Walt Lane were present, but Town Council members Donald VanDeusen and Daryl Baldwin were not.

Rizzo said he decided not to make any statements about the fuel issue during the regular meeting because “everybody is looking at you.” He said he doesn’t want to accuse anyone of stealing gasoline.

“If I make that comment, then they’re going to come at me. I think it’s suspicious, let’s put it that way,” he said.

The state comptroller issued a report earlier this month admonishing Johnstown officials for poor recordkeeping and inadequate controls for the two above-ground fuel tanks located behind the highway garage in the hamlet of Meco – a 2,000-gallon diesel tank and a 1,000-gallon unleaded gasoline tank.

According to the report, nearly 50 percent of the fuel purchased and pumped through the gas pumps at that location between Jan. 8 and May 23 of this year is unaccounted for, including 21,806 gallons of gasoline and diesel valued at $49,278.

The state Comptroller’s Office indicated town Highway Superintendent Jack Smullen said the unaccounted-for diesel was due to highway personnel not recording in the log all the gallons pumped.

“[Smullen] said that during snowstorms plow drivers frequently return to the highway garage to refill their trucks with diesel fuel, but did not always log the pumped amounts,” reads the report.

The Comptroller’s Office poked two holes in Smullen’s explanation of why the unaccounted gasoline was so high.

“We analyzed the logged pumped diesel fuel per vehicle for reasonableness and determined that the logged fuel varied significantly between trucks used for similar tasks,” reads the report. “For example, the diesel fuel log book showed that truck #50 was filled up 17 times totaling 894 gallons but truck #55 was filled up only five times totaling 246 gallons. However, the Superintendent stated both trucks were used for similar amounts of time during the winter for plowing and sanding.”

A greater percentage of unleaded gasoline, not diesel, which is typically used for most of the town’s snowplow trucks, was also missing.

During the period audited by the Comptroller’s Office, the town purchased 8,619 gallons of unleaded gasoline, but only 1,191 gallons were properly recorded as being used by town vehicles, meaning 83 percent, or 7,194 gallons costing $15,191, was not documented and 792 gallons were not used.

For diesel fuel, the dollar amount and gallons of undocumented use were greater. The report shows the town purchased 29,126 gallons of diesel fuel, added that to 792 gallons purchased before Jan. 8, 2018, then proceeded to lose 14,612 gallons of diesel, about 50 percent of the total, costing $34,087.

The Comptroller’s Office offered an assessment of the probability of malfeasance.

“Without the proper controls over fuel inventories in place, there is an increased risk that unleaded gasoline and diesel could have been stolen or misused.”

Rizzo said he thinks the town has approximately 12 diesel-fueled vehicles and three gasoline-fueled trucks. He said he thinks the state police should do an analysis of whether the mileage totals recorded during inspections of the town vehicles during the audit period match the approximate usage of gallons recorded by the comptroller.

The comptroller’s report states security for the fuel pumps was weak.

“[The] fuel pumps did not have an electronic authentication system to record pumped amounts to ensure only authorized personnel had access and could pump fuel,” reads the report. “The Town relied solely on the switch in the highway garage, which provides power to the fuel pumps, and a padlock on the unleaded gasoline pump to restrict access to the fuel inventories.”

The comptroller’s report offered these corrective actions for the town:

• Adopt policies and procedures to ensure their fuel inventories are properly accounted for, including procedure to log all fuel use by vehicle. Procedures should also assure fuel is adequately safeguarded and fuel reconciliations are performed.

• Review fuel reconciliations periodically.

• Ensure fuel pumps are maintained in proper working order, and access to pumps is secured and monitored.

• Ensure all pumped fuel is adequately recorded in fuel logs by all users.

• Maintain fuel inventory records through periodic stick-measured readings.

• Prepare periodic fuel reconciliations comparing gallons pumped, gallons delivered to stick-measured readings, as well as investigate and resolve discrepancies.

The comptroller’s report states a report issued by the Fulton County director of weights and measures on May 16 shows the fuel pump gauges are inadequate. The comptroller assessed the inaccuracy and factored it out of its finding, meaning none of the estimated variance was included in the final audit.

“We determined that while the unleaded gas fuel pump had an immaterial dispensing variance, the diesel fuel pump had a significant dispensing variance showing readings greater than the actual amount of pumped fuel. During the inspection, the diesel fuel pump registered 5 gallons of fuel had been pumped out but only 3.9 gallons were actually pumped out, a variance of 1.1 gallons, 22 percent,” reads the report. “This variance would increase the unaccounted-for diesel fuel we computed. [Wilson] stated to us that he would have both fuel pumps properly calibrated as quickly as possible.”

A letter from Wilson to the Comptroller’s Office is included with the online version of the report, which can be found at osc.state.ny.us/localgov/audits/towns/2019/johnstown-2019-178.

Wilson indicates in the letter that the town is following the comptroller’s recommendations.

“We have created a new fuel usage log containing the person who obtained the fuel, the vehicle identifier that is receiving the fuel, the odometer reading of the vehicle, the date of the transaction and the amount of the transaction in gallons,” wrote Wilson. “The fuel tanks are checked with a measuring stick twice a week to track the amount of inventory.”

Wilson also wrote, “each employee [has been] told that even if they take a quart of fuel for a gasoline appliance it WILL be recorded on the fuel log sheet … “

Smullen, who previously served as assistant highway superintendent, was appointed to replace Todd Bradt, who retired in April after 33 years working for the town, 10 as the elected highway supervisor. Smullen ran uncontested for a full four-year term in November.

Smullen said it’s clear Highway Department personnel were not following the protocol in place for logging fuel use prior to the comptroller’s report, but he said it had been the custom and practice of the employees not to do so prior to him taking control of the department, so there were no punishments for any employees.

“The guys were lazy, and they took fuel, and there was no protocol in place, actually, for any of the gas to even be logged,” he said, even though many thousands of gallons were logged.

Smullen said he’s sure the employees didn’t steal any of the gas.

“There was no theft. There’s no way to prove it, but I know the guys working there and there was no theft,” he said.

Johnstown’s town Highway Department employees created a public employee union in 2014, after decades of being one of the few local governments in New York state to employ a nonunion shop.

Smullen said the town is now locking both pumps and the highway employees have been warned they will face disciplinary action in the future if they violate the fuel-use policy, but then cast doubt on whether any punishment was really possible.

“At the time, there was no punishment because we didn’t see there was a problem,” he said. “Going forward they will be held accountable, but I have no idea what it would be. I’d have to sit down with [Wilson] and we’ll figure out what we’re going to do. We’re kind of limited, them being a union.”

Wilson said he does not believe any town employees stole fuel, in part because the comptroller found there was no spike in fuel use that might indicate a specific period of theft. He said employees have been warned that they must now fill out fuel logs. He said the town’s Highway Department union contract does have provisions for punishment.

“I’ve never seen a union contract that didn’t have some means of writing the employees up,” he said.