Outcry over fuel rates at ‘world’s smallest harbor’

The Depoe Bay fuel dock is located on the southeast corner of the harbor. On July 7, the Depoe Bay City Council voted to raise the price of fuel at the dock by 99 cents per gallon. (Photo by Kenneth Lipp)

DEPOE BAY — The Depoe Bay City Council’s decision to increase prices at the harbor fuel dock by almost $1 per gallon garnered heated feedback during its meeting on Tuesday.

The Depoe Bay Harbor Marine Fuel Station was completed in 2006, funded in large part by a grant from the Oregon State Marine Board. At that time, it sold fuel for 15 cents a gallon above cost, later raising that to 20 cents and to 35 cents in 2015. During its regular meeting on July 7, the city council voted to increase the rate by 99 cents to $1.34 a gallon above cost. The additional charge is meant to cover expenses the city incurs maintaining and operating the facility, including liability insurance, permits, credit card fees, telephone line, electricity, labor cost and depreciation. An analysis by City Recorder Barbara Chestler found that the fuel station cost $47,333 more last year than it brought in — most of which is attributed to labor — and the harbor commission noted in a June 2019 meeting that “while the fuel station is a boon for the charter and commercial boaters, it has been and is a losing proposition for the city of Depoe Bay.”

The issue was listed on the July 7 agenda as “A Resolution of the City of Depoe Bay Establishing and Publishing the Depoe Bay Harbor Fueling Services Annual Report for the Harbor Fuel Facility,” and the lack of any mention of a proposed rate increase was among the sticking points for commenters during the meeting last Tuesday.

Terry Thompson, a former state representative and Lincoln County commissioner, said he was “shocked” that Depoe Bay City Councilor Loren Goddard had not been allowed to vote on the measure during the July 7 meeting. Councilor Jerome Grant noted that Goddard recused himself due to a potential conflict of interest. Thompson also said he believed the language of the agenda item was misleading and that the increase in cost might drive boaters to other locations to refuel.

Mayor Robert Gambino said, “The idea was not for Depoe Bay to make money on fuel, the idea was to not lose any money. So if all of a sudden no boats purchased fuel in Depoe Bay, we would be fine.”

Mike Jesperson, who lives in Oregon City and operates a charter boat in Depoe Bay, also questioned the transparency surrounding the rate change. “Based on the lack off public hearing prior to the institution of the rate increase, the lack of transparency of the actual dollars associated with employees operating the fuel dock, which you have now associated with the Harbor Fund — I have looked at both the Harbor Fund and the General Fund — you are allocating a certain amount to arbitrarily and capriciously say ‘This amount is associated with the operation of the fuel dock.’ And so you are then raising the fuel price in order to get that amount that you have said the fuel dock does without a proper audit or justification to the public.”

Jesperson engaged in a short, impassioned back and forth with Councilor Barbara Leff and the mayor over documentation provided by the city, and after his remarks, Gambino admonished the gallery. “For the rest of you, I’m telling you right now, and I apologize, but my patience is getting really short here, so if anyone is going to do this kind of foot stomping and fist slamming, you’re going to be asked to leave.”

When Depoe Bay resident Chris Schaffner also noted that the agenda item did not mention a rate increase, Gambino acknowledged that “it wasn’t worded the way it probably should have been.” Schaffner said he thought the assessment of labor dedicated to the fueling station — given in Chestler’s report as 30 percent of the harbormaster’s hours and 10 percent of the assistant harbormaster’s — was flawed. He said he expected the increase would be “detrimental to the charter fleet.”

Walter Chuck, of Newport, said he thought the council should have first presented the proposed increase to the harbor commission. He also said that, given the pandemic, he considered the rate hike to be “price gouging.” Don Bets, of Depoe Bay, agreed, and he said that although the increase would not affect him much personally, he felt it harmed the city’s image and thus would have a deleterious impact on other local businesses.

Harbor Commissioner Lars Robison, who is also a charter boat captain, echoed concerns about the lack of information, not just for the public, but the harbor commission itself. “We didn’t seem to be part of the price structuring, there was nothing, no information to us, and I really didn’t like that part,” Robison said.

Gambino said, “I recognize that. I would agree with that, and I don’t know what to do other than to say sorry, and that doesn’t help.” Robison replied, “No, that really doesn’t cut it. We only meet once a month, you guys meet more often than that, and that information didn’t make it to the harbor commission.”

In all, 11 members of the public addressed the rate increase during the meeting. At one point, a Lincoln County Sheriff’s Office deputy showed up at the council chambers. It’s not clear who called authorities, and the deputy left after poking his head into the room and being waived off by Gambino.

The mayor told the News-Times the council would likely schedule a public hearing on the rate increase during a future meeting. 

Chestler told the News-Times via email, “The council of the city of Depoe Bay is striving to be fiscally responsible to all residents of the city and often has to make very unpopular, hard decisions to meet those fiscal responsibilities, and this is one of those decisions. The city values all businesses within the city and recognizes the harbor fleet’s role in our community’s tourism.” 

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