The U.S. Coast Guard announced this week it would not pay insurance claims for the massive Menemsha boathouse fire, due to the belief the fire started on the town-owned drive-on pier and not on Coast Guard property.

The dismissal, though not unexpected, prompted outrage from town selectmen, who said the Coast Guard’s belief the fire started on the town pier was incorrect.

“It’s totally infuriating,” selectman and chairman of the board Frank Fenner said at the board’s meeting Tuesday night. “I was right there, I saw where the flames were on the Coast Guard section and there were no flames that I saw on the drive-on dock. For them to infer that makes me boil.”

“It’s disingenuous to say the least,” selectman Jonathan Mayhew added.

In a letter from Legal Service Command in Norfolk, Va. dated March 8, Coast Guard attorney Susan Steiner informed the town of the claim denial.

“The information indicates that the fire began on the drive-on pier, quickly spreading to a nearby structure, access piers and moored boats,” she writes. “The investigation into this incident could not determine the cause of the fire that damaged the town’s property. Hence, because the claimed damages were not caused by the U.S. Coast Guard’s negligence, the claim is not payable.”

A seven-month-long state and federal investigation concluded a year ago and ruled the cause of the July 2010 fire undetermined. The fire completely destroyed the historic red-roofed boathouse and the town dock. Investigators named three possible sources of the fire — faulty wiring under the Coast Guard boathouse, faulty wiring under the Chilmark public pier, or a lit cigarette — but could not pinpoint the cause precisely.

The investigation also ruled out arson or any criminal activity in connection with fire, and concluded the fire did not start in the boathouse but at the connection between the two docks, where the deepest charring of the fire scene occurred, according to the report.

The selectmen, who previously suspected the claim might be denied due to the report’s inconclusive finding, responded to the Coast Guard letter this week with a request the that Legal Service Command retract its statements about the fire’s origin.

“While we find the action disappointing and reserve our right to appeal this decision, we completely reject your characterization of the fire,” the selectmen wrote. “The extensive joint investigation . . . did not establish that the fire started on the drive-on pier. Such a representation by Legal Services Command is misleading and contrary to eye witness reports.”

“Furthermore for Legal Services Command to state unequivocally that the damages were ‘not caused by the U.S. Coast Guard’s negligence’ is unsupported by the investigation.”

The letter was also sent to Rep. William Keating, Senators John Kerry and Scott Brown, and U.S. Coast Guard Sector Southeast New England Capt. Verne Gifford.

The town filed a claim for rebuilding the public dock that was destroyed in the fire. The new $1.5 million pier has since been rebuilt and paid for by the town. The Coast Guard is working on plans to rebuild the historic boathouse sometime in the next two years.

But the town is not the only one out of luck. About 40 people have filed claims through the town and the Coast Guard, about half of whom have not received a reimbursement. Those claimants were sent a letter similar to the one sent to the town two weeks ago. Most who filed claims suffered damages between $10,000 and $20,000 each.

The selectmen and other claimants have six months to appeal the decision to the Coast Guard or in U.S. District Court. Yesterday town administrator Tim Carroll said the town was not rushing into any decision to appeal the ruling, but is keeping its options open.

Mr. Fenner said he reviewed the final report again this week and questioned its integrity after finding his statement to be misrepresented.

“I specifically told these interviewers that when I was coming down the channel with my boat I was specifically looking to see if [commercial fisherman] Wayne Iacono’s boat was alright and see if I could see where the fire was,” said Mr. Fenner. “The fire was definitely inside the [Coast Guard] building . . . I don’t know where this came from.

“I really question all of these other interviews,” he continued. “Did anybody sign or see a copy of their interview and sign it?”

Selectman Warren Doty was equally disturbed.

“This letter is just infuriating,” he said. “They say the reason they’re not going to pay for any damages is because the fire started on our dock — that’s basically what it says and it’s just not true.”