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Preston - Southeast Area Transit failed Wednesday to reimburse the state more than $262,000 for cleaning up a 90,000-gallon fuel leak behind the bus company's Route 12 transit facility.
As a result, SEAT likely will become embroiled in yet another lawsuit after the default. The litigation would arrive at a time when SEAT's nine member towns are considering a joint resolution that would call on the state Department of Transportation to pay all the costs associated with cleaning up the fuel leak.
The state Department of Energy and Environmental Protection determined SEAT was responsible for the leak, which was first detected in August 2010. Some estimates said the leak began as much as a decade before it was discovered. DEEP took charge of the environmental remediation and is now seeking to be paid for its 26 months of work and the future cleanup costs it incurs.
SEAT missed its Wednesday deadline for repaying the DEEP $262,254. It owes the agency another $201,901 and is expected to incur interest and other charges. The DEEP said in a letter to SEAT last month that it intended to take the matter to litigation if the Wednesday deadline passed without payment.
"If we have to do work or bring in contractors to do work, we do try to recover those costs from the responsible party," said Dennis Schain, a spokesman for the DEEP. "It doesn't make sense for the taxpayers to foot the bill for a party like that."
The resolution being considered by SEAT's member towns also would require the towns to look at future expansion of the bus service and would move for a review of current standard operating procedures that may be ineffective.
The Montville Town Council passed the resolution Wednesday night while other towns, such as East Lyme, are still considering it.
SEAT has sued the state Department of Transportation, the owner of its Route 12 facility, and has argued that the DOT is solely responsible for the fuel leak. Part of the argument is that SEAT's underground fuel storage system, installed by the DOT, was to blame for the leak.
SEAT is seeking $795,443 from the state, which is a major contributor of its funding.
A 2011 audit of the bus company showed SEAT received more than $3 million - about half of its funding - from the state. SEAT in 2011 also spent $464,124 on cleanup costs and its net assets dropped by nearly $500,000.
This financial picture strongly suggests SEAT will be unable to cover all of the cleanup costs on its own.
A spokesman for the state DOT said Wednesday the agency will consider the resolution from SEAT's members towns that would require the DOT to foot the bill for cleanup of the leak.
"In our consideration and deliberation process on whether or not the DOT will assume those cleanup costs, the primary concern for us is making sure that customers get the service they deserve," said Kevin Nursick, a DOT spokesman. "We will use that as the balancing test. That's obviously the major issue here."
SEAT is the defendant in another lawsuit involving United Oil Recovery Inc. The environmental cleanup company was hired by SEAT and later sued the bus company for $415,000. United claims SEAT never paid remediation costs after it realized the scope of the fuel leak. A trial in the case has been scheduled for Feb. 14.
Members of SEAT's board of directors and its general manager have disputed the size of the fuel leak and have said it was far less than the 90,000 gallons the state reported.
Ella Bowman, SEAT general manager, has argued the leak was undetectable because the fuel was released in small amounts over time that were not noticeable.
The Southeastern Connecticut Council of Governments earlier this year attempted to push forward a legislative proposal that would have given the council and its member towns more authority over SEAT. The proposal ultimately never came up for a vote in the state General Assembly.