Preston - A diesel-fuel leak that began more than two years ago at the Southeast Area Transit facility on Route 12 has released 90,000 gallons of fuel into the surrounding environment. The ongoing cleanup effort is expected to cost at least $1.4 million.

The state Department of Energy and Environmental Protection first detected the fuel leak in August 2010 in an underground fuel line that fed above-ground fuel tanks at the SEAT facility, but no one knows exactly when it began.

And SEAT is embroiled in a lawsuit with Meriden-based United Oil Recovery Inc., the independent corporation it hired to handle the cleanup. United is seeking about $415,000 and claims the transit service did not pay for remediation costs after it realized the scope of the leak.

After a review of SEAT's fuel inventory records, DEEP determined that the leak started at least two years ago. SEAT General Manager Ella Bowman said Friday that one estimate states that fuel had been leaking for six to 10 years before it was detected.

"This is one of the larger underground releases that we've dealt with," Peter Zack, the assistant director of the emergency response and spill prevention division for DEEP, said Thursday. "It's a really big release."

The diesel fuel traveled several hundred feet underground - reaching depths of 18 feet - and polluted a small tributary of Poquetanuck Cove, Zack said. The cove opens into the Thames River.

Zack said the leak, which created a sheen on the cove, has not affected drinking wells and fish and other animals have not been greatly impacted. DEEP took over the cleanup effort last July.

Initial signs

In the summer of 2010, SEAT, which provides transit services to nine towns in the region, hired United to handle the cleanup, according to court documents. The company worked through July 2011 before filing a lawsuit against SEAT in September.

The suit claims that SEAT refused to pay for cleanup despite receiving periodic invoices that showed mounting costs. United is seeking $414,946, plus interest and legal fees, according to court documents. The case is ongoing in Meriden Superior Court.

Bowman said Friday that SEAT initially paid approximately $400,000 for the cleanup. She declined to comment on the ongoing lawsuit but said the underground fuel release was undetectable.

"It was a sub-surface release," she said. "There was no evidence of it."

However, Jaroslaw "Jerry" Pizunski, president of the SEAT drivers' union, said Wednesday that drivers had complained to Bowman for months about the smell of diesel fuel behind the SEAT facility.

DEEP first arrived on the scene after Preston road foreman Bob Boyd reported the smell of diesel fuel as he worked on the Norwich Hospital property across the street from the SEAT facility.

Aaron Green, a supervising and environmental analyst for DEEP, said it is unknown how long it will take to clean up the affected area, although Zack said it could be years. Green characterized the environmental harm as "moderate" because there are no drinking-water wells in the area.

Zack said DEEP's total costs will reach $1 million. The agency has plans for the installation of sheet piling to prevent fuel from reaching the Thames River.

DEEP also recently installed 12 wells as part of a recovery phase that Zack said is expected to cost approximately $500,000. The recovery wells will pump out the ground water, and once the water table drops, the fuel will flow into the wells, Zack said.

He said normally DEEP completes the remediation process and the agency then seeks to recover costs from the responsible party. A state Department of Transportation spokesman said Friday that the DOT is involved in ongoing discussions with SEAT regarding responsibility for the leak.

Paul Altman, the chairman of SEAT's board of directors, declined comment earlier this week on the fuel leak and the ongoing lawsuit.

'A red flag'

SEAT, which operates out of a state DOT building, has faced major financial difficulties recently. Figures presented at a board of directors meeting earlier this week revealed SEAT's expenses in the most recent fiscal year totaled more than $6 million while its revenue was about $5.5 million.

The bus company receives 70 percent of its funding - about $3.8 million - from the state, and 8 percent - about $450,000 - from the nine towns it serves. SEAT laid off five drivers in February 2011 and has cut routes as it has reduced its group drivers to 36.

Pizunski, the president of Amalgamated Transit Union Local 1209, and two other drivers said Bowman has resisted the union's efforts to see an audit of the financial records of the transit company. One of their concerns is mounting legal costs from the leak, Pizunski said Wednesday.

"Guess who's paying for those lawyers? The public," Pizunski said of the lawsuit.

The cost of the lost fuel has not been calculated. Bowman said Friday she was uncertain of the cost because the leak took place over a such long period of time.

Kevin Nursick, a spokesman for the DOT, said Friday the agency's primary objective is to ensure that a leak does not happen again and that environmental remediation in the area is completed.

"From our perspective, the loss of potentially 90,000 gallons of fuel and having that go undetected over a course of time is a red flag for us," Nursick said. "... That is a discussion we have had and will continue to have with SEAT in the future."

Changes at SEAT

The Southeastern Connecticut Council of Governments, a planning agency comprised of 20 top officials from towns in the region, recently accepted a legislative proposal that would give the COG more authority over SEAT.

The proposed legislation would allow the COG to add three members to the SEAT board of directors. It also would grant COG the authority to approve the appointment of the SEAT general manager and to ratify any contract in excess of $100,000. The proposal also calls for a annual audit.

Several members of the SEAT board criticized the proposal at a meeting Wednesday. Vice chairman Angelo Yeitz speculated at the meeting that it was the fuel spill that led COG to seek more control over the transit district.

The legislation must go before the General Assembly for approval.

SEAT's member towns are East Lyme, Griswold, Groton, Ledyard, Montville, New London, Norwich, Stonington and Waterford.

SEAT also has recently held several public hearings on a proposal that calls for 25-cent fare increases on all fixed bus routes. Those increases are expected to be in effect at some point in March.

In the most recent fiscal year, 19 percent of SEAT's revenue came from passenger fares. That accounted for about $1 million.

jeff.johnson@theday.com