Preston - Minutes of the Southeastern Connecticut Council of Governments' recent executive committee meeting indicate that the state Department of Transportation may be willing to pay for the fuel spill cleanup at the SEAT bus terminal provided SEAT undergoes a change in its management structure.

State and local officials continue to work on an agreement on how to pay for the cleanup behind Southeast Area Transit's main bus terminal. The cleanup was needed after the state Department of Energy and Environmental Protection found a sizeable fuel leak in August 2010 behind the Route 12 facility.

DEEP estimated the leak at 90,000 gallons and said it had been going on for at least two years. Early estimates put cleanup costs at $1.4 million or more.

Local officials from SEAT's towns have engaged in discussions with state DOT officials, including Commissioner James Redeker.

Kevin Nursick, a spokesman for the DOT, declined comment Monday because the matter is still in litigation. Waterford First Selectman Dan Steward, the chairman of the council of governments, said Tuesday that no resolution has been determined and discussions continue.

SEAT, which provides bus service to nine towns in the region, filed a lawsuit a year ago against the state that blamed the leakage on an underground fuel storage system installed by the state DOT. SEAT operates out of a DOT-owned building across from the former Norwich Hospital property.

Its board of directors voted to seek $795,443 from the state to cover environmental assessment and remediation costs on the premise that SEAT was in no way responsible for the leak.

Board members have said the leak is much smaller than DEEP reported, and the lawsuit claims it started six to 10 years before it was detected. SEAT General Manager Ella Bowman said the leak was undetectable because it seeped out in small daily increments.

Bowman acknowledged Tuesday that discussions are proceeding between SEAT's member towns and the DOT. She said she was unaware of any proposed resolution or changes to SEAT's management structure.

The council of governments' meeting minutes said recent discussions have been aimed at how to have regional input at SEAT under a state DOT management model.

A 2011 audit shows that SEAT received more than $3 million - about half of its funding - from the state. The audit also said SEAT's net assets dropped by nearly $500,000 in the most recent fiscal year, and it paid $464,124 in fuel cleanup costs.

The transit authority is still engaged in a lawsuit with United Recovery Oil Inc. United argues in the suit that SEAT owes the company $415,000 for remediation costs the transit authority never paid.

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

jeff.johnson@theday.com