The state Department of Transportation will assume management of the Southeast Area Transit, which has operated buses in the region for nearly 40 years, and will conduct a full review of its services.
The takeover, requested by the bus company in November, would bring an end to the legal battle over unpaid bills stemming from a 90,000-gallon diesel fuel spill discovered in 2010 by the state Department of Energy and Environmental Protection behind a SEAT facility on Route 12 in Preston.
DOT spokesman Kevin Nursick said it's too early to determine whether there would be any changes in bus service. He said DOT decided to take control because it wanted to ensure services for riders.
"We want to make sure the customers get a quality transit service in the area," Nursick said.
East Lyme First Selectman Paul Formica, who also is chairman of the region's Council of Governments, said the towns want to stabilize SEAT and enable it to "become the true regional transportation that southeastern Connecticut needs."
SEAT board Chairman Paul Altman on Tuesday declined to comment on the state's plan to take over the bus service. SEAT's general manager, Ella Bowman, could not be reached to comment.
SEAT's nine member towns asked the DOT in October to take over and to assume the clean-up costs associated with the fuel leak. The DOT also would assume SEAT's debts, including $350,000 for a lawsuit brought against the district by the oil company it hired to clean up the leak. SEAT also would withdraw its own lawsuit against the DOT, according to a Feb. 5 letter from the transportation commissioner to the SEAT chairman outlining the agreement's terms.
SEAT hired United Oil Recovery Inc. to clean up the fuel, but the Meriden-based company sued SEAT in 2011 for failing to pay in full for its services. Ultimately, the transit district claimed the DOT was responsible for the leak and sought $795,443 from the department in a 2011 filing with the Connecticut Claims Commissioner. The transit district also owed the DEEP hundreds of thousands of dollars for clean-up, The Day reported in November.
"All signs are positive that we will have an agreement in place very shortly, and the DOT will be assuming management of the operation," said Nursick, explaining that inclement weather delayed the processing of the agreement.
SEAT, founded in 1975, operates public buses in its member towns - East Lyme, Griswold, Groton, Ledyard, Montville, New London, Norwich, Stonington and Waterford.
In the letter to Altman, SEAT's board's chairman, state DOT Commissioner James Redeker outlined the terms of the proposed agreement, which is not a "compromise of a settlement of disputed claims and issues." Besides settling the payment owed to United Oil Recovery, SEAT would withdraw its suit against the DOT and release any future claims against the department. The DOT would assume SEAT's "remaining debts and obligations," excluding expenses from its claim against the DOT.
The letter referenced a resolution by SEAT's Board of Directors Nov. 16 asking for DOT assistance to cover fuel spill expenses and to assume management.
Nursick said once the agreement is effective, the DOT would conduct an assessment and review of services.
No changes should be made to employment unless in accordance with a union contract set to expire on June 30, according to the letter.
Formica said the member towns' participation in an advisory board for the transit district is under discussion, but parties, including SEAT's directors and the DOT commissioner, would have to come to a final agreement.