Illinois budget crisis affecting fuel cleanup

SPRINGFIELD, Ill. (AP) - Federal regulators have warned Illinois to resume paying companies that wrench leaky fuel tanks from the ground or be forced to tell gas station operators they have to pay, according to a letter obtained by The Associated Press.

It's another potentially crippling consequence of the state's 10-month budget stalemate, which makes the $58 million set aside to pay for cleanup inaccessible. The letter, dated March 21 and sent by the U.S. Environmental Protection Agency's regional director in Chicago, demands the Illinois EPA deliver a plan to free up the cash for scrubbing contaminated sites.

Companies in charge of yanking tanks said the work has slowed since the state can't touch the Leaking Underground Storage Tank Fund - financed by an at-the-pump gas tax and a fuel-delivery fee. One consultant in northern Illinois told the AP, "Cleanup is not being done."

But the state EPA, which has until April 21 to respond, counters that this isn't the first tank-fund payment backlog and there is sufficient money to pay the $20.3 million in submitted bills. Without reimbursement, contractors that pull leaking tanks and replace contaminated soil would have to find alternate financing - likely from costly insurance policies that would be required of gas station owners no longer covered by the state fund.

"The state budget impasse has impacted the fund by halting reimbursements for remediation of LUST sites for the past eight months," Robert Kaplan, the federal EPA's acting regional administrator, wrote in the letter, adding that it "compromises the financial viability of the cleanup contractors that are critical to ongoing cleanups."

But work continues on 211 gas-contaminated sites around the state, according to documents released to the AP under the Freedom of Information Act. However, the majority of contractors on the ongoing jobs haven't sought payment and state EPA spokeswoman Kim Biggs said there's no way to estimate how much it will cost.

The federal agency also questioned diverting $20 million from the fund as part of the $1.3 billion budget deal that Republican Gov. Bruce Rauner and Democrats in the Legislature struck to balance the ledger for the 2014-2015 fiscal year. The two sides continue to wrangle over a spending plan that should have taken effect July 1.

Biggs said past payment delays have run as long as 24 months without threat of federal sanction. "EPA continues to move reimbursement requests through our approval system so that payments will be made as soon" as a budget is approved, Biggs said in an email.

Legislation to free up $860 million in special-purpose funds that was introduced Thursday by Senate Republican Leader Christine Radogno includes $60 million for the leaking-tank fund. But millions more in expenses are piling up. Among contractors on the 211 sites where decontamination has begun since the start of the fiscal year, only 10 have submitted reimbursement claims, Biggs said.

That's because much work has stopped, according to Bob Renguso, senior project manager of the St. Charles-based Marlin Environmental Consulting. Work proceeds in stages, with EPA approval at each step, but many companies hold up when there's no money to cover the next phase.

"We can't do the next step and wait for reimbursement any longer - we've used up all our capital," Renguso said. "We've been trying to continue these last few months, where the next step is approved, but we're just sitting on it. Cleanup is not being done."

Biggs said contractors are responsible for continuing to remove the environmental threat regardless of when they're paid.

Josh Appleton runs Earth Services in the southern Illinois town of Benton. Consulting firms dependent on state reimbursement pay his firm to do the digging. He's waiting on about $1 million for work dating back to last spring - about one-quarter of his annual revenue - and has turned his attention to demolition jobs.

"We've pretty well put a halt to any LUST (tank) work we're doing," Appleton said.

___

Contact Political Writer John O'Connor at https://twitter.com/apoconnor . His work can be found at http://bigstory.ap.org/content/john-oconnor .