Ishpeming City Councilman Stu Skauge, second from right, asks questions about underground tank removal near the corner of First and Pearl streets at a regular council meeting on Wednesday as, from left, Ishpeming Police Chief Steve Snowaert, Fire Chief Ed Anderson; Finance Director Jim Lampman and City Councilman Justin Koski look on. The council unanimously approved a $20,000 expenditure for the June 28 project. (Journal photo by Lisa Bowers)

ISHPEMING — The Ishpeming City Council Wednesday agreed to pay for the removal of the two underground storage tanks near the intersection of First and Pearl streets.

The council unanimously approved a motion to pay about $20,000 for the June 28 removal of the tanks, one of which contained gasoline while the second was empty.

GEI Consultants Project Manager Mark Stoor said the U.S. Department of Agriculture Office of Rural Development, which is providing financing for the city’s water infrastructure replacement project, declined to cover the cost to remove the tanks via project contingency funds. The USDA-RD is providing the city with $12 million, consisting of an $8.98 million 40-year low-interest loan combined with a $3.02 million grant to fund the ongoing water project.

“I made every argument that I could,” Stoor said. “Their position was that the underground storage tanks were not their liability at all. They were pretty firm about it.”

The tanks, which were considered orphaned — or lacking a viable owner, were removed by a certified waste removal contractor, Stoor said, in accordance with Michigan environmental statute.

All the liquid inside the tanks was then shipped to a disposal facility in downstate Kalkaska, and the tanks were then destroyed to ensure they would not be used for any other purpose, Stoor said in an email on Thursday.

Councilman Stu Skauge asked that since the tanks were officially owned by the state, what their role in paying for the removal would be.

“Didn’t you say that those tanks are the property of the state of Michigan,” Skauge said. “So isn’t some other, state of Michigan (Department of Environmental Quality), or something responsible then for them?”

Stoor said even though orphaned tanks are technically owned by the state, the city is responsible for their removal.

“State law requires that we take them out as a municipality because we uncovered them as part of our construction process,” Stoor said. “It’s the standard guidance documents that tell us that we have to do that.”

Ownership of the orphaned tanks falls to the state, which allows any future environmental issues at the site to be mitigated under the 2014 Michigan Natural Resources and Environmental Protection Act, by the Underground Storage Tank Cleanup Fund using $20 million annually of the monies generated by a gas tax.

Stoor said the cost for the contractor was just under $10,000 with roughly another $10,000 for engineering services, which included coordinating with state officials for proper disposal procedures; preparing tank registration; performing sampling and lab testing to certify waste; and documenting the tank removal.

Funding for the project will come from the city’s street fund.

City Attorney Bonnie Hoff said although the expense to remove the tanks was unforeseen, the situation could have been much more costly.

“Given the big picture, those costs could have been exorbitant, given the historical nature of the real estate,” she said. “The state required it due to the change in environmental laws. So we are getting off in the big picture cheap.”

The Ishpeming City Council voted unanimously to authorize the city manager to execute permit paperwork required by the state for the removal of the tanks during a special meeting on June 13 after they were discovered during the course of construction.

The presence of the tanks, which were located on a parcel the city purchased in 1957, as well as the right-of-way, was not previously indicated on any city map, Hoff said.