LACROSSE, Wisc. -- The southern end of French Island has become the final destination for millions of railroad ties treated with creosote, a substance that has been criticized as a threat to human health and the environment, the Lacrosse Tribune reports.

Earlier this month, the Wisconsin Department of Natural Resources issued a solid waste processing permit for Rail Systems Inc., a company that grinds up old railroad ties so they can be burned as fuel at the French Island Generating Plant.

DNR previously issued air and stormwater permits, but did not require Rail Systems to get a solid waste permit - until town of Campbell officials and nearby property owners complained about the operation at 505 Bainbridge St. Town officials became worried about fire safety because huge piles of ties were stored within several hundred yards of a residential area.

Rail System's president, Jeff Schott, said the operation is being run properly and provides a vital service by recycling old railroad ties into an energy source.

"There is no hazardous situation going on down there, otherwise we wouldn't have a permit from the DNR," Schott said in an interview.

Schott said people are unnecessarily concerned about the 250,000 creosote-treated railroad ties the company processes each year. The company grinds approximately 200,000 ties for fuel, with the best ties sold whole for landscaping use.

"All it is is a biodegradable product. The wood doesn't leach," Schott said. "There's not a cancer-causing agent in a tie."

"Is creosote truly a dangerous chemical?" asked John Noyes, president of F.J. Robers Co., which leases land to Rail Systems. "Green-treated wood is worse."

Yet several federal and international agencies believe creosote is dangerous, classifying it as a pesticide and a probable human carcinogen. Wood treated with creosote is not classified as a pesticide or a hazardous waste by the U.S. Environmental Protection Agency, though that could change.

"Creosote is nothing to be played with. It's nasty stuff," said Martin Herrick, an environmental engineer with the DNR's La Crosse office who signed off on the Rail Systems permit. "There is a fair amount of research going on about the toxicity of creosote, and we reserve the right to modify their permit" based on the new research, he said.

So far, creosote-related chemicals have been found in stormwater and soil on the Rail Systems site, according to testing performed for Rail Systems. While those levels exceed some standards, they are not high enough to warrant a cleanup, DNR officials said.

The chemicals are polycyclic aromatic hydrocarbons - PAHs for short - and are found in coal tar, crude oil, creosote and roofing tar. The Department of Health and Human Services has determined that some PAHs may reasonably be expected to be carcinogens.

Out of concern that those creosote-related chemicals could reach well water on French Island, the DNR has tested private wells near the Rail Systems site, including a private day care center.

Those tests have come back negative for creosote-related contaminants. However, the well water at Rail Systems is contaminated and undrinkable, which the DNR blames on a plastic pipe used in the well construction.

Schott said he thinks the PAHs in the soil and stormwater may have come from somewhere besides the railroad ties. "That could be runoff from a truck," Schott said.

Noyes said the nature of the land at the south end of French Island makes it almost impossible to pinpoint the source of a contaminant. "Because of the background levels, you can't put a finger on it," he said.

"We built this area with dredge spoils," said Noyes, referring to the F.J. Robers barge, dredging and terminal operation. "It was capped with NSP ashes."

Starting in the 1940s, ashes from coal burned by the French Island Generating Plant were dumped on the island, according to DNR records.

Since 1992, when Rail Systems started operating, DNR officials have been concerned about environmental problems. Permits weren't required immediately, but over time the DNR required air pollution permits for the diesel engines and stormwater permits for water collecting on the site.

Herrick said the storage of ties was identified as a stormwater issue. In 1992, a DNR environmental engineer noted that railroad ties had been stockpiled on areas without any asphalt base. The engineer, Tom Stibbe, requested Schott provide a paved or recycled asphalt base "for all storage areas."

Schott put in an 18-inch asphalt floor beneath the storage building for chipped ties, but whole ties remained stacked outside on the ground for nearly a decade.

And as time went on, the stockpiles got bigger and bigger. By the late 1990s, town of Campbell officials became concerned, Supervisor Rod Schellpfeffer said.

"The fire chief and I were concerned about kids getting in there and starting a fire," Schellpfeffer said. "We worked on this for three years."

"We had kids going in there" and playing among the ties, said Noyes, who chairs the La Crosse County Board of Harbor Commissioners. He took action based on Schellpfeffer's concerns.

"I shut them down and dealt with the issue," Noyes said. He worked with Schott and the DNR on getting a solid waste permit for the operation in Robers' name.

"Now we are the permitee and they are the operator," Noyes said. "It gives us control. The environmental liability involved in any of this type of work leads you to want control."

"We're really happy they cleaned it up," Schellpfeffer said.

Under the new permit, issued Jan. 2, Rail Systems will no longer stockpile railroad ties outdoors. All ties delivered to the site will remain in boxcars or truck trailers until they are ground up. Rail Systems agreed to stockpile no more than 600 tons of chipped ties.

The area where the ties are ground and stored is paved with asphalt and includes a sewer catch basin, which is connected to the town of Campbell's sanitary sewer system. This way, water contaminated by the chips will be treated at the La Crosse Wastewater Treatment Plant.

The DNR did grant an exemption to rules that require a 250-foot setback from the Mississippi River for areas where rail cars and semi trailers are parked. Previously, railroad ties were stacked much closer to the river.