State lawmakers in Richmond this week voted unanimously for an independent audit of the finances and operations of SPSA, the regional waste authority plagued in recent years by debts, lawsuits and controversy.
Under a resolution passed by the Senate on Tuesday and the House on Wednesday, the state auditor of public accounts will conduct the review of SPSA’s internal workings and also compare them to how other trash authorities and private garbage companies do business.
The audit team will spend nearly a year on the effort, poring through documents and spreadsheets and conducting interviews. The auditors must report their findings, along with any recommendations for improvements, to the General Assembly by January.
“We’ll be asking things like, 'Why did you do this or that?’ and 'Why did you enter this particular contract?’ and 'What can you do about it now?’ Stuff like that,” said Walter J. Kucharski, who heads the Auditor of Public Accounts office, a state agency.
“We’ll be looking at the numbers and finances, of course,” he added. “But we’re also looking at performance – what’s worked and what hasn’t.”
Two local legislators – state Sen. Fred Quayle, R-Suffolk, and state Del. John Cosgrove, R-Chesapeake – sponsored the audit bill.
Cosgrove had wanted a deeper, tougher inquiry of the Southeastern Public Service Authority, an agency he said has lacked sufficient oversight for years. But those attempts were voted down or blocked this year and last.
So Cosgrove and Quayle jointly introduced their compromise bill for a state audit this year, which has sailed through the Legislature.
“I don’t need to tell you about the many questions and concerns we’ve received about SPSA,” Quayle said Thursday. “We’re asking for a good hard look at how they’re operating. And I’m confident that if they’re not operating correctly, we’ll find out what’s wrong and do something about it.”
John Hadfield, SPSA’s executive director, who is retiring in August and will not be in office when the audit is completed, said the waste agency supports the Cosgrove-Quayle resolution.
SPSA, Hadfield said in an e-mail Thursday, “has worked with the APA on routine audits in the past and we look forward to working with the APA in this capacity.”
SPSA was launched in the 1970s to handle most garbage and recycling in eight counties and cities in South Hampton Roads.
It has amassed about $250 million in debts since then in building a regional waste system, but member communities began to get nervous last year over how and when that money will be repaid.
In response, SPSA imposed the highest disposal fees in the state – $100 per ton of garbage – to help restore financial stability, offered early-retirement buyouts to employees and cut operational costs by 7 percent.
At the same time, the agency was sued by the city of Chesapeake, which sought to leave SPSA early, citing lost confidence in management and policy.
Also last year, an unpopular deal fell through to bring New York City trash to Portsmouth for incineration, and SPSA executives were found to be spending generously on trips, meals and other business expenses while decrying their financial crisis.
Kucharski, with the Auditor of Public Accounts, said his office has experience with analyzing waste authorities.
More recently, though, the office has reviewed the conditions inside the Virginia Department of Transportation and spending problems at the state Game and Inland Fisheries Department, and is now helping to sort through the state’s $2 billion computer-network contracts.
“There’s always too much for us to do,” Kucharski said.
Scott Harper, (757) 446-2340, scott.harper@pilotonline.com
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About These Comments
While an audit may be due, Mr Barrett has actually been the most accessible person I've ever heard of, to the general public's questions, for a man in his position. It would seem to me , that he doesn't have to answer to anything at all in this forum, but, chooses to do so regardless of possibly being at the receiving end of a large dose of criticism. Apparently he can dish it out as well as he can take it. I know I'm probably not the role model of good manners, but, you have to admire that. lol
Thank You Mike
Mike - thank you for your constant support and leadership. Our region's AWARD WINNING - Nationally recognized solid waste authority: SPSA is something Hampton Roads should be proud of - and its great leadership from folks like you, Hadfield, Blow, and past leaders like Curling and Phillips! It is people like little Scottie Harper, and the editors and paper that support him, that have me baffled. How can one little man get away with the silly stories - and ridiculous attention to this fine agency? What did SPSA ever do to him? He continues to spread rumors which only have scared employees - changed the ENTIRE dynamics of a great organization by his microscopic eye on everything SPSA does...SPSA - wasting taxpayers money? If you think that - I implore you to go over to their headquarters - middle of the work day and see that while the few employees left working in the dark to save energy, no celebrations of employee’s good work, no enthusiasm and little comradery - BECAUSE OF LITTLE MEN LIKE SCOTTIE H!!! Bad Scottie...bad paper for not investigating his story and bad paper for claiming it holds integrity as a high value. Integrity does not have the public in an uproar over fals
Lunacy?
Mr Barrett is like a small child during a temper tantrum. When he doesn't get his was he belittles other views. SPSA has been run in the ground by people like him.
Oh, that's classic. The ash
Oh, that's classic. The ash plant? That is kind of like sending the Seaman Recruit to find the mail buoy. Can you tell me where the ash plant was supposed to be located? I guess when people get their only news from the pages of the Pilot they are loaded for bear and reason, deliberation, and knowledge goes out the window. Once you have become inflamed by another headline in the Pilot, you are loaded for bear and you are never going to be deterred. Anger begets lunacy, and on this Friday afternoon as ther day winds down, I am going to simply enjoy your comment about the ash plant all weekend, and if for some reason I start to take myself too seriously, I will get a great kick out of that comment. You all, have a nice weekend as well.
You know...
You know that the GA could pass legislation to allow the municipalities to vote to create the Hampton Roads Trash Authority (HRTA)… Then the HRTA could pass a tax on to all of us to build a third incinerator, etc…etc…etc....
Nope, that won’t work, the Va Supreme Court would rule later that unconstitutional…
Just adding it all up in my head....
Ash Plant
You forgot to mention the ash plant that was built and never used at the cost of millions. Don't look in your mailbox for any SPSA leadership or efficiency wards.
Well of course, I do not
Well of course, I do not admit anything of the sort. I agree that from the day I was appointed to be the respresentative from Virginia Beach, I worked on behalf of the city council to change the method of financing short term obligations with long term debt, and issue that I had repeatedly criticized the SPSA board for enacting. However, as perhaps you are unaware, each member jurisdiction has but one vote, and I will acknowledge that while we were concerned about this practice, other members were quite content to continue to borrow in this fashion and to enjoy the lower municipal tip fees paid by their jurisdictions as a result of this practice. Finally, other jurisdictions became aware that this practice was not sustainable, and eventually the practice was changed, new more prudent fiscal policies were adopted, and the cities/counties agreed to higher tip fees to ensure that all debt is paid off by the end of the contract period.
Hey Mike, How long have you been on the board?
Mikebarrett said "I certainly agree that past business practices were unsustainable, and fortunately, those practices have been changed, new sustainable policies adopted, and the members have placed the organization on a stable financial footing." So mike, you agree that you and the other board members are the one's that have abused the SPSA funds and ran it in to high debts. Now the very people that ran up the debt and miss-used the funds are saying they are on 'stable financial footing". I can't help but wonder if the board members and Hadfield run their household finances the way they handle the SPSA money. You're a fine example of why there should be TERM-LIMITS on all elected and appointed positions. One of the other posters commented about seeing SPSA people up in NOVA SCOTIA partying at some convention. Was the board and Hadfield there mikey? Hopefully we'll see a very nice audit with some indictments to follow.
ok
so it was "someone else's fault". How about an opinion...stupidity or criminal??
Interesting perspective. I
Interesting perspective. I certainly agree that past business practices were unsustainable, and fortunately, those practices have been changed, new sustainable policies adopted, and the members have placed the organization on a stable financial footing. But as to the future, the chief administrative officers of the member jurisdictions have embarked upon an objective analysis of the options for the members in regard to future solid waste management activities. The SPSA board welcomes this analysis which should result in charting a path for the future of the regional entity as well. Of course, the irrational condemnation of debt on these pages ignores the reality that solid waste disposal is an industrial function, and the cost of a landfill, a refuse derived fuel plant, a waste to energy plant, and a fleet of tractors and trailors,was expensive from the very beginning and debt was essential to create a going concern. It was the postponing and elongation of the debt service that I was most concerned about, but a correction has been adopted.
Unelected bodies
This is the danger when unelected bodies that get ahold of taxpayer dollars. Would ANY elected body be allowed to spend a entity into such debt? The board acts so proud of their work. The only thing that the SPSA board did was get drunk on public money, spend money on useless projects and party on the backs of taxpayers. This is a body that will surely go away when their contract expires. That time can't arrive soon enough.
long ago
When SPSA first "hit the streets" I thought the purchase of Peterbilt brand trucks was "odd". This particular brand is not known to be the "economy car" of the truck world. In retrospect we now know the mentality of "what the heck it's not my money". And before the "experts" respond about "value, etc", spare me. I was in the industry my entire life. You'll NEVER convince me it was a competitive bid best buy. Funny how it foretold the problems to come.....
Seems board and hadfield are sweating?
Apparently some of the board members and hadfield have something to sweat over. Maybe a closer look at conflict of interest is in order? I've always wondered how someone can run an organization in the ground, built up huge debts while spending like there's no tomorrow and still get a huge bonus and salary increases. This is way past due and is indeed money well spent that could very well end up in huge savings and maybe an indictment or two.
Halifax
As I stated earlier I was in Halifax, NS two years ago and to my amazement SPSA folks where at the casino for a trash convention! Talk about waste of taxpayer dollars! I'm sure we learned a lot about good management practices at a casino convention hotel in Canada. This audit will be interesting....
Think Again
Well actually, if you came to that conclusion, you would be wrong. I voted for an expression of support for the audit, and I don't believe we have anything to hide. However, I do wonder whether Legislators bothered to actually read the KPMG audit and the annual report to our bondholders before they agreed to spend tax money to conduct a further audit. Further, the comparison of operating entities in the Commonwealth was already done a few years ago by the Counties, Cities, and Towns Subcommittee of Solid Waste Services incident to HJR 585, so why another review is called for is beyond me. I suspect it has much more to do with Chesapeake's lawsuit, most of which was basically thrown out of court. Further, the major issue with debt, that is the failure of the Board to adopt fiscal policies to curb the further use of debt and establish a schedule to pay it back, was supported by the City of Chesapeake representative for years. So frankly, to me, this is a waste of taxpayers dollars.
Mike Barrett
Mike, thanks for quoting the statement that is required to be included in all clean audit opinions. However, as you point out, the KPMG opinion states "the financial statements referred to above present fairly, in all material respects, the financial position..."
This article indicates that the APA audit will look at more than just the financial statements. As someone in a leadership role, I would expect that you would welcome an audit that may identify weaknesses in business practices and procedures that could result in more efficient and less costly operations. Don't you want to improve SPSA's operations??
I'm afraid that I have to agree with the perception that SPSA may have something to hide.
jmo
Not Anti tax....
I know taxes are never going away. I never argue that point. If I really felt anti-tax i would move back to TN with no state income tax. But what I am is someone concerned when the needs of the people are left to the way side to keep people like you in a comfortable bracket where you no longer have to worry about every nickel and dime.
I've said it before, I've been there, near poverty and at poverty. I've spent my time with the heat off in winter, with three layers of clothing on, sleeping under 3 blankets to keep warm, eating only chicken rice and water, so I could pay my mortgage and my car payment. I've worked like hell to get to where I am today. And I've seen that at every step on my way through 2 degree programs and starting certification programs next as well as a masters program that each time I move up I get taxed more. Then I look at people like you. People who casually believe that one more tax isn't going to hurt. I ask for the city and state to live within it's means. Not live like each year is going to give them double digit increases.
Hiding something?
I wonder if there's background here? Obviously the GA thinks there might be issues..... SPSA another example of wasteful government spending. Sure glad the HRTA will soon be gone!
Hiding something?
I wonder if there's background here? Obviously the GA thinks there might be issues..... SPSA another example of wasteful government spending. Sure glad the HRTA will soon be gone!
A beeter idea
Better yet, perhaps we can get you off the SPSA board and get someone on the board that actually cares about citizens and taxpayers instead of his own business agenda?