Because it expects an infusion of cash within months, SPSA should be able to cancel or greatly reduce a proposal to sharply raise its local trash disposal fees, SPSA board Chairman Don Williams told the Norfolk City Council on Tuesday night.
Williams, also a Norfolk councilman, said he hopes the increase will be called off because the Southeastern Public Service Authority is close to selling its Portsmouth waste-to-energy plant. He implied the sales price could be upwards of $200 million.
Two firms, Covanta Energy and Wheelabrator Technologies, are bidding to purchase the Portsmouth plant.
ReEnergy Holdings LLC also has bid to purchase all of SPSA's assets for $205 million.
Williams said recent bids for the Portsmouth plant "have been in the same range" as ReEnergy's bid for all of SPSA's assets.
That is why SPSA has repeatedly declined ReEnergy's attempts to purchase all of the assets, he said.
Williams said the sale will be complet ed by June 1 and that SPSA should have a check in hand by Sept. 1.
The SPSA board canceled a public hearing and vote scheduled for today on increasing "tipping fees" to $245 per ton from $104. The increase was needed to close a $16 million deficit in the current fiscal year, which ends July 1, that officials blamed on the economic downturn.
Tom Kreidel, a spokesman for SPSA, said the cancellation of today's vote stemmed from a legal complaint from Chesapeake officials, who expressed concern that SPSA was not providing 60 days of advance notice to hold the hearing and vote on the rate hike.
The increase would have essentially doubled trash disposal fees in Chesapeake, Norfolk, Portsmouth and Franklin and Isle of Wight and Southampton counties. Because Virginia Beach and Suffolk host landfills, those cities would not have been affected.
The vote was postponed for at least two months in part because of concerns raised by the city of Chesapeake.
SPSA hopes to temporarily make up the shortfall by cutting $2 million in costs and refinancing some of its debt, Williams said.
"We have 60 days now to explore options to close that gap," he said. "I think we'll find a way to do it" without raising tipping fees.
The agency, which has handled trash disposal in South Hampton Roads for three decades, has been crippled by $245 million in debt that it is legally required to erase by 2018.
The delayed vote could mean that the waste authority may run out of cash by then and be forced to close its doors, Kreidel said.
"That would be the worst-case scenario," he said. "But yes, that is a possibility."
Williams disputed that, saying the board will narrow - and, he hopes, erase - the deficit.
Chesapeake was the first of SPSA's eight member communities to say it would not support the $245-per-ton rate proposal. The Portsmouth City Council followed Chesapeake's lead Tuesday, also voting to oppose the increase.
SPSA's board of directors still will hold its regular meeting today but will not discuss or take action on the rate hike. The meeting begins at 9:30 a.m. at the Regional Building in Chesapeake.
Pilot writer Jen McCaffery contributed to this report.
Harry Minium, (757) 446-2371, harry.minium@pilotonline.com
Scott Harper, (757) 446-2340, scott.harper@pilotonline.com
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I wonder how much the current CEO's trying to pocket
I'm betting they have not contacted ReEnergy about withdrawing the Portsmouth plant from ALL of the assets they wish to purchase. In turn will redo their bid for a lower amount. From what I'm guessing.. new bid came up just for P-town plant.. went directly to city council right after they received bid to say they wont hike the price.. and plan to pocket $150 Million.
What's annoying is they shouldn't be getting paid to be a failure. There is no excuse for being that much in debt. What needs to be published is how much these stupid SPSA CEO's are getting paid. It's sad enough Blagovich's wife was getting paid $100,000K/year to work as homeless agency's chief fundraiser. So the homeless don't get anything till they fundraise enough to buy a house in the ghetto, which is her paycheck.
http://www.time.com/time/nation/article/0,8599,1873246,00.html
Blagojevich Wife Fired from Fundraising Job
Deficit
Let's see the comment that the economy is down so we are not making money, well doesn't that also mean less trips for the trucks, if so you need less drivers??? So less employes equal less expense,less fuel,less tire repair and so on. I think that the CEO should be sent to Washington as a lobbyist!. Or maybe a Bank Executive!.
Make up your mind
We are going bankrupt if something doesn't get fixed. We have to double the rates now or we will close the doors. We can't cut costs. We can cut costs by 2 million. We have enough cash to get by. We need to vote today. We can put this off until September. Geez. Pick an answer and stick to it.
Indication
If this isn't an indication of the boards ability to run this business, nothing is. They request the highest fees in the country and plead their case only to come back and dismiss their efforts as not needed because they expect an infusion of cash in the future. We need to get a real administrator in this group. Someone that knows how to run a recycling and disposal business. What we have is a group of politicians trying to run a business that they have absolutely no knowledge of. They need to be gone! Someone please take charge and do what clearly needs to be done before we face a mountain of trash and no place to put it because of pending legal actions. Uncertainty is no way to rely on a supplier. Replace the board, or add real experience.
SPSA
If I remember correctly, SPSA either raises the tipping fee to $245 a ton or shuts it doors. Now, after being told that some cities would not pay it’s possible to operate without such a large increase. Maybe the 245 is a scare tactic. Or maybe it was a last chance to “miss-manage”. Not selling all of SPSA gives the board and management a chance to “miss-manage” a little longer. “Miss-management” must be profitable for somebody.
The current Board is not capable of running the organization.
These problems will not go away until SPSA gets a new Board. The current Board is not capable of running the organization.
Time for a change maybe
How in the world did this situation happen for so long? Perhaps now is the time for privatization of trash removal? It couldn't get any worse that's for sure.