For a second time this year, SPSA has rejected without public debate a proposal from a New York company to buy the troubled regional waste authority outright.
In a letter dated Wednesday, SPSA's board chairman said the offer from ReEnergy Holdings LLC would have left South Hampton Roads with just one provider of trash and recycling services, and would conflict with other studies and bids from private companies to buy pieces of the public agency.
"For all these reasons, SPSA cannot entertain your proposal at this time," board chairman and Norfolk Councilman Don Williams wrote to ReEnergy's executive officer, Larry Richardson.
Richardson, based in Albany, N.Y., was in Hampton Roads on Thursday, still meeting with local officials about his company's
possible buyout.
He said he was unaware that a letter had gone out. His local attorney, Vincent Mastracco, also had not seen the letter as of Thursday afternoon.
"That's one element in this that's been consistent," Richardson said from Mastracco's Norfolk law office. "It has been a little strange."
In the letter, Williams told Richardson that the eight-member board of the Southeastern Public Service Authority discussed the buyout offer on two occasions, in December and on Wednesday morning, before deciding to say no.
Both sessions took place behind closed doors and without a public vote or public discussion, said Tom Kreidel, a SPSA spokesman.
A similar offer from ReEnergy was handled the same way this past summer, and became public only when SPSA disclosed the talks in a memo to local government leaders.
Launched in the 1970s, SPSA serves Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Franklin, Isle of Wight County and Southampton County. Its board consists of one member from each locality.
Kreidel said Thursday that the board was within its rights to consider the matter again in closed session.
He stressed that one of the deal's underlying principles - of doing away with existing service contracts with SPSA and inking new contracts with ReEnergy - was too complex and disorderly to consider in a public venue.
"It's like putting the cart before the horse," he said.
By rejecting the buyout, SPSA signaled its future course of action to remedy $240 million in debts, falling revenues and rate increases like the one endorsed Wednesday, which would make municipal disposal fees the highest in the nation, at $245 per ton of household garbage.
It means that SPSA is likely to sell its waste-to-energy power plant in Portsmouth to one of two private bidders, Covanta Energy or Wheelabrator Technologies, which then would run the facility as a private asset.
The plant, located on the Elizabeth River, burns about half of all garbage accepted by SPSA, converting it to steam and electricity, which it then sells.
"SPSA will continue privatization efforts with a focus on selling its waste-to-energy facilities first," Williams wrote in his letter to ReEnergy.
John Daniel, a Richmond attorney representing Covanta, said rejecting the ReEnergy offer makes sense on several fronts.
"It was overdue, really," Daniel said. "It was confusing their ongoing negotiations and was kind of a distraction."
He called the rejection letter "a step forward" toward "coming to a conclusion of actually retiring some of
SPSA's debts," noting that Covanta has offered to pay cash for the Portsmouth plant.
Daniel declined to say how much cash is on the table, though he said it would "go a long way toward retiring their debt load."
ReEnergy had wanted to buy all of SPSA's assets, including the power plant, the regional landfill in Suffolk, and the yard waste facility in Virginia Beach, which has been temporarily closed because of budget problems.
The company has said it would have paid at least $205 million for SPSA.
Scott Harper, (757) 446-2340, scott.harper@pilotonline.com
Delicious
Digg
Reddit
Facebook
Google
Yahoo
Get Rid of SPSA
They could bail themselves out by selling. However out of sheer greed SPSA insists on floundering along by gouging us with the highest rates in the country. SPSA has proved they are failures and it is time for them to say goodbye! And take HRT with them...
A more diplomatic comment...
I'll try to be as diplomatic as possible. Trust me, my comment is not out of anger but rather out of total disbeleif. SPSA is going to start charging its member communities the highest tip fees in the country (by almost double) and at the same time reject a bonified offer that would have cut the current rates in half and eliminated the entire $210MM debt. Mr Barrett; you don't have any additional information that would possible justify this inconceivable decision. I know you get information behind closed doors and all but the simple fact is, SPSA has had years to figure out this system, they spent years ruining the system and they've embarked on at least 5 reform processes all of which failed including the latest. SPSA is a complete failure and should be FIRED by its member communities. The Member communities should immediately remove thier representatives from the SPSA board and install people with one task and one task only. Get rid of it in 6 months or less. NO OTHER OPTION IS FEASIBLE OR PRUDENT...
SPSA BUYOUT
I think that these guys from the SPSA should really reconcider the buyout... God knows they have screwed up things enough with the way that they are running SPSA now. If any other company was run this way, either it would have already went bankrupt or they would have been put in jail for mismanagement or embezzelment! Turning down the offer and then doubling our tipping fees is just asking for more audits and tighter reins on what is going on. I believe that the head honchos at SPSA do not want to give it up so no one comes in and starts digging to find out all the mismanagement that has been going on.
Mr Barrett
Those with the least access to "the facts of the matter" are the very same people paying the bills the SPSA Board has foisted on the public. My suggestion would be to bring the business of the taxpayers to the taxpayers and stop conducting business behind closed doors with a distain for those you are burdening with the costs of the Board's failure to conduct the people's business in a responsible manner.
Leave the area with one provider?
Isn't that the status quo. I look forward to reading more about this offer. My guess is that management does not...
well Mike
Tell us the facts. Why is it in our best intrest to bleed the citizens dry instead of letting a private firm come in and operate at a profit with lower cost to the citizens. It is apparent they can do the job you and your people can't do.
Did you know...
Mr. Barrett,
Did the offer include funding all City of Virginia Beach Landfill II operations, as SPSA does (and has)? You speak of free waste disposal for the citizens of Suffolk, but I wonder just how many out there know that SPSA funds your VB landfill and that Virginia Beach is steadily busy filling it with MSW? The other members of SPSA might be interested to know that VB is abusing its contract with SPSA relevant to the percentage of MSW/annum it is allowed to dipose of in its own landfill. Isn't that similar to "free disposal". sir?
Thank you
I guess I would just say thank you for your wise counsel. However, I recall advice from a respected family member to the effect that those who render strong advice based upon anger are usually the ones with the least access to the facts of the matter.
Of course
The SPSA board would have lost their cushy appointment and lavish exclusive club parties. No more trips to exotic locations.
I sure hope there is a better reason that the one offered. An oportunity to retire all debt, 20 year contracts, and lower fees than SPSA BOD supports. Either there is some shaddy under the table dealings, or the SPSA board has been sniffing too much methane from the landfill.
One sole provider... humm
And what do we have now?
why isn't the name of the New york Company included?
In the other article about SPSA included in today's Pilotonline, the name of the company offering to purchase SPSA in listed as Covanta Energy. This is the same company who wanted to bring the trash barges to our area. Why is the Pilot not reporting this?
WOW, isn't it great to be an American?!?!?
WOW, isn't it great to be an American and be FORCED to pay for corporate mis-management in almost every possible way? Of course SPSA wouldn't sell it's monopoly of waste management in Hampton Roads when they are about to rape every citizen with twice the fees. Get ready in another 2 years to hear that SPSA is STILL going bankrupt and you'll then have to pay $400\ton. The most hilarious aspect of all this is you have NO choice but use their services if you still want water. Now what would happen if our local politicians refused to approve the increase? I think we all need to pressure our city councils to protest. Either way, if the cities absorb the increase or not, you'll end up paying. Not even recycling can prevent this fleecing. I never knew that waste management was a losing proposition after the mob making millions off trash up north for decades. Maybe if SPSA was actually ran by people experienced in waste management, it would turn a profit.
Are you kidding me?
it's time for PUBLIC review of SPSA's actions. After all, they seem to believe public money is theirs for the grabbing regardless of their incompetence. Let the public know why this offer is a poor option as opposed to more than doubling the tip fees.
Every member of SPSA should consider resigning due to their refusal to exercise fiduciary responsibility.
SPSA cannot police themselves-time for the state to step in and take over.
Privatized trash pick up....
Takes a whole now meaning of the "Godfather" so could there be a solution without outsourcing our trash problems? Already have a facility that can handle it instead of rethinking a costly wheel.