The Virginian-Pilot
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CHESAPEAKE
The chief financial officer at SPSA has resigned, the latest top executive to leave the troubled regional waste authority.
Walter R. Hunter told SPSA on Friday of his intentions to go. He will stay on board for two more weeks but is not eligible for severance, said Tom Kreidel, a spokesman for the Southeastern Public Service Authority.
Hunter will depart about a month after the job of SPSA deputy director, held by William Louis "Louie" Jordan, was cut from the budget, and six months after the authority's former executive director, John Hadfield, took retirement.
Hunter's resignation comes as SPSA struggles to stay solvent. The authority, established in the 1970s to handle garbage and recycling in eight cities and counties in South Hampton Roads, owes $230 million and faces a $16 million budget deficit this year.
To remain afloat, SPSA hopes to restructure some of its debts, putting off payments in order to keep about $30 million on hand to pay bills and meet obligations. Short of that, SPSA might have to increase local disposal rates to the highest in the nation -more than $245 per ton of household garbage.
An accounting firm hired by the Virginia Resources Authority, a state lender that is owed more than $129 million by SPSA, said that rate hike could climb even higher - to as much as $345 per ton - in order to generate enough money for the waste authority to stay open.
SPSA's board of directors is scheduled to vote on a rescue plan in April.
The accounting firm, Cherry Bekaert & Holland, said in a memo that SPSA has not yet begun to budget for 2010.
The memo also described how SPSA was forced to borrow $3.5 million from a line of credit with Wachovia Bank to pay off another credit line last year - and how it now is seeking approval to use another $7.5 million in borrowed bank money to cover day-to-day expenses.
Hunter joined SPSA four years ago -when financial concerns first surfaced among member communities - after a lengthy finance career with two natural-gas companies.
He did not return phone calls to his office Tuesday.
"Walt will be sorely missed at SPSA," Bucky Taylor, the authority's executive director, said in a statement Tuesday. "I truly wish him the best and am saddened by his departure."
SPSA has not decided whether to replace Hunter, who as director of finance and administration was earning $117,977 a year, said Kreidel, the agency spokesman. Kreidel described Hunter's announcement Friday as "surprising."
His departure leaves Taylor as the sole executive officer at SPSA. Just three years ago, 10 executives worked there.
Since then, the others have either resigned, left for new jobs or taken early retirement packages that were offered to save money.
Pilot writers Deirdre Fernandes and Jen McCaffery contributed to this report.
Scott Harper, (757) 446-2340, scott.harper@pilotonline.com
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Yes
SPSA does reimburse the Beach for the cost of operation of the V.B. Landfill, which includes equipment cost and labor costs. SPSA disposes of ash and residue at the site, and while in some years, SPSA has used the landfill in Suffolk, the Beach and SPSA signed the Ash and Residue contract that stipulates the agreement between the parties. This agreement also allows the Beach to dispose of municipal waste up to set percentage (5%) at no cost and to allow others to dispose of waste there, but agrees to charge the same fee as SPSA charges per ton. In simple, short, and concise language, the City has an agreement with SPSA, signed at the same time that the Use and Support Agreement was signed which governs the use of the Landfill by SPSA. Those who now criticize this agreement signed in August of 1984 just want out of their agreements.
Mike or anybody else that knows the facts
Can you explain to me what SPSA pays for at the Va Beach landfill? Does SPSA pay for the purchase of the heavy equipment (compactors, dozers etc)? Does SPSA pay for any of the salaries directly or indirectly? Does anyone have an estimated figure on how much SPSA pays yearly (plus debt intrest)towards the operation of the VA Beach landfill that SPSA does not use? This is not meant as a dig. I truely have only heard rumors about this and do not know whats true and what is embelished. No sarcasm directed.. Please don't respond with sarcasm (emily).
Simple Explanation
Well, of course Emily, the simple explanation is that you are once again poorly informed. When the Beach considered the implementation of an expanded recycling program, it went to SPSA and requested that SPSA adopt the collection of recycling material in automated fashion with the 90 gallon bins. SPSA declined, but posed no objection to the city's expanded program which replaced the SPSA program of using the small containers that had to be hand sorted. SPSA provides this service on a cost basis, so there was no financial detriment to SPSA at all. The City Council in Chesapeake has been led down the path of pursuit of SPSA's demise, apparantly with a zealot's pursuit of transferring its fiscal obligations with no regard to the contract Chesapeake signed. Truth and justice have been the first victims of this pursuit, the loss of 450 jobs and the loss of each city's coveted credit rating will be next. Way to go, Chesapeake.
MR BARRETT
If Virginia beach honored all it's contracts, how do you explain violating the contract with the recycling move?
Got it, Reid?
You see Reid, Emily is the spokesperson for the City of Chesapeake which has opened a full scale assault on the agreements signed when SPSA was created. Point is, they sued and lost, so now the battle has shifted to the legislature and to create internal divisions in the organization so it will fail. Their desired result is that the taxpayers of Virginia Beach bail them out of the deal they made 25 years ago but which they do not wish to honor today. So Reid, you and the members of the VBTA can hoist Pat Murphy up as your hero and follow him to the promised land, which in the end will result in the Beach, having followed the agreements in scrupulous fashion, will get forced to pay off obligations that belong to Chesapeake. Nice job Reid; you've given Emily all the help you can. Get ready to pay the price.
WHAT CITY IS SHIFTING RESPONSIBILITY?
No surprise here...it's Virginia Beach. Virginia Beach violated the SPSA contract when they started their own recycling program. They even extract host money from SPSA for a closed landfill. They bullied the SPSA board for years. For years VB voted to increase SPSA's debt knowing they didn't pay any of it. Now they refuse to be a part of the debt solution.
Last July the paper had an article about VB's moves to reopen Mt. Trashmore 2. They have to be planning to walk away from SPSA and leave 7 other cities holding the debt bag.
If this ends up in the courts, VB will be forced to pay it's share of the debt. Right now, they're trying everything they can to make the 7 other cities pay. My council people don't want this kind of forced taxation on their residents any more. Why should our homeowners be saddled with higher trash bills to help VB, the largest, richest city in Virginia?
Reid is a real hoot
Reid, you are a real hoot. This is about disposal of regional solid waste, and there is no agenda to take over the region by regionalists. It is simply a collective effort to do more cheaply what each member could have done individually at much greater expense. And frankly, if that were the sole measure, SPSA actually does that quite well. It is ironic that the ReEnergy proposal recognizes that by a willingness to buy exactly the same assets, but requires that the cities sign new, twenty year contracts. Well, we could do exactly that now, and the issue of high tip fees would disappear. But the problem is that the existing agreements expire in 2018, so SPSA can only finance over a few short years, and that makes debt service quite high, hence high tip fees. You of course blame all of this on regionalism, while in fact it is simply some cities want to shift their obligations to others.
Why did SPSA borrow so much money in the first place?
Mike, if SPSA did not have the ability to pay back the hundreds of millions that it borrowed, why did they borrow the money in the first place? Secondly, clearly the "game" was to "buy" political support for the "benefit" of the "regional agenda" by agreeing to give cities such as Virginia beach a "good deal" on their tipping fees so that the "regionalists" could "buy" political influence for the support of the General Assembly's creation of SPSA and to advance the unaccountable REGIONAL GOVERNANCE model - in effect usurping to power of VOTERS to have control over those that control our waste management. SPSA advocates KNEW the "deals" they were making could not be sustained - but they made them anyway and now they try to blame others for wanting SPSA to honor the deals SPSA's BOD made! Mike sounds like those people that signed mortgages they can't afford and want to blame the banks for lending them the money they agreed to pay back!
Natural advantage
Look MPC, I make no apology for being the representative from Virginia Beach. That said, I acknowledge that renegotiation of the original agreements is necessary. In that renegotiation, member jurisdictions must deal realistically with their own natural advantages and disadvantages. The Beach has invested in the creation of a landfill that is permitted and operational and may be expanded. Chesapeake has not. In the renegotiation, this difference in situation is a necessary starting point for reaching an equitable agreement. To think that Virginia Beach and Suffolk are simply going to cede their advantage to the other members is neither fair nor equitable.
I missed that in the original viewing but what I didn't miss was
"I think the tip fee will be in the $250-$350 range but the good news is your fee will be 53 bucks!" Doesn't exactly sound like you recommending your city will need to renegotiate its fees to help out the other member communities. I also noted that when you speak about the positive things of SPSA you use "we", but when you speak of the negative it is "they". You do realize you are a SPSA board member and decisions made by the board reflect upon all members? When the state auditors and other commissions speak of the mismanagement by the SPSA board you share equally with the other board members in the blame. The report didn't say board member A did this and board member B did this, it cited the board for not guiding SPSA clearly. Wake up, Mike, you were just as much asleep at the switch as the other members. What will you tell the 400 SPSA employees that will be unemployed if the doors close because of the boards mismanagement. "Sorry, I voted against it" won't help them pay their mortgage and feed their families.