SPSA's state lender turns the screws on the authority

Officials say the Southeastern Public Service Authority tried to hide parts of its desperate fiscal condition from the state agency that lent it money. For people accustomed to shenanigans at the trash authority, the only possible response is four simple words: What else is new?

According to reporting by Pilot writers Mike Saewitz and Scott Harper, the head of the Virginia Resources Authority accused the agency of failing to fully inform the state about bank loans, even when asked directly about them.

In a letter to Bucky Taylor, SPSA's executive director, the VRA's Sheryl Bailey wrote that her agency is still hoping to help, but "such a positive way forward will absolutely require full disclosure and accurate information regarding every single item encountered, both large and small."

SPSA owes VRA $129 million. The trash agency also owes VRA straight answers.

This isn't the first time SPSA has been scolded for its reluctance to come clean. In fact, its disastrous balance sheet - SPSA owes more than $230 million and is facing a $16 million deficit this year - comes after decades of obscuring the true cost of things from its customers.

That isn't an accusation of wrongdoing. It's a simple acknowledgment that SPSA - its executives and board - for years has pushed off costs into the future, as if the future would never come.

According to Saewitz and Harper, "SPSA initially said that little money had been used from a $13.2 million line of credit. But in late January, VRA officials learned that almost half was withdrawn or obligated, and they were stunned to read newspaper articles describing how SPSA had wanted to use the remaining $7 million to pay its operational expenses to keep the agency afloat."

That paragraph, in brief, is both how SPSA got so deeply into trouble and why extricating the agency is such a daunting task.

The agency was either less than honest or ignorant about where millions of dollars had been assigned. It didn't come clean about where the money was going. That's perhaps unsurprising since it planned to borrow $7 million just to pay its daily bills - in effect digging itself deeper into financial trouble.

SPSA, in its present incarnation, is due to die in 2018, the result of the deal it has with Virginia Beach, Norfolk, Chesapeake, Portsmouth, Suffolk, Franklin, Isle of Wight County and Southampton County.

If it does nothing else, SPSA will likely deposit a load of debt and obligations on those communities. That's why it is trying to sell its waste-to-energy plant, and why it should be considering selling off the whole operation.

In the meantime, it should fully disclose its financial conditions. If South Hampton Roads is going to be stuck with this bill, we should at least know how much it will be and how it got there.