PORTSMOUTH
As municipalities vote this month on a bailout plan for the troubled regional waste agency, leaders of the city that hosts the Southeastern Public Service Authority's biggest assets - two large trash plants - say they have some major concerns.
Portsmouth officials claim they haven't been properly reimbursed in the past for hosting SPSA's waste-to-energy and refuse -derived fuel plants.
They also worry that if the facilities are sold, as SPSA hopes, they could become magnets for out-of-state trash that the city would have little control over.
"There's no assurance that more trash wouldn't come in and we don't know what manner it would be delivered," Vice Mayor Bill Moody Jr. said.
Portsmouth's City Council is scheduled to vote tonight on a regional bailout plan for SPSA.
The plan, which requires the agreement of all eight member jurisdictions, would grant SPSA nearly $33 million in savings and new revenue from the refinancing of some existing debt and a new line of credit, all to be backed by the municipalities.
That would provide SPSA 15 months to fix its troubled finances. Trash authority officials have said they hope to sell assets - including the waste-to-energy plant in Portsmouth - during that time.
But the proposal also would raise tipping fees in Portsmouth, Norfolk, Chesapeake, Franklin, Isle of Wight County and Southampton County to $170 per ton of garbage from $104.
Those increases would be passed on to consumers in some cities. In Portsmouth, that would likely be an increase of $9, to $41 per month.
As Portsmouth leaders have considered the bailout, they've also sent a letter to SPSA detailing why they believe the authority owes the city money.
City Attorney Tim Oksman maintains that SPSA should have been making payments to the city in lieu of taxes since 1983 as part of its agreement with the city. The city has never received those payments, he said.
Last year alone, that payment should have been more than $200,000, Moody said.
Under the law, the city is entitled to go back five years, which could mean more than $1 million for the city, he said.
"We're going to go to great lengths to collect what we feel our citizens are owed," Moody said.
Bucky Taylor, SPSA's executive director, said the agency had gotten a legal opinion that the agency does not owe Portsmouth money under Virginia law.
"That's the way SPSA has operated," Moody said. "It pays some of its bills and not some of its others."
During a City Council meeting last week, Moody and a city resident also expressed concern that a new trash plant owner could bring out-of-state garbage into the city.
Covanta Energy Corp., one of the companies that submitted a bid for the plants, proposed that idea several years ago in conjunction with SPSA, but the deal fell apart amid public criticism.
The two trash facilities, which straddle Victory Boulevard, are located near the Cradock neighborhood.
Joanna Hall, president of the Cradock Civic League, said the neighborhood would have the same concerns with any new owner that it did when it opposed the Covanta deal several years ago.
She said the civic league's main concerns are: the potential for the importation of out-of-state trash, the need for beautification and trash pickup along Victory Boulevard, the desire for a curtain to conceal some of the operations at one of the plants, and the wish that the city maintain its citizen advisory committee to the regional trash authority.
A Covanta executive could not be reached for comment Thursday. But a representative of the company has said the company has no plans to import trash from out of state.
A representative for Wheelabrator Technologies Inc., the other company whose bid for the plants SPSA is considering, could not be reached for comment.
A third company, ReEnergy Holdings LLC, has submitted an unsolicited bid for all SPSA's assets. Executive Officer Larry D. Richardson said "there is more than sufficient waste in the region to satisfy the system requirements under our ownership."
But he stopped short of agreeing that a provision barring out-of-state trash would be part of any sales deal, though he said the company would certainly consider it.
Taylor said current negotiations do not restrict waste coming into the region. He said the board has not taken a position on the issue.
Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com
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Consistency
Yes, I have served on the board for eleven years, and have consistently raised the issue from the very beginning, as had my predecessors, about the failure to adopt a schedule of paying off debt in a reasonable and prudent manner. The Beach has consistently held that view, and we lost many early votes 7-1, yet over time, more and more members began to see the truth in that position. But even when we adopted policy to change that, the board failed to set tip fees high enough to execute the new policy. So when the recent crisis occured because of a significant reduction in waste quanities, there was no reserve to cover the loss of revenue, and the members balked at approving the tip fee necessary to cover the cost of operations, debt service, and a margin of safety. Of course, add in the Chesapeake Law suit, and the old adage that a house divided cannot stand, and we all know what has happened.
Well Mike, which board
would it be that made all these bad decisions? The one you sat on 3 years ago, or 5 years ago, or 8 years ago, or.......... Seems like you may be the longest running denominator in this whole trashy mess.
Yes HarveyMilk, I am not
Yes HarveyMilk, I am not sure what the issue of transparency has to do with the lower rates enjoyed by Suffolk, the Navy, the commercial customers, and Virginia Beach. The Navy and the commercial rates are negotiated and the market controls the price. Since there is a landfill in Hampton that will receive out of area waste (ie, from us) that pretty much dictates the price for commercial disposal. We could insist that they pay a higher price, but we would simply lose the waste and the revenue if we did so; then we could not provide the steam and electricity to the Navy and the grid. Same with the Navy which is handled by commercial contractors. Suffolk's municipal waste is free by their host agreement, and the Beach pays the set municipal tip fee but is reimbursed based on their cap established in the Ash and Residue agreement governing the use of the Virginia Beach landfill. The main variable then is the municipal tip fee paid by those representing less than 20% of the waste stream. That is set after a public hearing.
"Business"
You make a good point Mr. Barrett, was it not you who said "We are not a business in Business to make money, if we did we would just have to give it back to the Municipalities". I do not know about anyone else but I would love for you all to make money so maybe some of that would subsidize my increase in tax payments, oh that's right if you did make money there is no guarantee that the cities involved would still not increase taxes. They probably would just to fund some other bungle.
uarenotright
Just out of curiosity and because you sound so adamant about this issue of transparency; Do you voice your complaints about the lack of transparency at the public board meetings you do attended or is it the case that the only meetings you wish to attend are the closed door meetings to which you may not?
Transparency
Well, in all my years on the SPSA board, we have never discussed any issue in executive session that was not legal to do so. Afterall, our business is done by contract and agreement, and since we are actually a business in most respects, we do need to discuss contracts and deals without our competitors sitting in the front row. So while some have complained that our deliberations are not always in a public setting, to do our best to serve the public interest, some issues are best discussed in executive session as provided by law.
SPSA
Its a shame the Pilot wont push harder to have SPSA do more business in Public instead of behind closed doors.As long as there is no Transparency there will never be parity or reduced rates. We will continue to subsidize poor management, the private sector, and the federal government who have the lowest tipping fees.
Mr. Barrett when will there be transparency?
true but ...
Infer what you will from it, the Pilot, broke or not, tells people what they like to hear. To do otherwise would be to lose readership. It is both good and bad for SPSA and the member cities. You, for whatever reason, seem only to emphasize the the bad in it and while it is probably a safe bet that the Pilot will not change it's rather superficial format, I think I'd be hesitant to press the issue to forcefully if I was VB.
Pilot Failure
True, HarveyMilk, but following the earlier posts, how would you know that if your only source of information was what is written by the fiscally constrained Virginian-Pilot? A person that follows this closely would know that the very points made in the Chesapeake lawsuit, which was essentially thrown out of court, were then made in the so called Auditor of Public Accounts report requested and in my view directed by Chesapeake's senior member of the majority party in the House of Delegates. No reporter ever questioned the motivation of the City of Chesapeake in suing SPSA so they could get out of their agreement and transfer their fiscal obligations to the other members. No reporter connected the dots to inform readers that Chesapeake continued their declared war against SPSA by other means. So, many citizens simply don't know because the fiscally constrained Pilot reports what others have said with no evaluation of the facts or the truth behind the latest headline.
Give credit where credit is due...
Why is that everyone seems to imply SPSA is some rouge, poorly managed company with no goal other than to steal as much of our hard earned cash as possible? I mean, come on! SPSA was created by the member communities, it's board is (was) selected by the member communities and those board members, in a way, can't really do anything that their respective communities don't want them to do or they would be promptly replaced. How many folks really believe that, for example, Mike Barrett could walk into the next board meeting and say to the board "You know, It's unfair VB only pays $54/ton. Let's renegotiate our contracts." Duh, he would be promptly run out of VB. So, it's not "SPSA" this or "SPSA" that; It's the member communities responsible for SPSA. If SPSA is screwed up, and it is, it is not SPSA's "fault", SPSA's board has done what it was told to do by the member cities who have thus, in turn, ALL deflected the blame for SPSA's failures back to SPSA; A monstrosity they created. Until they all acknowledge their parts in this fiasco there can be no positive change.
Barretts Coments
Mr. Barrett,
The reason SPSA got into financial trouble is that no member of the Board was ever held to their Fiduciary Duty to do what was right for not only their City but for SPSA. When Mr. Hadfield put a vote before the Board the Bosrd voted as he wanted until there an actual businessman on the Board, and I am not speaking of you I am speaking about Mr. Mcmanas(sp)who worked for Dominion Power.When you were first put on the Board you were still affiliated with VEEPS, and you deplored SPSA, now you are their biggest Proponent. What has happened?
Debt
Well actually, how SPSA got into debt, and more importantly, why it was not paid off systematically, is one thing we do know. SPSA borrowed money to build the disposal system, that is, the RDF/WTE plants, the landfill, the fleet to pick up and deliver waste, and the transfer stations. No problem there unless the member jurisdictions had wanted to pay cash for these capital assets, which they did not. The problem is that as a matter of policy, earlier boards just kept borrowing and refinancing instead of instituting fiscal policies to pay off debt when it was due, and to only borrow for a portion of the cost and a portion of the life span of the asset. That kept municipal tip fees low, but over the last 25 years, the payments necessary to pay off the debt by 2018 have skyrocketed, and the memory of choosing this course of action has disappeared as the members blame SPSA instead of themselves.
I'm listening
I've maintained an open mind. Where was I wrong in my statement?
Well, Mike...
...you've singled out The Pilot for its "poor reporting," but I've heard nothing different on EVERY OTHER media outlet in Tidewater.
The crux of the matter is you guys ran SPSA like six-year-olds in an unsupervised candy store and when you got caught the finger pointing began. Now you want US (the surrounding communities) to bail you out for piss-poor management.
What you are doing now is what all [the SPSA board] have done since this debacle began, point fingers and making excuses for YOUR failure(s)!
Rest my Case
Everyone of these subsequent post is simply wrong on the facts, but none of these posters would know that if their source of information was only the financially distressed Virginian Pilot. That is absolutely my point. The Pilot has reported in great detail what some have said with absolutely no understanding of when they are being fed a story that meets the need of the speaker. Thank you posters for proving my point.
re: Financial Assistance Plan
Mike Barrett wrote:
>>>Words matter, and if the Pilot and other print media have anything going for them in this electronic age, it is experience and precision in reporting.<<<
Experience and precision? Oh, yeah the same way you and your cronies ran SPSA? That kind of precision, Mike?
I'll give you one thing, you have cajones coming in here and making ANY comment after [what looks like] the municipalities will be bailing your asses out for YOUR [SPSA's] mismanagement and poor business practices.
As I've said before, if any of us did this individually, we'd be doing time...
where's the truth?
a professional snake oil salesman/politician/developer/board member vs a newspaper trying to sell copies. Truth is we will never know how/why SPSA got so deeply indebted. Having been in the local trucking industry a long time there was very suspect things going on at SPSA from it's very inception. All the taxpayer can hope for is the least painful financial resolution. At least with a private industry contract we'll know where we stand at all times and won't be handed another debt time bomb.
So Mr Barrett
answer this: why do Suffolk and VB get reduced or no tipping fees for hosting landfills but Portsmouth hosts two energy plants and they not only have to pay for tipping fees but also don't get taxes for the properties?
It's time for SPSA to file for bankruptcy and have all contracts voided and tipping fees be spread equally among the cities. I'm tired of subsidizing two of the richer cities in the area. Time for them to pay for their mess, too.
Mike Barrett.....SPSA (BIG) MOUTHPIECE
Mike , you are the one that has it wrong! You work for SPSA and your company line is to cover up misuse of public taxpayer money. PERIOD! Portsmouth IS owed money....and it should have been a priority for EX councilman Ray Smith to have been at your doorstep to collect it, since he was our laison to your inept organization. Portsmouth, since 1993, should have taken SPSA to court to get these payments, yet being a HOST city, we have been "dumped" on. I guess "host" in this case, means a tick sucking all the blood it can out of its "victim". SPSA = on big fat bloated tick!!!
Opps.
Should be "Thanking" not "thinking" in previous post. Sorry folks.