Board rejects both offers to sell SPSA

CHESAPEAKE

The board of Hampton Roads' regional trash authority voted Tuesday not to sell the entire agency to a private company, opting instead to unload its most valuable asset.

The Southeastern Public Service Authority board wants to sell its trash-burning power plant in Portsmouth to Wheelabrator Technologies Inc. for $150 million.

The board declined offers from Wheelabrator and another firm, ReEnergy Holdings LLC, to buy all SPSA assets for $240 million.

SPSA executives and board members called Tuesday's vote an important milestone for the trash authority, which plans to use the $150 million from the sale to help pay off $240 million in debt.

SPSA board member Tim Oksman supported the Wheelabrator deal but abstained from voting, saying the decision was being made too quickly.

"The public did not know this resolution was going to be voted on today," said Oksman, who also is Portsmouth's city attorney. "Voting on it gives ammunition to everyone who says SPSA operates in secret and makes arbitrary decisions."

The most recent proposals to buy the entire agency were received a week ago, and the decision was made Tuesday after an hourlong closed session.

Other board members countered by saying that the asset sale has been under discussion for two years. Although Wheelabrator made a bid for all of SPSA, it has said in the past that it preferred to buy only the Portsmouth trash-to-energy plant.

SPSA's sale has been closely scrutinized and studied. The agency paid consultants more than $3 million to help with the deal. That does not include money spent for consultants to quickly review the newest set of proposals and turn around recommendations within a week.

"After two years of incredible conversation, I don't need to answer any more questions," said board member Michael Barrett, who represents Virginia Beach. "I'm ready to act."

Wheelabrator executives have said their deal would reduce trash-disposal fees for residents of the eight member localities, six of which are already paying the highest fees in the nation.

ReEnergy representatives promised even lower rates if the SPSA board chose their proposal, but board members were skeptical.

"If something looks too good to be true, it usually is," Oksman said. "The ReEnergy proposal looks too good to be true."

ReEnergy, a New York firm, is "basically investment bankers trying to get into the solid waste field," Oksman said. "The company is a startup company. It has no track record."

Wheelabrator, based in New Hampshire, is a subsidiary of Waste Management that specializes in operating plants similar to the one SPSA just sold, company representatives said.

"You know you're getting a company that can deliver with Wheelabrator, and you don't know that with ReEnergy," Oksman said.

Officials with some of the member cities praised the deal as part of a long-range plan to rescue SPSA from debt and decrease fees

for residents. The first step was to restructure the debt, and the second was to unload assets to help pay it off.

A new board is set to take over in January, and observers wondered whether the current board would try to make a decision on the proposals before then.

SPSA Executive Director Rowland L. "Bucky" Taylor said Tuesday's decision resolves what happens with the power plant and positions the new board to make decisions about the agency's remaining assets.

Del. John Cosgrove, a frequent critic of SPSA, said he was hoping that the trash authority would wait to make a decision until the new board had a chance to look at the proposals. He said he was concerned that one consultant had reviewed the proposals for the first time this weekend.

"It just seems like a rush," Cosgrove said. "I don't think there's been enough time for anyone in the public to take a look at this."

Mike Saewitz, (757) 222-5207, mike.saewitz@pilotonline.com