The Virginian-Pilot
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There are now two proposals to buy SPSA, the region's struggling trash authority.
Wheelabrator Technologies Inc., a New Hampshire-based subsidiary of Waste Management, revealed few details about a proposal submitted Monday to purchase the Southeastern Public Service Authority.
A New York firm, ReEnergy Holdings LLC, already has offered $240 million for SPSA and announced new efforts Monday to sweeten the deal for the trash authority's member localities.
Now, the SPSA Board of Directors will have a choice between those proposals and another,separate deal to sell the agency's trash-burning plant and related assets to Wheelabrator for $150 million.
At least one SPSA board member thinks the body could have a decision on the proposals by the end of the year, although that would require agreement from all of the eight member localities. There also is a chance the decision will be in the hands of a new board set to take over in 2010.
The proposals come nearly a year after SPSA revealed it was buried in $240 million worth of debt and faced a budget shortfall of $16 million. To help keep the agency afloat, residents of six local cities and counties are now paying the highest trash-disposal rates in the nation - $170 per ton of garbage.
Executives with Wheelabrator and ReEnergy promise their deals would significantly lower fees for the eight members: Virginia Beach, Norfolk, Chesapeake, Suffolk, Portsmouth, Franklin, Isle of Wight County and Southampton County.
Wheelabrator representatives said Monday that they would prefer to close on the $150 million power plant deal, which has been tentatively approved by SPSA; however, they said they felt they needed to compete with ReEnergy in case the SPSA board decides to sell the entire agency.
"We had no choice," said Mark P. Schwartz, senior manager for business development with Wheelabrator. Schwartz says a deal to sell the entire agency would face delays and obstacles while the power plant deal would give SPSA a quicker financial boost. The ReEnergy proposal has been on the table for months. Other companie s had 45 days to submit competing proposals.
Some board members and communities have expressed concerns about ReEnergy's financial plan and a requirement that communities sign 20-year deals with the private trash company.
In response, ReEnergy hired investment banking company Morgan Stanley to help with its financing plan. ReEnergy also has proposed deal-sweeteners for some member localities, including up-front payments to Suffolk and Virginia Beach to offset any new trash disposal fees. The two cities, which host SPSA landfills, have deals with the trash authority that have capped their disposal fees while the other localities' fees have skyrocketed.
ReEnergy's new proposal also has a series of options for communities unwilling to commit to long deals. Under the proposal, communities could sign six- and 12-year deals with ReEnergy. They also could choose not to continue with ReEnergy after SPSA expires in 2018.
Larry D. Richardson, ReEnergy's executive officer, said he would be surprised if the SPSA board could come to a decision soon without a long process involving the member communities.
But SPSA board member Michael Barrett, who represents Virginia Beach, said he expects to hear consultants' analysis of the two proposals by SPSA's board meeting Tuesday.
"I absolutely think a decision can be made" by the end of the year, Barrett said. "This has been a two-year process. No one can say we've rushed to judgment, that's for sure."
Mike Saewitz, (757) 222-5207, mike.saewitz@pilotonline.com
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Politics or Trash-All The Same
I live in Chesapeake and despite the fact it is someone politicians fault I have to pay an extra 3 bucks a month to have that can dumped every Friday, you can best believe it will be on the curb for that truck to stop and pick it up, even if there's just a Big Gulp cup in it.
Goliath the Spoiler...
Well well well, here comes the worlds largest garbage company that has over 50% of the market already seeking to buy everything else... so we poor citizens will have no options, no choices... NO WAY OUT No doubt we'll be hearing they are "too big to fail" in the years to come. At least with the ReEnergy proposal there was always an alternative available with Waste Management's landfills in Hampton and Waverly... Of course this will never happen. It would be like Microsoft buying Apple, Intel, AMD and Red hat... I'll bet they all know that and only submitted the offer to spoil the obviously better solution offered by ReEnergy. I read the ReEnergy supplimental information and it seems they have addressed all of Mr. Barrett, Virginia Beach and SPSA Board's concerns. Read it yourself folks.... http://www.sellspsanow.com/storage/Supplement%20to%20PPEA%20Proposal%209-09-09.pdf Of course GOLIATH didn't publish thier "offer" details... I wonder why they and SPSA are so secretive... Hmmmmmm...
Not the case
Thanks Burt for confirming your anonymous connection to ReEnergy. Your statement in your post is simply not correct, as none of the members have access to what the company has promised to each other member, and if ReEnergy thinks that this will result in each member being willing to sign a new twenty year agreement, I think you are mistaken. The opt out provision is an attempt to counter the reluctance of the eight to sign extensions, yet the cost of the option is not stated and this leaves it virtually assured that no member will change their mind about long term contracts. As far as I am concerned, it does not meet the stated concerns of the city I represent, but of course that decision is up to the city to make and I will certainly be guided by that decision. To suggest that Wheelabrator is being secretive and ReEnergy is not is simply not the case.
Mr. Barretts reply
Mr. Barrett,
I do not rely on the PILOT OR SCOTT HARPER for my facts,
I attended meetings before you got involved and still every once in a while.es i remember when the fee was 27.00 and SPSA was in the drivers seat, and you cannot blame Carbone on your inefficiency, any body on the board
who had any business sense would have grasped at the opportunity but at the first volley from the private sector what happened.Please sell the assets to the highest most cost effective offerer, even though i know that one person will not make the final decision, don't let the headlights blind the deer on the road do whats right for all Virginians not just tidewater.
trip down memory lane
Well yes, you are quite correct that no one cares about Carbone even though it had a profound effect on the financing of SPSA. Most experts then thought integrated systems like SPSA would fail in just a few years. And yes, the fee was $27/ton, and it was too low then, and if you have been watching for that long, you know that past members selfishly set the tip fees as low as possible, thereby failing to establish a fiscally prudent schedule of repayment of debt. Again, no one cares about that now although that it was what caused the revolt of the members who having voted for low tip fees, suddenly wanted out of SPSA when the folly of their own past decisions became evident. So the board does want to sell assets, and we plan to do so, and that is what all these proposals under the PPEA are about. The current board is capable and resolved to get the base deal possible for their members. Thanks for the trip down memory lane.
Mr. Barretts Thoughts
Mike, You would have made a great politician, and yes while the two cities that have the deals are happy, you fail to mention the percentage of trash that gets that reduced rate. Tired of beating a dead horse but why all of a sudden is everyone so interested in owning the assets of a public service authority that has run amok?
It is obvious there is still money to be made yet this group of unknowing autocrats, bureaucrat's and inept politicians has managed to run the system in to the ground by not reinvesting in itself and putting off till tomorrow what should have been done a long time ago. Sell it, be done with it or get out of the business because it is obvious that the SPSA region has not figured out anything, regionalism, mass transit,or anything that makes more the mass stronger instead of individuals who never agree on anything.
Good riddance SPSA RIP!!!
Have a nice evening
Thanks for the advice. Clearly, if you rely on the stories in the Pilot, and the posts herein from people who simply don't have a clue, I can understand why you may just wish to give assets away that have been paid for by the citizens of the members of SPSA, but I can assure you that the board of directors is working closely with the leadership of each of our members to get the best deal possible for our rate payers and tax payers. The insults are just part of the job, and while I would never presume to speak for the elected members of our board, at some point, it has become clear that many of the posters herein have specific agendas, and post anonymously to attempt to influence the decision of the board. Fortunately, we have our own experts, the member jurisdictions do too, and the CAOs who must count on SPSA for waste disposal until 2018, have been very involved as well. So I hope your rant made you feel better so you can have a nice evening.
Clueless?
The people you reference that don't have a clue are the taxpayers and citizens that are supposed to be able to rely on the elected officials that you so soundly profess are there to make decisions for us without the input of citizens.
So, the fact that we clueless tend to rely on the media, as well as other citizens, is due to the fact we have been lied to, shut out, and dismissed as clueless by the very people we elect to represent us; as well as the people (such as you) they appoint to represent us/them. So before you, as the spokes person for VB council, demean any further the citizens that are paying for your mistakes, you might want to check with the leadership that put you in that position to see if they indeed share your view that citizens/taxpayers are the clueless ones.
Best for the Public
Well aalto, you have voluntarily come on to this forum with constant criticism aimed at elected officials and at members of the board of directors, with accusations and statements that are simply not true. That of course is your right, but that does not mean that your comments should go unnoticed or uncorrected. You have to admit that you give no quarter, and I assume, you expect none. So when you post with an attitude, expect to get answered in turn. Show some inclination to consider someone elses opinion, and perhaps others will consider yours as well. Afterall, each of us who cares enough to be involved in civic affairs in one way or another generally wants to do what is best for the public; those that don't are usually found out quickly and forced out.
Mr. Barrett
Oh, I have. I have served the city of VB in many ways. However, I never did, nor would I ever demean any citizen as clueless.
I fully believe that elected officials are accountable to the citizens that put them there. Some believe we citizens should shut our mouth and let them decide our fate. Sorry. I cannot and will not give up my Constitutional Right to speak against my Government when I do not agree.
If you do not like the fact that you, as a representative of the VB government, do not like the criticism for your actions, step aside.