SPSA board agrees to retain director after extracting promises

John Hadfield

By Meghan Hoyer
The Virginian-Pilot

John Hadfield, the director of the financially troubled regional trash authority, entered his board meeting Tuesday morning wondering whether he would leave with his job.

Instead, the Southeastern Public Service Authority gave him a raise contingent on his making millions of dollars in cuts that could cost as many as 100 other SPSA employees their jobs.

The decision by SPSA’s board, which includes representatives from the eight local communities for which the agency handles trash , drew immediate criticism.

“I thought it was ironic,” said Ray Conner, Chesapeake’s commissioner of the revenue and the leader of a local group that has opposed SPSA’s efforts to import out-of-state trash. “We’ve got all these financial problems and you end up giving the guy a raise. Wholesale changes are needed.”

SPSA has about $250 million in debt, and in the next few years will need to drastically increase tipping fees to pay off loans.

The authority will take the first step Jan. 1 , raising waste disposal fees to its member communities about 30 percent. All but Suffolk and Virginia Beach have to absorb the higher fees. Initially, only Portsmouth has said it will raise residential garbage rates.

The SPSA board agreed Tuesday to give Hadfield a 4 percent raise, increasing his annual salary to $147,140. It is the same percentage raise given to all SPSA employees.

However, before the new fiscal year begins July 1, Hadfield must cut the organization’s $86 million operating budget by 20 percent – about $17 million. SPSA also must meet this year’s operating budget as presented.

Of that, roughly $5.25 million would come from salaries and benefits.

Many of the agency’s 500 employees will be offered early retirement or be fired, Hadfield said.

“It’s going to be very painful – painful for our employees, painful for our organization,” he said, adding that he wants to move quickly. “I do not want it to linger any more than it has to.”

Hadfield, who did not specify what other cuts would be made, has been with the authority for 28 years, serving for 20 years as deputy director before taking the top job in 1998.

Board member Charles Wrenn said Hadfield has the board’s support as they try to turn the ailing agency around.

“SPSA has financial woes now – there’s no question,” said Wrenn, a Franklin City Council member. “John’s accepting the challenge. The goals that have been prescribed are aggressive.”

Wrenn said the financial problems weren’t created by the authority’s staff. He said the SPSA board, which is compo sed of local government officials representing the eight communities SPSA serves, has resisted fee increases despite taking on more debt.

Nonetheless, several board members had called for a house-cleaning of SPSA’s upper ranks, saying administrators had done little to avoid the troubles.

In the closed meeting Tuesday morning – with only Hadfield and the board present – the discussion lasted nearly an hour before the board voted 5-0 during a public meeting to keep Hadfield in the top job.

Chesapeake’s Bryan Collins and Portsmouth’s Ray Smith attended the closed session but left immediately before the public vote. Leaders in both cities have been strong critics of SPSA.

“There was dissent,” Wrenn said. “Some people are more enthusiastic about the decision than others, let’s put it like that.”

Isle of Wight County’s representative, James Brown, was absent.

Smith, a Portsmouth council member who serves on SPSA’s four-member executive committee, would not comment as he left the meeting. Smith said Monday that SPSA’s executive committee was considering recommending that Hadfield be forced to retire. He and other Portsmouth officials have called for a change in leadership.

Collins, a Chesapeake councilman, said Tuesday night that his city “was not satisfied with the current operation” of SPSA. Chesapeake officials sued SPSA earlier this year in an attempt to leave the organization.

Even with the personnel cutbacks, SPSA has a financial challenge ahead. At Tuesday’s meeting, the board of directors also heard from KPMG, whose recent annual audit painted a bleak financial picture.

The authority cashed out $9 million of its $53 million in investments last year to help pay off debt but only slightly reduced its overall debt load. Meanwhile, the expec ted expenses associated with the future closing of SPSA’s landfill more than doubled, to $24.7 million from $12 million .

The board pledged during its September retreat to be debt-free by the time SPSA’s contract with all its member cities expires in 2018, Wrenn said.

To do that, he said, the authority would have to reconsider nearly every expense.

“It would be my expectation that every position be looked at, from the director to the guy furthest out in the field,” Wrenn said. “When you get a challenge like this, you have a lot to do.”

Staff writers Mike Gruss and Harry Minium contributed to this report.