New York company puts in third bid to purchase SPSA

That's great. How do I get a copy? I checked my usual source and its not online yet. Maybe you can post a link in your next post. As for Reenergy's intentions, I have no idea what they plan to do for Virginia Beeach but their proposal suggests they have a plan that's worthy of a real discussion/debate. If its all smoke and mirrors I'm sure the people, press and elected officials will figure that out. But if Reenergy's plan is a "better" option, I am hopeful that the SPSA Board and Members will give it a shot. As for the other two bids, we the citizens really have no idea what's being negotiated behind closed doors and we have no idea whether the financial impact will be equal to Reenergy. We have no idea whether SPSA will be able to get the Members'/ citizens' costs back to a reasonable rate. What we do know is that SPSA has proposed "fixes" to their financial problems dozens of times and has never been able to deliver an economically sustainable program.

You have an old copy of Beck; the latest is dated March 12, 2009, and makes note of the fiscal crisis. Of course, since then, all the actions they recommend have been taken. The bids are due tomorrow, and when received, will be analyzed by SPSA's financial advisors. They will be presented at the next board meeting on the 29th, public hearings will be scheduled in August at each member jurisdiction, a public hearing will be held at SPSA, and then in early September, the board will meet to deliberate about whether to enter into a contract to sell the WTE system and if so, to whom. If you have read the ReEnergy proposal as you say, you know that they claim that the..."ReEnergy proposal presents a longer-term solution for the Member Communities and treats all Member Communities the same with respect to tipping fees under the Waste Supply Agreements." You say you don't think that is what they mean. Is that true for other sections of their proposal as well?

I'm really curious why the proposals from Covanta and Wheelebrator haven't been shared with the public. Here's an easy question... What's the highest "bid" price? So what price relief is staff projecting? How much debt will the Members still have to deal with after the sale? Who will be responbsible for closing the landfill and maintaining it for 30 years? Alot of this information is out there in a detailed 75 page proposal from ReEnergy but the other "bids" are deemed "secret" for some reason. What happens in 2018 when the Support agreements run out? Why doesn't the Pilot submit a Freedom of Information request and give us the scoop on these competing proposals? My prediction... the final proposals will be delivered to SPSA this week, SPSA staff will pick thier favorite and present it to the Board in closed session. The Board will come out of closed session and immediately vote to accept staff's favorite without any real analysis or debate. Public hearings will be scheduled for appearances but the deal will be fully baked by then.

Of course you are right on the Fiscal year, my mistake. I was looking at the Beck rpt which hasn't been updated since Feb 2008. SPSA should not "pre-judge" the proposal based on asumptions like yours. I am sure ReEnergy fully understands that Virginia Beach, Suffolk and Portsmouth aren't going to agree to absorb more costs and will therefor have a proposal that makes them whole through the Host Agreement or some other method. Each member will be negotiating the new agreements for themselves. SPSA on the other hand should try to act based on what's best for the region. If SPSA acts "regionally" and let's the members take care of themselves on the new disposal agreements, host agreements etc, then we should get what's best for all citizens. The ReEnergy proposal is well thought out, offers clear value for the region and if seriously considered, analyzed, debated and adopted we the citizens could finally put this nightmare behind us. Face it, SPSA has not been able to deliver its promises and its time to give someone else a try.

Well, my point all along has been that I don't think it delivers price relief to everyone; in fact, it is quite clear that the citizens of Virginia Beach and Suffolk will get only prive increases. Alternately, once the sale of the RDF/WTE facilities is approved and then completed, it is fully anticipated that there will be price relief to all the members. The requirement for each member to abrogate their current Use and Support Agreements, which are set to expire on January 24, 2018, and sign new, twenty year contracts with ReEnergy, may not be perceived to be in the best interest of all the political jurisdictions. You mention the audi; SPSA is on a fiscal year basis which just ended on June 30, so the audit is underway and should be completed shortly. It is always presented in open session for all to see. It is done under GAAP standards and some deficiencies in the past have been noted and corrected. Frankly, with the turmoil in staffing at SPSA, I expect that to be the case this year as well.

Nothing that has happened since 12/31/08 goes into the audit and survey so there are really only three reasons for it not to be complete well before now. 1)Accounting Records that have not been managed to GAAP standards, 2)Very significant deficiencies that would require the auditor to write an audit letter warning of or stating as fact, SPSA's insolvency 3)the financials and audit have been complete for some time and withheld from publiication for the purpose of deception. I don't have any idea which reason applies but none of them are acceptible. All I'm saying is that "we the people" deserve to have all the facts presented without spin, they deserve to hear an unbiased review of the competing bids and they deserve to have their voices heard. This should not be a "political" decision. The SPSA staff clearly has a conflict of interest and should not have a say in the debate. People and businesses are suffering through this economy and they NEED the price relief offered by ReEnergy, not more of the same. SPSA simply cannot deliver.

Yes, there has been some disruption on the staff at SPSA as the workforce has been reduced by about 20%, and as you know, the administrative and executive personnel have borne much of the brunt of that. I expect a revised financial statement in a few days as the effect of the recent refinancing through VRA is made available. That refinancing did not change the overall debt structure by very much, but it did restructure the payments so that the annual amounts are more consistent in the last years of SPSA's existence. When I have received that statement, I will be pleased to provide a summary of the major categories which of course now includes debt owed to Virginia Beach for its agreement to forestall payments due to the Beach under the Ash and Residue contract.

I read the actual proposal online at www.sellspsanow.com. I read the "error filled" Pilot article as well as the articles in Suffolk and Tidewater newspapers. I also read the SPSA audit and RW Beck report a few months back and have attended a couple of your "public" meetings over the last 5 years. I'm a retired businessman so I have plenty of time for this and I enjoy keeping myself informed. Having run a business before, I have a pretty good understanding of how things work and what is and isn't possible. I can read a balance sheet and profit/loss statement. After watching the SPSA craziness for the last 10 years it's obviously become one of my hot buttons. The fact is, SPSA has not been straight forward with the members or the citizens and they continue to circle the wagons rather than find an answer. For instance, the latest public information is for the year 2007. I accepted your challenge but you didn't answer my questions. I could of course rely on the 2007 numbers but who knows how much worse things have gotten since???

Well Burt, you surely know quite a bit about the proposed contract. Care to divulge your source of information? In any case, my reading of the proposed deal leads me to different conclusions about a number of topics. SPSA actually proposes to lower tip fees as well over the period of time through 2018 especially if the anticipated sale of RDF/WTE actually occurs. And at this point in time, SPSA has made no demand to each member that it must renegotiate its agreement and sign a new long term agreement in its place. That is an important issue to the Beach as of course you know we have a permitted, operational landfill and may simply decide that in the future we will be better off simply using our own capacity. Further, I do not see anything in the proposed deal that will make Virginia Beach whole as you say. I make no derisive comments about ReEnergy; I just need to evaluate the proposal as a business proposal and listen to the advice of others as well.

Mr. Barrett, OK, I'll take your challenge of my assertion that all the debt is paid off. So what is SPSA's total debt? What is the total debt NET of the Debt Service payment reserve balance? What is the accrued closure and post closure account balance? What is the book value of the assets ReEnergy is not proposing to buy? I think if you do the math on these numbers the offer price pretty much covers it. The fact is, the public has never been told the complete unbiased truth and so we can't say for certain whether it will or won't pay all the debt. ReEnergy's proposal says "substantially all" the debt which is close enough for me. In year 4, assuming the Members deliver about 400,000 tons of waste they will be saving $30,000,000 PER YEAR! Please just admit it, this proposal deserves a full, detailed, PUBLIC, accurate analysis and debate. I'll bet the members can find something better to do with all that money once this thorn is removed from thier side!!! I'm confused by your position. Do you think ReEnergy wrote a 100 page proposal and its all lies?

SPSA and its board are living in a fairy tale. Come on guys, admit it, SPSA's board and management messed it up really bad and have no idea how to fix it. Just because SPSA hasn't been able to figure out how to do it doesn't mean a private company can't. Mr. Barrett, it doesn't matter what the "average" tip rate is, what matters is that the cities, and therefor its citizens are paying $170/ton for a service that can be provided for $87 (accomplished over 4 year period). If the investment company who formed ReEnergy believes they can do it and are willing to invest $80 million, I am certain they can deliver what they proposed. There is a lot of suspicion out there because of the profit motive, but I look at it differently. The equity investor knows it can accomplish the projections otherwise it would not continue to press. Second, a private company who commits contractually can't use smoke and mirrors the way a quasi-governmental agency does, and since it doesn't have taxing authority it better get it right on the front side. Fairy tale?

Mr Barrett, As I understand it the Beach enjoys XXX dollars of annual benefit from the tip fee cap and YYY dollars per year from the Ash disposal contract. I believe the ReEnergy people are proposing a revision to those Agreements that make the beach whole in total. I believe a similar calculation applies in Suffolk and Portsmoth. All three cities will be able to individually negotiate the contracts that accomplish the make whole, they will not have to rely on SPSA to do it for them. Disposal costs to the cities will be equal. Yes, there is a 4 year period of time during which rates will drop from current levels to the $87 per ton number. Its pretty clear from what I am reading that ReEnergy is NOT proposing to increase rates higher than currently charged but is COMMITTING to reduce rates to $87 over a 4 year period. We all know and I'm sure you also KNOW that the current rate ($170 I believe) is not sustainable by SPSA and is only a stop gap rate. Didn't they recently say it needed to go to $240/ton eventually? Let's get all three proposals on the table and in front of the public and have an open and accurate debate. No more behind closed doors discussions/negotiations... By the w

Well Mark, you will be pleased to know that the comprehensive agreement sent to the two bidders requires that they use only in area waste to create fuel to burn to create steam for the Navy, and only allows a short term, event specific exception if there is not sufficient waste in the region to create the refuse derived fuel to meet the demand of the Navy. That is, if the waste stream from regional waste goes below a preset trigger for one month, the successful bidder can buy OOA first, and then OOS, but only for the period of time that it needs to meet the Navy's demand, and only for waste that can be processed into refuse derived fuel.

True the ReEnergy proposal does say that tipping fees will be 87.50 in year 4 of the contract and will only go up as much as the CPI after that but what about years 1-3 where they are extremely vague in their answer to what the fee will be at first. They don't tell anyone because there is no way they can obtain 338 million dollars in financing without some plan to pay it back and that will be costly for the first few years probably more than what the citizenry is paying now if the recent trends in lending continue. Believe the snake oil salesmen if you want but usually if something sounds too good to be true it usually isn't.

The proposals have to be weighed to see what will be the best deal for the region. While I'm a supporter of private industry, one has to remember that corporations are in the business to make a profit whereas public entities don't have to: they only have to concern themselves with breaking even.

One of the things I'd want to see in any contract is a statement about avoiding bringing in ANY waste products from outside the region. Such waste would fill up our landfills even faster and could bring in other problems such as invasive species. If we keep our landfills to ourselves many problems can be avoided.

Ah yes, promises, promises. But not so fast. I have read the proposal, and Burt's summary misses a few key points. The proposal may cut fees for some, but it increase fees for others, including the Beach. Burt says the Beach and Suffolk will get all the same "benefits" but never acknowledges that the "benefit" they would get is much higher fees than in their current Use and Support Agreements. Burt, I suggest that is a bit disingenuous. In fact, you quote a tip fee of $87, but that is much more than the average tip fee is today. So before you advise folks to go out to public hearings to support a fairytale, you really ought to try to fully understand the proposal. Lastly, while you say the proposal covers all SPSA debt, I must remind you that saying something does not make it so. That is simply not true, although again if you get all you facts from the Pilot, you may make a mistake or two.

Holy Cow batman. You mean we can eliminate ALL SPSA debt and closure liability, cut disposal costs in half, extend the system's life from 9 years to 20 years and rely on EXPERTS with a minimum of 15 years of senior executive experience EACH! in very successful solid waste and energy businesses, supported by multibillion dollar investors VERSUS a rotating door of incompetent managers, politicians and political appointees who have to tax tax tax to cover up thier gross negligence...

WE should all show up at the next city or county commission meetings in our cities and DEMAND that our elected leaders stop bailing out a disasterous Government agency and enter the agreement with these guys as quickly as possible. All the naysayers out there simply haven't taken the time to read the proposal or they have no idea how business works... If the contract says tip fees will be $87 then they can't be any higher. VB will get all the same benefits in the revised agreement and Suffolk and Portsmouth will be made whole by Host agreements. Let's go people.... Give up on SPSA and let's get this mess behind us as soon as possible...

Actually, I said what I meant to say; that is, the Beach has not agreed to negate its current Use and Support Agreement. Frankly, given the incentive we received to induce membership in SPSA even though we had a permitted landfill, I don't think the Beach would agree to do so either. I do think that the bids we are about to receive from Covanta and Wheelabrator will turn out to be in the public interest, but I reserve judgment on that until we receive the bids and the evaluation from our financial advisors, and hear from the citizens at the SPSA public hearing and at the public hearings to be scheduled by each member. I am also informed by the results of the CAO sponsored report from SCS, a national environmental consulting firm, that opined that the best alternative for the region was to combine resources in a modified SPSA like organization. So at decision time, there will be no dearth of valuable information to consider.

Spin. Conflation. Misinformation.

Lack of transparency kills accountability.

Bugger off!

Let the elites work this one out.

Mr. Barrett--When you say that Virginia Beach has "not agreed," you would be correct. However, perhaps you should have said, "Virginia Beach has not YET agreed." I wouldn't be so quick to conclude that Virginia Beach has rendered its final verdict on SPSA.

Additionally, you claim that you will not vote against the "interests of...SPSA," but surely you are not confusing SPSA's interests with those of the citizenry? Surely you realize that the interests of the SPSA construct are secondary to the interests of the citizens of Hampton Roads, and that said interests are not, indeed, necessarily one and the same? (NOTE: This is where Mr. Barrett feigns shock and outrage.)