Board approves SPSA bailout

By Kathi Pines | Suffolk News-Herald

Published Thursday, March 5, 2009

The Southeastern Public Service Authority, on the brink of insolvency, bought itself some extra time Wednesday, when board members, after a closed-door session, approved use of a $7 million line of credit from Wachovia Bank.

Board members had been afraid that the waste management agency would cease operations by April 1 if measures weren’t taken to restructure $240 million in debts.

SPSA spokesman Tom Kreidel said, “Our board voted to approve the use of the remaining $7 million of the line of credit that SPSA had taken out with Wachovia, which had originally been for capital.”

Kreidel said the move will not save SPSA but will give it some breathing room.

“This change was approved by Wachovia, and the board voted to go ahead and do it. This does not cover the entire deficit but will keep SPSA operating for the next several weeks,” he said.

Kreidel said further measures are in the works to create a permanent solution.

“The chief administrative officers of our member cities are working on a plan that would cover the rest of the deficit, at least until the possible sale of the waste-to-energy facilities,” he said. “It is not a finished product yet, but we anticipate their decision/recommendation in the next week or so.”

The Portsmouth waste-to-energy plant is SPSA’s most valuable asset.

SPSA handles waste management for eight Hampton Roads localities, including Suffolk.

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