Cities try to save SPSA

Published 10:38 pm Thursday, March 26, 2009

Top officials in South Hampton Roads are collaborating to save the financially strapped Southeastern Public Service Authority.

SPSA spokesman Tom Kreidel confirmed on Wednesday that the city managers and county administrators of the eight member communities “got together as a working group” and agreed on a course of action. However, the plan will not be official until it is approved by the Virginia Resources Authority, one of SPSA’s largest creditors. That approval could come as early as Friday, Kreidel said, at a meeting of the authority’s risk management group.

Approval also must come from the governing bodies of the eight SPSA member communities – Suffolk, Franklin, Southampton County, Isle of Wight County, Portsmouth, Chesapeake, Norfolk and Virginia Beach. Franklin and Norfolk already have voted in favor of the plan.

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Kreidel said that under the plan, some cities would guarantee loans from Wachovia, and other cities would guarantee Virginia Resources Authority loans. In addition, tipping fees – the amount per ton that some members pay to put trash in the landfill – would rise to about $170 per ton, from their current level of $104 per ton. As part of a longtime agreement between Suffolk and other SPSA members, Suffolk deposits its trash at the landfill for free in return for hosting it.

Virginia Beach, whose tipping fees currently are capped in exchange for its participation in the group, also would make concessions under the proposed rescue plan. Currently, Virginia Beach pays the full price for dumping its trash and receives a rebate for the difference between that price and its substantially-lower contract price at the end of the month. Under the plan, the city would forgo the rebates through next June, waiving nearly $28 million in savings.

Asked what Suffolk’s part of the plan would be, Kreidel deferred to City Manager Selena Cuffee-Glenn, who could not be reached for this story.

The refinancing would help SPSA survive through the end of the fiscal year in June. The pending sale of the Portsmouth waste-to-energy plant, which was the topic of a closed meeting Wednesday, could provide as much as $200 million to help pay the authority’s debt.