SPSA submits smaller budget

Published 9:50 pm Wednesday, March 23, 2011

The Southeastern Public Service Authority on Wednesday presented a $49.2 million budget for the coming fiscal year that keeps most fees at their current rates and offers a 3-percent raise for its employees.

The budget is down 13 percent from the current fiscal year, because the authority has 15 fewer staff positions and a more accurate picture of how the sale of the waste-to-energy plant in Portsmouth affects its operating costs, financial officer Liesl DeVary said.

The municipal tipping fee — the authority’s main source of income — would stay the same in the coming year under the proposed budget, at $145 per ton. However, DeVary warned that if the tonnages coming into the landfill do not increase, the authority would have to look for opportunities for service reductions next year.

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“We have got most of the low-hanging, high-hanging and middle-hanging fruit out of the budget,” SPSA executive director Rowland Taylor said. “When you talk service reductions, you’re almost always talking hours of operation” at transfer stations.

A change in hours would require approval from Wheelabrator Technologies, Inc., which owns the Portsmouth incinerator, as well as from the SPSA board.

Personnel costs will see a net increase of about $23,600 compared to the current year. The 3-percent raise, combined with a hike in health insurance rates and workers’ compensation rates, are resulting in the increase in that budgetary line item.

One of the most significant increases in the budget is fuel costs, which are projected to rise 19 percent. The authority is budgeting $3.50 per gallon for its fuel.

The cost for the authority’s needed Department of Environmental Quality permits also will rise about $43,000.

Significant decreases in the budget also have been realized, however. A change in property and general liability insurance — obtaining it through the Virginia Municipal League, rather than a commercial carrier — will save about $346,000.

Information technology-related expenses have gone down about $295,000, largely because of a software conversion. The cost for the annual audit has gone down about $97,500.

One of the largest decreases in the budget is about $690,000 in decreased payments to Wheelabrator, including fuel credits. However, any increase in real estate taxes by Portsmouth may cause the taxes on the property to exceed $1 million, in which case SPSA would be responsible for a portion of the excess.

Unfortunately, DeVary said, the cost of some of the most expensive operating expenses is non-negotiable.

“Fuel, equipment, tires — you don’t have a whole lot of choice in those,” DeVary said.

The budget also sets aside about $9.5 million to pay off a portion of the authority’s $66.8 million in debt.

Chairman Joseph Leafe, who represents Norfolk on the board, said he remains optimistic that the economy will turn around.

The board will hear more updates on the budget at its April 27 meeting. On May 25, a public hearing will be held on the increased construction and demolition tipping fee, which is rising from $30 to $40 per ton. The budget could be approved that day.

To view SPSA’s budget proposal, visit www.spsa.com.