SPSA bid unpopular
Published 8:11 am Friday, September 4, 2009
FRANKLIN—ReEnergy Holdings LLC’s multimillion-dollar proposal to buy and operate the troubled Southeastern Public Service Authority was met by a less-than-enthusiastic Franklin City Council on Tuesday night.
Councilman Barry Cheatham, who also serves as the city’s representative on the regional garbage agency’s board of directors, said the purpose of the special meeting was to solicit comments from council members to take to SPSA as it considers ReEnergy’s proposal.
A number of issues gave council members pause as they reviewed the proposal. The switch from a public to a private entity and the 20-year commitment ReEnergy is requesting were among the most unpopular.
Councilwoman Mary Hilliard said that creating a 20-year monopoly would be “ugly and unpredictable.”
City Manager June Fleming said that, in her experience, a city signing a 20-year contract with a company is unusual.
“I don’t see a problem obligating yourself to what I call a long-term contract, such as 20 years,” City Attorney Taylor Williams said. He noted that the city has been in a contract with SPSA for 25 years.
“I think the question you need to ask yourself is: If you had been the person to sign the contract in 1983 with SPSA for services, now 25 years down the road, can you look at that contract and say to yourself ‘I’m satisfied,’” he said.
Vice Mayor Raystine Johnson expressed concern that ReEnergy’s proposed capital improvement plan could cause an increase in tipping fees.
“Everything in (the proposal), to me, has a dollar attached,” she said.
Councilman Benny Burgess said that he liked the idea of the city “getting out of the trash business,” but the proposal, at this point, has too many unknowns.
“Conceptually, I don’t have a problem with the concepts they have here,” he said. “It depends on when the details come out whether or not I would be able to support it.”
Others questioned the company’s enthusiasm to buy SPSA and take on its enormous debt. Cheatham said that there is nothing in the proposal that would prohibit ReEnergy from importing out-of-state trash to subsidize its income.
“Right now, this is just a proposal,” Cheatham said. “It’s not the end product by any stretch.” He said that a final proposal to sell to ReEnergy would have to be approved unanimously by all eight member localities.
SPSA is also reviewing proposals to buy the authority’s waste-to-energy plant in Portsmouth.
Cheatham said that ReEnergy is only interested in buying the entire authority, including the waste-to-energy plant.
“If waste-to-energy sells, this is out the window,” Cheatham said.
The City Council voted unanimously to authorize Fleming to sign and send a letter with the council’s comments to SPSA.