SPSA’s surprising turnaround

Published 10:03 am Saturday, May 7, 2011

A federal government professing interest in reforming itself for the sake of future generations of Americans might draw inspiration from an unlikely source: the Southeastern Public Service Authority.

South Hampton Roads’ waste management agency took a lot of heat from citizens and pundits, including this columnist, a few years back for reckless spending, soaring indebtedness and outrageous fees for its customers. The agency, led by Franklin resident Bucky Taylor, deserves equal credit now for putting its fiscal house in order.

SPSA is a good case study in making the tough decisions necessary to achieve true fiscal reform:

n A few years ago, the agency employed 480 people; today it employs 154. Granted, much of that reduction in force resulted from the sale of a Portsmouth waste-to-energy plant, but at least 121 jobs, or a quarter of the total workforce, were eliminated purely in the interest of austerity.

n In March 2009, SPSA had no money to pay its bills and was in the crosshairs of its primary creditor, the Virginia Resources Authority. Two years later, SPSA had $22 million in the bank and $10 million in reserve funds.

n The agency’s board and staff, even while slashing expenses, understood that some additional short-term revenue was essential to fiscal stability. They bit the bullet and raised the tipping fee paid by participating localities to a then national high of $170 per ton of garbage. It has sense been lowered to $145 per ton.

n SPSA got out of functions and obligations that were fiscally unsustainable, including operation of the Portsmouth incinerator and costly recycling service.

A turning point for SPSA was the General Assembly’s intervention a few years back when the agency was floundering. Legislation signed by then-Gov. Tim Kaine forced the agency to draft a strategic plan and booted elected officials off its board of directors.

Defenders of the former board structure will say that the fiscal turnaround had little to do with a reconstituted board — that, for example, the decision to sell the Portsmouth incinerator had already been made by the old board.

Taylor, for his part, while acknowledging some initial skepticism about political meddling by legislators and the governor, says the legislation, including the change in board makeup to citizen representatives and non-elected representatives from local governments, was healthy.

“The governor’s mandate provided the direction and incentive,” Taylor, a former Southampton County administrator and Franklin city manager, told Franklin Rotarians recently.

Board members Everett Williams and June Fleming of Franklin, Roy Chesson and Mike Johnson of Southampton, and Theodore Hardison and Doug Caskey of Isle of Wight deserve much credit for their strong leadership.

SPSA isn’t out of the woods. Continued strict fiscal discipline will be required to retire a remaining $50-plus million in debt before the agency’s scheduled termination in 2018. Tipping fees are still too high relative to what other communities pay for garbage disposal.

The eight participating localities, including Franklin, Southampton County and Isle of Wight County, will have to decide soon whether to extend their garbage alliance beyond 2018 or go their separate ways.

Two years ago, this columnist opined that the decision was a no-brainer for Western Tidewater — that our three localities should look at a smaller compact and make a plan to get out of SPSA while the getting was good.

SPSA’s remarkable turnaround has given local government leaders something to think about.

STEVE STEWART is publisher of The Tidewater News. His e-mail address is steve.stewart@tidewaternews.com.