Minutes 04/13/2009 - Laserfiche WebLink

Home Browse Search

April 13. 2009 WHEREAS, the VRA PRMC Resolution advances a number of measures intended to address SPSA's short- and long-term financial distress, including, among other things, (i) a proposal for VRA to restructure certain outstanding SPSA debt (the "VRA Restructuring"), (ii) the imposition of increased municipal tipping fees to be paid by certain of the Owner Communities, (iii) general obligation pledges by the Cities of Franklin, Portsmouth and Suffolk and the County of Isle of Wight, and a moral obligation pledge of the County of Southampton in support of the VRA Restructuring; and (iv) general obligation backing by the Cities of Norfolk and Chesapeake for an outstanding line of credit owed by SPSA to Wachovia Bank; and WHEREAS, by its April 7, 1983 Use and Support Agreement with SPSA, Portsmouth became legally obligated to pay such tipping fees as may be imposed from time to time by SPSA, and SPSA is legally obligated to impose such tipping fees on its members, consistent with its agreements with each member, sufficient to pay debt service on all debt owed by SPSA, including debt owed by SPSA to VRA; and thus Portsmouth and other SPSA members are already legally obligated to prevent any default on the VRA debt; and WHEREAS, there are several private waste and energy companies desirous of acquiring and privatizing SPSA in whole or in part, and SPSA must have interim financial stability in order to have time to properly the evaluate the merits of these various proposals, and the VRA Restructuring will provide the needed degree of interim financial stability; and WHEREAS, Portsmouth City Council recognizes the need for privatization because of the history of mismanagement of SPSA, and the Council hereby expresses agreement with the following findings of SPSA mismanagement from an October, 2008 study duly conducted by the Virginia Auditor of Public Accounts: · SPSA has not adequately developed and implemented a strategic plan. · SPSA has consumed assets without paying off the related debt. · SPSA has operated and priced programs and services without evaluating their associated costs. · SPSA has set fees without knowledge of other options for customers. · SPSA has not reassessed business decisions as conditions changed. · SPSA has not adequately funded future liabilities; and WHEREAS, there is a profound need for reform, restructuring, and/or privatization of SPSA; and House Bill 1872, patroned by Delegate John Cosgrove, now enacted into law as Section 15.2-5102.1 of the Code of Virginia (the "Cosgrove Bill," incorporated herein as Exhibit B, will for the first time require such reforms, effective July 1, 2009, including: · the requirement of an overall five-year strategic plan · limitation on activities not associated with SPSA's core purpose · the requirement of a detailed strategic operating plan · outsourcing or privatization of all functions that will result in reduced costs · evaluation of landfill capacity · detailed cost accounting requirements · detailed financing plan, including a plan for the retirement of debt · strict due diligence requirements prior to the issuance of any new debt, coupled with a restriction on new debt unless approved by a 75% supermajority vote of the governing body · strict compliance with the Virginia Freedom of Information Act; and · restrictions on contracting without informed approval of the governing body NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF PORTSMOUTH, VIRGINIA, THAT: The City Council finds that undertaking the VRA Restructuring will further the following four important objectives: