THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, April 27, 1995 TAG: 9504270354
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY SCOTT HARPER, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Medium: 79 lines
Garbage has never been a pretty business, but Wednesday it also got significantly more expensive for South Hampton Roads.
Tipping fees that cities and counties pay for disposal of household trash will jump 83 percent over the next two months, according to a plan approved Wednesday to aid the financially troubled Southeastern Public Service Authority.
Then, starting July 1, the fees will decrease some but will remain 41 percent higher than the current level, according to the aid package.
Not only is the two-month boost intended to raise money quickly, but it also is needed to satisfy nervous investment analysts on Wall Street.
SPSA recently saw its bond rating downgraded by the New York investment firm Moody's. The move - akin to a bank lowering a customer's credit rating - was made because analysts were anxious that SPSA was making decreasing amounts of money from its tipping fees.
Without a good bond rating, it would be more difficult for SPSA to borrow money for big projects, such as a landfill expansion or a new recycling center.
While local officials saw the need to keep a strong bond rating, they wondered how they will pay the two months worth of extraordinarily high tipping fees.
The city of Norfolk expects to pay about $500,000 in fees the next two months, solid waste administrator Jordan said. Asked where the money will come from, Jordan said, ``I don't know. It's something we're still trying to figure out.''
SPSA is facing one of its worst fiscal crises in its 22-year history. The biggest reasons: private waste companies and a Supreme Court ruling.
Under an open market created by the court ruling, which made it illegal for cities to dictate where their trash goes, companies are luring away business in droves with cheaper rates and few recycling requirements.
To boost SPSA, regional residents will pick up much of the tab. In Norfolk, the average bimonthly trash bill next year should rise from $6.17 to $8.10, said solid waste supervisor Louie Jordan.
And the Portsmouth City Council this week approved a $2-a-month increase for trash collection in its 1995-96 budget.
Suffolk is the only municipality served by SPSA that is exempt from the new tipping fees. The city is given a break because it hosts the regional landfill.
Virginia Beach, meanwhile, will only feel a pinch from the fees. The city is given special protection against rising fees because it accepts incinerator ash from SPSA.
In another money move Wednesday, SPSA approved a bare-bones budget for next fiscal year. It includes no pay raises for its 500 employees, no new programs and a pledge not to fill 54 vacant jobs.
Executive Director Durwood Curling said these moves will save about $2.3 million.
``This is about as low as we can go before we start hurting our services to the public,'' Curling said after a lengthy meeting of SPSA's board of directors.
Curling said he believes the financial crisis will begin to fade if Congress approves legislation to void the Supreme Court's ruling on so-called ``flow control'' of trash.
A measure carrying special provisions for SPSA, as added by Virginia Sen. John Warner, is weaving its way through the U.S. Senate. Curling expects the bill to be approved this year.
If it is, Curling said, tipping fees for cities and counties in the region could be reduced as early as next fiscal year.
Beginning Monday, however, tipping fees will rise from $34 per ton of household trash to $61 a ton, an 83 percent jump. The rates will last through July 1. At that time, the new $48.20-per-ton fee takes effect for all of 1995-96. ILLUSTRATION: Graphic
WHAT THEY PAY
[For complete graphic, please see microfilm]
by CNB