THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, July 6, 1996 TAG: 9607060351
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY SCOTT HARPER, STAFF WRITER
LENGTH: 133 lines
With debts to pay and business fading for the fourth straight year, the regional trash authority may use an explosive new tack to regain control of the lucrative garbage market in South Hampton Roads.
It may try to force its competition, private waste haulers, out of business.
Private companies call the suggested action a socialist takeover, and they promise to ``fight this through every legal remedy, every legislative remedy,'' as one consultant for waste giant Browning-Ferris Industries put it last week.
The Southeastern Public Service Authority recognizes that the idea carries much political baggage. After all, what agency wants to stand accused of kicking out companies that contribute jobs and tax revenues to the local economy?
But SPSA's executives insist that they have the power and legal precedence to instruct companies to pack up and leave town after a five-year waiting period.
As proof, they cite history. For decades, cities and counties have managed the trash of their citizens and businesses. Local governments built landfills. They collected garbage. Only recently have private companies started assuming the traditional government role of community garbage man.
More specifically, SPSA cites a little-known state law, passed easily by the General Assembly in 1995. Sponsored by Del. Shirley F. Cooper, a Yorktown Democrat, the law spells out what local governments must do to evict private trash companies, including giving them a five-year notice to stop doing business.
At the very least, SPSA hopes that just threatening eviction will encourage companies to negotiate a settlement for coexistence. That would allow SPSA to lower trash-dumping fees and continue to provide a wide range of services, said Durwood Curling, SPSA's executive director.
``It's not a desperate move on our part,'' Curling said, ``it's a cost-containment move. We need to stop the bleeding.''
The case already is being closely watched by national interest groups and legal experts facing similar private-vs.-public trash wars in their states.
And locally, the conflict could determine how much money homeowners and businesses will have to pay to dispose of trash, and how many environmental programs, such as recycling, will accompany their service.
Last week, a SPSA committee recommended that the board of directors issue a five-year notice to private haulers. The board declined to act, saying it needed more time to study such a serious declaration.
Private haulers were quick to denounce the idea. ``This is something that would happen in the former Soviet Union,'' fumed H. Benson Dendy III, a hired consultant for Browning-Ferris Industries.
At least nine private haulers do business in South Hampton Roads, bringing hundreds of jobs and millions of dollars of tax revenue to the region. They include national corporations, such as BFI and Waste Management Inc., and smaller operations, such as Atlantic Waste.
SPSA, a public cooperative, started accepting trash in 1985 from businesses and homes within its eight member communities. They are: Norfolk, Virginia Beach, Portsmouth, Suffolk, Chesapeake, Franklin and Isle of Wight and Southampton counties.
The authority was deemed a model of regional teamwork at the time. There was little private competition, however, and disposal fees were low - about $12 a ton.
Meanwhile, SPSA was borrowing hundreds of millions of dollars to expand its services and build new facilities - a waste-to-energy plant at Norfolk Naval Shipyard, curbside recycling, tire shredders, household hazardous waste collection, new transfer stations.
Then about 1990, private companies started rolling into eastern Virginia and Hampton Roads. Since then, five private landfills have opened east of Interstate 95, ready to accept garbage at vastly reduced rates.
Essentially, SPSA was being cut out of the trash loop. Its landfill was not being used as much, its transfer stations were ignored. The authority started to see a drop in revenues.
Private companies could entice more business because of lower dumping costs. It's cheaper because they offer fewer environmental options, such as curbside recycling and waste-to-energy burning, all of which are expensive. Instead, private companies simply bury most of their collected wastes.
To make up for lost revenues, SPSA has increased its disposal fees. It needs to do so to pay outstanding debts and fulfill contracts. Dumping a ton of trash in SPSA's regional landfill in Suffolk now costs $48.20. That's 41 percent higher than in 1995, and quadruple the cost in 1985, according to SPSA statistics.
For almost two years, SPSA's board of directors has struggled for an answer to stem rising fees and dwindling business. Some members now appear to be leaning toward the eviction option, although most realize its political danger.
``If you're going to tell a bunch of businesses that you're just wiping them out, you'd better have your ducks in a row,'' cautioned Virginia Beach City Manager James K. Spore, at a board meeting last week.
Private haulers are ready to fight, either through lawsuits, political pressure or lobbying for new legislation.
``Certainly we're concerned,'' said Vic Arthur, manager of the Virginia chapter of the National Solid Wastes Management Association. ``This is a very unusual situation with a lot of money and a lot of possibilities on the table.''
It sounds odd, but Arthur's group was a key supporter of the eviction legislation in 1995. Private haulers were worried that local governments and trash authorities could take over their contracts without notice or compensation.
Their fear stemmed from historic legal ties that give local governments control of trash services.
Del. Cooper thought it fair that companies receive some protection from a prospective takeover, so she sponsored a bill guaranteeing a five-year notice and public hearings.
``Competition is healthy,'' Cooper said last week. ``To be honest, I'd like to do more to strengthen what we've already accomplished. There still is a lot of latitude given to local government.''
The law specifies that only local councils can issue eviction notices. That means each SPSA member would have to approve the move. SPSA can only ask that each member's city council or county board of supervisors take up the measure.
To private industry, this means its representatives have eight chances to lobby against a notice being approved, and eight chances to try to fracture SPSA.
There is little time to waste, given SPSA's sharp business decline. It has lost 100,000 tons of waste since 1993 to private haulers, a trend that is projected to continue.
``We're losing the stream of trash, we're losing revenue and we've got long-term obligations on our bonds to meet,'' said S. Chris Jones, outgoing mayor of Suffolk and SPSA board member.
``We can't wait five years; we can't wait two years. The clock is ticking.'' MEMO: What's Coming? The Southeastern Public Service Authority, in
financial trouble, may use a new law to try to force private trash
companies out of business in South Hampton Roads. Companies pledge to
fight, if pushed.
How Can They Do That? The law, passed in 1995, says local
governments can take over trash duties within their jurisdictions if
private waste haulers are given five-year notice to leave. The law has
never been tested.
Why Should I Care? At stake are the price that area businesses and
homeowners will pay for trash collection, and the future of SPSA, an
agency created in 1976 by South Hampton Roads localities as a
regional-government experiment. by CNB