SPSA Asks For Loan Guarantee From Localities

Date: August 15, 2006

Source: News Room

Southeastern Public Service Authority, a regional waste authority in Virginia, is asking localities, including Virginia Beach, Norfolk, Portsmouth, Suffolk, Franklin and Isle of Wright, to guarantee a bank loan of $22 million for improvements. These improvements include $7 million to expand the Regional Landfill in Suffolk, which is running low on capacity, $2.6 million to upgrade SPSA's power plant in Portsmouth, and money to replace aging hauling equipment. SPSA's ability to borrow money from its long time financial backer is impaired by a lawsuit from the City of Chesapeake, which seeks early withdrawal from its contract with SPSA that otherwise terminates in 2018. The localities are expressing reluctance to guarantee the loan. Suffolk cited the lawsuit's impact on SPSA's ability to operate. Virginia Beach needs many questions answered, and both Portsmouth and Suffolk have voiced concerns about how the guarantee might potentially affect their bond ratings. Chesapeake will not back down on the lawsuit despite pleas to do so from SPSA and the other localities.

For more information, visit: www.spsa.com.

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