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Summary of Advantages of Sale of SPSA’s WTE Facilities Presented to SPSA Member Communities

Summary of Advantages of Sale of SPSA’s WTE Facilities Presented to SPSA Member Communities. February 2010. Benefits of Selling WTE Facilities. Reduce SPSA debt by approx. $142 million Reduce debt service: average 60+% less Reduce capital expenditures Cell VII expansion: $30 million

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Summary of Advantages of Sale of SPSA’s WTE Facilities Presented to SPSA Member Communities

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  1. Summary of Advantages of Sale of SPSA’s WTE FacilitiesPresented toSPSA Member Communities February 2010

  2. Benefits of Selling WTE Facilities • Reduce SPSA debt by approx. $142 million • Reduce debt service: average 60+% less • Reduce capital expenditures • Cell VII expansion: $30 million • Two new transfer stations: $22 million • Reduce operational expenses • Extend landfill life through diversion of non-processables • Reduce operational risks and complexity – more certainty

  3. SPSA Financial Viability • SPSA system remains unchanged • WTE Facilities owned by Wheelabrator but remains part of SPSA system through the service agreements (i.e. commitment of municipal waste to Wheelabrator) • Suffolk Landfill (SPSA) • Transfer Stations (SPSA) • Other services (SPSA) • Use and Support Agreements valid • Funding of system remains same through the tipping fees

  4. Key VRA Requirements • Member community guarantee of outstanding reduced VRA debt (~$50M) (See slide 6 and 7 for lenders’ positions) • Debt retirement plan • Proportional debt reduction among lenders • Levelized remaining debt service • Inter-creditor agreements among SPSA lenders

  5. Debt Retirement Plan • Options Considered • Pro rata reduction of all debt (Ambac, Wachovia, VRA, and Virginia Beach) – levelize remaining debt service. • Retire all but VRA 2009 bonds and City of Virginia Beach debt (Considered a “non-starter with the VRA and CAO’s), backloads debt service (sinking fund considered) • Pro rata reduction of all but Wachovia debt, which allows for full payback of Virginia Beach loan (note: approach is acceptable to Wachovia)

  6. Allocation of Guarantees Source: Mesirow Financial

  7. Pro-Rata Scenario with VA Beach Takeout Source: Mesirow Financial

  8. Project Savings Note: FY 2018 is a partial year. Use and support agreements expire January 24, 2018

  9. Note: FY 2018 is a partial year. Use and support agreements expire January 24, 2018

  10. Note: FY 2018 is a partial year. Use and support agreements expire January 24, 2018

  11. Source: SPSA Pro Forma, January 26, 2009, Pro Rate Debt Reduction, some variation may occur based on final debt retirement plan results Bottom Line: Member communities will spend less for solid waste disposal through 2018 if the WTE Facilities are sold.

  12. Status • Responses to VRA Resolutions submitted on Jan. 29 • Volume cap requested from Governor • Requesting member community guarantees in February • Inter-creditor agreements being finalized • Met with VRA Feb. 8-9 • Final VRA approval Mar. 2010 • Other consents being perfected for a closing before May 1, 2010

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