RICHMOND— Gov. Tim Kaine is now weighing in on the ongoing Southeastern Public Service Authority saga, telling seven of its member communities that if no agreement was reached to save the waste management corporation, SPSA’s demise could have a negative impact on the state’s bottom line.

SPSA officials say the entity is teetering on the brink of disaster because of nearly $240 million in debt it is unsure can be repaid in today’s harsh economic climate.

In a letter to each of the seven member mayors and the chairman of Southampton County Board of Supervisors, Kaine said he was concerned that SPSA’s financial crisis could “threaten” the state’s bond rating and asked the communities to reach what he called, “a successful resolution to this problem.”

Kaine said, “The basis of my concern is $129.4 million of SPSA bonds that are backed by the moral obligation of the Commonwealth through the Virginia Resources Authority.”

The state authorized the bond package based on the understanding that the member communities would continue to back SPSA financially, according to Kaine.

“As you know, failure by SPSA to pay its obligations to the VRA could trigger a sequence of events that would be unfavorable to the Commonwealth, SPSA member communities and all Virginia localities,” Kaine said.

Kaine also warned the communities of his legal authority to instruct the Secretary of Finance to “intercept” funds the state makes in support of the member communities’ local programs if SPSA’s monetary obligations to the state were not met.

After acknowledging receipt of the letter, Franklin Mayor Jim Councill said the city would discuss its next steps during Monday’s council meeting.

“We are going to be responsible,” he said, but declined further comment until he had time to speak with fellow council members.

Dallas Jones, chairman of Southampton’s Board of Supervisors, also declined comment until after he’d conferred with county administrators.

The VRA is currently looking for what is being called the “full faith and credit” of the member communities, excluding Southampton County, behind SPSA’s debt. Southampton County would need a referendum of voters to extend its full faith and credit.

Isle of Wight, which did not receive a letter from Kaine, has already agreed in writing to VRA to fulfill its obligations.

In other SPSA news, the House of Delegates voted 99-0 in favor of Sen. Fred Quayle’s, R-Suffolk, bill to require SPSA officials to entertain and negotiate any and all reasonable landfill gas contract offers from private companies on Thursday.

The bill passed the Senate earlier in the legislative session.

According to Quayle, SPSA had been approached by several companies that wanted to buy the rights to methane gas naturally generated in its Suffolk landfill.

Methane gas can be converted for use as electricity, steam or fuel energy.

Quayle said SPSA currently has a $250,000 contract with CIBA Corporation, also located in Suffolk, to buy a small portion of the landfill’s methane gas emissions.

But, Quayle said other companies have approached him with interest to buy the complete emission rights to the gas.

The new contract would net SPSA a profit of between $2.5 to $3 million annually, Quayle said. However, the companies were unsuccessful in getting SPSA officials to work out a deal.

“Basically, my bill was written to get the attention of the folks over at SPSA,” Quayle said. “These folks couldn’t get the people to talk to them because of all the other stuff SPSA is dealing with,” he said.

Quayle said that since he introduced the bill in January, SPSA has started talks with the interested parties.

“I believe they are seriously negotiating some type of plan at this point,” he said.

Quayle said a positive outcome could mean hundreds of jobs and increased tax revenue for the region because a new methane gas conversion plant would need to be built near the landfill off the Highway 58 corridor.

“I think this could be good for all of us. Something like this would create jobs that we sorely need in the area and SPSA would profit as well,” Quayle said.