Agenda - 09-14-1999 - 2 - Laserfiche WebLink

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7 During the Committee's discussions, the following potential funding mechanisms were examined, and are still being considered: 1. revenues from increased tipping fees only; 2. additional property tax revenues; 3. service charge to be instituted against each community to be.financed as they see fit; and 4. availability fees to be charged against service beneficiaries. Each of these alternatives was examined in a November 24th, 1998 report prepared by the Solid Waste Department staff for the Alternative Finance Committee. Please refer to that report (attached) for additional specifics on each of the financing alternatives. Regardless of the funding mechanism selected, the same revenue would need to be raised in order to properly fund the Solid Waste Management Plan The November 24'b staff memo (Graph 1) identifies the total revenue required. The Alternative Financing Committee solicits feedback from the governing bodies on each of the proposed funding mechanisms and which they would prefer to see. implemented. The Orange County Manager is , particularly interested in comments on option #4, whereby service charges would be levied against each community, and each governing body decide for itself the method to fund that service cost. The committee is particularly interested in hearing the impressions from the governing bodies of each jurisdiction by January 15 so that these could be incorporated into the January 26d. meeting agenda packet for the Alternative Finance Committee. I. Tipping Fee Increases needed if only tipping fee revenue were used. If increased revenues from tipping fees were the financial support for the Solid Waste Management Plan, then tipping fees would need to rise to $76.38 in FY 2001 -02 to support $2,590,000 in additional expenditures ; and would rise to $102.33 in FY 2005 -06 to support $3,601,000 in additional expenditures. The Solid Waste Department staff considered the potential effect of raising tipping fees to this extent. They concluded that the private waste haulers, who now deliver 49% of all waste deposited at the Orange Regional Landfill, would not continue to take their waste to our landfill if the tipping fees there were significantly higher than those of other facilities. The projected tipping fees shown above would be considerably higher than future fees expected at competing disposal facilities. The estimated loss of MSW tonnage and tipping fee revenue to the Orange Regional Landfill due to diversion of . that waste to alternate disposal sites, would need to be accommodated by an increase in the tipping fees already projected. Further revising the tipping fee upward to accommodate that loss of revenue would continue to drive • additional tonnage away from the landfill. Estimates are that with the differential in projected tipping fees between the Orange Landfill and competing disposal facilities, and the resulting loss of delivered tonnage, tipping fees would need to be increased an additional $35.01 (to $111.39 per ton) in FY 2001 -02 beyond the original projection simply to accommodate the loss of tonnage. This method would perpetuate a price- spiral of tipping fees required to generate the same revenue from a diminishing tonnage; if this spiral were to continue, only the four governmental entities would be paying the entire cost of the Solid Waste Management Plan through these,, tipping fees. The November 24s' staff memo (Graph 2) projects the tax impact on an average homeowner (home value: $140,000) in Orange County from the use of the various financing mechanisms considered here. The financing options considered in each of these scenarios vary significantly- in which segments of the community may subsidize other portions. For example, the use of tipping fees to fund the Solid Waste Management Plan would require that waste generators that do not receive recycling services to subsidize other portions of the community. 2