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6 <br />E. Willingness to consider gay -as -you -throw (PAYT) as a revenue and waste reduction tool <br />PAYT may be a suitable financing method for waste collection and disposal services; <br />however, this is the business of each local government. The Interlocal Agreement does not <br />allow for the imposition of a PAYT funding system on individual jurisdictions, although <br />each jurisdiction has the option of using PAYT and/or mandatory recycling as waste <br />reduction tools. These regulatory waste reduction methodologies are contained in the <br />County -wide solid waste management plan. We believe that the financing of collection and <br />disposal costs should be left up to each jurisdiction. <br />F. Recommends an indirect cost study prior to assuming lead role <br />The Town utilizes a cost allocation formula to assign administrative overhead costs to the <br />Landfill Fund. The formula is based on that allowed by the federal government for local <br />government projects and has been used by the Landfill Fund for several years upon <br />recommendation of the Chapel Hill Finance Director. The Chapel IMI General Fund <br />receives annual payments of 13.55% of full -time salary costs (currently $114,000). This has <br />proven reasonable compensation for financial, personnel, and general administrative <br />services. <br />We think the current allocation occasionally may not provide adequate reimbursement for <br />the time of the Town Manager and Town Attorney; however, these time commitments are <br />intermittent and are at least partially the result of our existing organizational structure and <br />the difficulty involved in managing our joint arrangement. A unified and consolidated <br />organization would not require such a high level of administrative involvement. <br />The County could use the percentage of overhead we have used; or use the percentage they <br />already use on federal contracts. We would suggest that the County begin using such a <br />method and, once they gain experience, conduct an analysis of real costs and make <br />adjustments as necessary. We believe that no pronounced differences in costs will be <br />encountered. <br />CONCLUSION <br />We believe the lack of agreement on governance has made it difficult to make decisions effectively <br />and in a timely manner. It has created unnecessary and time - consuming steps for all the elected <br />officials to go through. Staffing these extra steps has taken time away from the business of <br />managing the current operations. <br />We have reached a point where decisions regarding a construction and demolition disposal and <br />recycling site and the site for a materials recovery facility need to be made. We believe that these <br />decisions should not wait until the Interlocal Agreement is concluded to be resolved, but should be <br />made now and incorporated into the agreement. Additionally, we believe the implementation of the <br />solid waste management plan for Orange County must proceed now if we are to meet our adopted <br />goals of per capita waste reduction. <br />