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DocuSign Envelope ID:8A735669-3D2F-468A-BF99-3DF97688146A <br /> Proposal for Preparation of a Solid Waste Financial Plan <br /> The County anticipates that the SWPF, along with additional sources of revenues from the <br /> Department's operations and facilities, will not be adequate to cover the expenditures during the <br /> current fiscal year(FY 15-16). The amount of the SWPF would need to be escalated in order to <br /> fully cover the direct and indirect costs of recycling programs (including curbside, multifamily, <br /> commercial recycling, drop-off sites, electronics recycling), household hazardous waste <br /> collections,yard waste processing, clean wood waste processing, large appliance and scrap tire <br /> management, cardboard and scrap metal recycling. An increase in the fee would be necessary to <br /> support approximately 35 percent of the costs of operating Solid Waste Convenience Centers. <br /> OBJECTIVES OF THE PROPOSED STUDY <br /> The County seeks to retain an experienced solid waste consulting firm to complete a fee study to <br /> ensure an appropriate pricing policy to recover operating and capital costs, depreciation, and debt <br /> service consistent with generally accepted accounting principles (GAAP) for municipal solid <br /> waste enterprise funds. To enable the County to answer specific questions on the SWPF, a <br /> Financial Plan(Plan)needs to be developed to further identify, evaluate, and assess the <br /> appropriate annual fee amount which is sufficient to manage the County's existing programs <br /> over a I0-year planning horizon or so. <br /> In essence, the County desires to develop a Pro Forma Financial Model (Model), which will <br /> look at operating revenues and costs, as well as any potential debt/loans (as applicable) for the <br /> Department's long-term capital improvement plan. It is our understanding that the Model will <br /> need to address all programs and facilities included in the Enterprise Fund, and track waste <br /> disposal quantities at the Orange County Landfill and provide estimates of revenues back to the <br /> County. Furthermore, the County's Chief Financial Officer has developed a financial model for <br /> the Enterprise Fund that is used in the roll-up into the Comprehensive Annual Financial Report. <br /> At the outset of this assignment, SCS will validate this existing Model and see if it can be <br /> modified or adapted, or used as input model for the larger Model constructed by SCS. <br /> The objective is that the Model should be designed to be flexible enough to enable the <br /> Department to evaluate "what if' scenarios and financial analysis of the various options relative <br /> to potential operating efficiencies, changes in the assessment of the SWPF upon different user <br /> groups (municipal and unincorporated residents), changes in population growth, waste <br /> characteristics, Solid Waste Ordinance modifications,potential changes in State regulations, <br /> future solid waste disposal options, and future Department programs. The output of the Model <br /> will enable the Department to help quantify potential risks of these possible changes to its overall <br /> financial plan. <br /> SCOPE OF SERVICES <br /> The scope of services will require a well-planned and detailed approach in order to establish <br /> current system costs and expected future costs. Based on our extensive experience in <br /> conducting cost evaluations of similar solid waste systems, SCS has developed a standard <br /> process, which has been successfully applied on more than 50 solid waste cost evaluations and <br /> rate studies nationwide. A proposed scope of services is described in the following paragraphs. <br /> 5 <br />