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24 <br /> Orange County, NC <br /> Financial Plan & Rate Study for Solid Waste Enterprise Fund SCS ENGINEERS <br /> 2 . 0 COST OF SERVICE ANALYSIS <br /> Since the cessation of waste acceptance at the County's sanitary landfill in June 2013, the <br /> expenses associated with the County's existing solid waste management and recycling programs <br /> and facilities have exceeded the revenues generated by these programs and facilities. SCS <br /> reviewed historical program and facilities expenses (both operating and capital) as well as the <br /> historical revenues from various sources that have served to cover these expenses for the past <br /> several years. SCS projected the costs necessary to continue implementing these programs and <br /> operate existing facilities over the next 5 years (through FY 2020-21). SCS also projected the <br /> revenues likely to be realized during this timeframe in order to develop a"cost-of-service" <br /> analysis to identify potential funding deficits or surpluses. A brief overview of the Department's <br /> current budget and management practices, along with a description of SCS' assumptions and <br /> findings related to this cost-of-service analysis are discussed below. <br /> 2 . 1 BUDGET AND MANAGEMENT PRACTICES OVERVIEW <br /> 2. 1 . 1 Enterprise Fund <br /> The County has established the Solid Waste Enterprise Fund(Fund)to account for all <br /> Department solid waste and recycling program operations, which are financed and operated in a <br /> manner similar to private business enterprises. In other words,the County's intent is that the <br /> Fund be managed such that the costs of implementing these programs and facilities (operating <br /> and capital expenses, including depreciation) are covered by the monies in this Fund. Money is <br /> allocated to this Fund through user charges and revenues generated by the solid waste and <br /> recycling programs and facilities supported by the Fund, with limited revenue allocated from the <br /> General Fund. <br /> The Fund includes potential revenue from approximately 33 distinct sources (line items under <br /> the Budget Accounts), which can be associated with one or more of the four cost centers <br /> (Divisions)within the Department. Most of these sources contribute revenue into only one of the <br /> Divisions. However, line items for some sources contribute revenue into multiple Divisions. <br /> For general reference purposes, SCS divided revenue sources into three categories or tiers of <br /> sources; primary, secondary, and ancillary. Exhibit 9 displays the three tiers and core revenue <br /> streams associated with each. <br /> 14 <br />