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29 <br /> Orange County, NC <br /> Financial Plan & Rate Study for Solid Waste Enterprise Fund SCS ENGINEERS <br /> Year was used as the basis for forecasting expenses for the 5-year forecast (FY 2016- <br /> 17 to FY 2020-21). <br /> • Develop Revenue Requirement Projection—After developing the revenue <br /> requirement for the Test Year, SCS worked with County staff to project changes in <br /> anticipated costs due to inflation, labor increases, facility and vehicle maintenance, <br /> planning costs, etc. This resulted in a 5-year revenue requirement forecast for the <br /> entire sanitation program including collection, recycling, disposal of solid waste, <br /> public education, etc. <br /> • Revenue Offsets— SCS worked with County staff to identify revenue sources and <br /> develop estimates for the sale of recyclables, C&D permit revenues, C&D tipping <br /> fees, mulch and compost sales, LFG recovery, etc. <br /> • Determination of the Number of Customer Units—SCS worked with County staff to <br /> develop reasonable estimates of future number of customers over the next 5-year <br /> period. <br /> • Calculation of the Annual County Solid Waste Programs Assessed Fee— SCS <br /> distributed the revenue needs across the four Divisions to estimate the cost of service <br /> and calculate the annual Program Fee needed to balance the budget. <br /> Appendices D and E identify projected revenues and expenses, respectively, by service area used <br /> in the Model for the Department for FY 2016-17 through FY 2020-21. <br /> 2. 1 .7 Model Scenarios <br /> SCS developed two Rate Model scenarios to evaluate impacts to the Enterprise Fund financial <br /> situation over the 5-year planning period. Depending on the individual scenario, the Model <br /> assesses net revenue needs if the Program Fee, other revenues, and operating costs equal those in <br /> the Budget for FY 2016-17 with inflation factors applied, known capital items accounted for, and <br /> other adjustments made to specific line items as detailed in Appendix C: <br /> • Scenario 1 — Scenario 1 assumes status quo for the Department Solid Waste Program <br /> Fee ($107 per year). This scenario is intended to be used as a baseline or"Status <br /> Quo" scenario to enable comparison with Scenario 2. <br /> • Scenario 2—This scenario serves as an assessment of the required increase in the <br /> Program Fee to balance projected operating expenses and revenues for solid waste <br /> and recycling services. Scenario 2 assumes the Program Fee balances the Fund's <br /> annual budget if other revenues and operating costs equal those projected in the <br /> Budget for FY 2016-17, dependent on the sub-scenario. This iteration serves as a <br /> "break-even" analysis. <br /> 19 <br />