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48 <br /> Orange County, NC <br /> Financial Plan and Rate Study for Solid Waste Enterprise Fund SCS ENGINEERS <br /> • General Fund Contribution: SCS understands that the County has established a <br /> precedent since FY 2007-08 of utilizing contributions from the General Fund as <br /> revenue into the Sanitation Services Division. SCS' analysis was structured to <br /> assume that the contribution from the General Fund for the Test Year and four <br /> subsequent fiscal years is maintained at approximately$2 million per year. <br /> • Appropriated Balance Fund: SCS understands that the Appropriated Fund Balance <br /> line item account is used to balance the budget. It reflects load proceeds, Program Fee <br /> rounding, and other general fund transfers. While the County provided the value for <br /> the FY 2015-16 Budget as approximately $1.7 million, SCS opted to only account for <br /> known debt-financed endeavors in future fiscal years, which includes loans for <br /> convenience center construction costs in FY 2018-19 and FY 2020-21 ($804,784 and <br /> $904,255, respectively).No other loan proceeds or general fund transfers were <br /> included beyond the Test Year. Also note that the $345,432 loan portion of the FY <br /> 2016-17 Appropriated Fund Balance line item was included in the Revenues for both <br /> Scenarios for that year. <br /> • Contributions from Equipment Reserves:Note that one of the largest revenue line <br /> item accounts is the Contributions from Equipment Reserves, which has historically <br /> varied significantly from year to year and will likely do so in future years. SCS <br /> utilized values that were provided by the County as projected revenues for this line <br /> item account for the four subsequent future fiscal years. <br /> • Landfill Gas Recovery Revenue: SCS applied a deflationary factor of-3% to <br /> projected landfill gas recovery revenues to account for closure of the Orange County <br /> Landfill. <br /> EXPENSES <br /> • Future projections for the 50 operating expense line item accounts for the four <br /> subsequent fiscal years (FY 2017-18, FY 2018-19, FY 2019-20, and FY 2020-21) are <br /> escalated using the annual inflationary factor and the Test Year as the baseline, unless <br /> noted below as being handled differently. <br /> • Landfill Fees: The solid waste collected by the County is currently hauled and tipped <br /> at the transfer station in Durham. SCS assumed that, in addition to escalating annual <br /> costs by an inflationary factor, the Landfill Fees operating expense line item account <br /> will be impacted by a$2/ton tipping fee increase (from$42.50 to $44.50) in FY <br /> 2018-19, which is a 4.7% increase. <br /> • Debt Service Principal/Debt Service Interest: Debt servicing line items including debt <br /> service to principal and debt service to interest were escalated but kept in the same <br /> proportion. <br /> • Contributions to Equipment Reserves:Note that one of the largest operating expense <br /> line item accounts is the Contributions to Equipment Reserves, which has historically <br /> varied significantly from year to year and will likely do so in future years. SCS <br /> C-2 <br />