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7 <br /> Orange County, NC <br /> Financial Plan & Rate Study for Solid Waste Enterprise Fund SCS ENGINEERS <br /> EXECUTIVE SUMMARY <br /> In March 2016, Orange County,North Carolina (County)retained SCS Engineers (SCS)to <br /> conduct a solid waste cost of services and rate study(Study) and to develop a Financial Plan for <br /> the County's Solid Waste System(System). Based on data and information provided by County <br /> staff, a Pro Forma rate model (Rate Model)was developed, which enabled SCS to prepare <br /> projections of financial performance of solid waste and recyclable material collection and <br /> disposal for the selected planning period(FY 2016-17 through FY 2020-21) and model different <br /> possible rate structures. <br /> PROJECT OBJECTIVES <br /> The overall objective of a cost of service and rate study is to calculate the solid waste fees and <br /> assessments required to adequately recover the costs of providing solid waste and recycling <br /> services to the County's residents, businesses, and other institutions. Based on its solid waste <br /> industry experience, SCS developed a series of critical tasks that provided a foundation for the <br /> conduct of the Study and development of the Financial Plan. This methodology is discussed in <br /> Section 2 of this report. <br /> Enterprise Fund <br /> The County has established the Solid Waste Enterprise Fund(Fund)to account for all Solid <br /> Waste Management Department(Department) solid waste and recycling program operations, <br /> which are financed and operated in a manner similar to private business enterprises. The Fund <br /> includes potential revenue from approximately 33 distinct sources (line items under the Budget <br /> Accounts),which can be associated with one or more of the four cost centers (Divisions)within <br /> the Department. The Fund includes potential expenses from approximately 47 distinct general <br /> sources (line items under the Budget Accounts) and five capital sources from five accounts, <br /> which can be associated with one or more of the Divisions within the Department. <br /> The Solid Waste Program Fee is a single, county-wide fee assessed on each improved property <br /> within the County, including the municipalities and the portion of the Town of Chapel Hill <br /> located within Durham County. The current fee is $107.00 per parcel annually, but is adjusted <br /> annually as part of the Department's budgeting process based on estimated system expenditures, <br /> minus all revenue, and divided by the number of taxable parcels. <br /> The table below(and also in Section 2.1.3, Exhibit 11) below shows the distribution of the <br /> Department's revenues and expenses for the past four fiscal years and the budget for current FY <br /> 2016-17 by division. As shown, annual expenses have increased from the previous to the current <br /> fiscal year with the Solid Waste Enterprise Fund running a net deficit each year since FY 2012- <br /> 13. <br /> The table also shows the amount and percentage of the revenues over the past 4 years that were <br /> made up of transfers from the General Fund and Appropriated Fund Balance. The final row of <br /> the exhibit shows the additional net revenues and deficits added to the amount transferred from <br /> the General Fund. <br /> ES- 1 <br />