Agenda - 02-16-2017 - 2 - Solid Waste Five Year Financial Plan and Cost Study

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9 Orange County, NC Financial Plan & Rate Study for Solid Waste Enterprise Fund SCS ENGINEERS RATE MODEL SCENARIOS SCS developed two Rate Model scenarios to evaluate impacts to the Enterprise Fund financial situation over the 5-year planning period. Depending on the individual scenario, the Model assesses net revenue needs if the Program Fee, other revenues, and operating costs equal those in the Budget for FY 2016-17 with inflation factors applied, known capital items accounted for, and other adjustments made to specific line items as detailed in Appendix C: • Scenario 1 — Scenario 1 assumes status quo for the Department Solid Waste Program Fee ($107 per year). This scenario is intended to be used as a baseline or"Status Quo" scenario to enable comparison with Scenario 2. • Scenario 2—This scenario serves as an assessment of the required increase in the Program Fee to balance projected operating expenses and revenues for solid waste and recycling services. Scenario 2 assumes the Program Fee balances the Fund's annual budget if other revenues and operating costs equal those projected in the Budget for FY 2016-17, dependent on the sub-scenario. This iteration serves as a "break-even" analysis. Model Results The table below(and also in Section 2.1.8, Exhibit 12) shows the Modeled Budgetary Gap for Scenario 1 and the break-even Program Fees for Scenario 2 for FY 2016-17 to FY 2020-21. Note that the Program Fee was back-calculated using an optimization algorithm. Complete financial model results highlighting the Fund's projected annual net revenue/deficits are presented in Appendix F. Scenario Modeling Results Scenario FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 1 — Status Quo Budgetary Gap with $107 Program ($1,780,040) ($2,015,497) ($2,064,603) ($2,345,290) ($2,593,011) Fee 2— Break Even Program Fee with $0 Budgetary $137 $140 $141 $145 $148 Gap Note: Negative values indicate a projected gap. ES-3