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<br /> Comprehensive Revie w of <br /> S olid W aste Collection and Disposal Options <br /> <br /> <br />v2.1 190 10/22/12 <br />14.0 PRO FORMA EVALUATION <br />14.1 PURPOSE OF PRO FORMA <br />SCS developed a Pro Forma Model specifically for this Study to provide preliminary, planning- <br />level cost estimates and revenue projections to compare the alternative collection, disposal, <br />recycling, and other solid waste program scenarios considered for the Town during the course of <br />this Study. This section presents the structure, details, and sample results of the Pro Forma <br />Model and economic analyses. Full printouts of the pro forma model can be supplied to the <br />Town; however, due to the size of the pro forma output printouts and number of scenarios <br />considered in the analysis, this report only provides the summary tables for presentation <br />purposes. A 30-year planning period was selected to estimate the net present values of the <br />alternative scenarios considered. <br />The Pro Forma Model is a spreadsheet program that projects annual costs to construct, operate, <br />administer, and maintain the Town’s existing and hypothetical future solid waste collection, <br />processing, recycling, and disposal infrastructure. The model uses decision tree-type logic to <br />modify waste projections, collection and disposal costs and revenues estimates, select disposal <br />location (e.g., direct haul to an existing transfer station, construct a new transfer station, or direct <br />haul to a new or existing landfill), and schedule when certain program modifications are <br />implemented. The model addresses major capital and an operational cost to operate the Town’s <br />solid waste system under various assumptions and configurations as described in more detail <br />below. <br />The model is fairly complex. Various assumptions are made regarding annual solid waste <br />quantities, population projections, escalation rates for waste growth and costs, administration <br />costs, transportation costs, and landfill, waste-to-energy, and conversion technology processing <br />and disposal costs. The output from the model is an estimate of the net present value (NPV) of <br />each alternative strategy or scenario. NPV costs are calculated for each alternative scenario for <br />the 30-year planning period to allow for comparison of the scenarios from a cost perspective. <br />NPV is the current value of one or more future cash payments and offsetting revenues discounted <br />at an assumed interest rate. A NPV analysis is a useful tool in evaluating alternatives involving <br />complex cash flows. For this analysis, a lower NPV represents a more favorable scenario from <br />an overall cost perspective. <br />14.2 MAJOR COMPONENTS OF PRO FORMA MODEL <br />The structure and major assumptions of the Pro Forma Model are summarized below: <br /> Model Structure. The Pro Forma Model is an excel spreadsheet that performs various <br />decision tree, cost allocation, and forecasting functions. <br /> Waste Generation Estimates. As presented in Exhibit 14-1, waste generation <br />estimates were prepared based on historical data from the Town, including MSW <br />quantities collected from residential and commercial customers, and the quantities of <br />vegetative waste (i.e., yard waste), and bulky waste.