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10 Orange County, NC Financial Plan and Rate Study for Solid Waste Enterprise Fund RATE MODEL SCENARIOS SCS developed seven 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: • Scenarios 1 through 3 — Scenario 1 assumes status quo for the Department Solid Waste Program Fee ($107 per year). Scenarios 2 and 3 increase the Program Fee effective in FY 2016 -17 by $23 and $43, respectively, resulting in an assumed Program Fee of $130 for Scenario 2 and $150 for Scenario 3. Scenario 1 is intended to be used as a baseline or "Status Quo" scenario to enable comparisons of Scenarios 2 through 7. • Scenario 4 — 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 4 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. Scenario 5 — This scenario serves as an assessment of the required increase in the contribution from the General Fund to balance projected operating expenses and revenues for solid waste and recycling services if the Program Fee was permanently eliminated effective in FY 2016 -17. It is assumed that the revenue to enable this contribution would be generated by a Property Tax Rate increase. • Scenario 6 — This scenario incorporates the revenues and expenses associated with a hypothetical transfer station constructed and operated by Orange County and centrally located (Eubanks Road area) to current County solid waste operations and the Towns of Chapel Hill, Carrboro, and Hillsborough. For purposes of the Model, revenues and expense assumptions remain the same as in Scenario 1, and the approximated annual net revenue from the transfer station is calculated and added to current revenues as shown in Hypothetical Transfer Station Net Revenue Estimate (Appendix G). This scenario then assesses the required Program Fee to balance the Fund's annual budget and thus serves a break -even analysis. • Scenario 7 — This scenario mimics Scenario 1 ( "Status Quo ") but assumes a "phasing -out" of the annual General Fund Contribution and a gradual increase of the Program Fee over the next 5 years. The respective Program Fee and General Fund Contribution figures used for FY 2016 -17 through FY 2020 -21 are shown in the table below (and also in Section 2.1.7, Exhibit 12). ES -3