SWAG agenda 091616 - Laserfiche WebLink

Browse Search

13 Orange County, NC Financial Plan and Rate Study for Solid Waste Enterprise Fund • As outlined in Scenario 2, increasing the current amount of the Program Fee to $130 per year, which represents a 23 percent escalation, is anticipated to be insufficient to eliminate significant annual deficits, both with the current practice of General Fund contributions (Scenario B) and without (Scenario A). • As outlined in Scenario 3A, even increasing the current amount of the Program Fee to $150 per year (43 percent increase) is projected to be insufficient to eliminate significant annual deficits unless the General Fund continues to contribute nearly $2 million per year. • In the spirit of a true enterprise fund, the County would need to implement a Solid Waste Program Fee between $170 and $180 to fully fund all anticipated program expenses over the next 5 years. This is reflected in Scenario 4A and anticipates no General Fund contribution and no Appropriated Fund Balance revenues other than the identified loan proceeds for Waste and Recycling Center construction. • As an alternative to solely increasing the Program Fee, the County could take a "dual approach" by increasing the General Fund as well as increasing the Program Fee. The increase of the General Fund contribution should occur within the Sanitation Services Division to raise the Division's revenue from approximately $2 million to approximately $3 million to cover the annual deficit incurred in that Division. • A Revenue and Extension (R &E) Fund should be established to enable the Department to fund a reserve of 25% of its annual operating costs. This Fund would be designed to provide potential funding for unforeseen operational costs and declines in generated revenue. This would provide a buffer against financial obstacles such as declining recyclable material sale revenue and reduced C &D Landfill tipping fee revenues. Note that the R &E fund would require an increase in the Program Fee above and beyond the break -even fees identified in Scenarios 4A and 4B and could not be funded at the current rate of $107.00, nor the increased Fee amount under Scenarios 2A, 213, or 3A. • In the event that the Program Fee was eliminated in its entirety, in the spirit of a true enterprise fund, with no General Fund Contribution or Appropriated Fund Balance, based on Scenario 7, the impact on the tax rate would be a required increase of up to $0.07 per $100 of assessed value per year. • The Pro Forma Rate Model developed as part of this cost of service study should be updated annually and used for long -term financial forecasting of the Fund and to evaluate the likely impact of proposed Department operational changes. • Based on a cursory review of the program, SCS did not identify any notable inefficiencies within the Department operations. SCS recommends the County conduct a more in -depth review of its program on a routine basis to identify opportunities for revenue increase and expense reduction. ES - b