SWAG agenda 110316 - Laserfiche WebLink

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