DIVISION OF POLLUTION PREVENTION AND ENVIRONMENTAL ASSISTANCE

Transcription

1 Full Cost Analysis Worksheet for Local Government Solid Waste Management Programs Introduction TECHNICAL ASSISTANCE NC DIVISION OF POLLUTION PREVENTION AND ENVIRONMENTAL ASSISTANCE 1639 MAIL SERVICE CENTER RALEIGH NC (919) (800) The enclosed worksheet is provided to help local governments conduct a full cost analysis / accounting (FCA) of their expenditures associated with solid waste collection, disposal and recycling. An FCA provides a full overview of the true costs and benefits of each management method. Although an FCA requires some time and effort, local governments will realize many benefits by calculating the full costs associated with solid waste management activities: FCA provides local governments a valuable planning tool for determining a program s future direction as well as for preparing future budgets. Hidden costs are exposed so that solid waste management, waste reduction/recycling, and other program costs can be fairly compared. Program inefficiencies can be better recognized and remedied, especially if FCA is performed annually. FCA can help local governments examine various financial scenarios and the resulting impacts on solid waste rates. Through FCA, a local government can better understand and explore the feasibility of financial incentives such as pay-as-you-throw (PAYT) collection systems as components of its solid waste management program. In combination with an understanding of non-monetary costs and benefits such as environmental considerations and public expectations, results from FCA can help local governments make the best possible decisions regarding their solid waste management programs. It is recommended that you carefully review the instructions on page 3 of the worksheet prior to completing the full cost budget on page 4. Use of this document is voluntary and will have no impact on any future regulatory requirements that the State of North Carolina may issue on FCA. The North Carolina Division of Pollution Prevention and Environmental Assistance (DPPEA) requests your evaluation of the worksheet to help improve its usefulness and clarity. Additionally, to help us better understand the costs associated with local government solid waste management in North Carolina, DPPEA would welcome an opportunity to review your results. Please send any comments and/or copy of your completed analysis to: FCA Attn: Jim Hickman DIVISION OF POLLUTION PREVENTION AND ENVIRONMENTAL ASSISTANCE 1639 MAIL SERVICE CENTER RALEIGH NC

2 Utilizing Information From a Full Cost Analysis Once the FCA is completed, a local government can compare unit costs among different aspects of a program. For example, a local government can compare the cost per ton or household for recycling versus those for collection and disposal of solid waste. Costs can also be compared to results from other local governments with similar programs and demographics. Extreme care must be taken in comparing multiple local governments, however, as local governments may include different costs or conduct FCAs in different manners. Comparisons and the data obtained can also be used to educate the public about the actual costs of solid waste management and the relationships between the different services that are offered. Local governments can also use the FCA to redesign a solid waste budget so that costs are properly allocated and hidden costs are exposed. FCA can be used to identify areas for potential efficiency improvements, and if conducted annually can track program costs to determine if efficiency improvements are effective. FCA can also be used for incremental accounting that is, to determine how costs and relationships will change through the addition of new programs (e.g., a yard waste program). Once again, care must be taken here, because incremental accounting will tend to favor existing programs. There are many costs and benefits associated with managing solid waste and they should be considered when an FCA is conducted. It is not easy to estimate the current or future costs associated with groundwater remediation projects, etc., however, these costs represent future outlays and should be estimated to ensure accurate comparisons between program costs can be made. Other less tangible costs that are commonly associated with waste management are environmental costs associated with particular management practices. These costs include air pollution, energy consumption from the use of raw versus recycled materials, etc. These costs are even more difficult to estimate and can be estimated using several different valuation methods. Although these costs would provide a true cost analysis, they are likely beyond the scope of FCA and their inclusion would limit your ability to compare data with other communities. The North Carolina Division of Pollution Prevention and Environmental Assistance provides free, nonregulatory technical assistance and training on methods to eliminate, reduce, or recycle wastes before they become pollutants or require disposal. Telephone DPPEA at (919) or (800) or nowaste@p2pays.org for assistance with issues in this Technical Assistance Worksheet or any of your waste reduction concerns. Full Cost Analysis Worksheet 2 February 1999

3 Full Cost Analysis Worksheet Instructions The FCA budget form on the following page offers local governments a basic framework to determine the accurate costs of managing solid waste. It should be noted that collection, disposal, recycling, and other categories represent one method to break out costs. It is very possible that your costs will not fit neatly within these categories or that you will wish to break costs down into additional categories. The categories selected for this worksheet were chosen to represent the basic operations of most solid waste programs in North Carolina. Breaking costs down into additional categories may result in a more versatile full cost analysis. To complete the budget form, enter all costs and requested revenues into the table and perform calculations as indicated. Line items listed in the table are likely to be similar to line items in your solid waste budget and are explained on page 5. Most line items are straight forward, however, calculations may need to be performed in order to develop the proper number to enter into each cell. For some line items, helpsheets are enclosed to assist with your calculations. Program categories listed on the FCA budget form are defined as follows. Collection: All costs related to the pick up and transport of municipal solid waste to a disposal facility. Costs associated with collecting recyclables should be reported under the Recycling heading. Disposal: All costs related to the disposal of solid waste at a landfill, transfer station, or incinerator. Recycling: All costs related to the collection, processing, and transport of recyclables. Source reduction and reuse programs can be included here, broken into there own category(s), or included in the Other category as described below. Other: If you have large costs that do not fit neatly within one of the program categories listed above, you may want to add additional columns to calculate the costs of these programs separately (additional spreadsheet columns are included in the helpsheet section.) In doing so, expensive activities will not skew results of other program categories. Depending on your program and your desired level of detail, Other program categories may include: composting tire management white goods recovery households hazardous waste management subdividing categories between residential and commercial users. Consider the following as you complete this analysis: Make sure all program costs are included in the FCA budget form. Do not double count any costs. All figures should be in terms of annual costs costs in terms of weeks or months must be converted to years People, equipment and other resources may be shared between programs or departments. These costs will need to be apportioned among the different program categories according to the percentage of time dedicated to each use. Furthermore, it may be difficult to apportion costs according to time spent on activities. Therefore, it may be necessary to utilize other methods, such as tonnage or space used to apportion costs. For example, the cost of operating a convenience center can be determined by the percentage of the materials handled as waste versus recyclables. Your local government finance office may be a very good resource to help complete the FCA budget form. Full Cost Analysis Worksheet 3 February 1999

4 Fiscal Year: Annual Cost of Operations # of Employees 1 Wages + Benefits of Employees (FTE)* 2 Local Government Administrative Support 3 Equipment Operations and Maintenance 4 General Operations 5 Educational Materials 6 Cash Capital Outlays 7 Lease Payments 8 Contracted Services 9 Professional Services 10 Insurance 11 Tipping Fees 12 Other: Cost of Large Capital Expenditures 13 Annualized Large Capital Expenditures* 14 Annualized Landfill Development & Construction Costs* 15 Annualized Landfill Closure Costs* 16 Cost of Debt Service (loan & bond interest) 17 Total Annual Costs: (sum lines 1 16) Revenues 18 Sale of Recyclables 19 Equipment Salvage 20 Other Revenue Sources**: 21 Total Annual Revenues: (sum line 18 20) Full Cost Analysis Budget Form Total Program Category MSW SW SW Recycling Budget Collection Disposal Other: 22 Net Annual Costs: (subtract line 21 from line 17) Indicators of Efficiency 23 Tons of Material Managed per Year 24 # Households or Clients Served 25 Total Cost per Ton: (divide line 22 by line 23) 26 Total Cost per Household: (divide line 22 by line 24) * Helpsheets exist for these items. ** Exclude grant and state allocations. Full Cost Analysis Worksheet 4 February 1999

5 Review Instructions on Page 1 before completing the full cost analysis budget from on preceding page. Line Item Explanations For Full Cost Analysis Budget Form: Annual Cost of Operations Number of Employees: List the number of employees for which salaries will be determined in line one. If employees were apportioned between programs according to full-time equivalent 1 (FTE) you may enter fractions or decimals in the table. 1. Wages + Benefits: Should include salaries and benefits of all employees associated with solid waste activities. For employees who do not work full-time in one of the program categories, their salaries should be apportioned according to their FTE in each sector. The FTE of managers, public work directors, and other employees whose time is not dedicated to solid waste issues should also be included. If needed, see helpsheet #1. 2. Local Government Administrative Support: Includes the costs of general local government departments such as personnel, finance, and administrative offices that support solid waste programs. Ask your finance departments for estimates. 3. Equipment Operation & Maintenance: Fuel, repair service, parts/supplies, etc. If needed, see helpsheet #2. 4. General Operations: These costs include all miscellaneous expenses associated with each program such as utilities, office supplies, building maintenance, postage, uniforms, travel expenses, training, publications, etc. 5. Educational Materials: Brochures, promotional items, signs, etc. 6. Cash Capital Outlays: Equipment and other small capital expenditures spent as part of annual operations. Such costs may include bins, small equipment, software. 7. Lease Payments: Includes rent for buildings, vehicles, equipment, etc. 8. Contracted Services: Any services that are performed under contract such as hauling, collection center operation, HHW collection, etc. 9. Professional Services: Fees for consultants and other professional assistance. 10. Insurance: Property, fleet and other types of insurance. 11. Tipping Fee: Fees paid for garbage disposal or recycling if your local government does not operate its own landfill or MRF. Make sure tipping fees are separated from collection costs. 12. Other: Any program costs not included elsewhere in the table. Cost of Large Capital Expenditures 13. Annualized Large Capital Expenditures (such as equipment and transfer stations): For capital expenditures which are used over multiple years, costs should be divided and apportioned so that each year s budget bears some of the costs (depreciated). Roughly, the annual cost of the asset may be determined by dividing the purchase price by its forecast service life. You may be able to get advice regarding annualization from your local government finance office. If needed, see helpsheet # Annualized Landfill Development Costs (to be included only if landfill is in operation during the fiscal year being analyzed funds collected during the fiscal year being analyzed but set aside for future landfills should be excluded): Landfill development costs should be annualized as in line 14. Such costs include planning, environmental investigation, construction, etc. If needed, see helpsheet # Annualized Landfill Closure and Post-Closure Costs (to be included only if landfill is in operation during the fiscal year being analyzed): Landfill closure and post-closure costs should be annualized as in line 14. Such costs include capping, monitoring water quality, landscape maintenance, insurance, etc. If needed, see helpsheet # Cost of Debt Service: This cost is the annual interest your local government may owe on loans or bonds associated with solid waste management programs. If you do not know the debt service costs, ask your finance office. 17. Perform Calculations. Revenues 18. Sale of Recyclables: Revenue generated from marketing recyclable materials. 19. Equipment Salvage: Revenue Generated from the sale of old equipment. To avoid sharp changes in your FCA during years that equipment is salvaged, revenues from salvage should be estimated up front and allocated over the same period that the vehicle is depreciated. Salvage may also be accounted for a a negative value in line 13 (see helpsheet #3). 20. Other: Include other revenue sources that help defray the costs of these programs such as interest income. Do not include grants, solid waste tipping fee revenues for a landfill your local government operates, or state allocation of funds for white goods and tire management Perform Calculations. Indicators of Efficiency Complete Calculations as Indicated. 1 Full-time equivalent (FTE) employees include all part-time and full-time employees and those employees who work part of their time in the various program categories. For example, if a full-time employee works 25% of the time in recycling and 75% of the time in refuse collection, the employee s salary should be 0.25 FTE for recycling and 0.75 FTE for collection.

6 Full Cost Analysis Helpsheets Note: These sheets are not required to complete the FCA budget form. The following pages represent helpsheets and additional forms that may be useful in completing the FCA budget form. Depending on the organization of your current budget and current operations, some or all of these helpsheets may not be needed. Each helpsheet should be dedicated to only one solid waste program (e.g., solid waste collection, disposal recycling, or others); thus, you may need to photocopy helpsheets so that you will have a separate sheet for each program. Results from the helpsheets should be entered into the appropriate line item in the FCA budget form. The following forms are included: Helpsheet #1: Wages and Benefits Helpsheet #2: Equipment and Operations Helpsheet #3: Annualized Large Capital Expenditures Helpsheet #4: Landfill Development and Construction Costs Helpsheet #5: Landfill Closure Costs Other Columns: This sheet can be used to supplement the main FCA budget form if programs are being subdivided into more programs than can fit into the main form. Full Cost Analysis Worksheet 6 February 1999

7 Helpsheet #1: Wages and Benefits Program Category 2 : Fiscal Year: Employee Name or ID W Wages X Benefits Y Subtotal (W+X) Z Proportion of Time on this Program % Wages and Benefits to this Program (YxZ) Total Wages and Benefits (Line 1 on FCA budget form) 2 The local government should complete one Wages and Benefits from for each solid waste management program (e.g., solid waste collection, disposal, recycling, or others). Full Cost Analysis Worksheet 7 February 1999

8 Helpsheet #2: Equipment Operations and Maintenance Program Category 3 : Fiscal Year: Vehicle or Equipment ID V Fuel W Repairs X Parts/Supplies Y Subtotal (V+W+X) Z Proportion of use in Program % Equipment O&M Cost for This Program (YxZ) Total Equipment Operations and Maintenance (Line 4 on FCA budget form) 3 The local government should complete one Equipment Operations and Maintenance from for each solid waste management program (e.g., solid waste collection, disposal, recycling, or others). Full Cost Analysis Worksheet 8 February 1999

9 Helpsheet #3: Annualized Large Capital Expenditures Program Category 4 : Fiscal Year: Expenditure Description W Purchase Price X Salvage Value 5 Y Proportion of use in Program % Z Expected Life in Years Annualized Cost for This Program (W-X) x Y/Z Total Annualized Capital Expenditures (Line 13on FCA budget form) 4 The local government should complete one Annualized Large Capital Expenditures from for each solid waste management program (e.g., solid waste collection, disposal, recycling, or others). 5 The expected price to be received at the time the local government sells the asset. This number will be zero if it is not expected that the used equipment will be sold in the future. Full Cost Analysis Worksheet 9 February 1999

10 Helpsheet #4: Landfill Development and Construction Costs Program Category: Fiscal Year: Development Costs 1 Sitting the Landfill (engineering, mapping, and hydrogeological studies) 2 Engineering and Design 3 Legal Assistance 4 Land Purchase 5 Permitting Fees 6 Public Meetings and Hearings 7 Administrative 8 Other 9 Total Development Costs: (add lines 1 8) Construction Costs 10 Roads 11 Earthwork 12 Erosion and Sediment Control 13 Liner System 14 Leachate Collection & Treatment 15 Gas Venting/Control 16 Construction Monitoring 17 Site Landscaping 18 Scale System 19 Administrative Buildings 20 Equipment Maintenance Area 21 Site Paving 22 Construction Engineering 23 Upgrading Local Roads & Utilities 24 Other 25 Total Construction Costs: (add line 10 24) 26 Total Development and Construction Costs: (add lines 9 and 25) 27 Expected Landfill Life in Years Annualized Total Costs: (line 26 divided by line 27) (line 14 of FCA budget form) Full Cost Analysis Worksheet 10 February 1999

11 Helpsheet #5: Landfill Closure & Post-Closure Costs Program Category: Fiscal Year: 1 Closure Plan Preparation and Approval 2 Post-Closure Plan Preparation and Approval 3 Site Grading, Cap, Revegetation 4 Total Operations Costs for Erosion, Sediment, Leachate, and Gas Systems 5 Landscape Maintenance 6 Water Quality Monitoring 7 Insurance 8 Other Costs 9 Total Closure & Post-Closure Costs (add lines 1 8) 10 Expected Landfill Life in Years 11 Annual Closure & Post-Closure Costs: (line 9 divided by line 10) (line 15 of FCA budget form) Full Cost Analysis Worksheet 11 February 1999

12 Additional Categories Full Cost Analysis Budget Form Fiscal Year: Program Category Annual Cost of Operations Other: Other: Other: Other: # of Employees 1 Wages + Benefits of Employees (FTE)* 2 Local Government Administrative Support 3 Equipment Operations and Maintenance 4 General Operations 5 Educational Materials 6 Cash Capital Outlays 7 Lease Payments 8 Contracted Services 9 Professional Services 10 Insurance 11 Tipping Fees 12 Other: Cost of Large Capital Expenditures 13 Annualized Large Capital Expenditures* 14 Annualized Landfill Development & Construction Costs* 15 Annualized Landfill Closure Costs* 16 Cost of Debt Service (loan & bond interest) 17 Total Annual Costs: (sum lines 1 16) Revenues 18 Sale of Recyclables 19 Equipment Salvage 20 Other Revenue Sources**: 21 Total Annual Revenues: (sum line 18 20) Other: 22 Net Annual Costs: (subtract line 21 from line 17) Indicators of Efficiency 23 Tons of Material Managed per Year 24 # Households or Clients Served 25 Total Cost per Ton: (divide line 22 by line 23) 26 Total Cost per Household: (divide line 22 by line 24) DDPEA FY99-06 Full Cost Analysis Worksheet 12 February 1999