An SCS pro forma model for waste management gives you the much-needed ability to analyze how different elements of a business plan will impact your cash flows and value. Subsequently, using individual forecasts and operations data, you can analyze when in the future you might need financing allowing you the time to plan to acquire sufficient resources, permits, and equipment. Read the Merced County case study here to learn more.
SCS Engineers assisted the Merced County, California, Regional Waste Management Authority (RWA) in developing a Pro Forma Model that encompasses projected operational costs and revenues to help decision-makers develop timely cash flow forecasts. The RWA now has a useful tool for annual budgeting and developing long-term capital policies.
After several years of revenue declines for numerous reasons, including the recession, a change in management in 2012 ordered a re-assessment of RWA’s operational and administrative functions. Throughout the year-long process, a new Regional Waste Director was selected to implement a progressive strategy that would realize operational efficiencies, cost savings, an expanded customer base, and lower long-term debt through bond refinancing. These measures provided considerable benefit, particularly in regards to the long-term financial health of the agency; however, it was not clear if cash could be generated quickly enough to meet the existing need. As a result, the agency hired a rate consultant in April 2015 to assess the anticipated shortfall and prepare a report to the RWA’s governing board.
The RWA owns and operates two disposal and recycling facilities, each located near the population centers of Merced County. Both landfills need expansions to increase disposal capacity in the coming years. SCS Engineers developed a Pro Forma Model to help the RWA prepare a long-term cash flow analysis and assess whether or not funds were available from operations to forestall a bond issue for the capital improvements as well as to fund adequate emergency reserves. At the beginning of SCS’s engagement, RWA staff provided background data and information concerning residential collection revenues and operating expenses.
The Pro Forma Model estimated annual net revenues during the 12-year planning horizon; determined that the current debt service is a major drain until the bonds mature in FY 2026/27; calculated that funds for projected capital improvements, fleet replacement, and a new “Rainy Day Fund” can be realized even if the RWA receives low waste deliveries to the landfill; and projected cash reserves. The model recommended that the RWA consider funding a landfill gas to energy project out of cash reserves rather than bond proceeds and projected annual revenues from methane sales.
The RWA adopted the findings of the proposed pro forma model in October 2015. Conducting the pro forma modeling effort enabled the RWA’s decision-makers to project costs of the various capital, fleet, and waste flow options. Key among the lessons learned was the implementation of a “Rainy Day Fund” to provide a long-term financial backstop for unforeseen events in landfill operations that cannot be predicted today. Such events could include groundwater and landfill gas remediation, issues with landfill liners, and weather events. The fund is capped at 25 percent of the RWA’s annual operating costs, which can also provide three to four months of operating expenses. While typical of many large County or municipal General Funds, it is less typical of individual enterprise funds in the past. Such Rainy Day Funds are becoming more and more prominent across solid waste agencies in the United States.
Lastly, the RWA now has a financial tool that can be updated annually and will continue to project future revenues and capital expenditures and ultimately forecast rate needs more accurately.
Marc Rogoff, Ph.D., is a Project Director for SCS Engineers’ and our National Expert on Solid Waste Rate Studies. Marc has over 30 years of experience in solid waste management as a public agency manager and consultant and has managed more than 200 consulting assignments across the United States on all facets of solid waste management. He has written and co-authored many articles, including the following:
Conducting Solid Waste Rate Studies and Business Plans
Trends in Solid Waste Collection
Click here for more information about SCS Engineers Solid Waste Services
On Monday, October 27, 2015, the Solid Waste Association of North America–SWANA and the National Waste & Recycling Association– NWRA submitted joint comments to the U.S. Environmental Protection Agency– EPA on the proposed revisions of the Emissions Guidelines– EG and Compliance Times for Municipal Solid Waste Landfills and to the supplemental proposal to the Standards of Performance for Municipal Solid Waste Landfills.
SCS Engineers has also submitted comments pertaining to the proposed EG and compliance revisions to the EPA. SCS leaders are involved in many outreach activities to help landfill owners and operators understand and prepare for the impact of the proposed modifications.
Contact SCS Engineers at for more information, or visit the SCS website for upcoming events and pertinent resources.
Additional planning can help protect your facility from severe weather. This article discusses how owner/operators can help prevent damage to their critical solid waste facilities that need to function during and after a major storm.
Published in WasteAdvantage Magazine, October 2015. Click here to read the full article.
Written by Bruce Clark and Marc Rogoff, SCS Engineers in the Southeast Region.
Composting is a viable and important technology for managing organic wastes, as are modern landfills with comprehensive landfill gas collection and utilization systems. Both of these approaches have different capabilities and limitations. Understanding the facets of each approach allows individual communities to make waste management decisions, based on facts by environmental engineers that are beneficial for both human health and the environment.
SCS recently authored a report for the Metro Waste Authority in Des Moines, Iowa regarding their yard waste compost operations. Metro Waste’s yard waste compost system includes a bag and sticker program to support separate yard waste collection, shredding, screening, and windrow composting at the Metro Compost Center, which is co-located atop a closed City of Des Moines Landfill, and at the active Metro Park East Landfill.
The SCS report evaluated the costs, greenhouse gas emissions, carbon sequestration, and the advantages and the disadvantages of continuing their current operations or alternatively considering a partial or full closing of the compost operations. If operations are reduced or stopped, these materials would be disposed of in the active municipal solid waste landfill. The active landfill has a comprehensive gas collection system, and Waste Management owns and operates an 11.2 Megawatt landfill gas-to-energy facility at the landfill.
The report was used by the Metro Waste Authority in early 2015 to support an amendment to Iowa’s solid waste regulations. The amendment allows for yard waste to be disposed of and be managed in landfills, only if the landfill has an active landfill gas collection and control system with a landfill gas-to-energy facility to effectively control and reduce methane emissions. The legislation was passed as a restricted exemption to the State’s ban on yard waste disposal in landfills. The amendment in the State’s regulations provides landfill operators some flexibility in managing these types of materials, as other states have done as well.
Most media channels fully informed their readers of the science and function of both technologies, explaining that when considering all factors, one landfill operation can reap greater environmental benefits than another operation despite using the same solution. Some organizations view the law and the report prepared by SCS as “anti” composting, or that because SCS’s investigative analysis and report proposed options, SCS does not support composting. SCS Engineers fully supports composting. In fact, we design, permit, and operate compost facilities around the nation.
Read the SCS Organics Management webpage
Read about Anaerobic Digestion here and
Economic Strategies for Solid Waste Planning here.
By Kevin D. Yard, P.E., BCEE, Marc Rogoff, Ph.D., with contributions from SCS’ Environmental Consultants
In view of recent media coverage about the costs of recycling, perhaps it is time to take a “fresh look” at the compatibility of waste diversion and ultimate waste management, i.e., landfilling. Whereas some suggest that Zero Waste enthusiasts and Landfill Management professionals have counterproductive goals, through our recent experience with integrated waste management systems we have a newfound appreciation of the common ground of the two groups.
Zero Waste proponents espouse many important goals such as behavioral changes in consumers (e.g., reducing the generation of waste, minimizing the use of products that contain toxins, reducing energy consumption, etc.). Others, in the “No Burn/No Bury” ZW camp, suggest setting a goal at zero waste of resources achieved through measures such as: bans on disposal of materials that can be beneficially used, mandatory recycling programs to address hard-to-reach constituents, separate collection of food scraps, extended producer responsibility of hard-to-handle materials, etc. Some ZW enthusiasts have stated, “We put a man on the moon, so surely we can achieve ZW”.
On the other hand, many solid waste management professionals realize that landfills represent an important component of integrated solid waste systems and that other waste management options that are sometimes viewed as alternatives to landfills (e.g., material recovery facilities, composting operations, household hazardous waste collection programs, waste conversion and waste-to-energy plants, etc.) are more properly considered as complementary waste management tools. Further, most solid waste managers understand that landfills will continue to be required for residuals from other components of integrated waste management systems for decades to come.
While recognizing that recycling is presently common and an important component of modern waste management systems, particularly in large metropolitan areas, two questions remain:
Whereas in some areas, recycling can be a break-even proposition, in most areas, implementing recycling can cost from $0.50 to $3 per household, per month. One might ask with public school budgets being reduced, the nation’s infrastructure needing extensive improvements, and forecasted water shortages warranting major water resource projects, what is the most appropriate method for determining how the costs of recycling should be born?
Perhaps the answers lie in addressing recycling goals in a manner that makes economic sense depending on the conditions of each community or, more appropriately, each waste-shed. When viewing the magnitude of the investment in a modern-day municipal solid waste landfill, one can gain a greater appreciation for the need for properly managing and amortizing such investments. Like any investment in infrastructure, the public’s investment in disposal capacity should be valued and optimized in the interest of taxpayers. For instance, in areas with limited remaining disposal capacity and limitations for developing additional disposal capacity, investing in a more aggressive recycling program may be much more desirable and cost-effective than for areas with over 20 years of disposal capacity.
As prudent taxpayers, we need to work together to assure that the assets of waste management systems are optimized in a manner that protects the environment. This, of course, includes thoughtful consideration of recycling goals, which can contribute to a more cost-effective utilization of the available landfill capacity. As recycling enthusiasts provide an ongoing impetus for further waste reduction and enhanced recycling, optimization of waste diversion will continue to evolve. This evolution will be site-specific consistent with the variable impact of evolving waste management technologies and changes in the markets for recovered products. Given that the dynamics of each waste-shed can vary dramatically, many cities will benefit from a review of waste management alternatives. Based on our experience, it has been shown that such a review can not only result in an optimization of current assets, but also a plan for continued cost-effective solid waste service for many years in the future.
SCS’ professionals provide assistance to many municipalities across the U.S. by devising programs that address all aspects of the comprehensive waste management systems: waste collection, recycling, composting, waste conversion, and landfilling. SCS’ solid waste professionals stand ready to assist additional municipal managers upon request. Please visit our website at www.scsengineers.com, call or drop us an e-mail:
Kevin Yard, P.E., BCEE, Dallas, TX: , 817-571-2288
Marc Rogoff, Ph.D., Tampa, FL: , 813-621-0080
Greg McCarron, P.E., Suffern, NY:, 845-357-1510
Anastasia Welch, P.E., Overland Park, KS: , 913-681-0030
Michelle Leonard, Pasadena, CA, , 626-792-9593
Leaders and National Experts at SCS Engineers
Most agencies conduct an annual rate study to evaluate the cost of providing solid waste, recycling, and composting curbside collection services. The study is used to develop recommended rates for these services for each new fiscal year, and to maintain uniform services with a variety of service level options throughout the community. Further, competition from private haulers requires municipal providers of solid waste services to look for ways to enhance revenues by expanding services such as commercial collection, utilizing roll-off pickups, and recycling services. Addressing long-term maintenance and vehicle replacement is complex and risky without a long-term financial plan.
I recommend a proactive approach to engineer, manage, and design a strategic, sustainable and detailed approach to long-term financial planning. A detailed approach provides the flexibility to establish fair, equitable, and effective solid waste system rates while enabling a decision-maker to compare and contrast alternative strategies which address these key issues:
A rate study, if conducted appropriately, can help provide the agency with a long-range financial business plan. Each rate study requires a task plan and a project concept (pictured below), and to manage the following:
In short, the rate study provides a deeper understanding of what rates should be and allocates costs appropriately to various functional areas of an operation. Also, it is used by SCS clients to estimate year-by-year what is possible using various scenarios. For example, a municipality would like to buy 5 new collection vehicles or expand their landfill or recycling center. A rate study allows the decision-maker to assess the impact of the purchase on the current budget; then determine if enough surpluses will remain at a specific point during the fiscal year to purchase, or if a rate adjustment is necessary how much to adjust the rates.
by Jim Walsh, P.E., BCEE
Welcome to SCS Engineers’ redesigned website, including our new technical blogs. On the new website, you will find the environmental resources and solutions we offer and the industries we serve, starting with five inspiring projects and clients. Navigate to pages describing our environmental services and governing policies along with related resources such as: project case studies, articles, white papers, technical bulletins, upcoming events, and blogs written by our resident experts about the environmental information you seek.
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