01-03-1985 Council Packet Special Meeting

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Costs for the Land Disposal System, 1990 The land disposal development program estimates that three new landfills are needed in the region to meet disposal needs until the year 2000. Each landfill is estimated to cost about $20 million. Each landfill is required to construct a leachate collection system above a clay liner. The greatest cost of the new landfills is the construction of the clay liner and leachate collection sys- tem. Additional costs may be incurred if the clay for the liner must be imported to the site. The land disposal costs include preparation of the EIS, pre -development, liner and leachate collection systems, closure and postclosure monitoring and mainte- nance for a 20-year period. Closure costs include a gas -collection system. Post closure costs include a lump sum payment for environmental liability insur- ance. The costs of remedial actions that may be necessary are not included. The Council has $15 million bonding authority to purchase land for development of the new landfills or development rights for the landfills to be developed after 1990. The bonding authority can be used to finance the preparation of environmental assessments of the candidate landfill sites. The Council must assess the counties to retire the bond debt, but assessment does not apply to cities or towns in which a solid waste disposal facility is operating after Jan. 1, 1980. In addition, cities or towns with waste reduction or resource recovery facilities or programs established pursuant to a county land disposal abatement plan are el;gible for a reduced payment, proportional to the abatement. FINANCING ALTERNATIVES A wide variety of financing tools are available to fund resource recovery facil- 'ties and source separation programs. Types of financing include general obli- gation bonds; revenue bonds; leverage leasing; municipal lease purchase; grants, loans and loan guarantees; and surcharges. Table 4-16 identifies the types of financing that could be used by counties and municipalities to finance proposed waste facilities and programs. General obligation financing by a municipality, coonty, authority, or state government is usually the lowest cost debt instrument in terms of interest rate available. The advantages of this financing method are its relatively low interest rate, and hence, debt service and the relative simplicity of the required institutional arrangements. Disadvantages include high -risk exposure to the issuing entity and its taxpayers, the elimination of facility tax pay- ments because of public ownership, and the unavailablity of federal tax bene- fits available to private owners of resource recovery facilities. There are a number of kinds of revenue bonds that can be used to finance a resource recovery facility. They utilize project revenues (tipping fees, recov- ered material and energy sales, etc.) as the primary source of bond repayment. Revenue bonds can be issued for the purpose of creating industrial development in a community (industrial development bonds, nr IDBs) or for building pollu- tion control equipment (pollution control revenue bonds ur Pr,ABS). Because the private corporation assumes the risks, potential buyers will scrutinize the corporation's credit worthiness. The advantages of this financing form inciuue a shift of the majority of project risks away from the municipality, the pay- ment of property and income taxes by the operators, and certain federal tax benefits to the corporation if it is a resource recovery facility.