comox strathcona waste management (cswm) service … butler... · comox strathcona waste management...
TRANSCRIPT
Comox Strathcona Waste Management (CSWM) Service – Solid Waste Financial Model
Curtis Jung (AECOM) and Lisa Butler (CVRD)
October 21, 2016
Coast Waste Management Association – 2016 Annual
Conference – Session 7 – Economics of Waste
Presentation Outline
– Background - Why and How was the Model Built?
– Results and Actions - What did the Model Tell Us and What
Did we Do?
– Future Plans – What can we do with the Model?
October 21, 2016 CWMA - CSWM Financial Model Page 2
– CSWM function of
CVRD
– Responsibilities
• Two regional waste
management centres
that serve the Comox
Valley and Campbell
River
• Remote community
waste management
Page 3
– SWMP updated in 2013
• 2013 – Diversion rate – 51%
• Diversion target by 2020 – 70%
October 21, 2016 CWMA - CSWM Financial Model
Background – Why and How was the Model Built?
– Motivation
• Significant capital expenditures
planned in upcoming years
• Recent approval of Solid Waste
Management Plan
– Key Questions: o Is our current funding model
sustainable?
oGiven capital expenditures and
diversion targets specified in
SWMP, what will our future cash
flow look like?
Page 4 October 21, 2016 CWMA - CSWM Financial Model
Background – Why and How was the Model Built?
– Objectives
• Determine current and projected cash
• Identify cash flow issues
• Examine alternative means of system financing
Page 5
2. What are the revenues?
3. Who pays?
1. What are the costs?
October 21, 2016 CWMA - CSWM Financial Model
Background – Why and How was the Model Built?
– Methodology
• Reviewed CSWM SWMP
• Developed population and waste generation projections
• Mapped system components and flows
October 17, 2016 CSWM Financial Model Page 6
Mapping Waste Flows – Comox Valley Waste
Management Centre (CVWMC)
Page 7 October 21, 2016 CWMA - CSWM Financial Model
Legend
MSW – Black Arrow
Recyclables – Blue Arrow
C&D – Orange Arrow
Organics – Green Arrow
Results and Conclusions – What did the Model Tell Us?
– Key Variables for Scenario Testing
• Diversion Rate: 58% and 70% (Status Quo: 51% in 2012)
• Recent approval of Solid Waste Management Plan
Page 8 October 21, 2016 CWMA - CSWM Financial Model
Results and Conclusions – What did the Model Tell Us?
• Economies of scale are difficult to achieve – Several Small Pieces!
oTwo Regional Waste Management Centres
oSeveral pieces of waste management infrastructure in remote
communities requiring upgrades or closure in the next 5 years
Page 9 October 21, 2016 CWMA - CSWM Financial Model
Legend
MSW – Black Arrow
Recyclables – Blue Arrow
C&D – Orange Arrow
Organics – Green Arrow
Results and Conclusions – What did the Model Tell Us?
• System underfunded in the short and long term - additional revenue
source(s) required
o If maintaining existing funding model, breakeven tipping fees required to
fund the system in the long-term in excess of $200/tonne.
oModelled tipping fee increase to $130/tonne (maximum set), then
assessed tax requisition required.
Page 10 October 21, 2016 CWMA - CSWM Financial Model
Example Model Output - Net Cash Flow
Page 11 October 21, 2016 CWMA - CSWM Financial Model
Example Model Output - Required Tipping Fee
Page 12 October 21, 2016 CWMA - CSWM Financial Model
Resulting Actions – What Did We Do and Where Are We
Now?
– In 2013:
• CSWM tipping fee - municipal solid waste - $90/tonne
• Funding Model – 96% Tipping Fee, 3% Tax Requisition
Page 13 October 21, 2016 CWMA - CSWM Financial Model
Resulting Actions – What Did We Do and Where Are We
Now?
– 2013 Tipping Rates – Desktop Review
Page 14 October 21, 2016 CWMA - CSWM Financial Model
MSW ($/TONNE)
Long Term Financial Analysis – Tax Requisition
– Assessed multiple scenarios to introduce tax requisition
with objectives:
• Limit debt servicing costs
• Increase reserves
• Ensure sustainable funding model
– Tax requisition reviewed by board annually
Page 15 October 21, 2016 CWMA - CSWM Financial Model
Resulting Actions –Where Are We Now?
– Snapshot of Changing Funding Model and Fee Structure
Page 16
Year
2013 2016 2018
CSWM Tipping Fee - Municipal Solid Waste
($/tonne) 90 130 130
Funding Model
Tipping Fees 96% 68% 60%
Tax Requisition 3% 15% 39%
Other (MMBC recoveries, sales, LFG, etc.) 1% 17%* 1%
*Surplus from previous year makes up 16% of “other” revenue
October 21, 2016 CWMA - CSWM Financial Model
CSWM Funding Structure
Page 17
2018 2013 2016
October 21, 2016 CWMA - CSWM Financial Model
Model Calibration and Problem Formulation
– Key Assumptions
– Key Uncertainties
– Model Calibration
– Sensitivity Analysis
– Limitations of Model
Page 18
– **What is the question we want the model to answer?**
• Establishing purpose and expected output
October 21, 2016 CWMA - CSWM Financial Model
What’s Next for the Model?
– Regional Organics Composting Facility
– Optimizing the transfer of waste from CR to CV in five
years’ time
– Optimizing the transfer of waste from Gold River, Tahsis,
Zeballos, Sayward
Page 19 October 21, 2016 CWMA - CSWM Financial Model
Thank You
Curtis Jung (AECOM) – [email protected]
Lisa Butler (CVRD) - [email protected]
October 21, 2016