laura j. weber president the lydia company serving our clients to build a better tomorrow
TRANSCRIPT
Laura J. WeberPresident
The Lydia CompanyServing our clients to build a better tomorrow
Laura J. Weber The Lydia Company
Annual Operating Budget Full Cost Accounting Understanding Costs Example of how to use
Full Cost Accounting Key points to remember
Serving our clients to build a better
tomorrow
Laura J. Weber
Need to develop an annual operating budget for transfer station
The Lydia Company
Budget Category Total Operating Budget
Personnel
Fringe Benefits
Contractual
Telephone
Disposal Fees
Supplies
Postage
Insurance
Advertising
Maintenance-Vehicle
Maintenance-Equipment
Travel
Training
Mileage
Fuel
Equipment Rental
Equipment
Indirect
Total Operating Budget Serving our clients to build a better
tomorrow
Laura J. Weber
Is a systematic approach for identifying, summing, and reporting the actual costs of solid waste management
Takes into account past & future outlays, overhead (oversight & support services) costs, and operating costs
Source: http://www.epa.gov/waste/conserve/tools/fca/docs/fca-into.pdf
The Lydia CompanyServing our clients to build a better
tomorrow
Laura J. Weber
A solid waste management system consists of various activities and paths. Activities-building blocks of system – what you
do Waste collection, operation of transfer stations,
transportation, waste processing, disposal, and any sale of by-products
Paths – is what happens to the solid wastes Recycling, composting, waste-to-energy, land
disposal Follows from generation to disposal
The costs of activities & paths determine your total costs to manage solid wastes
The Lydia CompanyServing our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
Cost to store, handle, haul out, dispose, & haul back
Serving our clients to build a better
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Laura J. Weber
Set rates/tipping Fees Analyze alternative options for
collection, processing, disposal, etc. etc.
Justify budget requests Target cost reduction efforts Determine actual program costs Plan new facilities Communicate cost information
The Lydia CompanyServing our clients to build a better
tomorrow
Laura J. Weber
Hypothetical Indian Community Robin River Reservation
Community of 8,000 people, located in rural Maine Generate 10 tons/day of MSW=3,560 tons/year Generate 0.5 ton/day of mixed recyclables=183
tons/yr Have a direct discharge transfer station that
employees 3 full time operational staff, 2 full time management staff, and receives support services from other Tribal departments
There is a county transfer station located 12 miles and county landfill located 30 miles from reservation
The Lydia CompanyServing our clients to build a better
tomorrow
Laura J. Weber
Hypothetical Indian Community Robin River Reservation
MSW is directly discharged by customers into compaction trailer & contracts with hauler to haul
Mixed recyclables are directly discharged into roll off recycling container, receives no revenue from sale of recyclables, & contracts with hauler to haul
Robin River Tribe provides collection services & community are also allowed to self-haul to transfer station
The Lydia CompanyServing our clients to build a better
tomorrow
Laura J. Weber
Questions: What is the tip fee that
should be charged to breakeven for MSW & recyclables?
What is the cost/hour to operate the collection vehicle?
The Lydia CompanyServing our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
Collection Activity
Transfer Station Activity
Transport Activity
Landfill or MRF Activity
Serving our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
Must allocate budget categories to their activities in order to determine the activity cost
Budget Category Total Operating Budget
Personnel $163,916
Fringe Benefits $54,381
Contractual $1,200
Telephone $6,077
Disposal Fees, includes hauling costs $319,129
Supplies $21,129
Postage $335
Insurance $440
Advertising $3,173
Maintenance-Vehicle $2,104
Maintenance-Equipment $5,503
Travel $1,400
Training $1,000
Mileage $500
Fuel $12,000
Equipment Rental $10,410
Equipment $10,000
Indirect $29,938
Total Operating Budget $642,635
Serving our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
Approach to assigning budget categories to activity costsCollection Activity Costs (CAC)
Personnel + fringe benefits + disposal fee + maintenance vehicle + fuel
Transfer Station Activity Costs (TSAC) Personnel + fringe benefits + maintenance equipment + fuel
Transport Activity Costs (TAC) Hauling Costs
Landfill or MRF Activity Costs (LAMRC) Disposal Costs
What about the other budget categories? Contractual, telephone, supplies, postage, insurance, advertising, travel, training, mileage, equipment rental, equipment, indirect
Serving our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
Budget CategoryTotal Operating Budget
(TOB)Collection Allocation
(20% of TOB)TS Allocation
(80% of TOB)
Personnel $163,916 $32,783 $131,133
Fringe Benefits $54,381 $10,876 $43,505
Contractual $1,200 $240 $960
Telephone $6,077 $1,215 $4,862
Disposal Fees $319,129 $63,826 $255,303
Supplies $21,129 $4,226 $16,903
Postage $335 $67 $268
Insurance $440 $88 $352
Advertising $3,173 $635 $2,538
Maintenance-Vehicle $2,104 $2,104 $0
Maintenance-Equipment $5,503 $0 $5,503
Travel $1,400 $280 $1,120
Training $1,000 $200 $800
Mileage $500 $100 $400
Fuel $12,000 $10,000 $2,000
Equipment Rental $10,410 $0 $10,410
Equipment $10,000 $0 $10,000
Indirect $29,938 $5,988 $23,950
Total Operating Budget $642,635 $132,628 $510,007Serving our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
Collection Activity
Transfer Station Activity
Transport Activity
Landfill or MRF Activity
Cost/ton = (Transfer Station Activity Cost + Transport Activity Cost + Landfill or MRF Activity Cost) / total tons
Cost/ton calculation excludes collection activity
Serving our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
MSW & Recyclables Cost/ton Calculation
Budget CategoryTS Allocation
(80% of TOB)
Recyclables Allocation (10% of TS
Allocation)
MSW Allocation (90% of TS Allocation)
Personnel $131,133 $13,113 $118,020Fringe Benefits $43,505 $4,350 $39,154Contractual $960 $96 $864Telephone $4,862 $486 $4,375Disposal Fees (See note below) $255,303 $25,530 $229,773Supplies $16,903 $1,690 $15,213Postage $268 $27 $241Insurance $352 $35 $317Advertising $2,538 $254 $2,285Maintenance-Vehicle $0 $0 $0Maintenance-Equipment $5,503 $550 $4,953Travel $1,120 $112 $1,008Training $800 $80 $720Mileage $400 $40 $360Fuel $2,000 $200 $1,800Equipment Rental $10,410 $1,041 $9,369Equipment $10,000 $1,000 $9,000Indirect $23,950 $2,395 $21,555Total Operating Budget $510,007 $51,001 $459,007
MSW Generation = 10 tons/day = 3,560 tons/year
Recyclables Generation = 0.5 tons/day = 183 tons/year
MSW = $129/ton ($459,007/3560 )
Recyclables = $279/ton($51,001/183)
Note: Disposal Fee includes transport activity costs and landfill activity costs for MSW or MRF activity costs for recyclables Serving our clients
to build a better tomorrow
Laura J. Weber The Lydia Company
Total Operating Hours for Truck
Recyclable Collection = 187 hrs/year
MSW Collection = 1685 hrs/year
Recyclable Collection Cost = $70/hr($13,263/187)
MSW Collection Cost = $70/hr($119,365/1685)
Budget Category
Collection Allocation
(20% of TOB)
Recyclables Collection
Allocation (10% of
Collection TOB)
MSW Collection
Allocation (90% of Collection
TOB)Personnel $32,783 $3,278 $29,505Fringe Benefits $10,876 $1,088 $9,789Contractual $240 $24 $216Telephone $1,215 $122 $1,094Disposal Fees (See note below) $63,826 $6,383 $57,443Supplies $4,226 $423 $3,803Postage $67 $7 $60Insurance $88 $9 $79Advertising $635 $63 $571Maintenance-Vehicle $2,104 $210 $1,894Maintenance-Equipment $0 $0 $0Travel $280 $28 $252Training $200 $20 $180Mileage $100 $10 $90Fuel $10,000 $1,000 $9,000Equipment Rental $0 $0 $0Equipment $0 $0 $0Indirect $5,988 $599 $5,389Total Operating Budget $132,628 $13,263 $119,365
Note: Disposal Fee includes transport activity costs and landfill activity costs for MSW or MRF activity costs for recyclables
Serving our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
Question: How many tons/year of recyclables and MSW does the Robin River Sanitation Department collect & bring to the transfer station?
Robin River Transfer Station
Total MSW = 3,560 tns/yr
Total Recyclables = 183 tns/yr
Robin River MSW
Robin River Recyclables
Other MSW
Other Recyclables
Serving our clients to build a better
tomorrow
Laura J. Weber
Operate your program like a business with the goal to at least breakeven
Establish fees that are reasonable considering local market conditions
Keep good data & records Be flexible Analyze analyze and make changes
to improve your economics
The Lydia CompanyServing our clients to build a better
tomorrow
Laura J. Weber The Lydia Company
Laura J. WeberPresident
The Lydia Company
Connect With Me:www.facebook.com/TheLydiaCompany
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Serving our clients to build a better
tomorrow