Agenda - Council - 11/25/1980 - Laserfiche WebLink

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- 36 The data showing the greatest degree of variation is that for revenues from the sale of recovered materials or ehergy. The range of values was determined from referenced sources, but the average revenues were adjusted based on experience with existing markets. All materials recovery systems were assumed to employ front-end recovery, using state-of-the-art processes. Average material revenues were derived using EPA data for waste stream composition and recovery probabilities applied to forecasted prices for the recovered products at the point of origin. Average net costs were calculated as the difference between the annual costs and the total revenues. The net cost, in effect, represents the tipping fee that would have to be charged in order to ensure that the process breaks even. In reality, tipping fees are often determined more by local influences or by the costs of alternative disposal options such as landfilling. C. FINANCING METHODS One of the most frequently asked questions about solid waste abate- ment is "How will we pay for it?" This section contains a general discussion on fund procurement and other financial strategies for implementation of abatement programs. The financing mechanism actually used will depend upon the size and type of the project, but this overview can provide a basis for further investigation during the planning stages of any specific project. 1. CURRENT FINANCING OPTIONS a. General Funds Appropriations of project funds are available from a variety of sources, each with a varying degree of public and private involvement. The two most traditional acquisition and opera- tion methods for a large-scale recycling facility are the "turnkey" approach and the "full-service' approach. The turn- key approach involves public ownership and operation of a privately designed and constructed facility. The full-service approach entails complete private sector responsibility (owner- ship, operation and construction). There are other variations on these two basic schemes. The method of acquisition chosen will play an important role in determining the financing method. In general the options available are: 1} pay-as-you- go financing (public): yearly appropriations either by accumu- lating funds in advance or meeting obligations as they occur; 2) leasing or lease purchase (private): rental with or with- out intent to purchase or own; 3) subsidies or grants (pub- lic): discussed below; 4) borrowed funds (public or private): general obligation bonds, pollution control revenue bonds, lease revenue bonds, solid waste revenue bonds, or corporate or commercial bonds; 5) equity funds (private): in addition' to debt, private industry can provide equity funds in the form of cash contributions, land and equipment, etc.; 6) leverage leasing (publlc or private): a financial package that com- bines several financial mechanisms (Brown & Powers, 1980).