Allocation

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MUNICIPAL MULTI-PARTY ALLOCATION EXAMPLE

To illustrate some possibilities we have been discussing, we have created a fictitious composite landfill that began accepting waste in the 1970s and ceased operations in the early 1980s. The source of cost information is the Resources For the Future National Priorities List Database. We chose not to use multipliers for present value (except O&M) and number of operable units.) The site was an agency lead with past costs of $2.2 million. A group of generators, including the Village has formed. A deminimus buyout recovered 80% of past costs, with the remainder orphans. The Village has volunteered the use of its personnel and equipment and assisted in persuading the agency to select a sanitary landfill cap and institutional controls rather than a RCRA landfill cap as part of the remedy.
 

The remedy is being driven primarily by a water treatment system designed to address volatiles in liquid industrial sludge. The treatment system will be connected to and operated by the Village POTW. The Village will assume responsibility for operations and maintenance at the Site and will be credited with those costs less materials and some Group purchased services. The Village DPW has access to a source of topsoil and will use its equipment to help in preparation, construction and final site restoration. Credit will also be given for project management services to be furnished by the Village engineering department.
 

For allocation purposes the Village volumetric share (30%) is being applied against the sum of the cap, project management, and O&M costs. This share is $2.7 million of the $9 million total for those costs. As suggested earlier, the items to which the Village volumetric share was attributed are remedial costs most directly related to the nature and volume of waste contributed by the Village at the Site. The table reflects the respective allocation factors.


Hypothetical SITE REMEDIAL COSTS
and ALLOCATION

COST ITEMS $(Millions)

Cashout

Village

Industry

Total

CAP- site clearing, hydro seeding, clay, topsoil & passive methane collection (Muni provides soil and services for 20% share)


1.2

4.8

6.0

WWT- piping, leachate collection, slurry wall, treatment, pre-treatment, and hookup to the POTW



3.7

3.7

ENG - engineering and project management services (Muni services valued at 20% of estimated cost )


.3

1.2

1.5

O&M (Muni services valued at 80% of cost)


1.2

.3

1.5

Past Costs (RI/FS)

1.8

.4

2.2


Totals


1.8


2.7


10.4


14.9

The point to this example is that, without any significant cash outlay, the municipality could contribute 18% of total settlement costs at this site.

 

john@tatum.com    (248) 203-7030
4931 Ranch Lane / Bloomfield Hills, MI 48302