An owner or operator that meet the criteria of a local
government as identified in 017 of this Chapter, and
satisfies the requirements of Sections 015.01 through
015.03, may demonstrate financial assurance up to the
amount specified in Section 015.04:
015.01 Financial component
015.01A The owner or operator must satisfy
Section
015.01A1 or
015.01A2
as applicable:
015.01A1 If the owner or
operator has outstanding, rated, general obligation bonds that are not secured
by insurance, a letter of credit, or other collateral or guarantee, it must
have a current rating of Aaa, Aa, A or Baa, as issued by Moody's, or AAA, AA,
A, or BBB, as issued by Standard and Poor's on all such general obligation
bonds; or
015.01A2 The owner or
operator must satisfy each of the following financial ratios based on the owner
or operator's most recent audited annual financial statement:
015.01A2(a) A ratio of cash plus marketable
securities to total expenditures greater that or equal to 0.05; and
015.01A2(b) A ratio of annual debt service to
total expenditures less than or equal to 0.20.
015.01B The owner or operator must prepare
its financial statements in conformity with Generally Accepted Accounting
Principles for governments and have its financial statements audited by an
independent certified public accountant (or appropriate State
agency).
015.01C A local government
is not eligible to assure its obligations under this section if it:
015.01C1 Is currently in default on any
outstanding general obligation bonds; or
015.01C2 Has any outstanding general
obligation bonds rated lower than Baa as issued by Moody's or BBB as issued by
Standard and Poor's; or
015.01C3
Operated at a deficit equal to five percent (5%) or more of total annual
revenue in each of the past two (2) fiscal years; or
015.01C4 Receives an adverse opinion,
disclaimer of opinion, or other qualified opinion from the independent
certified public accountant (or appropriate State agency) auditing its
financial statement as required under Section 015.01B.
However, the Director may evaluate qualified opinions on a case-by-case basis
and allow use of the financial test in cases where the Director deems the
qualification insufficient to warrant disallowance of use of the
test.
015.01D The
following terms used in this section are defined as follows:
015.01D1 "Deficit" equals total annual
revenues minus total annual expenditures;
015.01D2 "Total Revenues" include revenues
from all taxes and fees but does not include the proceeds from borrowing or
asset sales, excluding revenue from funds managed by local government on behalf
of a specific third party;
015.01D3
"Total Expenditures" include all expenditures excluding capital outlays and
debt repayment;
015.01D4 "Cash Plus
Marketable Securities" is all the cash plus marketable securities held by the
local government on the last day of the fiscal year, excluding cash and
marketable securities designated to satisfy past obligations such as pensions:
and
015.01D5 "Debt Service" is the
amount of principal and interest due on a loan in a given time period,
typically the current year.
015.02 Public notice component
The local government owner or operator must place a reference
to the closure and post-closure care costs assured though the financial test
into its next comprehensive annual financial report (CAFR) after the effective
date of this section or prior to the initial receipt of waste at the facility,
whichever is later. Disclosure must include the nature and source of closure
and post-closure care requirements, the reported liability at the balance sheet
date, the estimated total closure and post-closure care cost remaining to be
recognized, the percentage of landfill capacity used to date, and the estimated
landfill life in years. A reference to remedial action costs must be placed in
the CAFR not later than 120 days after the remedial action workplan has been
approved by the Department. For the first year the financial test is used to
assure costs at a particular facility, the reference may instead be provided to
the Department, and placed in the operating record until issuance of the next
available CAFR if timing does not permit the reference to be incorporated into
the most recently issued CAFR or budget. For closure and post-closure costs,
conformance with Government Accounting Standards Board Statement 18 assures
compliance with this public notice component.
015.03 Recordkeeping and Reporting
Requirements
015.03A The local government
owner or operator must provide the Department the following items and place a
copy into the facility's operating record:
015.03A1 A letter signed by the local
government's chief financial officer that:
015.03A1(a) Lists all the current cost
estimates covered by a financial test, as described in Section
015.04;
015.03A1(b) Provides evidence and certifies
that the local government meets the conditions of Sections
015.01A, 015.01Band
015.01C; and
015.03A1(c) Certifies that the local
government meets the conditions of Sections 015.02 and
015.04.
015.03A2 The local government's independently
audited year-end financial statements for the latest fiscal year, including the
unqualified opinion of the auditor who must be an independent, certified public
accountant or an appropriate State agency that conducts equivalent
comprehensive audits;
015.03A3 A
report to the local government from the local government's independent,
certified public accountant (CPA) or an appropriate State agency based on
performing an agreed upon procedures engagement relative to the financial
ratios required by Section 015.01A2, if applicable,
and the requirements of Sections 015.01B,
015.01C3 and 015.01C4. The
CPA or State agency's report should state the procedures performed and the CPA
or State agency's finding; and
015.03A4 A copy of the comprehensive annual
financial report (CAFR) used to comply with Section
015.02 or certification that the requirements of
General Accounting Standards Board Statement 18 have been met.
015.03B The items required in
Section
015.03A must be provided to the Department and
a copy placed in the facility operating record as follows:
015.03B1 In the case of closure and
post-closure care, prior to the initial receipt of waste at the facility,
or
015.03B2 In the case of remedial
action, not later than 120 days after the remedial action workplan has been
approved by the Department.
015.03C After the initial placement of the
items in the facility's operating record, the local government owner or
operator must update the information and provide to the Department the updated
information and place a copy into the operating record within 180 days
following the close of the owner or operator's fiscal year.
015.03D The local government owner or
operator is no longer required to meet the requirement of Section
015.03 when:
015.03D1 The owner or operator substitutes
alternate financial assurance as specified in this chapter; or
015.03D2 The owner or operator is released
from the requirements of this chapter in accordance with Sections
004, 006, and
008.
015.03E A local government must satisfy the
requirements of the financial test at the close of each fiscal year. If the
local government owner or operator no longer meets the requirements of the
local government financial test it must, within 210 days following the close of
the owner or operator's fiscal year, notify the Department that the owner or
operator no longer meets the criteria of the financial test, obtain alternative
financial assurance that meets the requirement of this chapter, provide the
Department the required submissions for that assurance, and place a copy into
the operating record.
015.03F The
Department, based on a reasonable belief that the local government owner or
operator may no longer meet the requirements of the local government financial
test, may require additional reports of financial condition from the local
government at any time. If Department finds, on the basis of such reports or
other information, that the owner or operator no longer meets the requirements
of the local government financial test, the local government must provide
alternate financial assurance in accordance with this chapter.
015.04 Calculation of Costs to be
Assured
The portion of the closure, post-closure and remedial
actions costs for which an owner or operator can assure under this section is
determined as follows:
015.04A If the
local government owner or operator does not assure other environmental
obligations through a financial test, it may assure closure, post-closure, and
remedial action costs that equal up to forty-three percent (43%) of the local
government's total annual revenue.
015.04B If the local government assures other
environmental obligations through a financial test, including those associated
with underground injection control facilities, petroleum underground storage
tank facilities, PCB storage facilities, and hazardous waste treatment, storage
and disposal facilities, it must add those costs to the closure, post-closure,
and remedial action costs it seeks to assure under this section. The total that
may be assured must not exceed forty-three percent (43%) of the local
government's total annual revenue.
015.04C The owner or operator must obtain an
alternate financial assurance instrument for those costs that exceed the limits
set in Sections 015.04A and
015.04B.
