Current through Register Vol. 41, No. 3, September 23, 2024
An owner or operator that satisfies the requirements of
subdivisions 1 through 3 of this section may demonstrate financial assurance
using the local government financial test up to the amount specified in
subdivision 4 of this section.
1.
Financial component.
a. The owner or operator
shall satisfy the provisions of subdivision 1 a of this section, as applicable:
(1) 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, he shall supply the director with
documentation demonstrating that the owner or operator has 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
(2) If the owner or operator does not have
outstanding, rated general obligation bonds, he shall satisfy each of the
following financial ratios based on the owner's or operator's most recent
audited annual financial statement:
(a) A
ratio of cash plus marketable securities to total expenditures greater than or
equal to 0.05; and
(b) A ratio of
annual debt service to total expenditures less than or equal to
0.20.
b. The
owner or operator shall prepare his financial statements in conformity with
Generally Accepted Accounting Principles for governments and have his financial
statements audited by an independent certified public accountant or by the
Auditor of Public Accounts.
c. An
owner or operator is not eligible to assure his obligations under this section
if he:
(1) Is currently in default on any
outstanding general obligation bonds;
(2) Has any outstanding general obligation
bonds rated lower than Baa as issued by Moody's or BBB as issued by Standard
and Poor's;
(3) Operated at a
deficit equal to 5.0% or more of total annual revenue in each of the past two
fiscal years; or
(4) Receives an
adverse opinion, disclaimer of opinion, or other qualified opinion from the
independent certified public accountant or Auditor of Public Accounts auditing
his financial statement as required under subdivision 1 b of this section.
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 the test.
2. Public notice
component. The local government owner or operator shall place a reference to
the closure, post-closure care, or corrective action costs assured through the
financial test into the next comprehensive annual financial report (CAFR) after
January 7, 1998, or prior to the initial receipt of waste at the facility,
whichever is later. Disclosure shall include the nature and source of closure
and post-closure 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 corrective action cost shall be placed
in CAFR no later than 120 days after the corrective action remedy has been
selected in accordance with 9VAC20-81-260. For the first year the financial
test is used to assure costs at a particular facility, the reference may
instead be 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 care costs,
conformance with Government Accounting Standards Board Statement 18 assures
compliance with this public notice component.
3. Recordkeeping and reporting requirements.
a. The local government owner or operator
must submit to the department the following items and place copies of the items
in the facility's operating record:
(1) An
original letter signed by the local government's chief financial officer worded
as specified in 9VAC20-70-290 G;
(2) 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;
(3) A report
to the local government from the local government's independent certified
public accountant (CPA) or the Auditor of Public Accounts based on performing
an agreed upon procedures engagement relative to the financial ratios required
by subdivision 1 a (2) of this section, if applicable, and the requirements of
subdivisions 1 b, 1 c (3), and 1 c (4) of this section. The CPA or state
agency's report shall state the procedures performed and the CPA or state
agency's findings;
(4) A copy of
the comprehensive annual financial report (CAFR) used to comply with
subdivision 2 of this section or certification that the requirements of General
Accounting Standards Board Statement 18 have been met; and
(5) A certification from the local
government's chief executive officer stating in detail the method selected by
the local government for funding closure and post-closure costs. If the method
selected by the local government is a trust fund or similar mechanism, there
shall be included a certification from the local government's chief financial
officer indicating the current reserve obligated to closure and post-closure
care cost. If the method selected by local governments is the use of annual
operating budget and Capital Investment Funds, there shall be a certification
from the local government's chief financial officer so indicating. Nothing
herein shall be construed to prohibit the local government from revising its
plan for funding closure and post-closure care costs if such revision provides
economic benefit to the local government and if such revision provides adequate
means for funding closure and post-closure care cost. This certification shall
be worded as specified in 9VAC20-70-290 H.
b. The items required in subdivision 3 a of
this section shall be submitted to the department and placed in the facility
operating record as follows:
(1) In the case
of closure and post-closure care, either before January 7, 1998, or prior to
the initial receipt of waste at the facility, whichever is later; or
(2) In the case of corrective action, not
later than 120 days after the corrective action remedy is selected in
accordance with the requirements of
9VAC20-81-260.
c. After the initial submission of the items,
the local government owner or operator must update the information, place a
copy of the updated information in the operating record, and submit the updated
documentation described in subdivisions 3 a (1) through (6) of this section to
the department within 180 days following the close of the owner or operator's
fiscal year.
d. The local
government owner or operator is no longer required to meet the requirements of
subdivision 3 of this section when:
(1) The
owner or operator substitutes alternate financial assurance as specified in
this section; or
(2) The owner or
operator is released from the requirements of this section in accordance with
9VAC20-70-111
E,
9VAC20-70-112
B, or
9VAC20-70-113
C.
e. A local government
shall 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, obtain alternative
financial assurance that meets the requirements of this section, place a copy
of the financial assurance mechanism in the operating record, and submit the
original financial assurance mechanism to the director.
f. The director, 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 the director
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 shall provide alternate financial assurance in
accordance with this article.
4. Calculation of costs to be assured. The
portion of the closure, post-closure, and corrective action costs for which an
owner or operator can assure under subdivision 1 of this section is determined
as follows:
a. If the local government owner
or operator does not assure other environmental obligations through a financial
test, it may assure closure, post-closure, and corrective action costs that
equal up to 43% of the local government's total annual revenue or the sum of
total revenues of constituent governments in the case of regional
authorities.
b. If the local
government assures other environmental obligations through a financial test,
including those associated with UIC facilities under
40 CFR
144.62, petroleum underground storage tank
facilities under 9VAC25-590, polychlorinated biphenyls storage facilities under
40 CFR Part 761, and hazardous waste treatment, storage, and disposal
facilities under Part IX or X of the Virginia Hazardous Waste Management
Regulations (9VAC20-60), it shall add those costs to the closure, post-closure,
and corrective action costs it seeks to assure under subdivision 1 of this
section. The total shall not exceed 43% of the local government's total annual
revenue.
c. The owner or operator
shall obtain an alternate financial assurance mechanism for those costs that
exceed the limits set in subdivisions 4 a and 4 b of this
section.
Statutory Authority: §§
10.1-1402
and
10.1-1410
of the Code of Virginia; §§ 1008(a)(3), 2002, and 4004(a) of the
Resource Conservation and Recovery Act; 40 CFR Part
258.
