The major challenge of any public works manager is getting a firm handle on costs. This is especially true for solid waste leaders. Given the current economic climate, it is important for agencies to complete a cost-of-service study that focuses attention on critical financial and management issues. This analysis will outline how much revenue from tipping fees, collection fees, and assessments an agency needs to run the services it provides. There are 8 simple steps solid waste managers can take to review basic accounting and financial principles while ensuring the input of key stakeholders is obtained and addressed.

1. Gather historical expenses and revenues.
2. Identify test year.
3. Refine revenue requirements.
4. Calculate revenue offsets
5. Allocate system costs.
6. Calculate tonnage delivered by customer
7. Estimate number of assessment units.
8. Set tipping fee

The results of this analysis are three rate options that managers can pick from:

• No change in rates and assessments
• Full recovery of all costs
• CPI adjustment only

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