California Department of Resources Recycling and Recovery (CalRecycle) 

Bulletin 1: Amount of Required Coverage/Funding Formulas

Publication No. 200-94-009

October 1994

To All Operators of Solid Waste Landfills:

This is to clarify the requirements of Title 14, California Code of Regulations (CCR), Division 7, Chapter 5, Article 3.5, section 18282. 14 CCR section 18282 requires operators to make deposits to their closure and/or postclosure maintenance funds (trust funds or enterprise funds) based on the anniversary date of establishing the fund. On each anniversary date of establishing the fund, operators are required to increase the minimum fund balance by the amount resulting from the following formulas. Formula #1 applies to all anniversary dates prior to December 31, 1993. Formula #2 applies to all anniversary dates on or after December 31, 1993. (Note: If an operator establishes a trust fund or enterprise fund after using one or more alternate acceptable mechanisms, the initial payment into the fund must be at least the amount required if the trust fund or enterprise fund were established initially).

    1.  (Cf/Ct X E) = minimum deposit           2.  (Cf/Cr X Er) = minimum deposit

Cf is the annual capacity filled. This is the portion of a landfill's total permitted capacity filled during the following period: 1) from August 18, 1989* until 60 days before the anniversary date of establishing a trust fund or an enterprise fund occurring before August 18, 1990; and 2) from 60 days before any other anniversary date establishing a trust fund or an enterprise fund occurring before the subsequent anniversary date. Please see below for sample calculations.

Ct is the total permitted capacity. This is the capacity approved by the landfill's permit, including any changes in capacity approved by a new permit or a permit modification; but excluding any capacity filled before August 18, 1989.

E is the current closure and/or postclosure cost estimate(s). This is the most recent of the estimates prepared according to 14 CCR section 18263 and/or section 18266.

Cr is the remaining permitted capacity. This is the landfill's total permitted capacity less the cumulative capacity filled at the facility since August 18, 1989.

Er is the remaining closure and/or postclosure maintenance cost estimates to be funded. To calculate the remaining cost estimates to be funded, subtract the current value of the fund from the current closure and/or postclosure cost estimates.

14 CCR section 18282 requires the balance of the closure and/or postclosure maintenance fund be equal to or greater than the current facility(ies) closure and/or postclosure maintenance cost estimates, when the facility(ies) receives its last shipment of waste. In addition, operators may make only one written request to the Board to change the anniversary date of the fund to coincide with the private company's or municipality's fiscal year.

If you have questions regarding this information, please contact staff of the Board's Financial Assurances Section at the phone number or e-mail address given at the bottom of this page.

Sample Calculations

Assumptions: No inflation factor applied, operator does not accelerate deposits, interest not accrued on balance of fund, operator keeps fund current, and annual fill remains constant after 1990.

Operator establishes trust fund November 1, 1989* *(this is anniversary date). Sixty days prior to this anniversary date is September 1. Therefore, to calculate the annual deposit the operator uses annual capacity filled from August 18, 1989 to September 1, 1990 (60 days prior to November 1).  Subsequent dates for calculating annual capacity are from September 1 to September 1 of the following year.

1990    

Cf is 4,000 c.y. filled from August 18, 1989 to September 1, 1990, divided by Ct which is 200,000 c.y., times E which is $1,000,000.  Therefore, 4,00/200,000 = .02 and.02 X $1,000,000 = $20,000 is the 1990 deposit.

1991

Cf is 5,000 c.y filled from September 1, 1990 to September 1, 1991, divided by Ct which is 200,000 c.y., times E which is $1,000,000.  Therefore, 5,000/200,000 = .025 and .025 X $1,000,000 = $25,000 is the 1991 deposit.

1992 and 1993

Calculated as shown above.

December 31, 1993 new formula requirements effective. 

1994

Cf is 5,000 c.y. filled from September 1, 1993 to September 1, 1994, divided by Cr which is 176,000 c.y.  (Note:  The capacity remaining (Cr) is determined at the end of the year.), times Er which is $905,000 ($1,000,000 cost estimate minus $95,000 fund balance). Therefore, 5,000/176,000 = .028 and .028 X $905,000 = $25,710 is the 1994 deposit. All subsequent deposits are calculated in this manner.

If this operator wishes to change the anniversary date of establishing the fund to coincide with the company's fiscal year of July 1, he or she must make a written request to the Board. For example, if the request is made and approved in January 1994 to change the November anniversary date to July, the July 1994 deposit must be calculated based on capacity filled from September 1993 to May 1994. If the request is made and approved in May 1994 to change the November anniversary date to January, the operator must make the required November 1994 deposit, then the January 1995 deposit must be calculated based on capacity filled from October 1994 to November 1994.

* The date Article 3.5, entitled Financial Responsibility for Closure and Postclosure Maintenance, became effective.

**The anniversary date is the month actual deposits are made.

This is the first in a series of bulletins designed to guide and assist operators of solid waste landfills to comply with state and federal statutory and regulatory financial assurance requirements. All operators are encouraged to contact the Financial Assurances Section to address a specific topic.

Last updated: April 7, 2005 
Financial Assurances, http://www.calrecycle.ca.gov/SWFacilities/Financial/
Richard Castle: Richard.Castle@calrecycle.ca.gov