Performance Audit of Solid Waste Transfer Station Capital Projects

On the whole, the SWD’s financial plan is comprehensive, sound, and based on reasonable financial assumptions. We identify options for cost savings and revenue enhancement. Related to transfer station project costs, we determined that the transfer system plan was developed through an iterative and collaborative process; regional decisions on service levels and similar decisions made through that planning process have, in some cases, increased costs. These decisions contributed to King County’s transfer stations having higher capital costs per ton, in general, than those of other jurisdictions we surveyed. There is additional time for further review of the decisions that have increased costs and may increase solid waste rates into the future. The current, estimated remaining (post 2011) capital expenditures related to these three stations is $220 million.

We make four recommendations in this report. The most important of these is that SWD should update transfer system and individual facility plans as they have indicated their intention to do. During this process, SWD should provide county policy-makers and regional partners systematic analysis of the incremental cost impacts of the number and capacities of the transfer stations, the functionalities of the stations, and an assessment of which project financing and delivery method is most likely to result in lower capital costs. We make three other recommendations related to using appropriate economic assumptions, life-cycle cost analysis, and long-term investment strategies.

SWD has a 2011 operating budget of $91 million and will dispose of an estimated 828,000 tons of waste for the citizens of unincorporated King County and the thirty-seven cities that are served under interlocal agreements. The purpose of the audit was to assess whether the rate proposal submitted by King County’s Solid Waste Division (SWD) of the Department of Natural Resources and Parks would be feasible within a sustainable financial plan, and to evaluate the cost effectiveness of the transfer station capital improvement projects which directly influences disposal rates.