The overall objective of this specific study is to generate a waste management balance sheet that indicates whether or not there is a financial incentive to decentralize the waste stream. This incentive would need to be present at both the faculty level and the university level. Further, there are a number of possible decentralization formulas. The method employed in this report reflects all of these elements. Each are described in detail below, beginning with how the global calculations were performed, followed by the individual faculty analyses and a outline of the four scenarios run for the purpose.
Since the final product of the analysis is a balance sheet, the method is described in a manner consistent with this form, first discussing the income side then the expenses side of the balance sheet at both the global and the individual faculty levels. Once the incomes and expenses are tallied, one can determine if the overall balance is positive or negative. If positive, waste management becomes a money-making proposition.
5.1 University as a Whole
Calculating the revenues that potentially exist for the university of Waterloo if waste was managed more effectively was somewhat involved. Two 'sources' of revenue were considered. The first are revenues resulting from the sale of material already in the recyclables waste stream, the second, recyclables currently in the landfill-bound waste stream. Determining revenues from materials currently in the recyclables stream was simply a matter of reviewing statistics routinely compiled by the waste management coordinator. Obtaining figures for recyclables in the landfill bound waste stream was more of a challenge.
Three pieces of information are required before this revenue figure can be calculated. The first is to determine the contents of the landfill-bound waste stream, the second is to identify the recyclables, and the third is to assign a value to the recyclables that might be in the landfill bound waste stream.
Determining the contents of the landfill-bound waste stream was the greatest challenge. A visual waste audit was performed at the university of Waterloo in 1992. This audit provided a moderately detailed breakdown of waste stream contents and the percentage of each material. These percentages were applied against the total number of Tonnes of waste generated in 1995. Each category of material roughly corresponded with mill prices, and based on the price per Tonne of a given material, a revenue for each set of recyclables in the waste stream was determined. These were, in turn, tallied to produce an overall potential revenue. Materials were identified as recyclable in consultation with the waste management coordinator, and mill prices used in our calculations were based on figures routinely compiled by the coordinator.
The other side of the balance sheet are expenses. In the case of the university of Waterloo waste management expenses include the following:
- landfill hauling service charges
- landfill tipping fees
- cans, glass and newsprint service charges
- white paper service charges
- cardboard service charges
All of these expenses are routinely compiled by the waste management coordinator, and all that was required was to tally them.
5.2 Individual Faculties
Producing a waste management balance sheet for individual faculties was much more involved than producing one for the university as a whole. Waste management data is not compiled on a per faculty basis, neither was the waste audit performed on a per faculty basis. In order to generate an individual faculty waste management balance sheet, both sets of data had to be converted into terms meaningful at the per faculty level.
The visual audit performed in 1992 provided both a sense of the size and composition of waste flows coming from specific buildings on-campus. Converting this per building information into per faculty information would be the key to developing waste management balance sheets for individual faculties, both in terms of determining potential revenues and setting waste management budget allotments. This was accomplished by assigning each faculty those buildings in which they utilized the greatest relative space. This was determined by calculating the percentage space per faculty/department group per building. Source data was supplied by the Office of Space Utilization of the University of Waterloo. Once these calculations were performed, a list indicating those faculties for which all associated buildings had clean data was compiled.
Once buildings were associated with faculties, it was possible to determine waste flows and composition per faculty simply by tallying the figures available for each building associated with a given faculty.
Unlike the income calculations performed for the university as a whole, faculties have two general sources of income. The first is the sale of recyclable materials, and second, a series of budget allotments. The budget allotments represent the proportion of the waste management budget a particular faculty is entitled to based on waste flows.
In the case of the university figures, revenues from both the recycling waste stream and the revenues from the landfill-bound waste stream could be tallied. This information could not be compiled on a per faculty basis. Only the potential revenues based on waste stream composition could be calculated. This calculation was performed simply by identifying the recyclables in the waste stream, determining the Tonnage of a material category and assigning the mill price for that material.
Four waste budget allotments had to be determined for each faculty:
- Landfilling Hauling Budget Allotment
- CNG Hauling Budget Allotment
- Cardboard Hauling Budget Allotment
- Fine Paper Hauling Budget Allotment
To arrive at this figure the waste audit was used to determine the amount in Tonnes each faculty produced of a given material, this amount was then expressed as a percentage of total university production of the same material, and this percentage was then applied against the budget assigned for handling that material. This dollar figure is designated the budget allotment and is income for the faculty.
Once budget allotments were determined, expenses could be calculated fairly simply. In the case recyclables the expenses were exactly equivalent to the budget allotment provided. In the case of landfilling fees the following calculation was performed. The cost of landfiling each Tonne of waste, including service charges, tipping fees and GST, was calculated. This cost was then applied against each Tonne of landfill-bound waste generated by the faculty. The sum of this figure and the other budget allotments comprise all waste management expenses incurred by a faculty.
Many decentralization scenarios are possible. Because of time and data limitations the authors only performed four. The first 'scenario' is really only the baseline. It is a summarization of the actual waste management balance sheet for 1995. The other three explore the financial consequences of several different sets of assumptions.
- This 'scenario' is a representation of the costs and revenues actually accruing over 1995. It represents the baseline against which all alternatives can be measured.
- In this decentralization scenario faculties are given waste budget allotments based on 1995 performance and are allowed to collect revenues generated from recyclables. This scenario gives the greatest potential incentive to the faculty to divert recyclables from the landfill-bound waste stream.
- This decentralization scenario assumes that waste budget allotments are calculated assuming that all recyclables are diverted from the waste stream. In short faculties would be given much less money, and if 100% of the divertables or recyclables were not removed from the waste stream, the faculty would potentially need to pay for waste management at the expense of other faculty projects. In this scenario faculties are allowed to collect revenues from recyclables sold to mills.
- This decentralization scenario assumes that faculties are given waste budget allotments assuming 1995 levels of waste generation. In other words, the total expense to the university for waste management would remain unchanged, though the potential for increased revenues exists. All revenues from recyclables (both diverted and in recycling stream) are collected by the central administration. Faculties are able to earn discretionary funds only by reducing landfill-bound waste flows.
5.4 Correction Factors
The 1992 audit information was collected over a one week period in March (White, 1992, pg 8). In order to make projections based on this data as relevant as possible to the 1995 annual waste management situation a multiplier incorporating several corrections was required. Three primary issues had to be addressed:
- Audit data had to be expressed in terms of years to match other waste management records
- Impact of sampling period on audit data
- Changes in waste stream size between 1992 and 1995
Converting data expressed in terms of weeks, as in the case of the audit information, into years is moderately straight forward: multiply by 52. This assumes all weeks of the year are identical to the week sampled however. In the case of the audit, the sample week was higher than the average. In order to adjust for this potential distortion the weekly average was determined, and the percentage difference between it and the sample week was used to appropriately devalue the audit week data when expressing it in annual terms. A third correction factor was applied to account for the change in waste stream size between 1992 and 1995. The total waste stream for 1995 was expressed as a fraction of the 1992 total and a percentage was obtained. The product of all these correction factors was used as a multiplier whenever waste audit data had to be converted into 1995 terms for our analysis.
A brief note should be made about divertables. The visual audit indicated that some materials could be diverted from the landfill, though they could not be sold as recyclable material. These materials have been designated as divertables by the authors of this report. They cost nothing to remove from the waste stream and help lower landfilling costs. Because they have no direct cost they were not treated explicitly. They are reflected, however, in the landfilling fees. All divertables were assumed removed from the landfill-bound waste stream as the various alternative scenarios were explored.
The most involved aspect of this proposal was to project whether or not a faculty could expect to gain any additional funds should our proposed decentralization of the Waste Management Budget be implemented and the recyclables in the waste stream diverted to buyers. If the faculty was to gain, how much could be expected. The test of our system would be if such a gain existed and if that gain was sufficient to warrant the faculties initiating aggressive recycling programs.
The first challenge was to determine how to measure the amount of waste each faculty generated and to determine how much and what kind of recyclable materials existed. Once this was accomplished, one had to determine what incomes and expenses were associated with waste management for that faculty and how much for each.
Measuring the waste generated by faculty was not a simple task. This becomes clear when one considers how that 1) there is no clear correlation between buildings and faculties and 2) all waste collection systems and audits are based on a per building basis. We had to find a way of assigning buildings to each faculty. The method we finally employed was to assign each faculty those buildings in which they utilized the greatest relative space. This was determined by calculating the percentage space per faculty/department group per building. The figures we used for this task were supplied by the Office of Space Utilization for the University of Waterloo. Once these calculations were performed, a list indicating those faculties for which all associated buildings had clean data was compiled.
With these assignments in place we could begin to use the data compiled as a result of an extensive visual audit prepared in 1992. It supplied information regarding the contents of the waste stream for 37 buildings on-campus, detailing how much paper, glass, compostables and the like were generated over a one week period.
Two concerns emerged as we attempted to use this data to generate annual figures having some bearing on the 1995 situation. First, we had to consider when the week-long sample was taken and, second, we had to assess whether it was reasonable to assume that the size of the waste stream had not changed between 1992 and 1995. We applied two correction factors to the 1992 data, the first correcting for the higher that average results which could be expected during the sample period and the second reflected the 13% in total waste stream size during the intervening years.
Once we had corrected annual data, important given that all the Official numbers available to us are expressed in such terms, the task was to total the amount and kind of material found the waste streams of each faculty. The totals and breakdowns were critical to determining the budget allotment each faculty deserved and how much of the costs for cardboard, glass, cans, paper and other recyclables were to be attributed to each faculty. Without this information it is impossible to determine if the costs outweigh the benefits of decentralizing the budget.
Several notes regarding the value of recyclable materials, the cost of collecting recyclable materials and the cost of disposing of non-recyclables might be useful here. Land filling materials costs money.
About $75 per Tonne. Recycling materials produces revenues, varying in amount according to the material. The costs of Land filling materials increases incrementally, the collection services for recyclable materials are levied in flat fee fashion. Recyclables are collected in basically two categories 1) Cans, Newsprint and Glass (CNG) and 2) Cardboard. Bearing these facts in mind will make the following discussion more clear.
For the sake of organizing discussion, the specific calculations used in our assessment will be outlined presently, first starting with the income side then the expenses side of the balance sheet.
6.1 Income Calculations
Each faculty would receive income from the following sources:
- The University of Waterloo Waste Removal Budget
- The University of Waterloo CNG Removal Budget
- The University of Waterloo Cardboard Removal Budget
- Revenues from Recycled Paper Sales
- Revenues from Recycled Glass Sales
- Revenues from Recycled Aluminum Sales (Pop Cans)
- Revenues from Recycled Cardboard
1. UW Waste Budget Allocations
- First recall that our proposal is to take the current level of spending on waste removal for the campus as a whole and apply it in decentralized fashion among the various faculties and university departments. This is to say, to give each faculty a proportion of this budget and allowing them to use this money as necessary to pay for the amounts they actually landfill. If an effective recycling campaign is launched, there will be money left over (as well as revenues generated) which the faculty can apply to any projects they wish.
The calculation involves three steps, first determining the total amount of waste produced (recyclables and non-recyclables) by the faculty. It is important to note that all the figures used throughout this report describe the materials found in the landfill-bound waste stream. This total weight is then divided by the total weight of the landfill bound waste stream generated by the campus as a whole. This produces a percentage which is then levied against the total waste removal budget of the University. This is the figure which is used as the UW Waste Budget Allotment throughout our analysis.
2. UW CNG Removal Allotment
- As mentioned earlier, recycling is collected on a flat rate basis, meaning that within a range there is no increase in cost even if there is an increase in the total amount recycled. This is the case with can newsprint and glass (CNG). The calculation is very similar to that of the Waste Budget Allocation described above. The total weight of cans, glass and paper produced by the faculty divided by the total weight of recyclables less cardboard produced by the university as a whole. This percentage is then applied against the total budget for CNG removal and designated as the CNG Hauling Allotment in our later calculations.
3. UW Cardboard Removal Allotment.
- This calculation is similar to the previous two. The total amount of cardboard generated by a faculty is divided by the university total and this percentage is applied against the total cardboard removal budget of the university. This is then given to each faculty (should our proposal be implemented) as the UW Cardboard Hauling Allotment.
4. UW Paper Allotment
- It should be noted that the white paper recycling program does not cost anything at the University of Waterloo. The collector charges nothing, instead collecting a percentage of the selling value of the material. As a result the university need not provide a fine paper allotment.
5. Revenues from Recyclable Materials
- This calculation is identical for each material so one paragraph of discussion is sufficient. The total amount of each material produced by a faculty is multiplied by its price per Tonne. The amounts vary from $60/T to as much as $13,000/T. As might be expected, a considerable amount of revenue is generated in this fashion.
6.2 Expense Calculations
Expenses, as already hinted at in the Income Calculation section, come in three principle forms:
- Land filling (Tipping) Fees
- CNG Collection
- Cardboard Collection
As discussed already, the collection services for Cardboard and CNG are flat rate charges and each faculty is simply responsible for its proportion of this campus-wide bill. Each faculty, through the decentralization scheme proposed, would be given an allotment of the UW budget for each service to cover this expense.
The Tipping fees are treated differently. Each faculty is responsible for covering all costs surrounding the disposal of their landfill-bound waste. This gives them the opportunity to reduce this quantity, thereby, using the difference (UW Waste Budget Allotment-Actual Tipping Fees levied) for their own purposes. The total tipping fee charged to each faculty is determined simply by totaling all waste not diverted down recycling pathways and multiplying this figure by the tipping fee plus the GST.
6.3 Balance Sheet
As indicated earlier, once all the costs and all the potential incomes are determined, one simply adds each column up and takes all expenses from all incomes. If the balance is positive, it means that the proposal warrants further exploration.
Last updated April 21, 1996. das