Training on Municipal Waste M anagement Planning

1. Training on Municipal Waste Management Planning 7th Training Kutaisi, June2017

2. Financial chapters • Each WM plan needs 2 financial chapters: • In the status part with a description of actual figures referring to the past years: • The annual budgets and realizations; • Income from citizens and others (billed and paid SW service charges and revenues, payment rate); • Costs of collection, service of vehicles etc, costs of staff and other operational costs including depreciation; • Investments made and subsidies (cash and equipment) from the state, loans utilized (if any); • For the planning part we suggest the following table of content:

3. Financial chapter planning • Table of content: • General principles • Costs calculation methods • Investment and operational costs • Financing costs • Solid Waste Management service revenues • All of course linked to the objectives of the WM plan such as increased service level and safe disposal of waste

4. Financial chapter planning • General principles • Polluter pays principle (for people and for companies) • Cost covering (collection, cleaning, disposal) • Real costs (with contingencies, without profit) • Balanced and effective costs (high service vs practical and cost consequences) • Inter municipal cooperation for cost effectiveness (e.g. share equipment, PR/PA, CDW) • Any other principle that you mention in the objectives of the plan

5. Financial chapter planning • Cost calculation methods • Each year, the municipality will submit a budget and associated SWM service charge proposal to the Sakrebulo for approval. • For households: • the waste service charge will be based on an average waste generation per person (measurementsat landfill/TS required!); • The municipality may decide to use a different waste service charge for different villages/communities based on rural / urban or based on contributions made per villages/communities in separate collection and home composting; • Communities not served by collection trucks will be exempted for payments; • Households on or below the social minimum (as regulated in law XXX) will be exempted (alternative sources required!).

6. Financial chapter planning • Cost calculation methods • Waste from tourism • Waste generated by tourist will be covered from the general waste budget (and thus charged to the households directly or via municipal taxes) or • Waste generated by touristwill be covered via a special tourist tax to be levied on the hotels and B&B or • Small hotels, B&B etc. can use the municipal collection service, large hotels and tourism facilities not: separate contracts

7. Financial chapter planning • Cost calculation methods • Wastefromtourism • This means that in the WM plan a decision needs to be made on tourism waste and how to charge it (tourism tax, general budget, contracts, what are large tourism facilities?); • If opted for tourism tax, a decision needs to be made in the WM plan to define the calculation method for the tourism tax; • If opted for a mix of contracts and municipal services for small hotels and B&B, in the WM plan a calculation method needs to be defined;

8. Financial chapter planning • Cost calculation methods • Wastefromtourism • Smallhotels, B&B that are allowed to use the municipal collection service and premises that are used primarily by the owners as a second house or holiday house will be charged according to the following formula [………….to be determined by the municipality…..]: • Example 1: Number of overnight stays multiplied by the average waste generated per person per day multiplied by the waste service charge (per day) as charged to residents; • Example 2: Number of beds multiplied by 30% multiplied by the waste service charge (per day) as charged to residents; • Comment: 30% is based on 3 months tourism season (25%) + 5% outside season. Note that this method does not take into account the actual occupancy rate but this avoids that unregistered guests avoid payments for waste.

9. Financial chapter planning • Cost calculation methods • Company waste • Small companies will be able to use the municipal services; • large companies and companies that also generate hazardous waste (such as gas stations) will need to agree on a contract with an authorised waste collection company that delivers the waste directly to the regional landfill or an authorised waste treatment facility. • This means that in the WM plan a definition of small companies needs to be made.

10. Financial chapter planning • Cost calculation methods • Company waste • Companies that are allowed to use the municipal collection service will be charged according to the following formula: [………….to be determined by the municipality…..]. • Example 1: number of employees multiplied by the waste service charge as charged to residents; • Example 2: fixed amount based on 4 employees multiplied by the waste service charge as charged to residents; • Example 3: service area (m2), number of seats (restaurants, cinemas), beds (hostels, health care units) multiplied by the waste service charge as charged to residents.

11. Financial chapter planning • Investment and operational costs • Investment and operational costs must include depreciation and amortization costs • Investment and operational costs for the present service level are calculated to be: • Make a table of present equipment (vehicles, containers in numbers, capacity, year of purchase, remaining economic life), staff composition (numbers, specialization, unit cost) and operational costs (staff, maintenance and fuel, depreciation and amortization etc.) (already done in the status quo part – to be repeated again) • Add to this the expected need for replacement of equipment etc. during the planning period

12. Financial chapter planning • Investment and operational costs • Investment and operational costs for increased service level are calculated to be: • Make a table in which for each village / community you intend to introduce waste collection services per year and the need for additional equipment, operational costs etc. • Investment and operational costs for the introduction of separate collection are calculated to be: • Make a table in which you present the measures for separate collection, in which year you plan to do this and what investment and operational costs this will bring • Investment and operational costs for increased public awareness are calculated to be: • Make a table in which you present the measures for public awareness in which year you plan to do this and what investment and operational costs this will bring

13. Financial chapter planning • Financing costs • Financing costs for new investments (vehicles, containers, etc.) are calculated to be: • Make a table in which you present the financing sources (loans, grants, own municipal sources) of new investments and estimated financing costs (annual interest costs, commitment fees, management fees and principle repayments of loans)

14. Financial chapter planning 5. Solid Waste Management Service Revenues • SWM service charges and revenues from households, commercial and legal entities are calculated to be: • Make a table in which you present the SWM service charges and revenues billed to and paid by all types of waste generators (households (rural / urban), commercial and legal entities, tourism facilities, CDW)and other revenues (e.g. revenues from sales of recyclable materials))