Waste Management 2008 Annual Report Download - page 59
Download and view the complete annual report
Please find page 59 of the 2008 Waste Management annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Closure and Post-Closure Costs — We base our estimates for closure and post-closure costs on our inter-
pretations of permit and regulatory requirements for closure and post-closure maintenance and monitoring. The
estimates for landfill closure and post-closure costs also consider when the costs would actually be paid and factor
in inflation and discount rates. The possibility of changing legal and regulatory requirements and the forward-
looking nature of these types of costs make any estimation or assumption less certain. Changes in estimates for
closure and post-closure events immediately impact the required liability and the corresponding asset. When the
change in estimate relates to a fully consumed asset, the adjustment to the asset must be amortized immediately
through expense. When the change in estimate relates to a landfill asset that has not been fully consumed, the
adjustment to the asset is recognized in income prospectively as a component of landfill airspace amortization.
Remaining Permitted Airspace — Our engineers, in consultation with third-party engineering consultants and
surveyors, are responsible for determining remaining permitted airspace at our landfills. The remaining permitted
airspace is determined by an annual survey, which is then used to compare the existing landfill topography to the
expected final landfill topography.
Expansion Airspace — We include currently unpermitted expansion airspace in our estimate of remaining
permitted and expansion airspace in certain circumstances. First, to include airspace associated with an expansion
effort, we must generally expect the initial expansion permit application to be submitted within one year, and the
final expansion permit to be received within five years. Second, we must believe the success of obtaining the
expansion permit is likely, considering the following criteria:
• Personnel are actively working to obtain land use and local, state or provincial approvals for an expansion of
an existing landfill;
• It is likely that the approvals will be received within the normal application and processing time periods for
approvals in the jurisdiction in which the landfill is located;
• We have a legal right to use or obtain land to be included in the expansion plan;
• There are no significant known technical, legal, community, business, or political restrictions or similar
issues that could impair the success of such expansion;
• Financial analysis has been completed, and the results demonstrate that the expansion has a positive
financial and operational impact; and
• Airspace and related costs, including additional closure and post-closure costs, have been estimated based on
conceptual design.
For unpermitted airspace to be initially included in our estimate of remaining permitted and expansion
airspace, the expansion effort must meet all of the criteria listed above. These criteria are evaluated by our field-
based engineers, accountants, managers and others to identify potential obstacles to obtaining the permits. Once the
unpermitted airspace is included, our policy provides that airspace may continue to be included in remaining
permitted and expansion airspace even if these criteria are no longer met, based on the facts and circumstances of a
specific landfill. In these circumstances, continued inclusion must be approved through a landfill-specific review
process that includes approval of the Chief Financial Officer and a review by the Audit Committee of the Board of
Directors on a quarterly basis. Of the 42 landfill sites with expansions at December 31, 2008, 19 landfills required
the Chief Financial Officer to approve the inclusion of the unpermitted airspace. Ten of these landfills required
approval by the Chief Financial Officer because of community or political opposition that could impede the
expansion process. The remaining nine landfills required approval primarily due to the permit application processes
not meeting the one- or five-year requirements, as a result of state-specific permitting procedures.
Once the remaining permitted and expansion airspace is determined in cubic yards, an airspace utilization
factor, or AUF, is established to calculate the remaining permitted and expansion capacity in tons. The AUF is
established using the measured density obtained from previous annual surveys and then adjusted to account for
settlement. The amount of settlement that is forecasted will take into account several site-specific factors including
current and projected mix of waste type, initial and projected waste density, estimated number of years of life
remaining, depth of underlying waste, anticipated access to moisture through precipitation or recirculation of
landfill leachate, and operating practices. In addition, the initial selection of the AUF is subject to a subsequent
25