Waste Management 2007 Annual Report Download - page 100

We apply the following guidelines in determining a landfill’s remaining permitted and expansion airspace:
•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 also include currently unpermitted 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 54 landfill sites with expansions at December 31, 2007, 18 landfills required
the Chief Financial Officer to approve the inclusion of the unpermitted airspace. Eight of these landfills required
approval by the Chief Financial Officer because of a lack of community or political support that could impede the
expansion process. The remaining ten 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, 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, and anticipated access to moisture through precipitation or recirculation of landfill leachate. In addition, the
initial selection of the AUF is subject to a subsequent multi-level review by our engineering group and the AUF used
is reviewed on a periodic basis and revised as necessary. Our historical experience generally indicates that the
impact of settlement at a landfill is greater later in the life of the landfill when the waste placed at the landfill
approaches its highest point under the permit requirements.
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)