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The term „modrfied cash basis" is used because two signfficant costs that are unique to the operation of a lanc}fili need to be recognized in the establishment of solid waste rates. These two expenditures are predevelopment costs and closure & post-closure care costs. Since both of these costs are material in nature they should be recognized during the I'rfe of the landfill versus being expensed when the costs are incurred. These costs are discussed in greater detail in Section V. Detailed Cost Information Forms (Other Direct Landfill Costs - Forms 5, 6 and 7). B. Cost Components Full cost accounting is defined as the "identification and inclusion of all direct and indirect costs associated with providing a particular service." The first step in developing cost of service based rates for the city's solid waste services is to determine what costs are to be included. 1. Direct Costs Direct Costs are those expenditures which are specifically budgeted for solid waste services. They are also directly and clearly attributable to the specific service performed. The use of an enterprise fund for tracking and recording a city's solid waste costs will make the identification of direct costs easier. However, even if a ciry records its solid waste costs in the general fund, these costs can usually be identified using the city budget and supporting financial records. Examples of direct costs include: Salaries, Wages & Benefits Debt Service Annual Cash Capital Outlays General O&M Costs Equipment O&M Costs Professional Services Utilities Contract Services Closure & Post-Closure Care Costs Predevelopment Costs The workbook will provide the means to calculate not only the direct costs associated with the city's solid waste utility, but also the direct assignment and allocation of these costs between individual solid waste programs, such as collection, disposal, recycling and yard waste. The wor{dbook separates direct costs into the following six sections: Salaries, Wages & Benefits Other Landfill Costs Vehicle Expense General O&M Costs Capital Costs Other Costs 2. Indirect Costs The full cost for a municipal solid waste program cannot be calculated without taking into account the indirect costs associated with the program. Indirect costs represent services which are provided to the city's solid waste operations by other departments within the city. Indirect costs are those that relate to administrative or general services that are shared by many departments within a municipality. Indirect costs include such services as: Administration/City Manager Central Purchasing Finance Department Accounting/Billing Ciry Council Legal Department Personnel Administration City Engineer Management Information Systems General Insurance 1 000196