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Sunday, August 10, 2014

As Things Change, Ensure you are Prepared


We all know that waste service is not just picking up cans filled with waste and dumping them at a landfill. The industry has evolved, solid waste hauling companies are now on the forefront of the recycling and green movement. Solid Waste collection companies now remove more recycling, green and organic waste than they do solid waste. In addition, companies are now running more and more green clean trucks and in some cases, powering those vehicles with self-generated green fuels. All of these changes were driven by political changes at the state level and then given to the industry as a "change or be left behind" measure.

As solid waste companies stepped up to the challenge of the changing environment, they needed to ensure they had the right team in place behind them. Growing as a company starts with examining ones contract to ensure future changes are going to be covered and accepted with the municipalities service is provided to. Next step is to obtain the financing to purchase the equipment needed to be in compliance with new laws. Finally, developing rates and ensuring compliance through audits and annual reviews have kept solid waste companies on the forefront of the ever changing political waste movement.

And as much as the industry has changed over the past 15 years, it is going to continue evolving well into the future. Most solid waste companies are seeing this now with changing clean air laws which means fleet replacement for compliance. Additionally, more and more jurisdictions are asking for organic recycling options and different disposal methods or facilities. In order to do this, companiess must ensure they have the right team behind them. Management can work with outside consultants to review contracts and negotiate with municipalities to be politically poised to overcome the challenges faced. Picking and working with the right financial institution will help solid waste companies obtain funding to purchase the right trucks, bins and facilities. After choosing the right financial firm, companies once again work with the right audit and consulting firms to make sure that they are in compliance with all rules set forth under loan agreements, and develop rates sufficient enough to cover costs.

Before a solid waste company can change for the better, an analysis of your company’s cost structure should be performed and compared to budgetary needs. Failing to do so could adversely affect the financial stability in any given year causing large increases during the true up cost analysis years, which are generally politically challenging. Ensuring your company has the ability to operate year over year and obtain the financial backing needed to operate is essential. Your financial firm can help with navigating through the complexities of these laws and the ever changing waste environment.

Contact David Button, Solid Waste Business Development Specialist, at David.Button@Amllp.com or 415-568-3292 or Bill Brause, Solid Waste Audit Partner, at Bill.Brause@amllp.com or 925-790-2600 with questions or for more information. Armanino LLP Certified Public Accountants & Consultants is the largest CPA firm based in California, with offices in San Ramon, San Jose, and San Francisco. Visit www.amllp.com.

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