Page 118 - 2018 Comprehensive Annual Financial Report - City of Winston-Salem

E. Closure and Postclosure Care Costs

State and federal laws and regulations require that the City place a nal cover on the Hanes Mill Road Sanitary Land ll and
the Old Salisbury Road Construction and Demolition Land ll as each unit is closed and perform certain maintenance and
monitoring functions at the site for a minimum of 30 years after closure. In addition to operating expenses related to
current activities of the land ll, an expense provision and related liability are being recognized based on future closure
and postclosure care costs that will be incurred during operation and will continue after the date the land ll no longer
accepts waste.
The City is required by state and federal laws and regulations to demonstrate nancial assurance for closure and postclosure
care. The City is in compliance with the requirement and has established a capital reserve fund for these purposes. The
capital reserve fund of $18,511,991 at June 30, 2018, is reported as restricted assets on the balance sheet of the solid waste
disposal fund. Recognition of these reserves for land ll closure and postclosure costs is based on 100% usage of the Hanes
Mill Road Sanitary Land ll for the unlined section of the land ll which closed in June 1997. Cell one, two, and three of the
lined section was closed in July 2005. Phase one and part of Phase two of the expansion area is currently constructed and
being lled and recognition of reserves is based on the engineer’s estimate of cost projected through closure of the
land ll. The estimated total current cost for Hanes Mill Road Land ll, $41,569,978 and Old Salisbury Road, $9,807,177, of
the land ll closure and postclosure care is based on the amount that would be paid if all equipment, facilities, and services
required to close, monitor, and maintain the land ll were acquired as of June 30, 2018. However, the actual cost may be
higher due to in ation, changes in technology, or changes in land ll laws and regulations. Old Salisbury Road Land ll is
currently under construction/ lling and recognition of reserves is based on the engineer’s estimate of cost projected
through closure of the land ll.

F. Pollution Remediation Obligations
The City has identi ed speci c City-owned properties where it is either known or reasonably believed that the sites
contain certain pollutants. Most of the properties have not completed an environmental assessment of the impact or
have active remediation systems in place; however, each site has been reported to a North Carolina regulatory agency as
having a current or reportable incident, thus voluntarily obligating the City for certain remediation activities. None of the
reported pollution creates an imminent endangerment to public health or welfare and many of the sources of impact
have already been eliminated, as reasonably appropriate.
An estimated pollution remediation obligation of $1,986,124 is recorded in the Statement of Net Position in the stormwater
fund. This amount re ects current estimates for groundwater pollution remediation at City Yard. City sta has voluntarily
worked with appropriate State regulators to assess the environmental impact and to develop a corrective action plan. The
estimated cost of remediation is based on an external consultant’s estimate for the corrective action plan, which involves
a) remediating 19,000 gallons of contaminated water and 8,700 tons of petroleum-contaminate soil, and b) excavating
and disposing of 15,000 cubic yards of CCBP ( y-ash) and 945 tons of metal-contaminated soil. As remediation activities
proceed or new information becomes available, the obligations will be reassessed. Increases or decreases in estimated
costs due to price uctuations or changes due to technology or laws or regulations cannot be estimated at this time.
Obligations pertain to soil or groundwater contamination, primarily from storage of underground fuel tanks, former
disposal activities, or industrial use at the sites.
Certain other sites associated with pollution activity within the City have been identi ed, primarily pertaining to former
waste disposal or prior property use; however, costs for remediation activities are not estimable as of June 30, 2018.
In addition, we estimate no future recoveries to potentially reduce the recorded pollution liabilities in scal year 2018.

G. Risk Management

The City has employment bene t funds for health bene ts and workers’ compensation, and post-employment bene t
trust funds for retired employees’ life and health insurance. Reserves are established for reported claims and claims
incurred but not reported for each scal year.
In addition, the City contracts with a not-for-pro t corporation, Risk Acceptance Management Corporation (RAMCO), for
services related to settlement of general and automotive liability, workers’ compensation claims which exceed the sum of
$250,000, health care claims which exceed the sum of $250,000, and certain tort claims and reserve funding for claims.
Under the contract, the City made an annual basic payment in 2018 of $1,065,510 to RAMCO for normal claim payments.
RAMCO is responsible for the administration of all claims for damages against the City, which are not covered by
commercial insurance, subject to a $1 million limit per occurrence. In July 1994, the City transferred the balance of its self-
funded excess liability fund to RAMCO for investment and together with any investment earnings thereon, to pay claims
in excess of $1 million but less than $3 million. Should there be a claim or claims in excess of $1 million for which payment

112 2018 AN NUAL R E P O R T