This series of three articles examines the costs involved in each stage of a generic landfill’s lifetime, shows how to do pro forma statements for profit and loss, and analyzes the tax and financial aspects of each stage of operation. In so doing, these articles illustrate the unique profitability of landfill operations for a given market share. Each article focuses on a different stage of a landfill’s operational lifetime.

By Daniel P. Duffy

Part I examined a hypothetical landfill’s market and potential for waste receipt; as well as its site investigation, engineering, design, and permitting costs.

This second article examines the cost of construction for site facilities and for each landfill cell. Additionally, the operating cost and disposal volume of each overlapping cell are described to show how cash flow will change over the operating life of the landfill.

Part III will look at the costs of landfill capping and closure, installation of gas management systems, and post-closure care and maintenance costs (and how to plan ahead and provide financial assurance for each).

The Hypothetical Landfill
As laid out in the previous article, the total landfill volume would be approximately 4 million cubic yards. The landfill’s footprint is square with dimensions of 1,200 feet, and is a little over 33 acres. Because of sloping, the final surface grades needing cap and cover are approximately 34 acres. Similarly, the bottom of the landfill needing a liner and leachate system is 33.5 acres. Total acres of landfill construction (cap and liner) is 67.5, giving a ratio of volume to construction area of almost 60,000 cubic yards per constructed acre.

The landfill is located in an area with a waste disposal market of approximately $29 million dollars per year at an average tipping fee of approximately $40 per ton. Assuming that the landfill gets the bulk of the waste from three counties in the market area and 10% of the market in the remaining five counties in the market area, then it can expect an annual disposal rate of approximately 200,000 tons per year. At an average tipping fee of $40, its projected annual gross revenues would be $4.4 million. These revenues can be expected to increase at roughly the same rate as the market area’s population, approximately 4.5% per year. At 200,000 tons per year, the landfill will utilize approximately 363,000 cubic yards of airspace per year. With a total capacity of 4 million cubic yards, its projected operational lifetime would be 11 years. During that operating life, the landfill will construct an average of 3 acres of lined cells and/or final cover each year.

Landfill Construction Costs
Up to this point, the landfill operator has completed (and spent money on) a complete landfill siting and hydrogeological study. This included a topographic survey of the site and the establishment of highest stable groundwater elevation contours. All of this site information has been graphically represented by site plans and cross sections. With this data, the landfill designer was able to complete and obtain approval for a landfill design that includes a layout of the landfill footprint, its maximum excavation depths (and its total excavation volume), location of all of the ancillary site features and support facilities (scale, access roads, security fence, parking lot, office trailer, etc.), the maximum landfill height above existing grades, the location and extent of surface water runoff, and sedimentation management controls.

Prior to any construction, the landfill site will be cleared and grubbed. Depending on the nature and extent of the existing vegetation, the costs of clearing and grubbing can run from $1,000 to $4,000 per acre, with $3,000 being typical. At minimum, those areas that will require initial construction (the ancillary facilities and structures areas and the initial waste disposal cell) will require clearing and grubbing. However, to avoid multiple mobilization costs for the clearing and grubbing contractor, the entire site may be cleared and grubbed at once. Subsequent site maintenance can be performed to prevent the growth of woody vegetation during the lifetime of the landfill. Cleared wood can be either hauled offsite or chipped onsite and stockpiled for future use as mulch.

A site survey was performed previously (either as a ground survey or an aerial survey) as part of the hydrogeological evaluation. During this survey, benchmarks were established, site features located and topographic contours drawn. A second site survey is required to stake the various construction areas of the site. This staking includes building corners, roadway centerlines, and a grid staking of the first waste disposal cell. Grids should be laid out at 50-foot intervals aligned with the limits of the landfill. Survey stakes should also be set at 50-foot intervals along slope break lines (crest of slope, toe of slope, along the center leachate collection pipeline, etc.). The cost of grade surveying can run from $5,000 to $8,000 per acre, with $7,000 being typical. Additional survey shots will be taken at these grid points and break line points through the cell excavation and construction process, but this is done as part of quality assurance/quality control, and is done to ensure establishment of proper slope and grades. The costs of these tasks should be included in the QA/QC effort.

Once the site has been surveyed, staked, cleared and grubbed (and while ancillary facilities and structures are being built) work can begin on the landfill itself. The first step is to establish liner construction grades and elevations by excavation and/or placement of structural fill. Most landfill construction requires excavation within the landfill and the use of the excavated soil (if it is suitable for construction purposes) to construct structural fill berms around the landfill perimeter. Excavation in good soil can cost between $2 and $6 per bank cubic yard. Structural fill soil berms can cost between $6 and $10 per cubic yard.

Exceptionally stiff subsoils, shale, and rock formations may require blasting prior to excavation. Though some stiff soil may be broken up by a dozer ripper attachment, it is usually more cost-effective to blast. Blasting costs (drilling, setting charges, explosives, safety requirements) will be at least an equivalent of an additional $1 per bank cubic yard, with prices falling for larger volume excavations.

Conversely, certain unsuitable soils—such as peat moss and other highly organic soils—must be completely removed from underneath the landfill, and beyond the landfill limits if necessary. Such excavation usually costs twice that of normal soil excavation and will require an equivalent amount of structural fill soil backfill. This results in a cost per bank cubic yard of $10 to $22.

For our hypothetical landfill the maximum average excavation depth is 33 feet. Assuming that blasting is not required and unsuitable organic soils are not present, the average amount of excavation per acre is 50,000 to 55,000 cubic yards. Excavation volumes will be less along the landfill boundary due to the need for 33% slopes to establish grades, and will be greatest over the “flat” floor of the landfill’s center. Excavation costs per acre will run from $100,000 to $330,000 per acre.

The landfill is assumed to have a minimal structural fill berm constructed along the landfill’s perimeter to provide anchoring for the liner elements and structural toe stability for the final waste slopes. With 10-foot height and 33% interior and exterior slopes, this berm will require 11 cubic yards of fill soil per linear foot (varying somewhat with the lay of the land). The total perimeter of the hypothetical landfill is 4,800 linear feet, resulting in a berm of approximately 53,000 cubic yards. With a landfill footprint of 33 acres, the average amount of perimeter berm constructed per acre would be 1,600 cubic yards. The perimeter berm cost per acre would be between $10,000 and $16,000. This is just an average for long-term planning purposes. The landfill’s geometry is such that the actual amount of berm required per acre will vary greatly during construction (acres adjacent to corner boundaries will require more berm, acres in the middle of the landfill will require none).

Once the base grades have been established, the landfill’s liner and leachate management system can be constructed. Most states require only a single liner and leachate system for municipal solid waste, and require a double system for hazardous waste landfills only. The lowest element of the liner/leachate system is the compacted clay liner. The construction of a clay liner is much more stringent in terms of material specifications, construction effort, and quality assurance. The required in-place density and moisture content will be determined by Proctor curves and tested by Boutwell test pads to assure that the maximum allowable permeability is achieved (usually 1 x 10ee-7 cm/sec). The results of these analyses and field tests will determine the weight of the compacting equipment, the penetrating length of the compactors sheepsfoot pad, the number of passes required to achieve compacted density, and the field moisture content required for the construction effort. The cost of a clay liner runs from $10 to $20 per cubic yard (depending on the ready availability and quality of the clay). State agencies require clay liners with a minimum thickness of 2 feet to 5 feet, resulting in the need for 3,200 cubic yards to 8,100 cubic yards per acre. The cost per acre of clay liner construction will vary from $32,000 to $162,000. A well-chosen landfill site with sufficient good clay onsite will tend to have lower costs.

After the clay liner has been constructed and certified, work can begin on the geosynthetic components of the liner and leachate management systems. A composite liner system consists of the clay liner overlain by a high density polyethylene (HDPE) geomembrane. As with any other plastic, the cost of geomembrane can vary wildly depending on the current price of oil. This price may even change during the course of a single construction season if a summertime gas shortage increases the price of oil (yet strangely, the cost of geomembrane never seems to fall as the result of a sudden gas glut). The thickness of the geomembrane used in liner systems is typically 60 mils. Smooth geomembrane is used on the flat floors of the landfills while roughened geomembrane with a textured surface is used on the 33% side slopes. The cost of smooth geomembrane can vary from $0.50 per square foot to $0.75 per square foot. Textured geomembrane will tend to cost $0.20 per square foot more than the smooth variety.

The hypothetical landfill has a total lined area of 33.5 acres divided into 23 acres of floor and 10.5 acres of slope. An average lined acre will have approximately 70% smooth geomembrane and 30% textured membrane resulting in a cost of installed geomembrane varying from $24,000 to $35,000 per acre. The actual cost per acre will vary based upon geometry of the landfill and the location of the cell being constructed.

Some sort of protective geotextile is installed immediately above the geomembrane to provide a cushion and minimize impingement of the liner. This can be either a simple geotextile or more often a geocomposite drainage blanket. The geocomposite consists of a factory bonded three-layer sandwich: nonwoven geotextile bottom cushion, geonet drainage medium, and a top geotextile filter. It provides both protection for the underlying geomembrane and more rapid removal of leachate. The costs of two-sided geocomposites with 8-ounce per square yard nonwoven geotextile layers will vary as with the geomembranes, with a typical price range from $0.75 to $1.00 per square foot. The total cost per acre of geocomposite varies from $33,000 to $44,000.

Above the geocomposite is a layer of high permeability granular material (sand and aggregate). Typically, a minimum thickness of 2 feet is required, resulting in a total granular volume of 3,200 cubic yards per acre. The cost of granular material, like the cost of clay, will vary wildly depending on local availability and quality. The cost of granular material can range from $15 to $20 per cubic yard, resulting in a per acre cost of $48,000 to $64,000. Often, a geotextile filter blanket is placed above the granular soil layer, but this is not recommended.

Installed within the granular soil layer are the leachate collection pipes and fittings, gravel pipe mounds, collection sumps, extraction pumps, force mains and storage tanks. The pricing of each component is unique, but can be roughly prorated on a per acre basis.

Assuming a parallel spacing of 200 feet, each acre will have approximately 220 linear feet of leachate collection pipes. With a unit price per foot ranging from $4 to $8, the cost per acre would be $880 to $1,760.

The amount of aggregate filter material mounded around and above the collection pipes to a height of 3 feet will cost $20 to $25 per linear foot of pipe (this includes any separation geotextile installed on the aggregate). The total cost per acre would be between $4,400 and $5,500.

One leachate collection sump is installed per disposal cell. A typical cell covers an area of approximately 10 acres. The collection sump requires intricate welding of the geomembrane, more extensive QA/QC testing as this is the point where leachate accumulates, and the installation of large diameter (18 inches and larger) riser pipes. Total cost for a sump installation can be about $15,000 to $20,000, resulting in a pro rated per acre cost of $1,500 to $2,000.

Each leachate sump and riser assembly will house extraction pumps, discharge hoses, pipe fittings, and connections. The cost of these components will be between $8,000 and $12,000, resulting in a pro rated per acre cost of $800 to $1,200.

An above-ground leachate storage tank (5,000-gallon capacity minimum) will be installed on average for every 100 acres of landfill. At a cost of $50,000 to $100,000, the pro rated per acre cost would be $500 to $1,000.

Connecting the leachate extraction risers to the leachate storage tanks is a series of double-walled (minimum 4-inch interior diameter) HDPE force mains. The cost of trenching, pipe, installation, bedding, and backfill can range between $20 and $25 per linear foot. Assuming one pipeline per storage tank (or per 100 acres of landfill area) and a distance of 1,000 linear feet, the pro rated cost of the force main would be $200 to $250 per acre.

The total cost per acre of the leachate management system would be between $8,000 and $12,000 (approximately).

In addition to the physical acts of construction and installation, management and quality oversight is required. This is typically done by independent third-party consultants and breaks down as follows:

• Geomembrane liner construction management costs from $18,000 to $20,000 per acre.
• Clay liner construction management costs from $2,000 to $4,000 per acre.
• Overall project management costs from $12,000 to $16,000 per acre.
• Construction surveying and drawings costs from $6,000 to $10,000 per acre.
• Earthwork (structural fill and excavation) QA/QC costs from $15,000 to $20,000 per acre.
• Liner (clay and geomembrane) QA/QC costs from $16,000 to $20,000 per acre.
• Leachate management system installation QA/QC costs from $6,000 to $9,000 per acre.

Total overhead and quality control would therefore range from $75,000 to $100,000 per acre.

Table 1 summarizes the above initial construction costs and the typical cost per acre of landfill construction.

The cost of constructing a landfill can range from $300,000 to $800,000 per acre, with the main cost difference due to availability of clay and ease of excavation. For the purposes of this study, the hypothetical landfill will be assumed to be well sited with ample clay and easy excavation. Its cost of construction per acre will be approximately $350,000.

Support Facilities Construction Costs
Typically all of the ancillary structures and facilities (with the possible exception of the access roads) are constructed up front. Assuming a square landfill footprint of 1,200 feet by 1,200 feet, the landfill’s perimeter access road would have a length of approximately 1,250 along each side for a total of 5,000 feet. Given the possible setbacks from the property line required by the state regulatory agency, and the area required for other facilities, the security fence could be approximately 6,000 feet. Cost for support facilities and structures are summarized as follows:

• Each building’s cost will depend on its function and may vary as much as $10 to $100 per square foot. Office buildings will cost between $60 and $100 per square foot, maintenance buildings between $50 and $70 per square foot, with shacks and tool sheds closer to $10 to $20 per square foot. Assuming 10,000 square feet of maintenance and 3,000 square feet of office space, the cost of onsite buildings will range from $680,000 to $1 million.
• Fencing costs between $10 and $20 per linear foot with gates costing between $1,000 and $2,000 per linear foot. Signage placed along the fence (usually at 200-foot intervals) will cost between $10 and $20 each. Total security barrier costs would range from $65,000 to $130,000.
• Modular truck scales and associated computer systems can cost between $100,000 and $150,000 each (one per landfill)
• Wheel wash facilities can cost between $200,000 and $250,000 (one per landfill).
• Gravel roads cost between $1 and $2 per square foot while asphalt roads cost between $6 and $9 per square foot. Assume only gravel roads and parking lots are constructed with a 24-foot width at 5,000 linear feet. The total access road costs would range from $120,000 to $240,000.
• Total support facility and ancillary structure costs would range from $1.165 million to $1.77 million. Given its size, it is assumed that the hypothetical landfill will need minimal support facilities and is located so as to minimize costs at $1.2 million.

Disposal Fees and Operations Costs
As previously stated, the landfill is in a market area with an average tipping fee of $40 per ton. Each landfill acre will have an average disposal capacity of 60,000 cubic yards. At an average in-place density of 0.55 tons per cubic yard, this is equivalent to 33,000 tons per cubic yard. Therefore, each acre has a gross profit potential of $1.32 million (though this will vary significantly during the lifetime of the landfill since some cells will be able to place waste in masses that overlay the slopes of previous waste disposal cells). The entire 33-acre landfill has a gross profit potential of approximately $43.5 million.

By comparison the 33.5 acres of liner construction will cost $11.725 million. With the support facilities and structures, the total capital costs prior to final closure would be approximately $13 million.

Operating costs involve staffing, utilities, equipment operations (leasing or loan payments, fuel, oil, lubricants, maintenance, etc.), leachate disposal and treatment, scale operations, paperwork, recordkeeping, billings, engineering staff and services, environmental monitoring, and daily cover applications. Equipment is the single largest operating cost closely followed by daily cover.

At 200,000 tons per year, the average daily waste receipt would be between 500 and 600 tons (a relatively large amount by real world standards). At minimum, this landfill would require

• A front end loader for onsite hauling of bulk material and small construction tasks (CAT 950 or equivalent).
• A dozer (CAT D7 or D8) equipped with a trash rack to spread dirt and waste.
• A steel, wheeled compactor (CAT 826G or equivalent) to compact the waste and achieve maximum possible in-place density.
• Additional equipment such as water spray trucks (to hold down dust), scraper, backhoe, several pickup trucks, and a road grader.

The total unit cost of operations is relatively small compared to the landfill’s capital costs. This makes landfill economics unique among industrial or construction operations (a landfill is both). As a percentage of the tipping fee, operating costs can run from 5% to 15%. Larger landfills will have a smaller percentage. Table 2 provides a summary of typical annual operating costs.

Determining Cash Flow
The cost of the support facilities and ancillary structures is incurred prior to the start of landfill operations, in Year 0, $1.2 million. The first three acres of lined cells will also be constructed in Year 0 at a cost of $350,000 per acre, or $1.05 million. The total costs incurred in Year 0 would therefore be $1.55 million.

On average, each year will require the construction of another 3 acres at a cost of $1.05 million. However, larger areas may be constructed at greater intervals, such as 9 acres every 3 years. Annual operating costs will be $600,000 for a total average annual cost of $1.65 million.

Each year, the site receives 200,000 tons and charges a tipping fee of $40 per ton. This results in annual gross revenues of $8 million. This results in an annual “net” profit (before interest and taxes) of $6.35 million. Assuming that no final cover is constructed during the first year of operations, the payback period for the initial start-up costs in Year 0 is about 3 to 3 months. However, this does not include annual costs for partial installation of final cover or disbursements to a sinking fund to cover the costs of the 30-year post-closure care.

Daniel P. Duffy, P.E., is an environmental engineer in Cincinnati, OH.

MSW - July/August 2005