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Is Landfill Provisioning an issue for regional and remote councils? 

By Pat Pathmanthan,  Waste Advisory Leader

Landfill sites have several long-term legacy costs which continue well beyond operational closure. Historically, smaller regional and remote councils have not made adequate provisions for those costs, often due to forecasting complexity and regulatory change. The Queensland Audit Office (QAO) has recently addressed the need for councils to adequately provide for legacy costs to ensure accurate financial reporting and good governance. 

The QAO recently recommended to a small council that the landfill provision be revisited and resolved as appropriate. The landfill provision model provides financial security to the regulators and council. As a result of this requirement, council has adopted a more proactive approach in preparing its financial statement, regarding the accounting of landfill assets and liabilities. 

So, what has changed and why? 

The provisioning for landfill has a 3-fold obligation, firstly there are the legislative and environmental requirements, there are the obligations to the community and underpinning this, the financial obligations.  

"Local councils have an obligation to ensure they carefully plan for the remediation of landfill operations and as such must give due consideration to post closure care of these sites. As this responsibility comes at a significant cost to councils, there would be considerable value in taking the time to review your current practices to provide yourself with the confidence that this aspect of your operations and planning for post closure remediation is able to be fully considered by Councils so they can take appropriate steps to minimise the risk to their future financial sustainability."  Robert Ferguson, LGAQ Lead Public Health and Waste.    

Some councils may have operating and closed landfill sites that give rise to obligations to rehabilitate and monitor sites significant periods into the future (30 + years).  The liability can be significant, and the correct measurement and treatment is vital to ensure financial reports are accurate.  

Good governance and accurate reporting for landfill sites could also be achieved through the preparation of a restoration accounting model. The preparation of a detailed closure and post closure care plan for the waste disposal facility would provide some clarity around timing costs for landfill restoration and monitoring. 

Accounting for landfills is a technically complex accounting method that gives rise to several specific challenges for a council.  These challenges include identifying the landfill sites and key characteristics of sites, determining the costs associated with aftercare management (including ongoing monitoring costs) and determining costs associated with rehabilitation. This can certainly be an all-consuming and incredibly difficult task for those councils that do not necessarily have access to the expertise and resources in-house. 

Interestingly, the landfill licence (part of the original DA) may require that the landfill site’s post closure care extends for a nominal period of 30 years. This is after the cessation of waste disposal activities and continues in effect until it can be demonstrated to the administering authority that the area used for waste disposal will not release contaminants into the environment.  

Councils operate as the tier of government closest to the community (where they work and live) and as such are committed to ensuring they meet their legislative, environmental and community responsibilities pertaining to the management and remediation of landfill sites.  

As a new council term is upon us and faced with the challenges of finalising a new budget in the current economic climate, it could be timely that consideration be given to the review of your obligations and current planning towards post closure care of landfill sites and any financial considerations are part of your decision making and enabled to take appropriate action.