In response to last week’s story “Composting facility hits almost $14 million”, RMOW capital projects manager John Nelson advises that the original cost of the project was $9 million, not $6 million as reported.
“Originally the estimated cost of it was $9 million, and it was reduced to a cash outlay of $6 million because we assumed a $3 million lease,” said Nelson.
“Now the $3 million is included in the $13.8 million figure, but the capital cost actually increased from $9 million to $13.8 million, not from $6 million to $13.8 million.”
Nelson said most municipal annual equipment leases are included in annual operating costs. However, an accounting decision was made to start including the lease in the capital costs.