Canal Winchester residents will see a couple of added features on their Waste Management trash bills starting in October – an increase in monthly service fees and a new fuel/environmental surcharge.
"The contract is a little different than a regular franchise. It is a host community agreement since Waste Management operates a facility in Canal Winchester," said Canal Winchester Finance Director Nanisa Osborn. "The agreement allows the company to raise the costs for residential service by no more than five percent per year."
Monthly fees for residential service increased by 44 cents to $9.19 and, due to the rising costs of diesel fuel, the company added the surcharge to the present contract. According to Osborn, the village entered into the 10-year agreement in July 2000. The most recent changes take effect Oct. 1.
Based on a data report detailing fuel costs and collection percentages from 2005 up until the present time, the fuel surcharge would be approximately $1.38 and the environmental surcharge would be approximately 44 cents, bringing the total monthly bill to $11 before taxes.
The company, which operates a waste receiving facility in the village, reported on its Web site that the fuel surcharge is based on "unusual changes in the cost of operations" and linked to the national average price of diesel fuel as reported by the Energy Information Administration (EIA) of the United States Energy Department.
As of Sept. 22, the average price for a gallon of diesel fuel was $3.95, which was down six and a half cents from the previous week, but up more than 92 percent from a year ago. The EIA reported crude oil costs account for 64 percent of the price for diesel fuel, compared with 73 percent for regular gasoline. Distribution and marketing account for 14 percent, followed by 11 percent for refining and the same percentage for taxes.
Diesel-powered trucks operated by the company average three to four miles per gallon, roll-off vehicles are slightly better at eight miles per gallon, and third party vendors assess Waste Management a fuel charge or increase related costs for waste transport.
Waste Management said it is committed to controlling costs, but rising fuel prices and environmental compliance-related costs are beyond their full control. The fuel/environmental charge is intended to help the company cover increased costs while achieving an acceptable operating margin.
"Most communities have already been paying the surcharge," said Beth Schmucker, spokesperson for Waste Management of Ohio. "With fuel costs continuing to skyrocket, Canal Winchester is now transitioning to what other communities are paying in fuel surcharges."
The fuel/environmental surcharge is a one-line item on customer invoices that contains two separate components – the fuel surcharge and an additional environmental cost recovery fee. The fuel surcharge fluctuates with changes in the average cost of a gallon of diesel, but the environmental charge is a set fee and does not fluctuate monthly.
The environmental portion of the fuel/environmental charge is currently 4.2 percent of all invoice charges, including the fuel surcharge (excluding taxes). The policy was implemented in January 2005 to cover nationwide annual increases in environmental compliance costs instituted since 2002. The amount or percentage of the charge is not tied to any specific, direct or indirect, costs, but to Waste Management’s overall costs on a company-wide basis.
Environmental costs include landfill cover material, engineering, and landfill/ waste-to-energy facility testing and maintenance. Collection operation costs include disposal of tires, batteries, oils and fluids and the monitoring and management of vehicle emissions.
