After approving a new 10-year agreement with Dayne’s Waste Disposal for trash collection services in the city of Mexico the city council has approved a new base rate for 12 months beginning April 1.

The new base rate for refuse collection services is set at $15.26 a month which is up about $2 from the current rate set at $13.27 per month. That base rate is determined by taking the total costs to the city which includes Dayne’s rates and user fees for things like the household hazardous waste program.

The total costs to the city are more than $801,000 and when divided between the city’s more than 4,300 residential customers the cost to each residence adds up to just over $183 annually. When that cost is divided by 12 months the base rate is established.

The base rate is not what the customer will see on the final bill. Deputy City Manager Roger Haynes told council members at a Jan. 22 meeting that part of the contract with Dayne’s calls for a fuel rate adjustment charge. The base rate for that formula is set at $2.20 per gallon of diesel fuel. The fuel rate is capped at a total cost of $16.40. Haynes said the cap is set pretty high.

“In order for that fuel rate cap to be met diesel fuel costs would have to go up to $7.90 per gallon,” Haynes said. 

The formula for the fuel adjustment charges the customer $0.01 for every $0.05 the price of diesel goes above the base fuel rate of $2.20 per gallon. Haynes said he’s gotten some questions about why not increase the base fuel rate to a number that’s closer to current rates. He said if the city increased the fuel rate base there would have to be an adjustment somewhere else, most likely in the overall base rate.

“We would have set a higher floor and a higher ceiling that he could go up to,” Haynes said. “It was advantageous for us to keep the $2.20 per gallon as the basis for making the adjustment.”

During the last billing cycle, Mexico customers were charged a $0.30 fuel adjustment rate for the month. Haynes said those fuel rate adjustments are higher during the winter months.

“During the winter months, there’s a little additional cost in the diesel fuel because of the additive you have to keep it from freezing and gelling,” Haynes said. “All things considered and kept the same, I expect this to go down a little bit in the next month.”

Haynes said the city surveyed 14 different communities to gauge what others were paying for trash pick-up services and found that Mexico is much cheaper than nearby communities. On average the base rate in those other communities is about $17.28 per month.

“We’re still providing a very good service for a fair cost to our citizens,” Haynes said.