The City of DeKalb is getting ready to approve a new 4-year agreement with Waste Management (pp. 122-128) for residential pickup of trash. One proposal is to tie increases to the Consumer Price Index (CPI), allow for a minimum annual increase of 2% and cap it at 6% no matter what fuel prices are doing. Staff have rejected that option, so Monday Council will consider a contract containing a 0% increase the first year but then 4% per year for subsequent years through FY2013. Staff prefers this plan because “the volatility of fuel pricing would place unnecessary risk upon residents and such a pricing plan would not be in the best interests of the City.”

Prices per “service unit,” then, would jump from 14.62 to 16.45 over the life of the contract — but wait! This may yet be a moot point because the city could opt to sign on to the “Toter” program citywide upon termination of a pilot program March 31, 2010. If the “Toter” program is adopted by DeKalb, households would be charged $17.79 initially, with three raises of 4% each by the end of the contract. In other words, we could go from the current rate of $14.62 to right around $20 by the end of FY2013.

By comparison, the worst-case scenario of a 6% annual increase over the 4 year contract period would result in an FY2013 rate less than $18.50.

The maximum unnecessary financial risk to residents, then, will be posed by the city itself under this plan.