Durango residents will likely see a 2.5% rate increase for trash and recycling collections next year, and that could increase to 5% in following years to keep up with rising costs.
Durango City Council was presented with the final iteration of a trash and recycling rate study conducted by Kessler Consulting Inc. on Tuesday at the council’s study session.
While no decision was made, councilors all agreed to move forward with the study’s suggestions to raise rates. A 2.5% increase equates to a 42 cent raise in monthly cost for the average resident who pays for a 90-gallon container.
The study revealed that if rates are not raised, the cost to fulfill waste management services will exceed the revenue collected in the next couple of years. The projected cost of trash and recycling services in Durango in 2021 is $3.1 million, but the study suggests the cost of providing services could go up by as much as $1 million by 2025.
According to the study, without changing rates the city will see a significant drop in its reserve funds beginning in 2023.
Ideally, trash and recycling operations should be banking 25% of its revenue for future costs and capital investment projects. The city currently meets those requirements, but can’t maintain current levels of savings with out increasing fees.
“Our reserves are going to be dropping. So the reserves that we have now are going to be diminished,” said Durango Mayor Kim Baxter.
Rates have not increased in the last two years, even though fuel prices and cost of living have gone up.
“It’s hard to ignore the cost of gas, and the cost of everything,” said City Councilor Jessika Buell. “I don’t want the city to be in a sticky situation in our future. So I’m supportive of the way were heading with that minimal increase.”
Staff members said the city did not raise rates during the past two years mainly because of COVID-19.
A significant cost the city is expected to incur in the near future includes a new baler. The current baler will be past its useful life in 2025. Higher demands for commercial trash services require an additional truck be purchased and added to the fleet within the next two years.
“If we keep our current rates and we have to buy the new truck and the new baler, I see it being between 2024 and 2025 we actually go into the negative,” said Levi Lloyd, director of city operations.
Council also discussed the possible need for a new recycling transfer facility in the near future as a result of increased population, but at this time, the potential rate increase is not being considered as a revenue stream for a new transfer facility.
njohnson@durangoherald.com
