On March 26, 2015, Deffenbaugh Disposal became a subsidiary of Waste Management. Since that acquisition, Deffenbaugh has been working to harmonize our operations, systems and business practices more closely with those of the Waste Management family of companies. One part of that harmonization is an improvement to Deffenbaugh’s disclosures and customer notifications. As part of the settlement of a class action based on Deffenbaugh’s alleged business practices prior to WM’s acquisition, Deffenbaugh agreed, subject to the final approval of the U.S. District Court of Kansas, to make certain changes to Deffenbaugh’s practices to make it easier for commercial customers to make informed contracting decisions when choosing a service provider or to exercise their contractual rights under their existing Service Agreements. In particular, with the Court’s approval, Deffenbaugh agreed that going forward it would: : (a) publicly post descriptions of the various Fees on the Company website; (b) publicly post a table for the Fuel Charges so that actual or prospective customers can ascertain their expected Fuel Charges for any given national average price of diesel fuel according to the U.S. Department of Transportation website; and (c) provide written notice in advance of, or contemporaneous with, any proposed Rate Increase, along with contact information should a customer desire to speak with a customer service representative.” These improved notification practices are in accord with Waste Management’s existing practices.
INVOICE CHARGES
Fuel Charge:
Historically, Deffenbaugh charged commercial customers a combined Fuel/Environmental charge that was calculated in a manner that was not disclosed to customers and not directly linked to changes in a published diesel fuel price index. Transition to the WM fuel index will provide transparency and predictability of fuel charges based on diesel prices published on a government administered publically accessible index. In the first quarter of 2017, all customers receiving the Deffenbaugh fuel charge will be transitioned to the WM fuel index. At current diesel fuel prices as of the fourth quarter of 2016, this fuel surcharge is approximately 10% of the monthly base charge, and this transition is designed to be cost-neutral relative to Deffenbaugh’s current pricing structure.
Environmental Charge:
Historically, Deffenbaugh charged commercial customers a combined Fuel/Environmental charge that was calculated in a manner not disclosed to customers. Transition to the WM environmental charge will provide a description of the amount and purpose of the charge and over time, will allow the environmental costs associated with the Deffenbaugh business to be administered under the WM company-wide environmental charge program. The WM environmental charge is a recurring charge and typically is a fixed percentage of all non-tax invoice charges. The environmental charge is typically combined with the fuel charge and invoiced as one line item. In the first quarter of 2017, for all customers receiving the Deffenbaugh Fuel/Environmental charge, the environmental portion of the charge will be transitioned to the Waste Management environmental charge. In most circumstances, the typical Deffenbaugh customer will be paying approximately 8%. Our intention is to make this change cost neutral to you in the month of transition.
Impact Fee:
In March 2011, the City of Shawnee passed Ordinance 2986 which imposed a landfill Impact Fee on the continued operation of Johnson County Landfill. This fee is passed through as a separate invoice charge of $2.24 per ton for rolloff and disposal service or $0.2283 per yard for commercial service. Customers not currently assessed the impact fee will receive this charge in 2017.
Administrative Charge
The administrative charge is a recurring charge, currently at $6.50 per invoice. The administrative charge covers the cost of generating paper invoices and processing payments. Manual invoice and payment charges are consistent with best practices across this and other industries as a method of driving downs costs through automated payments and paperless billing, which also has a positive impact on the environment. Customers can eliminate this charge by signing up for automatic, pre-authorized payment and paperless billing through My Account on wm.com. Customers benefit from automated, pre-authorized payment and paperless billing by saving the time and money required for postage to mail the payment. In addition, customers can rely on the on time, hassle-free processing of their payment.
For additional information about the WM Fuel and Environmental Charge, please see http://www.wm.com/fec.jsp. It is Waste Management’s intention over time, to migrate all Deffenbaugh customers to the standard WM fuel and environmental charge.