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1. What is a fuel surcharge?
A fuel surcharge is a  transportation industry standard to cover costs when the cost of gas goes beyond a certain point. In the last few years, gas prices have gone higher than we ever thought they would. Therefore, it is a very real possibility that the fuel surcharge may become applicable.

2. Does RIDES have a fuel surcharge?
Yes, we do. As agreed to in our contract, ProMed will surcharge us if/when gas reaches $5.01 or more per gallon.

3. Why such a high price?
Dealing with a surcharge is a headache for all involved. Since MCLS bills you annually for your delivery service, figuring out how to bill for such a fluctuating number is a challenge.

4. How is the charge determined?
We will use a sliding scale. A monthly average will be calculated, based on the average weekly price of gas as reported by AAA of Michigan fuel gauge index:
http://www.fuelgaugereport.aaa.com/

Average price per Gallon    Surcharge %
 
$5.01        to       $5.20          10.00%
$5.21        to       $5.40          11.00%
$5.41        to       $5.60          12.00%
$5.61        to       $5.80          13.00%
$5.81        to       $6.00          14.00%
$6.01        to       $6.20          15.00%
$6.21        to       $6.40          16.00%
$6.41        to       $6.60          17.00%
$6.61        to       $6.80          18.00%
$6.81        to       $7.00          19.00%

5. How will this be billed?
If the fuel surcharge becomes necessary, MCLS will invoice once every 6 months. For example, if the price of gas is between $5.01 and $5.20 for six months, a library who receives delivery 2 days per week will be charged $60 -- the yearly cost ($1,200) divided in half ($600), then multiplied by 10%. The average gas price for the previous six months (if at $5.01 per gallon or higher) will be used to calculate the percentage surcharge.

6. Why bill every six months? Why not just add the surcharge to next year's bill?
Several options were considered for billing the surcharge, including monthly, quarterly, semi-annually, and annually. Monthly and quarterly invoices would be very labor intensive, especially considering the small amount many libraries would see on the bill, and is not cost effective. Annual billing could prove to be quite onerous for libraries. Semi-annual billing seems to be our best alternative.