Last month, the overall costs of goods and services purchased by local governments decreased 0.2 percent, according to American City & County’s Municipal Cost Index. The February 2012 Municipal Cost Index value of 223.4 is 3.5 percent higher than last year.

Most items tracked by American City & County showed only slight price changes in the last month. The largest increase was seen in iron and steel scrap, which increased 6.6 percent in one month. Iron ore showed the next largest increase at 5.5 percent.

Notably, fuel prices showed the greatest price decreases in the last month among the items tracked by American City & County. Natural gas was down 4.6 percent, and it is down 19.3 percent since last year. Diesel fuel dropped 3.8 percent last month, but it is up 20.2 percent since last year. Gasoline decreased 2.3 percent in the month, but is up 13.1 percent over last year. Home heating oil prices have increased 21.6 percent since last year, which is the greatest increase of all items tracked by American City & County.

The Municipal Cost Index, developed exclusively by American City & County, is designed to show the effects of inflation on the cost of providing municipal services. State and local government officials rely on American City & County's Municipal Cost Index to stay on top of price trends, help control price increases for commodities, make informed government contract decisions and intelligent budget planning. Since 1978, readers have loyally referred to the Municipal Cost Index to determine the cost of inflation and, hence, the rising cost of doing business as a local government.

American City & County’s Municipal Cost Index for February 2012 and a complete archive since 1978 is available now at americancityandcounty.com/municipal-cost-index.