POLICY & PROCEDURE NO. 170
Target Cost Recovery Levels
Based on these policy statements, the following table overlays certain cost recovery levels grouped in low (0- 40%), medium (40.1% to 80%), and high (80.1% to 100%) cost recovery ranges. It is important to note that these groupings provide policy guidance and are not absolute. Some policy statements may weigh more heavily than others, which may result in a different cost recovery level grouping for particular fees. For example, fees for recre- ational activities are expected to be set in general at the medium cost recovery level. However, fees for recreational activities for which there is high demand may have a high cost recovery level due to high enrollment levels per class. It is important to note that User Fees and Charges will be reviewed at least biennially by the City Council as part of approval of the Master Fee Schedule.
Cost Recovery Levels Cost Recovery
Percentage Rate
Policy Considerations
(one or all may apply)
Low 0% - 40% • Public at-large benefits
• No intended relationship between fee
and benefit received
• Fee collection not cost effective would
discourage compliance
• No intent to limit use of service
• Affordability of service to low-income
residents
Medium 40.1% - 80% • Services share factors of both low and high recovery levels
High 80.1% - 100% • Individuals receive most of benefit of service
• Other alternative service providers
• Use is regulatory or specifically dis-
couraged
FINAL REPORT
City of Concord
Submitted electronically on October 22, 2020
submitted electronically: February 27, 2026
Review of MDRR Refuse Rate Index
Rate Adjustment Request
Attachment 3
414 13th Street, Suite 450, Oakland, CA 94612 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com Jeff Rayos, Administrative Services Manager
Public Works Department, City of Concord
1455 Gasoline Alley, Concord, CA 94520
submitted via email: [email protected]
SUBJECT: Final Report - Review of MDRR Refuse Rate Index Rate Adjustment Request
Dear Mr. Rayos:
R3 Consulting Group, Inc., was engaged by the City of Concord (City) to assist with a review of Mount Diablo Resource Recovery’s (MDRR) Refuse Rate Index (RRI) rate adjustment request for fiscal year (FY)
– 2026 – 2027 to ensure mathematical accuracy and reasonableness of MDDR’s request.
MDDR is requesting a 3.28% indexed increase, plus 6.26% for the 5-year Base Year Rate Adjustment, coming to a total increase of 9.54%. R3 concurs with the calculated rate increase and does not recommend any changes.
MDRR’s initial rate adjustment request was submitted to the City on January 27, 2026. The Rate Setting Process and Methodology Manual states that if MDRR fails to submit the financial information in the required format by January 31st of the application year, it is agreed that MDRR shall be deemed to have waived the RRI for that year.
R3 reviewed Mt. Diablo Resource Recovery’s rate application and confirmed that:
The correct indices were used;
It is mathematically accurate;
It is consistent with applicable terms and conditions of the City’s Franchise Agreement and the Rate Setting Manual; and
This final report presents the results of our review.
We appreciate the opportunity to be of service to the City. Should you have any questions regarding this report or need any additional information, please don’t hesitate to reach out directly.
Sincerely,
Libby Costello | Consultant Alex Soulard | Managing Consultant R3 Consulting Group, Inc. R3 Consulting Group, Inc.
917.557.9293| [email protected] 707.888.8693 | [email protected] February 27, 2026
City of Concord | Review of MDRR Refuse Rate Index Rate Adjustment Request Page 1 of 3 with the City of Concord for the collection of solid waste, recyclables, and organics. Commercial rates are adjusted as negotiated between MDRR and the commercial customers; however, maximum permissible residential rates are approved by the City Council pursuant to the requirements of the Franchise Agreement. The Franchise Agreement with MDRR contains a Rate Setting Manual, which describes the methodology for annual refuse rate adjustments and special extraordinary increases. The rate adjustment request is due from MDRR on or by January 31st of each year and is required to contain the following components:
》 Financial information, which is used to determine relative item weightings for each of the Refuse Rate Index (RRI) components; and
》 Calculation of the appropriate percentage change in each of the indexed categories.
These two main components are multiplied for each indexed category, resulting in a weighted percentage change, which are then summed to produce a total percentage change applied to each residential rate.
The City of Concord and MDRR previously agreed to rate increases as part of the Base Year Rate Application in 2021, which resulted in a 21.55% rate increase. Instead of accepting a one- time increase, the Council chose to accept an option that MDRR proposed that spread the increase over 5 years as follows:
》 9.76% increase in 2022
》 RRI plus 4.61% in 2023
》 RRI plus 4.61% in 2024
》 RRI plus 6.26% in 2025
》 RRI plus 6.26% in 2026
The requested 2026 RRI increase would thus be in addition to the scheduled increase of 6.26% in 2026 that represents year five of the Council-approved five-year implementation of the 2021 Base Rate Application. This scheduled increase was agreed to in 2022 to spread the MDRR’s 2022 special extraordinary request for rate adjustment over a five-year period. This year, 2026, will be the next applicable year for MDRR to submit a Base Rate Application to adjust for the rates that will go into effect in 2027.
Rate Adjustment Requests & Recommendations
MDRR’s request, made on January 27, 2026, calculated a rate adjustment of 3.28%, as shown in Table 1. MDRR used the 2024-2025 actual costs by category as per the rate adjustment methodology detailed in the Rate Setting Process and Methodology Manual for Residential Solid Waste Fees (Updated Manual, March 2019, or “Rate Setting Manual”). Using the various categories and indices specified in the Rate Setting Manual, MDRR calculated a weighted percent change of 3.28%. Table 1, on the following page, demonstrates MDRR’s initial rate application request, and Table 2 displays the current rates, new proposed rates, and the difference between the two.
FINDINGS
Background
Mount Diablo Resource Recovery (MDRR) has an exclusive franchise agreement (Agreement)
City of Concord | Review of MDRR Refuse Rate Index Rate Adjustment Request Page 2 of 3 Table 1 – MDRR Initial Submission
Item
# Index Category 2024 Costs by
Category
% Index
Change
Item
Weight
Weighted
Percentage
Change
1 CEU6056210008 Labor $15,841,483 4.89% 33.40% 1.63%
2 WPU057303 Motor Fuel $1,771,093 -12.61% 3.73% -0.47% 3 PG&E: Schedule G-NGV1 CNG $162,249 0.11% 0.34% 0.00% 4 WPU141301 Vehicle Replacement $1,484,718 4.47% 3.13% 0.14% 5 PCU336211336211 Vehicle Maintenance $2,621,531 3.57% 5.53% 0.20% 6 CUURS49BSA0 CPI All Items $11,942,741 2.15% 25.18% 0.54% 7 Nov '23 - Oct '24 vs. Nov
'24 - Oct '25 Disposal Fees $13,602,725 4.33% 28.68% 1.24% Total Allowable Expenses $47,426,540 100.00%
Franchise Fees $6,753,827
Total Expenses $51,266,641
Proposed Rate Increase 3.28%
Table 2: Proposed Monthly Rates for 2026-2027
(a) (b) (c) (b)+(c) (a)+(b)+(c)
RRI Scenario 4
(Year 5 of 5) 1 July 2026
Container Size/Type Current
Rates 3.28% 6.26% Subtotal New Rate (rounded to
nearest nickel) Difference
32 Gallon $54.31 $1.78 $3.40 $5.18 $59.50 $5.19
64 Gallon $73.42 $2.41 $4.60 $7.00 $80.40 $6.98
96 Gallon $90.04 $2.95 $5.64 $8.59 $98.65 $8.61
average increase $6.93
32 Gallon Senior-Low
Income $41.66 $1.37 $2.61 $3.97 $45.65 $3.99
Additional Recycling
Container $18.49 $0.61 $1.16 $1.76 $20.25 $1.76
Additional Green
Waste Container $18.49 $0.61 $1.16 $1.76 $20.25 $1.76
average increase $2.50
R3 reviewed the indices and the calculation methodology used in the MDRR application. R3
requested supporting documentation for disposal fees and expense allocations from MDRR, and MDRR provided the requested data on February 10th and 11th, 2026. R3 verified the figures in the documentation with those presented in the application.
R3 compared the
2024 expenses by category to those from 2023 and noted that the differences were minor, leading to only minor variations in the Item Weightings.
City of Concord | Review of MDRR Refuse Rate Index Rate Adjustment Request Page 3 of 3 The 3.28% rate increase is in addition to the 2026 rate increase “spread” of 6.26%, described above, resulting in a total rate increase of 9.54%. R3 recommends that the City authorize the collection rates as submitted by MDRR.
Attachment 4
Fee Schedule
Amendments
KYLIE HICKS -CARRERA, BUDGET ANALYST
APRIL 28, 2026
Agenda
❖Background
❖Brief overview of recommended fee increases
❖Requested action from Council
2
Background
Policy and Procedure 170 – Fee Setting Policy
❖Sets cost recovery goals
❖Provides policy guidelines for setting and updating fees and charges
❖Generally, fees adjusted by changes in labor costs
3
Summary of Proposed Changes
Proposed fee adjustments are driven by the following:
❖Department recommendations
❖Incorporate wage adjustments
❖Cost recovery
4
Proposed Fee Adjustments
❖ Recommended fee adjustments
▪Recovers $1.5 million in FY 2026-27
▪ This has been incorporated in the adopted FY 2026-27
operating budget
❖Proposed Amendments to Fee Schedule
▪ Attachment 1, Exhibit A
❖ Effective June 1 and July 1, 2026 depending on fee
5
Annual Sewer Service Charges
❖ Rates adopted by Council on June 6, 2023
❖ Increasing at rate set by Resolution No. 23-6042.2
6
Solid Waste Fees For Residential Uses
❖Components
▪Franchise Agreement establishes an annual increase tied to the Refuse Rate Index
▪In 2022 Council approved a five-year phase in for the costs of Organics (Food) Recycling—we are in the last year of this phase in 7
Recommended Action
❖Open Public Hearing
❖Take Public Comment on Proposed Fees and Charges
❖Close Public Hearing
❖Adopt a Resolution Amending Exhibit A to Resolution No. 78-6042
8
Questions?
9
April 16, 2026
The Honorable Jerry McNerney
Chair, Senate Revenue and Taxation Committee
State Capitol, Room 410
Sacramento, CA 95814
RE: SB 1408 (Arreguín) - Contra Costa Transportation Authority Dear Chair McNerney:
On behalf of the City of Concord, I am pleased to express our support for SB 1408 (Arreguín), which authorizes the Contra Costa Transportation Authority (CCTA) to seek voter approval for a local transactions and use tax.
Since 1988, the CCTA has served as a trusted steward of voter-approved funds, managing transportation sales tax programs and countywide planning. Through the previously approved Measures C and J, the CCTA has demonstrated a proven track record of delivering major projects that reduce commute times, boost the local economy, and implement sustainable transportation solutions. Despite these successes, our county faces persistent transportation challenges. Many residents endure long commutes and heavy congestion on major corridors, and it remains difficult for many - especially seniors, students, and low-income individuals - to move freely and safely throughout the county and region.
SB 1408 is a critical mechanism for ensuring that Contra Costa County can continue to plan, fund, and implement the transportation projects and programs our residents need. This legislation is essential for creating a safer, further connected, and more accessible system for everyone.
The City of Concord respectfully urge your support for SB 1408. If you have any questions, please contact Justin Ezell, Assistant City Manager, at (925) 671-3155.
Sincerely,
Laura M. Nakamura
City of Concord Mayor
cc: Senator Timothy S. Grayson
Assemblymember Ávila Farías
Concord City Council
City Manager Valerie Barone
Assistant City Manager Justin Ezell
Community Relations Manager Colleen Awad
Concord City Clerk Joelle Fockler
League of CA Cities, East Bay Division Sam Brightman
Meg Desmond, League of California Cities, [email protected]
7.a
7.b