STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 8, 2026
TO: Mayor and Members of the City Council
VIA: Patrick Tang, Interim City Manager
SUBMITTED BY: Mike Roberts, Interim Public Works Director SUBJECT: Proposed Amendment to the Joint Exercise of Powers Agreement forming the West Contra Costa Integrated Waste Management Authority (Joint Powers Authority) to Change the Authority Fiscal Year to January 1 - December 31 beginning in 2027 RECOMMENDED ACTION:
The City Council is requested to approve the Resolution authorizing the Mayor to execute the amendment to the Joint Exercise of Powers Agreement to change the Fiscal Year from July 1 - June 30 to January 1 - December 31, commencing January 1, 2027.
BACKGROUND:
The Authority’s Fiscal Year (FY) is July 1 through June 30. Section 1.7 of the JEPA defines Fiscal Year as July 1 through June 30, and section 8.8 requires the Authority Board to adopt a Fiscal Year budget by June 30. The proposed budget is typically presented to the Board of Directors for review and consideration at the May Board meeting, prior to consideration for approval at the June Board meeting. However, the rate setting process under the Post-Collection Agreement (PCA) is on a calendar year schedule.
The Authority Board of Directors adopted the Authority’s fiscal year 2026-2027 operating budget on June 11, 2026, per approving Resolution No. 26-14. In addition, the Board also approved Resolution No. 26-12 on June 11, 2026, directing the Executive Director to ask the Member Agencies to consider executing the amendment to change the fiscal year.
ANALYSIS:
Changing the Authority’s fiscal year intends to eliminate issues associated with having the approval of the Authority Budget and the Post-Collection Agreement (PCA) rates on different schedules. Since the Authority fiscal year commences on July 1 each year, the JEPA requires the Authority Board to pass its annual budget prior to June 30 annually. However, adopting a budget in June makes it hard to assess the rate impact for the following year, since the rates associated with the PCA and the City’s Collection Services Franchise Agreement with Richmond Sanitary Service are not calculated and approved until the October/November/December timeframe and then become effective on January 1.
The Authority’s budget is funded by ratepayer fees tied to the volume of solid waste, compost, and recycling collected by its Member Agencies haulers and delivered to the PCA contractor for processing and disposal. Tose fees cover the Authority’s budget, its Household Hazardous Waste Program, the PCA contractor’s expense, and regulatory fees.
The Authority approving a budget in June, when the primary revenue source (the PCA rates) is not increased until January 1, can inherently result in a deficit in necessary revenue for the July 1 through December 31 period. Because rates are not adjusted until January 1, the rates funding the budget are aligned for only six months of each fiscal year.
Rate revenue is also variable, since it depends on tons delivered to the PCA service provider (i.e., fewer tons results in less revenue). This potential disparity can increase the July to December deficit. For the fiscal year ending on June 30, 2026, the Authority experienced budget deficit of approximately $173,000 as a result of the difference between the adopted budget and projected year-end revenue.
Staff is requesting the City Council to direct the Mayor to execute the amendment to change the Authority’s fiscal year from July 1 through June 30, to January 1 through December 31, commencing January 1, 2027. This change will require simple revisions to the JEPA that must be approved by the governing body of each Member Agency in order for the change to become effective. If all of the Authority’s Member Agencies approve the revision before October 2026, Authority staff will notify its Board of Directors of the change to the fiscal year and present a restated budget for fiscal year 2027 budget (January 1 – December 31, 2027) that will align the budget decision making with the 2027 rate setting cycle.
A summary of the key rationale to change to the Authority’s fiscal year includes the following:
Enable City staff to present information to the City Council that is necessary to understand the complete rate impact on ratepayers of establishing rates for both collection services and post-collection services during the City’s annual rate-setting process each fall for rates effective on January 1 the subsequent year.
Provide the Authority Board the opportunity to understand the estimated rate impact of the Authority’s operating budget during the rate setting process.
Provide the Authority Board the opportunity to understand all components of the Authority’s post-collection rate (PCA expense, HHW Program expense, regulatory fees, and Authority operating budget) when reviewing and considering the budget.
Provide Authority staff the opportunity to propose a budget that includes a revenue projection based on the best available information and is tied to the actual rates charged to ratepayers for the full subsequent calendar year.
Redline Revisions to JEPA Sections
The amendment to the JEPA required to change the Authority’s FY is limited to revising sections 1.7 and 8.8. The proposed redline revisions to these sections are as follows:
ENVIRONMENTAL REVIEW:
The amendment to the JEPA is not a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15378 as it is an administrative action that will not result in a direct or indirect impact to the environment.
FISCAL IMPACT:
There is no fiscal impact associated with the recommendation.
ATTACHMENTS:
Attachment 1 - Resolution to Approve a JEPA Amendment to Change the Authority Fiscal Year to January 1 - December 31 beginning in 2027 Attachment 1, Exhibit A - First Amendment to the Fifth Amendment and Restatement Joint Exercise of Powers Agreement
Attachment 2- West Contra Costa Integrated Waste Management Authority Resolution No. 26-14 approved on June 11, 2026