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Fiscal Year 2026/27 Preliminary Budget
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Requested Action(s)
recommendation
Review and approve the preliminary FY 2026/27 Budget, as presented.
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Financial Impact:
As listed.
Background Information:
Attached is the recommended preliminary budget for fiscal year 2026/27.
Below is a description of major revenues and expenses:
Income
The proposed FY 2026/27 budget utilizes the following revenue sources and would result in a contingency of $58,533.40 (6.20%):
- Interest (440300) income is relative to federal interest rates. The Agency follows the guidance provided by the Tehama County Auditor-Controller for the purposes of budgeting interest income. The recommended interest rate has not yet been released, so the preliminary budget is based upon a 2% interest rate.
- Gate Fees (461001) have been budgeted based on a flat fee. Even though several expenses are projected to increase over FY 2025/26 due to changes listed in this narrative, staff is recommending decreasing the monthly fee to $62,000. FY 2025/26 resulted in anticipated increases in expenses related to the closure of the Corning Household Hazardous Waste Facility and transitioning the 4R Kids Exhibit to the trailer. As those projects will be completed in FY 2025/26, the Agency can decrease several expense categories.
- Hazardous Waste Fees (461005) includes PaintCare reimbursements for managing paint reuse. A small amount of revenue is also attributed to hazardous waste fees from Very Small Quantity Generators (VSQG).
- Miscellaneous Revenue (471120) generally includes grazing lease fees, and other small amounts of revenue.
- Interfund Revenue (461070) is reimbursed salary/wages for direct labor on grant-related work.
Expenses
- Salary/Wages (510100), Overtime (510120), PERS (510200), OASDI (510210), Group Insurance (510300), and Unemployment Insurance (510310) take into consideration normal step increases at anniversary dates and the current employer PERS contribution rate.
- Pay in Lieu/Misc Payouts (51015) - Of current Agency staff, one staff member elected to receive payment for accrued vacation or Personal Time Off.
- PERS Unfunded Liability and ADP Misc PERS Unfunded are the Agency’s portion of the PERS unfunded liability, currently at $37,521 for FY 2026/27, and an additional discretionary payment to pay down the unfunded PERS loan balance faster. There will be some fluctuation in the Agency’s annual payment as it is based upon the prior year’s actual PERS payroll.
- Workers Compensation (510400) rates are expected to increase; however, the actual rate was unknown at the time this agenda item was prepared. As such, staff assumed a 10% increase over FY 2025/26.
- Property, Crime, Liability, and Pollution Insurance (531500) includes an anticipated 10-25% increase in property, crime, liability, and pollution premiums over FY 2025/26. A more accurate figure will be available in June.
- Maintenance of Equipment (53170) includes typical maintenance of equipment.
- Maintenance Structures-Improvement of Grounds (53180) takes into consideration the cost of maintaining the fire suppression systems at the Agency’s Household Hazardous Waste facility.
- Membership and Dues (53200) includes membership to the Rural Counties’ Environmental Services Joint Powers Authority, Solid Waste Association of North America, California Association of Recycling Market Development Zones, California Product Stewardship Council, Red Bluff-Tehama County Chamber of Commerce, and Corning Chamber of Commerce.
- Misc Expense (53210) is budgeted at $16,000. This expense account is utilized for Board per diem compensation for meeting attendance.
- Office Expense includes typical office supplies. This has decreased since the copier lease has ended and the Agency now owns that equipment.
- Professional/Special Services (53230) is proposed to be budgeted for $82,010. Expenses to be funded through current year franchise fees include attorney fees, independent audit costs, use of personnel at the Tehama County Auditor-Controller’s office for various accounting services, and an administrative fee pursuant to the agreement between the Agency and the County. The administrative fee between the Agency and the County increased slightly in FY 2026/27 but may need to be increased again once Tehama County completes their fee study and amendments to the MOU are completed. Below is an itemized breakout of budgeted expenses:
FY 25/26 FY 26/27
Attorney Fees $15,000 $15,000
Accounting Services Agreement $10,000 $10,000
Administrative Fee $24,246 $26,010
Audit $23,000 $23,000
Lawrence & Associates $10,000 $1,000
Miscellaneous $2,000 $1,000
Janitorial Services $6,000 $6,000
Total $90,246 $82,010
- Special Departmental Expense has decreased from the FY 2025/26 budget as the Agency finished transitioning the 4Rs Kids Exhibit from the bus to the trailer.
- Employee Travel/Training and Transportation (53290 and 53291) includes typical travel, training, and fuel costs. Training costs are expected to decrease slightly for FY 2026/27 as most can be covered under current grants. While fuel costs are rising, the Agency has decreased our travel miles due to the sharps mail-back program becoming more successful requiring less trips to service our sharps kiosks.
- Utilities (53300) reflect anticipated costs for PG&E, Hue & Cry, and fire alarm maintenance, monitoring and testing.
- Hazardous Waste Disposal (558007) is proposed to be budgeted at $170,000. This reflects the newest rate increase proposal to the current agreement for services, detailed in a separate agenda item.
- Litter Abatement/Illegal Dumping funds illegal dumping on roads outside of Baker and Plymire and supports AB 109 illegal dumping clean-up costs in the community. Pursuant to the Agency’s policy, $12,000 is allocated to PATH and the remainder is available to fund waste disposal resulting from cleanups on public land.
Impact of the Proposed Changes on the Tipping Fee
Per Section 6.B.1 of the Landfill and MRF Operations Agreement, if the cost to operate the Agency is more or less than the fee paid to the Agency on an annual basis, the Agency reserves the right to raise or lower the fee as necessary, and will notify Waste Connections by April 15th of each year. As reported previously, the Agency has an unrestricted retained earnings balance that would allow the Agency to operate without any revenue for more than one fiscal year. As such, staff is proposing to decrease the gate fee for FY 2026/27 to $62,000 per month. This would reduce the Agency’s portion of the tipping fee by about $1.61/ton or $0.25 of the minimum fee. As a reminder, the JPA Fee is only a small portion of the tipping fee. Other impacts to the tipping fee include annual CPI adjustments, the new agreement incentivizing diversion from the landfill and compaction of waste by the contractor, the closure/post-closure trust fund fee, the Phase III permitting fee, and the cell liner trust fund fee.