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Newport Beach

Volume 7, Issue 6  |  January 21, 2022


Council approves recycling fee increase, waives license tax for businesses closed due to COVID

By SARA HALL

Residents will be paying a few more dollars each month for the recycling service fee following a City Council decision this week.

After a public hearing about the rate increase, council voted 5-1, with Mayor Pro Tem Kevin Muldoon dissenting and Councilmember Marshall “Duffy” Duffield absent. The clerk received 10 protest letters.

The increase is meant to partially offset additional costs of meeting new state mandates. California state law requires that every household, business and multifamily property recycle their organic waste beginning Jan. 1, 2022. 

City approves CR&R truck

Click on photo for a larger image

Photos by Sara Hall

The current $3 per residential unit per month recycling service fee (excluding Newport Coast) generates about $970,000 in annual revenue. The new rate will increase revenue by an additional $1.36 million.

For most Newport Beach households, the fees would increase from $3 a month to $6.28 a month. Households in the Newport Coast area, which do not currently pay a recycling fee, would pay $5.86 per month. 

“There is a finite capacity in landfills, that’s what’s driving all of this,” said Councilmember Diane Dixon, “and state mandates are unavoidable.”

If the city doesn’t comply there could be significant fines, several council members pointed out.

“No one likes to see any kind of fee increase,” Dixon said.

This will recover a portion of the cost to the city for implementing a more expensive type of post-waste treatment, she said, but it will ensure that the city handles waste in the most responsible manner possible. 

“For just the minor cost of half a pizza, we will bring the city of Newport Beach into compliance with modern waste handling techniques with minimum inconvenience and service to our residents,” Dixon said. 

Most cities in Orange County have been on this organics system for many years, said Public Works Director Dave Webb. Some municipalities are on a two-cart system, but many are moving toward three carts. 

“We’re basically catching up with the rest of the county in the way we recycle our material,” Webb said.

The recycling service fee was first implemented in 1990 to recover added operational costs incurred by the city. Since the last update in 2009, operating costs have continued to increase. 

State laws continue to increase the amount of material required to be recycled, which increases the cost of the program, explained Public Works Deputy Director Micah Martin.

The current $3 per residential unit per month (excluding Newport Coast) generates about $970,000 in annual revenue. The new rate will increase revenue by an additional $1.36 million.

The fee study calculation is based on operational costs to collect and process recyclable materials, Martin said.

Council approves trash bins

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The current residential black trash bins

After Tuesday’s approval, the new fees (per residential unit per month) are $5.86 for the Newport Coast area and $6.28 for the rest of the city. Both would have annual Consumer Price Index increases moving forward, Martin noted.

The reason for the two different fees comes down to two different service areas and two separate contracts, Martin said. The city contract covers more residential units in a larger area that pulls more recyclable material. 

On Jan. 1, 2002, the city of Newport Beach officially annexed Newport Coast from Orange County, and on Feb. 12, 2002, the city continued providing the refuse collection services as a separate contract. At the time, the recycling fee was not updated to incorporate the Newport Coast refuse contract.

“This is not something you will see again, in terms of having two different fees that are affecting two different parts of our city, assuming that we end up agreeing to one master contract with CR&R sometime this year, which is the intention,” said Councilmember Will O’Neill, whose district covers Newport Coast. 

The recycling service fee is a cost-of-service fee based solely on recovery of the operational costs associated with collection of recyclable materials in accordance with state mandates. Each fee rate is based on the annual contract costs, the diversion rate for recyclable material vs. landfill, the number of households subject to the fee, and city staff time related to contract management and program administration.

State laws are changing and raising the amount of diversion the city has to pull out, Webb said. They need to get more of the recyclable material (aluminum, bottles, etc.) out of the waste stream and not put it in the landfill, he explained, which changes the way it’s processed.

Currently, CR&R picks up both the blue and black containers. 

The black bins go to the “dirty MRFs” (Materials Recovery Facility), which accepts comingled materials (trash, compost, solid waste, etc.). They try to take what they can out of the mixture and everything else goes to the landfill, Webb said.

The blue bins are a lot more efficient to recycle because it’s been pre-sorted by residents and will go to a “clean MRF.”

Technology is heading more toward clean MRFs and cities are doing away with dirty MRFs, Webb said.

“So, when you put stuff in your black can, all that stuff is going to go right to the landfill now,” Webb said. “We need to separate into different cans so that we put it into clean MRFs, and there are costs associated with that.”

If all material was put in the black bin and taken directly to the landfill, the cost would be lower. But because the state requires it go to a facility for processing first, that increases the average rate. 

“There’s an added cost to just not dump it in the landfill,” he said. “And that’s only going to get even more stringent.”

It’s required by a state that the organic material is pulled out and no longer goes to the landfill, Webb said, so the city is adding a green bin. 

Organics recycling is mandated by the state to reduce the volume of waste transported to landfills and reduce greenhouse gas emissions from organic waste decomposition. 

Organic waste includes food waste, green waste, landscape trimmings, non-hazardous wood waste and food-soiled compostable paper.

“(Those are) the changes we’re trying to deal with,” Webb said.

Council approves Marine Ave

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Businesses line Marine Avenue on Balboa Island

Also on Tuesday, council unanimously approved a one-year waiver of business license tax renewal for businesses required to close by order of the state of California.

Council voted 5-0, with Councilmember Noah Blom recusing himself due to a business conflict.

He’s seen the struggle from local business owners, Mayor Brad Avery said. As a customer – and friend to many business owners – he appreciates their role in the city. 

“Small businesses are so important to the fabric of our town,” Avery said. “This is just another effort by the city of Newport Beach to support our small businesses.”

The program will be implemented on a rolling basis starting on April 1 and would run through March 31, 2022, explained Finance Director Scott Catlett. As businesses renew their license, they would be eligible for the deferral. 

Considering the state’s various orders over the past year, city staff identified the businesses they believe would have been impacted based on the codes provided to the city. Eligible business categories include restaurants and bars, department stores, bakeries, dance studios, child care services, tour operators, hair and nail care, gyms and stores that sell furniture, jewelry, clothing, shoes, or books.

The program also includes an appeal process for businesses that had to close but aren’t on the list.

There are about 25,000 total businesses licensed in the city and staff identified 1,850 commercially based businesses that would be eligible.

There has been a substantial interruption to local businesses over the past year, O’Neill said. This is a good example of how the city can help, he said.

“(This will ensure) that our businesses see some relief as we move forward into this coming year,” O’Neill said. “(We’ll) hopefully continue to see our businesses survive and…thrive as well.”

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