HomeMy WebLinkAbout09 - Continuance of Franchise Termination Proceeding for Key Disposal & Recycling, Inc. to the May 14, 2024 City Council MeetingQ �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
April 9, 2024
Agenda Item No. 9
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David A. Webb, Public Works Director - 949-644-3311,
dawebb@newportbeachca.gov
PREPARED BY: Charles Springer, Senior Management Analyst - 949-718-3466,
cspringer@newportbeachca.gov
TITLE: Continuance of Franchise Termination Proceeding for Key Disposal
& Recycling, Inc. to the May 14, 2024 City Council Meeting
ABSTRACT:
On March 26, 2024, the City Council held a hearing to consider terminating the
non-exclusive commercial solid waste franchise agreements (2020 Franchise
Agreement) with Haul -Away Rubbish Service Co. and Key Disposal & Recycling, Inc.
Following the hearing, the City Council introduced Ordinance No. 2024-07, and
proceeded with staff's recommendation to terminate the Haul -Away Rubbish Service Co.
Commercial Franchise agreement. Additionally, at this hearing, the Council provided Key
Disposal with a continuance of its franchise termination proceeding to the April 9 City
Council meeting in order to provide the contractor additional time to remedy outstanding
non-compliance elements. City staff is now meeting with Key Disposal & Recycling, Inc.
to look into remedying its non-compliance elements. In doing so additional time will be
required to warrant sufficient review of compliance efforts. Staff requests continuing the
Franchise Termination Proceeding for Key Disposal & Recycling, Inc. to the May 14, 2024
City Council meeting should a new ordinance for termination need to be introduced.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Continue the franchise termination proceeding for Key Disposal & Recycling, Inc. to
the May 14, 2024 City Council meeting.
DISCUSSION:
The City of Newport Beach utilizes a non-exclusive commercial franchise waste hauling
system for the collection of municipal solid waste, recyclables, organic waste and
construction and demolition debris. On October 22, 2019, the City Council approved a
model agreement amending the Non -Exclusive Commercial Solid Waste Franchise
Agreement (2020 Franchise Agreement) to include explicit State of California diversion
compliance requirements and revised insurance requirements for franchisees.
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Continuance of Franchise Termination Proceeding for
Key Disposal & Recycling, Inc. to the May 14, 2024 Council Meeting
April 9, 2024
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As of April 9, 2024, there are 22 commercial waste haulers authorized to operate within
Newport Beach under the 2020 Franchise Agreement. Prospective hauling firms undergo
a rigorous review and approval process to become franchise haulers. Once approved,
franchise haulers can provide fixed route and/or temporary waste collection and diversion
services to clients within the city. Franchise haulers are also subject to ongoing reviews
by City staff for 2020 Franchise Agreement compliance.
Moreover, CalRecycle, the State agency responsible for managing statewide recycling
and waste management programs, has placed Newport Beach under a Corrective Action
Plan (CAP) due to deficiencies in meeting waste diversion requirements established by
AB 341, AB 1826 and SB 1383 — all legislative pieces intended to establish and meet
statewide waste diversion targets for organics, green waste and food scraps, as well as
recyclable waste. Under the CAP, the City is required to demonstrate "significant
progress" in meeting the waste diversion requirements established by the legislation.
Key Disposal & Recycling, Inc.
The City issued a Notice of Default to Key Disposal & Recycling, Inc. on February 26,
2024, informing the waste hauler it failed to comply with 10 terms of the 2020 Franchise
Agreement. The waste hauler failed to rectify these deficiencies to the satisfaction of the
City, or at all, in the period allotted by the Notice of Default, as well as failed to appeal the
Notice of Default within 10 days of issuance, per Section 23.0 of the 2020 Franchise
Agreement. On March 8, 2024, the City issued a Notice of Intent to Terminate Key
Disposal & Recycling, Inc., informing the firm of a public hearing concerning its
termination from the 2020 Franchise Agreement, pursuant to NBMC Section 12.63.140.
This hearing was conducted at the March 26, 2024 City Council meeting. After hearing
from the owner of Key Disposal, the City Council suggested Key Disposal & Recycling,
Inc. be afforded until April 9, 2024, to gain compliance with unresolved elements listed in
the Notice of Default. In working to resolve these outstanding issues, City staff and Key
Disposal require additional time to review and/or try to resolve the non -compliant items.
Staff requests the City Council further continue this item until the May 14, 2024 City
Council meeting.
FISCAL IMPACT:
Key Disposal & Recycling, Inc. represents a single account, and nominal revenue loss is
anticipated should this Commercial Franchise be terminated.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
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Continuance of Franchise Termination Proceeding for
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April 9, 2024
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NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
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