Bottle Bill Battle Continues as Good Life Grocery Threatened with Steep Fines

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Over the past three years, the View has reported on The Good Life Grocery’s efforts to comply with the State’s “Bottle Bill,” the California Beverage Container Recycling and Litter Reduction Act, or CalRecycle, passed in 1986. Kayren Hudiburgh, co-owner of the store, which has locations on 20th Street and in Bernal Heights, thought the state would waive a $100 a day fine for not providing onsite bottle and can redemption services when a recycling center opened near the neighborhood last summer, fulfilling the requirement to have a redemption option in each of the City’s 58 “convenience zones.”

Under the Beverage Container Recycling Act, San Francisco is divided into convenience zones that must be “served” by a recycling center within a half-mile radius. If a zone is “unserved” for 60 days, beverage retailers either have to function as a redemption center or pay fines. Our Planet Recycling, LLC, whose main center is located at 531 Bayshore Boulevard, had opened a smaller outfit at 250 13th Street, that subsequently closed in a matter of months.

“It was financially difficult,” said Ors Csaszar, owner of Our Planet Recycling. “People were using the site, and there was more and more traffic every day, but we couldn’t keep up with payroll.”

An Our Planet Recycling employee explained that the 13th Street location didn’t have the necessary client base, and was dependent on subsidy payments from CalRecycle, known as “handling fees.” CalRecycle made disbursements, but the monies didn’t arrive soon enough to prevent the center from closing. Csaszar hopes that efforts by state and local agencies will result in financial assistance sufficient to reopen and maintain the 13th Street center. Last August, Csaszar told the San Francisco Chronicle that it’s difficult to keep both his Bayview and South of Market recycling businesses up and running.

Kelly McBee, policy analyst at Californians Against Waste, said that cheap oil prices have made plastics manufacturing inexpensive, contributing to a decline in scrap value. The worth of recycled materials has also dropped as a result of changes in glass and metal container manufacturing practices, and due to Chinese restrictions on solid waste imports.

The decline in scrap prices has been a blow to the financial solvency of recycling centers, with 1,000 closing in California since 2013. In response, the state issued an emergency regulatory action last fall to “establish fixed reasonable financial returns for urban and rural recycling centers for the 2018 calendar year.” The timing was too late to save Our Planet Recycling’s 13th Street location.

According to Californians Against Waste, the Bottle Bill legislation has been one of North America’s most successful recycling and pollution reduction programs, with 362 billion beverage containers recycled since 1987. However, McBee commented that the law has become outdated and burdensome to local grocers. The closing of recycling centers has also negatively impacted homeless individuals, who had depended on income from cashing in bottles. Californians Against Waste reported that the state’s container recycling rate has dropped below 80 percent for the first time since 2008, equivalent to 1.7 million containers winding up in landfills or as litter-pollution daily.

McBee cited the 13th Street center’s opening as “a big deal;” its existence had caused a 10 percent jump in San Francisco’s convenience zones served by a beverage container recycling center. Although dismayed by the closure, McBee is hopeful about recently passed Senate Bill 458, introduced by Senator Scott Weiner, which mandates that mobile recycling centers be deployed to bring recycling services to underserved areas across the state, including in San Francisco. CalRecycle is currently working on implementing the program.  An Informal Rulemaking Stakeholder Workshop: SB 458 Pilot Projects Emergency Regulations, was held last month to discuss operational issues. McBee also mentioned the possibility of new legislation being introduced shortly to help “mom and pop” stores with Bottle Bill requirements.

According to Anna Avoyan, district representative for Senator Weiner, there are 3,000 to 4,000 stores in California that are in a situation similar to The Good Life Grocery, lacking the capacity to serve as a redemption center and struggling to afford the fines. She said that CalRecycle is adamant that the penalties levied on these grocers are valid, and that there’s no legal basis to alleviate the resulting financial burden. A CalRecycle employee told a View reporter that, “There should be some modifications put in place to look out for the little guys.” An automatic phone message from CalRecycle directed at callers inquiring about Bottle Bill fine invoices states, “We anticipate a large volume of calls related to invoicing.”

In February, Hudiburgh received a past due notice from CalRecycle for $18,100. Last June, Hudiburgh had secured an “Exemption Approved Notice” from the agency due to the establishment of Our Planet Recycling’s 13th Street location.  However, with closure of the recycling service, Hudiburgh was provided with an “Exemption Revoked Notice” in February, indicating that $3,000 was owed from June 2017, despite the recycling center’s operating at that time. According to a CalRecycle statement, The Good Life Grocery has a 60-day grace period before another notice is sent. CalRecycle operates in accordance with State Administrative Manual 8776.6 and Government Code Section 16580-16586 regarding debt collection.

“Our financial statements show that the Potrero store has not made a profit this fiscal year,” Hudiburgh stated. “We are holding on, but it is a struggle. We pay our bills and taxes on time. Our 20 employees get two bonuses a year in addition to their salaries plus health care and stock ownership. We give back generously to the community; always have. All our expense categories are up. At the end of the month we just do not have an extra $3,000 to pay CalRecycle. How in the world could we pay a fine that is the exact same amount as Whole Foods, Trader Joe’s, Costco and Safeway, who have all opted to pay the fine rather than be a redemption center. The only store left in our “convenience zone” is Good Life Grocery, 1,200 square feet, to either be the redemption center or pay the fine of $100 per day. This is not rational.”

Hudiburgh asserted that most of her store’s sales are from produce and fresh goods, with only a small amount of trade in canned and bottled items. The store’s monthly garbage and recycling expenses total about $1,000. Hudiburgh maintained that The Good Life Grocery can’t afford to pay the fines and lacks the space to serve as a redemption center, which she says would also violate her lease and Department of Public Health regulations.

Numerous media outlets have detailed CalRecycle’s struggling recycling program in recent months. In 2017, Resource Recycling Inc. reported that a state audit revealed that retailer Walmart had failed to pay $7.2 million in bottle deposits in California by underreporting the number of beverage containers it brought into the state, sold or transferred over a three-year period. This money, known as California Refund Value, ultimately gets put into a CalRecycle to pay recycling centers’ operating costs. Walmart paid the sum plus interest late last year but wasn’t subject to penalties. In February, the Alameda County District Attorney’s Office announced a settlement with Walmart over allegations that the company sold plastic products that were misleadingly labeled “biodegradable” or “compostable” in violation of California law. Walmart didn’t admit liability, but agreed to pay $875,000 in civil penalties and an additional $50,000 to CalRecycle.