Collection of recycling and sewer fees for some Newport Beach properties to continue in property tax roll

Newport Beach officials approved a resolution Tuesday that allows Orange County to continue collecting sewer and recycling fees for some 5,300 accounts through their property tax bills, extending a program initiated last year.

City staff said the city provides sewer service to roughly 23,000 customers and its current recycling service attends to about 22,600 customers. Most citizens and local businesses use both these services, but a small percentage use only one or the other.

Approximately 606 only use the sewer service, while 4,692 only use the recycling service — a close approximation of about 5,300 accounts that would be anomalies, according to deputy finance director Michael Gomez.

Gomez said over the past few years there has been difficulty in collecting fees from these customers, as they don’t use the city’s water services in tandem with sewer and recycling services.

“We don’t have a good mechanism to collect on any delinquent accounts. It’s very different from accounts that have water, sewer and recycling all in one bill. We have the ability to shut off the water service for nonpayment, but on the sewer only or recycling only [customers], we don’t have that same capability,” said Gomez.

“Oftentimes, we resort to historical processes of sending out reminder notices or having [account] balances move forward or possibly sending them off to collections,” he added, before the vote Tuesday. “But when we do that, the amount we can often collect is a smaller percentage of what the bill actually is.”

Managing collections also takes up staff time, and if an outside agency is brought in to handle the collections, an 18% charge is added to the bill amounts the city receives.

To work around the challenge, staff proposed in July 2022 that the city allow properties using sewer services or paying recycling fees to have those charges included in their property tax bills. The City Council approved the suggestion, and Gomez said because of the new practice, 98.3% of recycling fees were collected and 97.3% of sewer fees were collected over the past year.

Prior to that, Gomez said the city was collecting fees from about 83% of recycling-only properties and about 75% for those that only use the sewer services.