HWMA staff told the board that a $2.7 million state grant intended to retrofit the old Eureka recycling building for organics processing has been placed on hold by CalRecycle, and that the authority has requested an extension and submitted a modified work plan.

"HWA was awarded $2,700,000 in May 2024 for facility improvements and processing equipment upgrades to retrofit the old Eureka recycling building into an organics processing facility for Humboldt County," the presenter said. Staff later reported that CalRecycle issued a stop‑work notice on Nov. 14, 2025, "essentially freezing the grant funds and placing the entire project under CalRecycle review." HWMA submitted a modified work plan and an extension request on Dec. 11, 2025, and as of the meeting the extension remained under review.

Staff framed the delay as tied largely to franchise agreements and RFP outcomes: initial RFPs for in‑county feasibility received no qualifying proposals, and franchise negotiations among jurisdictions and haulers remain a critical dependency. Staff said jurisdictions expect franchise agreements to be executed in February or March; the grant term technically ends in April 2026, and the project’s July 1, 2026 target to begin out‑of‑county transport relies on both executed franchise contracts and CalRecycle approval.

Directors asked about appeal options and next steps if CalRecycle denies the extension. The presenter said they were not aware of a formal appeal process offhand but would check and report back, and that, "If CalRecycle does choose to reallocate the grant funding, this will have a significant impact on the target deadline and our overall ability to execute this project." Staff also noted they have continued with smaller budgeted projects while the extension is under review and have finalized permit revisions to submit to the local enforcement agency.

The board did not take a formal vote on the organics item at this meeting; staff requested direction and reported they are evaluating proposals for a feasibility study and coordinating franchise negotiations. If the grant is not reinstated, staff warned that the authority would have to revisit funding and fee options to cover infrastructure and long‑term operations.