An effort is under way to open up San Francisco’s garbage hauling business to competition for the first time in 80 years.
Recology has for decades operated as a monopoly hauling San Francisco garbage, and the company is on the verge of expanding its hold on The City’s trash business. The company is expected to win approval of a $112 million 10-year contract to dispose of The City’s trash in a landfill it owns 130 miles away in Yuba County. Currently the trash ends up in the Altamont landfill, operated by Waste Management.
The landfill contract has prompted city officials to revisit a debate about whether The City should change laws dating back to 1932 that have permitted Recology to haul San Francisco trash without having to compete for the job.
Supervisor David Campos said he is considering a November ballot measure that if approved by voters would repeal those 1932 laws.
A recent consultant report done for the Local Formation Agency Commission, which Campos chairs, showed that 92 other Bay Area jurisdictions examined either award garbage contracts based on a competitive process or they have franchise agreements in place. San Francisco has neither.
Campos is undeterred by the fact voters have rejected measures to change the 1932 laws twice before. “We live in a tough economic time,” Campos said. “I think now more than ever we have to make sure we get the best deal possible.”
He said competition could result in increased revenues to The City’s coffers with a higher franchise fee. “If it’s 15 percent [of revenues] as opposed to 10 percent, you’re talking about $14 million more that could go into the general fund,” Campos said.
“We don’t think it’s a worthwhile effort to unhinge a system that is working,” said Recology spokesman Adam Alberti.
Two influential groups, the San Francisco Labor Council and the San Francisco Chamber of Commerce, have opposed opening up the trash hauling services to competition.
“We have a regulated monopoly. The City is getting a fair return in terms of services and cash in balancing what those rates should be,” said Jim Lazarus, Senior Vice President of Public Policy for San Francisco Chamber of Commerce.
Campos has asked LAFCO’s consultant to examine other cities’ trash agreements as it relates to franchise fees. A follow-up hearing is expected in about four weeks.
Meanwhile, the Board of Supervisors Budget and Finance Committee is scheduled to vote on the landfill agreement with Recology today.
History of SF’s trash business
- 1932: The Refuse Collection and Disposal Ordinance of 1932 created 97 permits to collect solid waste. Over time, the permits were sold to several companies, which eventually became Recology.
- 1993: 76.3 percent of voters reject Proposition Z, a measure to open up trash hauling to competitive bidding.
- 1994: 64.5 percent of voters reject Proposition K, another proposal to open up trash hauling to competitive bidding.
- 2009: Norcal Waste Systems Inc. officially changes name to Recology Inc.
Source: Recology, Budget Analyst Harvey Rose