No-bid government contracts generally make for dirty public policy, and this includes the agreement for The City’s garbage collection monopoly, held for decades by the company first known as Sunset Scavengers and then as Norcal Waste and since 2009 as Recology.
Despite voters in 1993 and 1994 strongly rejecting measures to reopen the competitive bidding for San Francisco trash hauling, Supervisor David Campos is trying again with a November ballot measure.
“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.”
Opportunity to revive the debate, at a time when The City’s annual deficits need more help than ever, came when the Board of Supervisors started considering approval of a $112 million, 10-year contract for disposing of San Francisco’s garbage in a landfill.
Unlike the in-city trash pickup monopoly, landfill disposal never became closed to competitive bidding. But now Recology wants to enlarge its control of The City’s trash business by winning the disposal contract for a new landfill it owns130 miles away in Yuba County. Currently, city garbage is going to the much closer Altamont Landfill in the East Bay, operated by Waste Management.
An independent consultant report commissioned by the Local Agency Formation Commission — chaired by Campos — revealed that all 92 surveyed Bay Area jurisdictions either award garbage contracts after competitive bidding or have franchise fee-and-service agreements in place. San Francisco has neither, which puts it in a uniquely vulnerable position.
In fact, it was discovered early last week that San Francisco officials might not even be sure exactly how much money Recology pays The City annually. LAFCO had asked the Department of the Environment about the longtime $7.5 million yearly fee it collects from Recology. In response, LAFCO received a single-page generalized list from the Department of the Environment purporting to show that San Francisco actually receives approximately $29 million in annual taxes, fees and free services from Recology.
This $29 million would equal 10.6 percent of Recology’s current $274 million annual earnings. However, the list is heavily laden with items such as vehicle license fees and business taxes, which Recology would have to pay anyhow — even if it was also paying a standard franchise percentage fee.
The Board of Supervisors Budget and Finance Committee held a hearing on the landfill agreement Wednesday and postponed a vote until July so that city Budget Analyst Harvey Rose could prepare a report about the finances of the entire 1932 measure that still controls San Francisco garbage hauling.
While the quality of service and benefits from Recology’s exclusive deal has influential defenders, ranging from the San Francisco Labor Council to the San Francisco Chamber of Commerce, transparent contracts won by competitive bidding are always better for the public in the long run.