The combined trash bill for city departments would increase by 11 percent over the first four years of a $44 million contract proposed between San Francisco and Recology.
For the past five years, The City has paid Recology an average of $5.5 million annually for garbage collection, or a total of about $27.5 million. The largest share of the cost is for the Recreation and Park Department, which accounts for 26 percent of trash pickup spending, according to a budget analyst's report.
The total cost for city departments is expected to increase to $6 million next fiscal year, under the proposed six-year contract. Over the length of the contract, the rate increases will average out to approximately 2.85 percent per year with no rate increases in the final two years of the contract.
Today, the Board of Supervisors Government Audit and Oversight Committee will vote on the proposal. If approved, as expected, the contract will be voted on by the full board Tuesday.
“City departments' refuse rates have historically been set at 20 percent below commercial rates,” the analyst's report said. “However, because residential and commercial rates were increased in 2013, the City is currently paying 31.4 percent below current commercial rates.”
According to the report, the increase is intended to bring The City's costs back in line.
The contract proposal is a reminder that Recology has long held a monopoly in San Francisco's waste-recovery industry, including residential-, commercial- and public-refuse service. The contract to pick up city departments' garbage was not competitively bid.
Recology's monopoly status is based on laws dating back to 1932. Previous efforts to bring competition to the industry have failed, including a ballot measure in June 2012 that was defeated by 76 percent of voters. Recology spent $1.7 million to oppose the effort.
Tony Kelly, who was among those supporting the measure, along with former Supervisor Quentin Kopp, a retired judge, said he has no plans on reviving the monopoly debate.
“Maybe somebody can make the argument a little bit better than we can,” Kelly said. “Maybe people will figure out we shouldn't have monopolies.”
Meanwhile, the Recology contract for city department service is expected to undergo little debate at the board. Another Recology-related issue, however, remains unsettled and much more controversial: a landfill contract.
A lucrative garbage contract with Recology to transport San Francisco's waste 130 miles away by rail to a Yuba County landfill was canceled in 2012 amid lawsuits over improper bidding and lack of environmental review. But the proposal is currently undergoing environmental review and may return to the board for re-consideration next year.
Recology currently transports waste to the Altamont Landfill owned by Waste Management. That contract is expected to expire in 2016.