2011-07-21 "S.F. moves closer to Yuba County landfill pact" by Rachel Gordon from "San Francisco Chronicle"
San Francisco is one step closer to sending more than 5 million tons of trash to rural Yuba County over a 10-year period after a Board of Supervisors committee backed a new landfill agreement Wednesday.
The proposal, to be considered by the full board next week, has been the center of an extended City Hall debate over which company is best suited to bury San Francisco's waste that isn't recycled or composted and ends up in the dump.
The current 27-year agreement with Waste Management to dump San Francisco's garbage at its Altamont Landfill site in Livermore expires in 2015.
The San Francisco Department on the Environment, which oversees the landfill contract, rejected Waste Management's bid to keep the contract. The department instead picked Recology, the San Francisco waste-management company formerly known as NorCal Waste Systems that already has a 79-year-old monopoly on picking up the city's waste.
Melanie Nutter, who heads the department, said she is confident that the proposed Recology contract "is the best deal for San Francisco and the ratepayers."
Nutter said the cost savings could be as much as $100 million over the life of the contract - a number that critics of the deal dispute, saying that Yuba County could boost costs to use the 236-acre landfill owned by Recology just outside of Wheatland.
Lobbyists and executives from the competing companies showed up at City Hall in force to attend the committee hearing.
Waste Management, based in Alameda County, sued this week to block the proposed deal with Recology, and some Yuba County residents and business interests have been fighting the proposal to let San Francisco put its garbage in their backyard.
"We want to preserve the water quality to grow quality crops," said Matthew Conant, a walnut farmer in the area who serves on the California Farm Bureau Board.
Other business interests in the region, one of the poorest in the state, welcome the waste at Recology's Ostrom Road landfill, saying it will bring more jobs and money.
Under the proposal, San Francisco landfill-bound waste would be trucked to Oakland and then put on rail cars for a 130-mile journey to Yuba County.
San Francisco now generates abut 5,600 tons of trash a day, with all but 20 percent or so diverted from landfill. San Francisco's goal is to have zero landfill waste by 2020.
City officials who back the Recology contract said that in addition to projected cost savings, the company has to be praised for its commitment to recycling and composting.
The employee-owned company also has strong support from organized labor.
"They have a good track record with the workers and have provided us with very solid service to help San Francisco reach a meaningful diversion rate," said Supervisor Ross Mirkarimi.
2011-07-21 "Recology president Mike Sangiacomo disses the Guardian as landfill agreements head to full Board" by Sarah Phelan from "San Francisco Bay Guardian" newspaper
Dressed in neon- yellow vests, a crowd of Recology employees filed into the Board’s Chambers to witness the Board’s Budget and Finance subcommittee, which Sup. Carmen Chu chairs, vote to forward the Department of Environment’s proposal to award the city’s landfill disposal and facilitation agreements to Recology (formerly NorCal Waste, Inc), to the full Board.
The B&F vote wasn’t exactly a surprise. In the past six months, Recology's top brass have been exerting pressure on the committee members to approve the agreements, which got delayed after folks started raising questions about the lack of a franchise fee and competitive bidding on all other aspects of San Francisco's multimillion dollar municipal solid waste stream. And lobbyist Alex Clemens reported $17, 134.25 in promised payments from Recology between January and June 2011 for services that included contact with B&F subcommittee vice-chair Ross Mirkarimi in mid-June.
If the full Board goes ahead and gives the green light July 26, that approval would authorize Recology, which Waste Age's June 2011 issue named as the 10th largest waste management company in the U.S., to start transporting and disposing up to 5 million tons of municipal solid waste in its Ostrom Road Landfill in Wheatland, Yuba County, once the city’s agreement at Waste Management’s Altamont landfill in Livermore expires, which is expected to happen some time in 2014 or 2015.
The initial refusal of Mirkarimi and fellow B&F subcommittee member Sup. Jane Kim to agree to Chu’s suggestion that they forward the proposed agreements “with recommendation” appeared to be indications that both supervisors harbored some concerns about the deal. UPDATE: But According to DoE communications director Mark Westlund, before yesterday's meeting was over, Mirkarimi called to rescind the vote on the landfill item asking for it to go to the full Board with recommendation. Jane Kim concurred, and so now it goes to the Board with unanimous committee support.
“Overall, I think this was a good contract,” Kim said during the July 20 hearing.
Kim added that she thinks “We need to continue the dialogue,” about the city’s 1932 refuse collection and disposal ordinance, which resulted in Recology gaining a monopoly over every aspect of the city’s $225 million-a-year waste stream, except the $11-million-a-year landfill disposal agreement.
Kim noted that under the arrangement that grew out of the 1932 ordiance the city doesn't get a franchise fee. And she claimed that San Francisco is getting half of what other Bay Area cities, which all have franchise fees, get from their waste contractors. “So, I’m really interested in continuing that conversation, but I think it’s a separate conversation,” Kim said.
Mirkarimi, who is running for sheriff this fall, noted that he has been “the most outspoken member” of the committee on the Recology item, and that his concerns were what led the committee to “put a pause” on the deal, until the committee could “undertake more homework.”
Thanks to that pause, the city’s LAFCO committee was able to commission a report on what other jurisdictions do around transporting and disposing of their solid waste in landfills, and Mirkarimi noted that his office “held a number of meetings” and he tried to leverage this opportunity to “reanimate activity at the Port.”
“I was hoping we might be able to arrive at something much more deliverable,” Mirkarimi said, presumably referring to the fact that these efforts only resulted in DoE unveiling a last-minute amendment to include two “possible changes” to operations and facilities at the Port of San Francisco in the agreements.
These possible changes, which DoE director Melanie Nutter presented during the July 20 hearing, involve a) utilizing modes of transportation, including barges, other than, or in addition to, the rail haul plan proposed in the agreement, b) developing new facilities at the Port for the handling of waste, recyclables, organics and other refuse, meeting no later than the fifth anniversary of the agreement to discuss the feasibility of such changes, and c) incorporating into the rates, or otherwise financing, the cost of implementing such transportation alternatives and the cost of such facilities.
“I think that cost-effectively we may be able to insert the Port into this equation, but it’s not ready for prime-time yet,” Mirkarimi observed.
Mirkarimi concluded by noting the many innovative things Recology has done in terms of making the city’s waste disposal system more environmentally friendly. “This should be a front-burner conversation,” Mirkarimi said noting that Mayor Gavin Newsom made it a focus of his administration to make San Francisco the greenest city. Referring to the fact that San Francisco claims to have a 77 percent diversion rate—the highest in the U.S—Mirkarimi said, “That comes at a cost, it doesn’t come for free.”
Mirkarimi’s comments came in the wake of Nutter's claims that Recology’s bid for the landfill disposal agreement will save ratepayers $130 million, over the 10-year course of the agreement, compared to the bid that Waste Management submitted. “This is the best deal for San Francisco,” Nutter said.
Nutter’s estimates were repeated by Jim Lazarus, who spoke on behalf of the SF Chamber of Commerce and the Alliance for Jobs and Sustainable Growth. "This is the right contract for the people of San Francisco,” Lazarus said.
But Nutter’s $130 million estimate was thrown into question by Yuba County Sup. Roger Abe, who had driven the 130 miles from Wheatland to alert San Francisco that Recology’s bid is based on the assumption that Yuba County will only charge San Francisco a $4.40 per ton host fee.
As Abe pointed out, Yuba’s rates have not changed in 14 years, and his county is considering increasing them later this year by up to $20 or $30 a ton.
Such an increase, multiplied by the 5-million tons of garbage in the agreement, could dramatically increase the cost to San Francisco ratepayers over the course of 10 years, Abe observed..
[If Yuba County approves an increase, and diesel fuel prices also increase, it could eliminate much of the cost differential between Recology’s and WM’s bid: a recent Budget and Legislative Analyst report shows that Recology would charge $58.94 a ton, ($28.53 for tipping and other fees + $30.14 transportation cost per ton), while WM would charge $66.79 for tipping and other fees + $18.33 transportation costs per ton.). But if diesel rises above $2:30 a gallon, SF ratepayers could also get hit with a fuel surcharge.]
Also speaking at the hearing was former D10 supervisorial candidate Tony Kelly, who along with retired Judge Quentin Kopp, David Gavrich’s SF Bay Railroad, and other concerned citizens, recently gathered 12,000 signatures to qualify a petition to require all aspects of San Francisco’s $225-million-a-year waste services to be put out to bid, and to require the winning bidder to pay San Francisco an annual franchise fee.
Kelly et al were originally aiming to qualify their petition for the 2011 ballot, but they blame what Kelly described during public comment as, “a very expensive advertising campaign,” by Recology, plus harassment of petition gatherers and signers, as why they ultimately had to delay qualifying their initiative until the June 2012 election cycle.
Kelly urged the committee to probe the details of a $10 million Special Reserve fund, which Recology could access, under the terms of its facilitation agreement, to cover all its expenses that have not yet been reimbursed through rate hikes. “You’d think the Budget and Finance sub-committee would want to explore those things,” Kelly said.
David Gavrich, who is also President & CEO of Waste Solutions Group, which has hauled 6 million tons of waste in the last 20 years, said approving the landfill disposal agreement, without knowing what rates Yuba County are about to set, was tantamount to “opening up San Francisco’s check book to Yuba County.”
“Recology has never moved a single ton by rail,” Gavrich also asserted.
But while none of the supervisors asked for any clarification of details in the proposed agreements, including the last-minute amendment, during the hearing, Chu was quick to comment about Gavrich’s “blank check” comment, noting that any county can increase its rates. “Alameda County already charges a lot more, so there are no guarantees either way,” Chu said.
She also claimed that the agreements had been subjected to a “very extensive, competitive and open process, especially around tipping fees.” What Chu didn’t mention is that earlier this week, WM filed a writ of mandate with San Francisco Superior Court to prevent the final award of a new long-term solid waste transportation agreement and landfill disposal contract to Recology ordinances, on the grounds that the deal violates the City’s competitive procurement laws.
Instead, Chu urged moving on the deal as soon as possible, by invoking the specter of a disaster hitting San Francisco before a landfill agreement is reached.
"Imagine if we had to go to the open market,” Chu said, apparently ignoring the fact that WM has stated that it would take SF’s waste in an emergency.
After the vote, Kelly expressed concern that the agreements are not competitive, but cost-plus, which means all costs get passed along to ratepayers. And that the city continues to lack a contract and ensuing franchise fees. “They are running this as if it’s still the 1950s,” Kelly said.
Kelly claimed that Recology Vice President John Legnitto, who is the 2011 Chair of the SF Chamber of Commerce’s Board, told him that Recology had been in negotiations with City Hall around a $4 million franchise fee, but that the money would now be spent opposing Kelly et al’s competitive bidding initiative.
But when the Guardian approached Legnitto after the hearing, he refused to comment, telling me my questions should go to Recology’s Robert Reed.
And Recology President Mike Sangiacomo, who was speaking to Chronicle reporter Rachel Gordon rudely told me, “Not today thank you,” when I approached him seeking comment on the Board committee’s vote.
“What did you do to him?” Gordon asked, as she followed Sangiacomo into a corner of City Hall. Er, nothing. Except what any self-respecting reporter would do. Like ask questions, read documents, and challenge the spin.
But that something clearly has ruffled the feathers of Recology’s top brass.
“It’s like Godzilla, it’s like Monster Island, they can’t help themselves,” Beyond Chron’s Eric Smith commented to me during the hearing. “I’m disgusted by how money, labor and all these different entities can influence what happens. They don’t care about the little people. They care about the bottom line.”
Smith, who ran for D10 supervisor in 2010, spoke to the huge pressure that has been exerted on those supervisors who have publicly raised questions about Recology’s monopoly over all other aspects of the city’s $225 million-per-year waste stream. “Big corporations like Recology throw big money around and intimidate the electeds,” Smith said.
Meanwhile, DoE deputy director David Assmann confirmed that the City Attorney’s Office is looking at WM’s writ of mandate. But Assmann added that it is too early to respond to questions about the implications of that legal action on the Recology agreements.
Assmann also responded to a number of questions I'd already raised on the Guardian’s blog about the juicy details buried in the Recology agreements, beginning with a special reserve fund that was established in 1988, as part of Recology’s facilitation agreement that governed the transportation of waste to WM's Altamont landfill, which is where San Francisco has been depositing its trash since 1987, and that will be rolled over to form the basis of a new special reserve fund.
Assmann said the fund currently contains almost $29 million, but only needs a baseline of $15 million. The extra funds will be the subject of a hearing this fall, he said, to determine how to use the balance, including exploring the possibility of using the funds, which were collected through a 1.3 percent surcharge on ratepayers, to lower the garbage rates.
Assmann also noted that while there is no limit on how much Yuba County can theoretically increase its host fees, “there has to be a nexus with associated costs,” and that Yuba County supervisors would have to bring any such proposed increase, which would also apply to all their other landfill users, to their voters.
Assmann further noted that the idea behind developing new facilities relates to the city’s 2020 goal of zero waste is “to get to zero waste we need new methods of handling waste,” Assmann told me explaining that San Francisco wants to be able to take residual material and process it so it could be recycled and wouldn’t end up in the landfill.
Assmann said a consultant is comparing the feasibility of building those facilities on land next to Recology’s Tunnel Road facility in Brisbane, or on land the Port owns in San Francisco, and the report should be completed later this year. He also noted that the transportation amendment would allow the City to switch or improve its transportation mode, during the life of the agreement, should cleaner technologies be developed, “including trains that run on less polluting fuel.”
Assmann clarified that San Francisco ratepayers won’t be footing the cost of building a new rail spur in Yuba County. “We’re not paying capital costs. The rail spur is not a cost that Recology can charge because it’s out of county. And if San Francisco only produces 2 million tons during the life of the agreement, we are under no obligation beyond that.”
And he noted that a potential $10 million contingency payment would only go into play if the City gave Recology the green light, and the company incurred costs related to rail haul, and the City then reneged on its deal, at which point Recology could then use its incurred costs to justify why it needs up to $10 million to included in the garbage rates.
All interesting details as we approach the Board’s July 26 vote—with a lawsuit hanging over the City’s head. So stay tuned…
Comment by Tracy Austin:
Shame on you Ms. Phelan! You hurt Mr. Sangiacomo's feelings. Your article on 'Digging into the juicy details of Recology's proposed landfill disposal and facilitation agreements' was spot on and raised great questions.
“Big corporations like Recology throw big money around and intimidate the electeds,” True. Note that they've not only sued Humboldt County Nevada; but the Humboldt County Commissioners as individuals; when the commissioners did not vote to extend the 3 year condional use permit Recology did not complete for another 5 years.
Same patterns: Cozy up to elected officials, heavy PR, intimidate local officals that don't fall in line, heavy PR, fight to change/expand operations once they get a foothold, heavy PR, intimidate. Asside from suing local government in Humboldt County, they are sponsoring field trips to the Ostrum Landfill site, maintain a page in the local paper where non-profit ads get posted (they don't know they are placed on a page sponsored by Recology). Jokingly, they even offered 'recycling classes'. Now, certainly, Winnemucca, anyone, could benefit from Recycling classes. But Recology is planning to haul in over 1 million TONS year of non-recycleable CA waste to this small community. Winnemucca voters, passed an ordiance by 70% of the voters to to limit out of town waste to 1 1/2 times the amount generated by regional users of the Humboldt County landfill.This limit equates to approximately 15,000 tons per year. So very humorous/hypocritical of Recology to teach recycling.
You'd need to contact Yuba Group Against Garbage (YuGAG) with any questions on the material; but the folks in Yuba County have combed over a 'Frequently Asked Questions' document currently posted at the San Francisco Department of the Environment (www.sfenvironment.org under quick links). They published clarification on many of the items deemed accurate and unchallenged by the department. Here's the Frequently Asked Questions document with the YuGAG clarifications: [http://nolandfill.files.wordpress.com/2011/07/response-to-faqs-proposed-landfill-agreement-final.pdf]
Thanks for keeping us posted Ms. Phelan.
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Recology's business model in San Francisco has always been the bait and switch.
They have always done it. The Special Reserve Fund was set up years ago by Public Works so they had the financial ability to audit Norcal Waste now Recology.
If the city did an audit on Recology they would find millions and millions of money that never went to where it was supposed to go. They say they need all new equipment not true and they only buy a handful of trucks. Labor costs for certain programs and benefits not true and on and on. Recology exports there business model to San Bernardino and San Jose and get's indited. That's why the name change.Here in San Francisco corruption continues with the full support of the Teamsters Local 350.Union and elected and non elected officials like Melanie Nutter Pelosi's top aide. I wonder why they chose her? or did Recology
The Federal Government is the only one who could break this up. Good luck SF your going to need it.
2011-07-27 "$112 million deal may send S.F. trash to Yuba County" by Will Kane from "San Francisco Chronicle" newspaper
San Franciscan trash could soon be headed to faraway Yuba County after the Board of Supervisors Tuesday approved a controversial $112 million contract to send city refuse to the rural area.
Over 10 years, 5 million tons of San Francisco garbage could be loaded onto trains and taken almost 132 miles to a landfill site just outside Wheatland. The deal between dump owner Recology and the city will likely start in 2015 and last until 2025. But the city hopes there will be no trash to haul by 2020.
A coalition of Yuba County residents and San Francisco activists objected to what they said was a sweetheart deal between the city and Recology that would end up costing the city plenty and harming the environment in Yuba County.
But by a vote of 9-2, the board OKd a contract supporters said would save city residents more than $100 million over 10 years and protect the environment. Supervisors David Campos and John Avalos voted against the plan.
"It is a good day for Recology, a better day for the rate payers of San Francisco," said Adam Alberti, a company spokesman.
Until now, Recology has collected trash in San Francisco and shipped it to landfills owned by competitors, notably Waste Management, which operates the current landfill in Altamont. But now, Recology will gather trash in the city and dump it at its own landfill. This arrangement cuts costs but bothered would-be competitors - like Waste Management - and some city officials, who say the no-bid arrangement isn't fair.
"We are reliant on an outdated process," Avalos said before the vote.
A 1932 ordinance virtually guarantees that Recology, formerly Norcal Waste Systems, will have the exclusive right to collect trash in San Francisco. An initiative to open trash collection in San Francisco to competitive bidding is expected to be placed on the June 2012 ballot.
The city Department of the Environment began working on the big-bucks question of who gets San Francisco's trash almost five years ago. Recology will still have to secure a number of local approvals before the deal will be complete, including approval of a rail spur into the dump, Alberti said.
Residents of Yuba County - one of the poorest counties in the state - are mixed on whether they want to be home to San Francisco's trash. The deal will bring jobs and $22 million to the county.
But it will also bring 5 million tons of trash to a landfill surrounded by verdant agricultural land.
"The green stops at the city limits of San Francisco," said Rick Paskowitz, a member of the Yuba Group Against Garbage (YuGaG), who can see the landfill from his home. "Our bottom line is not to produce contaminated food that comes down to San Francisco."
City environment officials say they have no concerns about the landfill. The plan calls for trash to be collected and trucked to Oakland in special containers that can be loaded onto a train. At least three times per week, a 45-car train will roll to the Recology landfill.
Irene Creps, a San Francisco resident who owns property near Wheatland and is opposed to the landfill project, said she wasn't surprised the city approved the contract.
"It is a big company," she said, referring to Recology. "It is the same way everywhere; the whole thing is acting toward who holds the money power."