Recology and the Ballot Box

You may have seen Recology TV ads lately, with the tag line: "Why mess with success?"  Recology has a long history, through multiple names, of being the sole no-bid trash hauler in San Francisco since 1932.  There are a couple of interesting articles at the New York Times and in the Chronicle.

From the NY Times,

Recology has “the only such monopoly among 29 jurisdictions in the Bay Area,” said Quentin Kopp, the former judge, state senator and city supervisor. A few days ago, a group led by Mr. Kopp submitted a ballot initiative that would mandate the garbage contract’s being put out for competitive bid. Mr. Kopp said the monopoly had cost San Francisco hundreds of millions of dollars in inflated rates and forgone franchise fees over the years.

This isn't the first time the NY Times has done a piece on Recology.  Last winter, they published this on the company.

Recently on the Potrero Hill Yahoo Group, the discussion of Recology came up when someone asked about a woman standing in front of a grocery store collecting signatures relating to Recology.

As mentioned in the NY Times and Chronicle articles, Quentin Kopp is one of the ballot measure's sponsors. So is Potrero Hill resident and 2010 SF Supervisor candidate Tony Kelly.  Mr. Kelly wrote in to the Yahoo group to respond to a few of the questions about Recology and the no-bid contract that they have:

- the measure I'm sponsoring proposes competitive bidding, based on cost AND zero-waste/recycling goals and labor standards for workers, and there's a preference for local companies. So Recology should have little to worry about in a competitive bid, as long as they maintain those standards. 

- the reasons I'm sponsoring it are because San Francisco ratepayers pay twice as much for garbage services as San Jose (which also has a successful zero-waste program), and 73 Bay Area cities get substantial franchise fees from garbage service contracts, while we don't. we have a very wasteful contract that supports a monopoly, and City Hall should not be doing business that way.

Just doing a quick search of both garbage programs’ websites, it looks like in SF, residents pay $27.55/mo for the regular 32-gallon bin, while in SJ they pay $29.95 for the same bin, plus $4.35/mo for yard waste collection that we get free. We also get 10-free large item pick-ups per year while in SJ they pay $25 for up to three items. If we take advantage of the ten large items per year pick up, then we pay one quarter of that which a SJ residents would. Even if we don’t, residents in SF still pay about $80 less per year than in SJ.


http://www.recologysf.com/residentialRates.htm
http://www.sjrecycles.org/residents/garbage_rates.asp

A quick check of both sites provides little information on rates businesses pay, but the Recology site does say that businesses in SF that have recycling can reduce their rates by up to 75%, so that seems pretty good. According to the NYT article, it did look as though commercial rates were significantly higher here than in other cities, but perhaps that is meant to offset the low residential rates. As someone who’s not a business owner in SF, I am appreciative of the low residential rates, but I could see how, as a business owner, disparities in the application of commercial vs residential rates would be something one would want adjusted. Who’s to say that it would be, though?  Perhaps there simply needs to be regulation of the commercial side of things as there currently is with the residential contract.

Another FYI, Waste Management (Oakland’s garbage collection company) is based in Texas, although in some of its practices, it could be based in San Francisco, achieving a 100% HRC Equality Index score for example.  However, it is like the chain store of garbage companies, with contracts across the country and the ability to under-cut Recology if it wanted to.  San José, on the other hand, has multiple companies handling it’s garbage collection. In most parts of that city, three companies handle each of the three aspects of residential trash – garbage, recycling, and compost, unless you live in an apartment building, in which case a fourth company handles your garbage and recycling. In all, San José has twenty-one franchised garbage haulers.  While there's no correlation between rates paid and degrees of recycling going on, it should be noted that San José’s commercial zero-waste program is only 22% successful at the moment, while its residential program is in the low 70’s, both below that of San Francisco.

My sense is that by imposing a franchise fee on a company, they’d claim to have to increase rates or reduce service to pay it. Franchise fees would raise millions of dollars for the city, but as we see in San José, those fees would get passed on to the residential consumer. As we can also see from San José, having that extra $15M in the bank doesn’t necessarily translate into a government that is flush with cash.