The politics of Proposition A are exactly backward from what one might expect.
The progressive activist who wants Recology to compete with other garbage companies for its franchise hopes voters endorse the fundamentals of capitalism on Election Day, June 5. Meanwhile, the venerable company and its coalition of friends in business, labor and government say competition would be harmful to The City’s role as a pioneer in recycling and waste diversion.
Recology’s waste-disposal monopoly has been studied by outsiders and voted on by San Franciscans. Yet despite an apparent wealth of information, voters have little truly useful data to go on.
A 2011 study prepared for The City found that residential collection rates were 10 percent to 18 percent higher than those of Bay Area cities that recycle comparable materials and engage in competitive bidding. Recology’s rates were similar to those of San Jose, but the study didn’t assess whether garbage service here should cost less than in the South Bay because of The City’s compact size, or more because of its higher cost of living.
Recology’s base commercial rate is 60 percent to 127 percent higher than those of cities that engage in competitive bidding. But the company said most businesses qualify for discounts that encourage recycling, which makes its rates about average.
“Six cities have moved to competitive bidding in California, and they have averaged 20 percent savings,” said Prop. A backer Tony Kelly, president of the Potrero Boosters Neighborhood Association.
Kelly wants to recycle the millions a year he thinks The City could save by requiring companies to bid for The City’s garbage franchise.
Under the 1932 Refuse Collection and Disposal Ordinance, which can only be amended by voters, Recology owns the right to provide service on all 97 city garbage routes. It could be the only Bay Area waste hauler whose franchise never expires.
But that’s beside the point, said Jim Lazarus of the San Francisco Chamber of Commerce.
“This isn’t broken,” Lazarus said. “There is no reason to make this change.”
He said The City couldn’t hope for better service than it receives from the environmentally responsible, employee-owned Recology.
Kelly conceded that Recology does an admirable job of diverting waste from the competitor’s landfill in which it is now deposited. But he fears that will change once Recology begins shipping waste to its own landfill in 2015 or 2016. Every ton of garbage the company must now pay to dispose of will suddenly represent a new revenue source, Kelly said.
President Mike Sangiacomo said Recology will still have ample reason to recycle.
“A good chunk of our profitability comes from the incentives we get from reducing our diversion to the landfill,” he said.
Sangiacomo said Recology also provides The City with a variety of free services, such as pickups for bulky trash and disposal of about 60,000 tons annually of city refuse and waste.
“We have gone a long way to helping The City achieve what no one else has,” he said.
But Prop. A backer Quentin Kopp, a former supervisor, warned San Franciscans to brace for a post-election rate hike. Kelly also noted that in 2001, city staff recommended a 20 percent rate hike only to be overruled in favor of a 44 percent increase pushed by a then-little-known bureaucrat named Ed Lee.
“We’re just kind of relying on the good graces of Recology,” Kelly said.
What Proposition A would do:
Require competitive bidding for The City’s garbage franchise
Divide garbage service into five separate contracts: residential pickup, commercial pickup, waste separation, transport to a landfill and disposal of the remaining waste
Require that The City own the waste processing and transfer stations
The case for Prop. A:
Based on the experience of other cities, competitive bidding would save San Franciscans $44 million to $55 million a year, which could be applied to city services or used to reduce garbage rates
The case against Prop. A:
Recology does an exemplary job and has helped make San Francisco a national leader in recycling and waste diversion