One of the biggest, most important municipal contracts in San Francisco is never put out to bid. It's awarded to the same company, automatically, and has been since 1932. Recology Inc. (formerly known as Sunset Scavenger, Envirocal, and Norcal Solid Waste Systems) is the only outfit licensed to pick up trash in the city. It's also the only company that has a monopoly guaranteed in the City Charter.
Its residential rates are set every five years by an agency almost nobody's ever heard of, the Refuse Collection and Disposal Rate Board, which consists of the city administrator, the controller, and the general manager of the San Francisco Public Utilities Commission. Commercial rates are set by Recology alone; there's no appeal or oversight.
San Francisco is the only major city in the United States that contracts out solid waste collection to a private company. And it may be the only city of any size that does it without competitive bidding.
Now that city officials are discussing where the garbage should go — that is, what landfill should hold it — there's a perfect opportunity to open up the 1932 deal, amend the charter, and fix this.
Sups. David Campos and Ross Mirkarimi are working on a measure that would mandate competitive bidding for the contract to pick up commercial and residential trash. "It's not in the interest of the ratepayers to have a monopoly," Campos told us.
It's true that Recology has worked with the city on reducing the waste stream and developing a curbside compost and recycling plan. And Recology is an employee-owned company.
But that doesn't mean the city or its residents and businesses are getting the best possible deal. Could another company do the same job better — and for less? Maybe. Would the prospect of a competitive bid drive Recology to improve service and cut rates? Absolutely. That why most municipal contracts are put out to bid on a regular basis.
But there's a larger question here, one that the supervisors also should consider. Why does San Francisco have private garbage collection anyway? All over the country, cities handle that task as a part of the function of government.
There are several distinct advantages to evaluating a public option for refuse. For starters, the city is in desperate need of money — and Recology is making a nice profit off its local gig. It's entirely possible, even likely, that the city could take over garbage collection, keep the rates at the same level, and bring in millions to the general fund. It's also possible that city officials would decide to forego some of that income and cut rates to make life easier for residents and businesses.
Since the 1932 charter provision is getting a new look anyway, the supervisors at least ought to look at the possibility of ending private garbage collection. A fairly basic study should be able to establish how much revenue Recology takes in, what expenses are involved, and whether it's worth pursuing municipalization.
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