Supes Want to Rescind Law that Bans Competition in SF Trash Collection

Does Recology have a right to pick up San Francisco's trash forever? Supervisors Ross Mirkarimi and David Campos don't think so. They plan to put a measure before voters in November rescinding a 1932 law that prevents the city from introducing competition to San Francisco garbage collection.

“I don't have anything against Recology,” Campos says about the company that changed its name from Norcal Waste Systems in 2009. “From a public policy standpoint, it's not a good idea that this service has not been subjected to a competitive bid for 78 years.”

But of course. Consumers would be stupid not to shop around. That simple logic, however, will probably get squashed in this fall's campaign.

With $206 million in annual trash pickup fees at stake, the election battle over whether to end Recology's city-sanctioned monopoly promises to become “a ding-dong battle the likes of which the city hasn't seen in a decade or more,” says retired Judge Quentin Kopp, a city supervisor during the 1970s and a state senator during the '80s and '90s. “We'll see the bunco artists from the city's political consulting firms. They'll all be involved.”

If the past is any indicator, Recology will fight hard to preserve its monopoly. But the company has a long way to go in settling on a convincing message. I asked Recology spokesman Adam Alberti what would be wrong with putting the garbage contract out to bid.

“We believe the current system in place provides the best option for San Francisco,” he said.

I repeated the question.

“It's a charter amendment, and it can't be put out to bid.”

What would be wrong with making it so it could be put out to bid?

“The debate about whether the system works or not is a debate we'd be happy to have,” he said. “But we feel that debate is afield of the issue now at hand.”

Shall I just write that you refuse to answer the question? What would be wrong with putting the contract out to bid?

“Legally, the problem would be that the city and county would not have the authority to do so. Practically, we believe that the system in place, it would be the superior choice for the ratepayers, and ultimately it's a board policy matter on how they would proceed,” said Alberti — who never did answer the question.

In 1993, Kopp, with the San Francisco Taxpayers Association, backed a ballot measure to submit the city's trash service to competitive bidding, just like most cities with privately run refuse systems. During the three weeks leading up to the 1993 election, his Senate office received three dozen anonymous, threatening calls. “One even said she would come down and shoot all of us if it passed,” Kopp said in news reports. The Chinese American Democratic Club, which endorsed the initiative in a newspaper ad, was also deluged with calls. “You have no right to put that in the paper. I hope to God we win, and if we don't, something's going to be done about that,” one caller reportedly said.

Norcal's campaign manager disavowed the threats. The measure lost. A similar one was rejected by voters in 1994. In 1997, the Examiner's Lance Williams tallied $1.28 million Norcal had spent during the previous four years to persuade voters and politicians not to touch the company's monopoly.

But this time around, Recology might have a more difficult time piecing together a successful campaign.

The company admittedly has history on its side. During the early 20th century, the city gave small haulers exclusive purview over 97 different garbage routes — a policy that may have seemed wiser than allowing a route-poaching free-for-all. Over the years, smaller routes were gradually absorbed into bigger ones, until the business became dominated by two cooperatives formed by Italian-American trash haulers: Sunset Scavenger and Golden Gate Disposal. In 1932, a city charter revision enshrined the monopoly and assigned a city board to regulate residential rates. The two haulers were eventually merged into Norcal, even though trucks still bore the names Sunset and Golden Gate.

The question of what to do about the city's garbage-pickup monopoly re-emerged on Feb. 9, when the Board of Supervisors held a hearing on a different matter: Where should we store the city's annual mountain of waste? The Department of the Environment recommended that the city end a deal with Waste Management Inc. to haul San Francisco garbage to a landfill near Livermore, and instead enter a 10-year, $112 million deal to let Recology use a dump 130 miles away in Yuba County.

City budget analyst Harvey Rose produced a report saying the best course might be to roll all waste-hauling services into one giant contract. But, he explained, the city would never get the best possible deal on combined pickup and disposal unless it handled it in the form of a contract put out to bid.

During the early 1990s, garbage haulers wishing to get a piece of Norcal's trash business were the ones putting pro-competition measures on the ballot. In campaign propaganda, Norcal painted them as self-interested interlopers.

For this year's proposed initiative, however, Campos took his cue from the Rose study, first reported on [“Should City's Garbage Contract be Trashed?“]. That report followed a scathing 2002 budget analyst's report equating the Norcal monopoly with high rates and uneven service.

“My understanding is they haven't changed,” says Debra Newman, the assistant budget analyst who worked on both studies. Her boss, Rose, says, “It's a time-honored procedure in government to evaluate who is the most qualified firm that will provide the best service at the lowest price.”

Even if Recology scrapes together another million or so dollars to fight off Campos' and Mirkarimi's initiative, the company just might be crushed under the tonnage of its own illogic.

Not long ago, Recology submitted the best bid to pick up trash in San Mateo County, and ousted incumbent hauler Allied Waste there in January. But Recology's spotty startup service generated a deluge of complaints from skipped customers. Service there isn't much of a bargain, either. In Redwood City, halfway between San Francisco and San Jose, Recology charges residential customers $321 per year, just $9 less than in San Francisco.

If Campos and Mirkarimi's measure makes it to the ballot, Recology will have to make the argument that competition is good for San Mateo County, where the company won — but somehow bad for San Francisco, where it stands a risk of losing.

Recology is a private company, but analysts estimate its annual revenues at around half a billion dollars. Can it spend enough of that money to put another competition initiative into the waste bin? Kopp believes Recology will try.

“Don't forget, as an initiative campaign, there's no limit on spending. You'll see hundreds of thousands, maybe millions of dollars spent,” he says. “You'll see wild and spectacular claims by the proponents and the opponents.”

Let the trash-talking begin.

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