privately with the department of environment and others, there are just some unknowns that would make me feel a little bit better if this process were a little bit tighter or at least lends itself to something that gives me greater confidence that we are doing the right thing. and with that, i want to ask the budget analyst a question. this is based on process, and i am not suggesting anything. there seems to be some of a construction as to how process was to be followed within the box of protocol within the city, as it relates to house segmented the different contracts are as they have been, in essence, administered byrecology, and in one episode, waste management.

if you look at the three or four segments of the different aspects of what it takes in order to move our refuse, then i am wondering, are we being as future focused as i think we could possibly be? but to the process first. as the city, just so we establish this, as the city entered into substantial contracts like this without a specific rfp or a waiver from the board of supervisors? >> madam chair, members of the committee, supervisor mirkarimi, i do not know of any contract valued at $206 million that has not been subject to approval by the board of supervisors. i could stand corrected, but i

am not aware of any that even approaches that have not been subject to competitive bidding. supervisor mirkarimi: i am talking about a dollar amount relative to what is before us. >> let me clarify. the $206 includes the collection of trash and the landfill, but even if you took out the landfill, i do not know of the process, and, again, this goes back to 1932, when the ordinance was written, and that is the way it is. i am not suggesting that anyone has done anything wrong. what we are suggesting to the board of supervisors that they might want to consider an improvement to this process. supervisor mirkarimi: right, and

i think that is part two of the process, and as you can tell by the screams outside, people feel the same way, i think. [laughter] but that is really the question that is before us. that is a larger grass-roots kind of question. >> supervisors, i just want to clarify one thing. the $206 million is the cost of the entire system. it is not a contract to the city. it is ratepayers' paying $200 million. it is like pg&e customers paying for their own electricity and natural gas. that does not go through the board of supervisors, as a love. -- has allowed. supervisor mirkarimi: that is a bad analogy.

>> it was a bad example, but i just wanted to clarify it is not a contract with the city. if it were a contract with the city, it would have to go through the process. >> i totally agree. the point i want to make is that the rate payers, the residential ratepayers, and businesses in san francisco, they are paying a for the $206 million. that is not subject to the board of supervisors' approval. the water rates are subject to the board of supervisors' approval, as an example. supervisor mirkarimi: electricity rates, they are not approved, but rate increases are in their respective governments that administrate their power in municipalities. next, was recology the only

company invited to bid on the costs for transportation? i do not know. chair chu: department of environment? >> there were no bids. using existing costs, and analysis. supervisor mirkarimi: it is a set-up question. >> it is also what the city provides. supervisor mirkarimi: just sort understand the diagram -- just so i understand the diagram, what we are proposing through the recology transportation system, where is it going to go exactly? where will it go, once it leaves san francisco? >> it will go to the landfill. right now, there is the transfer

station in the southern part of the city, and it gets transported by long-haul trucks to altamont. if the new one is accepted, it would be put into containers at the transfer station and be transferred into rail cars. supervisor mirkarimi: where in oakland? give me some specificity, please. those are important. you have given me where one is and where the destination is, and along the line, i am trying to understand. >> port of oakland land. supervisor mirkarimi: port of oakland land. chair chu: others are here. supervisor mirkarimi: we might

get to that. it is not just waiting there. there may be a period where it rests there, depending on how much is there? >> there will be containers to take off of the truck and putting on railcars -- and put it on rail cars. supervisor mirkarimi: this is based on volume, but if at any time, we have a lot of baby diapers, because we are having birth rates in san francisco, and i attributed in the equation, in 2009, but walk me through this. is there a way station, storage? >> this is all in sealed containers.

no way of anyone knowing what is in those containers. supervisor mirkarimi: ok, so this is the follow-up, how is this somehow not subjected to some type of environmental review? that i no question -- that unknown question. >> ceqa -- there is no facility being built. no facility, nothing to be reviewed. supervisor mirkarimi: then you might want to qualify your answer a little bit more. as i read, there is a question of organic and inorganic, how that might be part of the parcel that is moving forward, but i am still thinking that when we are transporting, hauling, delivering, that at some point,

i would think that ceqa would have kicked in, and i want to get in the record what that does not speak to our transportation, because, most often, ceqa does apply to these kinds of conditions. >> i can answer a previous question you had. supervisor mirkarimi: police. >> the transfer station that -- please. >> the transfer station that is operated, they have a 5,000 ton capacity, so assuming there was a spike in garbage, that would be part of what stays in the pit until it is loaded and transferred, so there will not be that much variance in the rail cars, because the pit has enough capacity to deal with spikes overtime.

supervisor mirkarimi: i appreciate that answer, but since we have you up here, maybe you can answer something that just came to mind. i know this has been floating out there. a more perceived point of access, so they would also have a role in this. why were they not involved in this? especially since part of that is part of it. why not part of the port of san francisco? >> we would love to engage the port of san francisco.

the portis did send a letter to the department of the environment back in 2009, and either using a korea or a barge to help transfer waste. there were some initial meetings with puc staff -- either using rail or a barge to help transfer waste. this was not pursued as an option for part of this process. and then the other option that was addressed was rail. the railyards, if the trash was loaded onto cars in there, it would have to travel all of the way through san jose and east bay, about 100 miles of transport, which would significantly increase both the costs as well as have a negative environmental impact, and so it is through the staff

discussions, options. subsequently, i did have a discussion with someone who said they still have a desire to do this, whether by rail or by barge, and she says that she does nothing going through with this contract will preclude us from looking at options in the future, and we agree with that. >> -- supervisor mirkarimi: i appreciate that response. i think it was suggested that it could be a role for the board to play. for me, just listening and having dialogue with many of the stakeholders in this process, i am wondering if we may have moved a little bit too fast past the notion of making the ports as part of the different access

or transporting something that may have been more of a primary consideration and not an afterthought. chair chu: i believe there was some follow-up. supervisor kim: could you explain more? >> as the director was saying, the bay bridge construction, in the future, once the construction is complete, there may be more capacity that could be used.

so the way she compelled the idea to me is that it was something we could address. supervisor kim: can you explain that to me? >> the deputy director has something. >> this is not a five-year agreement. this is a 10-year agreement. there are options for developing other things going forward. at the end of this agreement, so there are certainly some alternatives in the future. supervisor mirkarimi: yes, but there are term limits, so we feel excited about doing something now. [applause] -- [laughter] supervisor kim: i am asking

about this current agreement. >> the other thing to look at is the facilitation agreement, we could look at a few years from now and say that there are alternatives that have come into play that may warrant a new negotiation. supervisor kim: how would that occur? could you explain that? >> this does not mean that we cannot renegotiate the other portion. supervisor kim: ok. chair chu: thank you. i do want to turn back to supervisor mirkarimi, but a quick question about your barge issue, when you did your analysis, you said that they both said no about accessibility, but how would this manifest? you would have, hypothetically, waste sitting on a barge that

would have to be transported by land? >> that is correct. chair chu: and then, do you have a timeline? i think the america's cup, and there is the bay bridge construction and the america's cup that the board is concentrated on at this time. why do we not go back? supervisor mirkarimi: it relates to the situation that it will reach its capacity. >> that is correct. supervisor mirkarimi: could it be more than that? less than that? >> right now, we are sending tons to the landfill and takoma and so if you cannot delete out how much we have left -- tons to

the landfill right now. the amount going to the landfill could be less than that. it could extend the life. we basically did two calculations of a linear. this was about the same, and it ended up at about five years. it extended the life of about eight more months. it could be a little longer but still in the ballpark of five years. supervisor mirkarimi: does that mean that we would have a little more latitude about how we could get better rates for the ratepayers or how we might be able to use that lead time?

when they arrive at the exact same place. i am wondering. i am not hearing or feeling the alarm clock that this has to be nailed down today with this particular decision, because, for me, what is driving some of this is i am not so sure yet if the consumers of san francisco, the ratepayers, are getting the best thing for their buck. i will give you an example. what if we were to look at the bundling of both transportation and landfill together? or other segments in a way that might be competitively bid that might give us a different frame as to how that translates into a cost to the rate payer? could that not in the next year or two or five months, six months lend us more information to make that happen? >> in terms of timing, it took

us 4.5 years to get to this point. we could move along much more quickly if we did it again, but the fastest process if we did not have public input would be about two years. we also have to take the results of this process to be able to factor it into rates. that in itself is about a year long process, so the minimum we could do with it is three years, and three years from now, we are getting pretty close to the end of the line. if it is true if we continue to aggressively recycle and reduce the amount of waste, we could extend the life of our landfill but not significantly. the other thing, there are a couple of factors that could turn it in the other direction. one is if the economy picks up, then our rate reduction -- waste reduction may slow down pit one of the reasons there is less in the landfill is that less is

being produced. if it goes up, it will be harder for us to produce less. secondly, capacity. if there is a major earthquake, for example. we were just faced with a situation about the rail going into chinatown, and they were going to take all of that to the landfill. fortunately, we were able to change that. it's something like that happens, that could change our capacity in one year -- if something like that happened. we need to be able to of systems in place so we are not left at the mercy of having to negotiate at the last minute. supervisor mirkarimi: i am going to make a bit of a hedge year, but i do not think that we risk our relationship with recology,

and they would think we are doing our due diligence. again, it gives me the glimmer of thinking that we could probably go of a bit further. when you say "contingencies," i think that was a good word. there is the jurisdiction to look into these kinds of contracts. they were never asked to look at this contract, and that would be an important sync. lafco has obviously great experience in the wake process, the rate-making process, and these types of projects -- great experience and the rate process. trying to figure out what is this the best deal to the rate

payer. i am going to stop here. i know my colleagues have other questions, but thank you for your answers. chair chu: thank you very much, supervisor mirkarimi, for your questions. why do we now not go to supervisor campus? supervisor campos: thank you. i would like to begin by thanking the department of environment, the director, and it is a pleasure to see you in that position, and i am excited about all of the things that you bring to that role, and i think you and your staff for all of the work that has gone into this -- i thank you and your staff. that is greatly appreciated. i also want to think the budget

analyst for his very thorough work on this issue -- i also want to thank the budget analysts. in terms of what the rate payers will be paying, not necessarily a contract between the vendor and the county of san francisco. it is really the contract between the vendor and the ratepayers. if i can through the chair ask the budget analyst, going back to the $206 million, i assume that is per year. what amount of that, how that is broken down in terms of refuse collection, transportation, and disposal. my understanding is that the total value of the contract for disposal or the landfill is

about $112 million for 10 years. so does that mean that the rest of that $206 million can be broken into refuse collection and transportation? >> madam chair and members of the committee, a supervisor campos, that is correct. supervisor campos: with the remainder, about $180 million, how much of the is broken into refuse collection -- how much of that? >> we do not know, a supervisor -- do not know, supervisor campos. supervisor campos: may be the department of environment can provide that information. >> we do not know that right now. we can get this on

transportation within the city. the whole set of information, and as i said, we took one year to go through the rate process. i do not know if we have been a rough figures on how it is broken out. we can get that for you. we certainly have that. supervisor campos: i think that would be helpful. to be honest with you, i am surprised, given the value of the package that we do not know that breakdown. $206 is a lot to ask of ratepayers. i am surprised we would not know what amount goes into transportation, refuse collection, and disposing of the refuse, but if you can -- >> we certainly have all of that information. supervisor campos: but not here. >> yes, not here. we have all of that. the department of public works

was significantly involved in the process. supervisor campos: thank you. i have a clarifying question to the city attorney's office, if i may, through the chair. one of the things we have heard from the department of environment is the reason they did not do a competitive bid on transportation fees is because of this 1932 ordinance, that essentially indicates that you have to have a permit to be able to carry trash within the confines of the city and county of san francisco. there, my understanding is they are pointing to that as a reason why there was no competitive bid on the transportation piece of this package. my understanding is that the 1932 ordinance is not that brought but is something that specifically addresses the issue of what happens within the city

and jurisdiction of the city and county of san francisco, so is it the position of the city attorney's office that the entirety of this deal, including transportation, was not legally allowed to be bid because of that 1932 ordinance? >> supervisor, tom owens, a city attorney's office. i think the concepts are being collapsed in the question. what i think the department was trying to communicate is aspects of the facilitation agreement had to do with the operation of the transfer station and transportation with in the city limits were not put out to competitive bid because of the 1932 ordinance and that they are the only people that can transport this in the city have a license for that transportation outside of the city and county was, in the

department's view, included in the landfill disposal rfp. it was not support the the subject of a different rfp, just a business decision and an environmental decision. supervisor campos: ibm confused, because my understanding was that the transportation -- i am confused. any transportation outside of san francisco was competitively bid? >> the bidders were invited to submit proposals for the operation, landfills, and that included transportation and questions about accessibility, etc., and the recology proposal specifically addressed the rail proposal, and the waste

management specifically addressed -- the cost estimate was based on the current costs between the transfer station and alameda. supervisor campos: i have to say that this is news to me, because what the city attorney is saying is in contrast to what is in the report. it may be possible for a second firm other than recology to transfer refuse after it had been collected by recology, with a competitive bid process, but if you are saying -- >> we are dealing with transportation outside of the city and county. the other was a business decision, not a legal decision. supervisor campos: ok, but that supervisor campos: ok, but that is different than what you just