you had said before that it had been done, and not use a it was not. >> no, what i said is it was not support the called out for a separate rfp, but it was for an integrated response, that the bidders have an option. that is how you got the transportation cost estimates and the cost comparison. supervisor campos: is that your understanding of what happened? >> my understanding is, in accordance with the 1932 ordinance, that no refuse can be transported on the streets of san francisco accept those permitted licensees, which in

this case is only recology. going from the transportation -- the transfer station to the landfill requires travel on the streets of san francisco. therefore, it was limited. on the bid, they were asking for the landfill disposal, but as part of that bid, in the recology proposal, they were providing, as opposed to the way they do it now, to only go by truck, they were providing a transportation alternative of truck and rail, so that their proposal provided this other transportation option. the waste management proposal assumed basically the same transportation, because of this limitation, i believe, of the 1932 ordinance, so it kept the transportation costs the same as

they currently are. i hope that explains it. supervisor campos: that clarifies things. if i may, through the chair, go back to the department of the environment, i am looking at the structure of the deal, and i know that right now, the only focus of this action is: the actual landfill contract -- is the actual landfill contract. did you consider revisiting the 1932 ordinance so we have the ability to go through a competitive bid as a way of knowing if indeed we are getting the best bang for your bop, as supervisor mirkarimi indicated -- the best bang for your buck. >> no, supervisor, we did not. we were abiding with existing law. we looked at the various

alternatives of having a secondary transfer station outside the city transporting from the city transportation to the second transfer station and invading that portion out from their to the landfill because that would be allowed under the 1932 ordinance, but we did not undertake an examination of the system. we feel that was a policy decision. supervisor campos: through the chair, did you look at what other jurisdictions within the bay area are doing with this issue, how they are handling this issue? >> absolutely. we look at a number of different jurisdictions and how they are doing it. we are in a fairly unique situation, obviously. one of the things we did look at was a vertical integration. interestingly enough, even cities that have a competitive bidding situation have vertical integration. oakland, for example. the waste is collected,

transported, and disposed of by one company. there are a number of vertically integrated cities in the bay area, and we looked at what they were doing and what we are doing, and we certainly have a system that has produced better results than any other city in the bay area. >> one thing that i wanted to add was that we have not considered looking at the 1932 ordinance, also because, as the deputy director just said, it has actually served san francisco very well. as you know, we've averaged 77% of our waste from landfills, and that is part and parcel with the public-private partnership we have with recology where they are committed to zero ways and we are committed to zero ways. when we have people coming and asking what operation we have, the system that has been set up in san francisco has served us really well to meet our zero

waste goals, and it is shown as an example of how it actually works well in cities, so i wanted to mention that as well. supervisor campos: i appreciate that comment. along the lines of was supervisor mirkarimi has indicated, i have a lot of respect for the work that recology does and has done, but the problem is that you have no way of really knowing, once you sole source a contract, whether or not, as good as the deal may be, if you are indeed getting the best deal possible. that is the issue here. has nothing to do with any deficiencies that this company may or may not have. to the contrary, i think that we are satisfied. but the question is -- how you ensure that rate payers are indeed getting the best deal? do you know if there is any of the jurisdiction in the bay area for going competitive bidding of a facilitation agreement along the lines that

we are doing here? >> i do not know, but i have not looked at that specifically. one of the things we do look at, however, is as part of the rate process, we look at what rate payers are paying in different cities. we do a comparative analysis every time there is a rate process, and we have consistently been in the lower rate section of that analysis. supervisor campos: since, as was noted by the city attorney, the 1932 ordinance does not prohibit going with a company that would transport the trash from outside the jurisdiction of the city to the landfill, why is it that you again did not consider bidding that portion of this contract so the you can verify that indeed you are going to get the best deal for the rate payers? the thing about that process is

that if recology is in the best position to provide a competitive bid for ratepayers, a competitive bid process would show that. i'm trying to understand why you would not do that because the 1932 ordinance does not preclude that. >> just a clarification on the response to you. when he said that he looks at the rates of other jurisdictions, he is only looking at the residential rates. as a matter of fact, as i testified, the commercial rates are set by recology, not by anyone else. so that he does not look at comparable rates for businesses in other jurisdictions. supervisor chu: thank you, mr. rose, department of environment. >> in regards to a question you had asked a moment ago, emory bill does to the contract and a number of cities in north they

have long-term contracts that they have just renewed. supervisor campos: do you have something in writing that shows what you look at? >> we can get that to you. supervisor campos: great. thank you. >> one of the other questions about the commercial rates -- it is true that the city does not regulate commercial rates, but they are this close and in the financial analysis. it is correct that we do not regulate them. we do look at them as part of the overall rate process now. we also have information on the direct question of considering a second facility outside of the city. in fact, there was an overhead in a presentation. we did look at the -- the only way that this type of situation would work is if you had a second transfer station outside the city. the only way you could operate

the system would be if you on loaded and unloaded with twice. it would have to be consolidated at our existing transfer station, and it would have to be unloaded at a transfer station, which would either have to be built, or you would have to use an existing one. and you would go through all the environmental impacts of two transfer stations. you would also -- so you would have both costs of environmental impacts of that second transfer station. it is a doubling of the handling of the ways. there is no way that that would not have significant financial and environmental impacts. supervisor chu: thank you. let me just ask a clarifying question, and this is a follow- up. we have talked a lot about what the rate payers would be incurring in terms of cost, which is a big consideration for me. what i see in terms of the cost comparisons that you have laid out here that i think nobody is disputing, at least not in the analyst report, not in any of

the presentations, really, is that the difference in cost for the rate payers is a difference of about $35 a ton. if we went with waste management, for example, if that were an option at this moment, we would be paying $35 more per ton. that is what i'm understanding, right? that's not anything anybody is disputing. the question is that why we did not open up the process to a bit. my understanding really has to do with the 1932 agreement and the limitations that that imposes. really, the issue about not rfp- ing it out is if you did, shorter first having to have voter approve repeal of the 1932 ordinance would be simply the fact that whatever the new alternative would have to be would have to consider first building a new transfer station somewhere outside of san francisco, which would think would be $40 million to $60 million. it will require that, we first

dump the trash at the recology currently, we would be loaded, take it to another facility outside san francisco, and dump it again. we are loading was, dumping price, and that would all have to be factored in in terms of costs. in terms of a competitive transportation facilitation agreement, we would have to have a separate entity come up with at least $40 million to $60 million reduced costs in terms of facilitation agreement that would have to be $40 million or $60 million less to make up for having to build a facilitation agreement. plus, they would have to load in additional costs for the duplicate times, basically. is that what i'm understanding? >> that is absolutely correct. >> -- supervisor chu: just a quick thing, also. if we were to build a second transfer station, which is something people have been talking about outside san francisco, that would actually trigger an environmental impact study because that would be

building a new facility that would be handling waste, correct? >> that is absolutely correct. supervisor chu: i think there's just a quick follow-up question -- supervisor campos: i still have, actually -- supervisor chu: on the same topic? supervisor campos: yes. supervisor chu: we will go first to supervisor campos, kim mirkarimikim. -- campos, kim, mirkarimi. supervisor campos: this is the first time i have heard that figure, and maybe it is given that they did not give me the information. as the budget analyst verify whether or not the $40 million to $60 million figure that would cost to build a transfer station, whetherr not that is [inaudible] through the chair. >> mr. chairman and members of the committee, supervisor

campos, we have not verified that number, but let me clarify that our recommendation was to go to the voters with respect to this 1932 ordinance. if that was not in effect, there would not necessarily have to be terribly or transfer stations. supervisor campos: thank you. -- not necessarily have to be two transfer stations. supervisor campos: thank you. what would happen if god forbid you opened this process of to competitive bid, which i guess we are really scared of here, if that is the case, that recology presents the best deal for the city and county of set francisco, the competitive bid process will demonstrate that. competitive bidding is not something to be afraid of if you truly have the best deal possible.

if, for instance, as you indicate, there is a $40 million additional cost, then the competitive bid process would make the decision very easy because it will show that no other company can compete with recology, but what if that is not the case? and you are not going to know that until you actually go through the process. that is another thing. but the important piece here, and this is the last set of questions. at some point, this may or may not come before the board, but i do want to get to the peace of the report because there is a very important letter that was referenced in the presentation, a 2009 letter, from director moyer. that letter basically says, as i read it, that the court wants to

know why the department of the environment has not reached out to them to figure out what they can do. we are talking to hundred $60 million that the rate payers are going to pay. why would we not think about the port having a piece of that action? i have read all the documents. i have, i think, a complete record. is there a written response to that record? >> that is a lot of questions, and i will try to answer them all. there is no written response to the letter. there were meetings that were held. getting back to your earlier question about competitive bidding, you are absolutely right. we have not been opposed to competitive bidding. this is the first time the landfill contract has ever been put up to bid. we are very supportive of it. we put this up to bid and win for the process. it is true that if you go

through a process, again with a competitive bid, as you say, if we went through a process with a transportation agreement and end up with a result shows that while this is the best deal we could have gotten any way, why would you want to go through the process again? supervisor campos: ok, thank you. >> and also, this is not the last time this is going to come before the board in the sense that it is a 10-year agreement. >> i think the difference is that i do not think that we should wait 10 years to get this right. i think we have the opportunity to get the best contract possible for the city and county of san francisco. i do not want to belabor the point. my colleagues have questions, but what i would say my colleagues and for members of the public who are watching, we have asked the city attorney's office to draft a charter amendment so that we can bring the item to the voters so that

we revisit the 1932 ordinance so that we really make sure that the city and county of san francisco and its rate payers have the best deal possible, and we will be talking more about that. to the extent that there are so many questions about this deal, including the very important question of the port's role -- and i'm sorry, but i've not seen any documentation that satisfies in terms of a proper response, a full response to what the board is saying. i think we need to look at the issue, and as the newly elected share of the local agency formation commission, under state law, it has served a function, and one of the functions is to study these kinds of issues. i will be submitting in the very near future a request that we ask for a study to review this issue so that we compare what we are doing to best practices relative to the rest of the bay area because we really want to

make sure that we do what is in the best interests of ratepayers. i think we owe ratepayers' that. if that requires slowing the process down and giving ourselves more time to make sure we do it right, i think we owe that to the ratepayers of the city. supervisor chu: thank you, supervisor campos, for your comments. we will now go to a supervisor kim. supervisor kim: i had a follow- up question on the transfer station. was also my first time hearing the cost. do we own the current transfer station in san francisco? >> the current transfer station -- no, we do not own that, but it is totally paid off. there are no costs for the transfer station. supervisor kim: how's that possible? >> it has already been paid for. it is an existing infrastructure that is in place.

>> you mean there is a lease associated with the current transfer station? that is all paid off? >> it is owned by recology. there is no additional ratepayer costs, i guess what i'm trying to say. >> as to the double loading and double dumping, why is it that, let's say we were interested in having a transfer station outside of san francisco. why is it that recology could not transport directly outside of the city? why would they have to go to the site in bayview first? >> because, different types of vehicles are used for long haul and for collection. the curbside collection trucks do not take material to a landfill. it is very different. >> not a landfill. a transfer station. >> the executive transfer station in the city, but they are designed for short

distances, so if you then have to take those trucks to another transfer station outside the city, you are taking 50 or 70 or whatever the number of trucks are and driving them an extra distance as opposed to consolidating them in a transfer station that is within the boundaries of san francisco. >> if it was just outside the boundaries, though, that they could do that. >> they could do that. if it was just outside the boundaries. >> just on that point, in terms of the extra transfer station, if we were to build one outside, the current station is set up to separate out the recyclables and composting. if we were to consider a separate transfer station at some point later on, we would have to consider whether there is a duplication of sorting out of materials or not, and that would be potentially a different cost, right? >> that is correct. there's also residual with that comes from the pier where the recyclables are sorted.

that has to be consolidated, so it is not as simple as just taking it to another transfer station outside the city. supervisor mirkarimi: i want to return back to the department of the environment on several points that i made earlier or referenced earlier, and my colleagues have also spoken on, but i want to get back and circle the louvre on the question on transportation. it is noted that on recology's response to the department's rfp, it states that subsequent to the city's issuance of the request for proposals for landfill disposal capacity, a supplemental request was made by the city back san francisco r&d provides the city an estimate of the cost to provide transportation to the city's msw organic and atp materials as

compared with the current truck transportation costs. the cost to transport the materials by rail to the ostrom road landfill includes transport to the intermodal yard in alameda county, and it is destined to be approximately $30 per ton in $2,009. the average cost of transport by truck to the ultimate landfill and organic materials to the hero of landfill is currently approximately $18.33 per ton, so i guess the question still is vague on looking in the competitive aspect of that one swipe that i think is a point of concern and interest here, why we cannot just zero in a little bit more in pulling out what is the best deal sense what was

noted in their response, suggested that this was an afterthought by supplemental response, so therefore, i would think that it would also be an afterthought to try to get still a more competitive bid. >> just one comment on that. we received a letter from waste management after we had gone through the process in which they have put together a table and estimated their cost to transport waste to the landfill, which was $19.50 a ton, which is higher than what we are currently paying for recology. supervisor mirkarimi: right, but it still does not necessarily -- i'm not necessarily representing anybody else's interest in this at all. but i'm just trying to understand that speaks to the question on transportation and still competitively putting that out to a bidding. so that we have a greater matrix as to what to choose from. it does not look like that was done. second to that is again, i'm

still not clear on why we will move from or not move from truck hauled to rail haul in that environment review exempts us in that there was not a requirement or that even the department of the environment would not even asked the requirement or insist on the acquirement of a more incisive analysis like ceqa. being the department of the environment, it would seem like a no-brainer, so i'm trying to understand why would we want to exempt that process. >> we did not apply for an exemption. ceqa is meant to be for facilities. we certainly research this completely to see whether there was a need for any kind of environmental review, and there is not. there is no facility being built. existing infrastructure is in place. the rail is already there. rail lines are already running. we're just utilizing one system

instead of another. we did the analysis of the environmental benefits of rail and trucks. from that perspective, we did our due diligence on the environmental impact of the choice. >> -- supervisor mirkarimi: there is no rail infrastructure that is to be built at all? >> there is a spur at the landfill. supervisor mirkarimi: does that not qualify as potentially being a candidate for environmental review? >> they are going through the permitting process for that. supervisor mirkarimi: ok. if they go through the permitting process for that, does that also mean -- what, based on ceqa review for or permitting process that speaks to environmental analysis? >> i missed the past couple of questions, but did receive some

information from an attorney who has been working on this it has informed me that there is a subtle pre-emption that governs rail and any intermodal transformation and a sense that from any state ceqa review. there is a pre-emption for rail transport. >> -- supervisor mirkarimi: they do that because that is why they are able to transport nuclear waste and the kind of radiological material through municipalities and state roads that did not have to reveal the travel patterns, but that does not mean that our own department of the environment does not step up to the plate and say we do not like this analysis because we do not like this analysis. the feds do that in order to cover federal action. that does not mean local government has to do it because we are interested in making sure our bases are covered environmentally and public health wise. that is my point. there are many people here from

all over. i think public comment is probably where people are anxious to go. supervisor chu: yes. thank you, supervisor. at this time, we would like to open the floor up for public comment. i do want to a for the contractor an opportunity to also speak at public comment. there are a number of cards that i do have. an announcement from the clerk. as you come up and please indicate your name and indicate whether you are in support or opposition of this agreement. right now, i'm going to call a number of names off of the speaker cries that i receive. if you hear your name, if i could ask you to line up in the center aisle so you can speak. public, will be at two minutes an individual. [reading names]

if we could have the first speaker come on out. any time. >> and the executive director of the alameda county waste management authority, which is a joint powers authority of 17 member agencies in alameda county that have solid waste authority. we are also on the recycling board, a charter agency created by the voters about 20 years ago. i'm here today in opposition to the contract as currently structured, and there are two reasons for that. i will squeeze them into the two minutes. i had assumed i would have three. the first reason is that the transfer station to be located in oakland is not transparent to us in terms of what it actually

is. i heard for the first time today that it is some sort of very simple intermodal transfer. that might be ok, but we have heard before that it would be a transfer station of some sort that would require facility permits an amendment of the cavity -- county waste management plan and so forth, which would exempt us from having to go through a potentially litigious and difficult public policy process. until that issue is settled, until we have an understanding of what the station is, what ceqa exemptions apply, whether facilities permit is required or not -- until that has occurred in a transparent and public way, i have to stand in opposition to the contract is currently scheduled. second, you have been told by staff that they are not clear whether our fees are negotiated or not. that is puzzling to me. i've been talking to staff for almost two years. our fees are fully negotiable. i will provide a copy of a letter i sent if you want today. the fee structure is negotiable. it was not a race to the bottom