to us are very costly. that's something that also came up at lafco. recology has invested in quite a bit of recycling and composting infrastructure. some of the special programs cost money. there was a lot of talk about apples to apples and if oakland was a fair comparison. supervisors kim: that was a little frustrating in the lafco report. it was hard to discern what the cost of all these programs were. i think there's probably a general consensus here to continue this item. i would like to see what the cost of these additional services are that, for example, other jurisdictions do not have. according to the report, many other jurisdictions have community clean-up days and

compost giveaways and many of the things recology provides, which i think is great. i love that recology provides these services to our city. just to get a sense of what the benefits are. we have a sense of whether the residential rates are comparable and whether the fees are comparable compared to the services that other jurisdictions are getting. it would be good to get that. could you also talk a little bit more -- we are out of compliance with state law. are the penalties associated with >> that> there are no penalties. it is a concern that we do not have 15 years as part of our plan. it is mandated, but there are no penalties. supervisors kim: i know we have the impact on the county, which i think many other jurisdictions do not have. that is something we have with

recology and the department of environment. can you talk about what we use those fees for? >> many of the impound account fees go to different departments. department of environment get some portion. the department of public works gets some portion. and the department of public health. from the perspective of the department of environment, most, if not all of the impound fees are focused on ares erased program and are toxic program. they're also the smaller portions that cover environmental justice. those go into staff costs, education, outreach, implementation, and on zero waste, implementing the mandatory composting and recycling law is very cumbersome, but cost-effective.

our composting rates have doubled. apartment buildings have gone from a 20% of two greuptick rat. from the perspective of department of environment's they do help us. supervisors kim: it would be great to get the budget for that and the outcome on how we spend that money. exactly what you outlined. can you talk about whether we can segregate the residential and commercial? and why we are not able to do that now? >> can you say the question again? supervisors kim: my understanding is that we currently cannot segregate the profits brought in and we see it

as one lump-sum. is there any reason for that? >> i will have to look into that question. i do not know. supervisors kim: i think those are my questions for now. thank you. supervisors chu: supervisor campos. supervisor campos: thank you, madam chair. a couple of things about what was said in terms of the competitive bid process and the concern of what would happen. one of the things that was noted is that you never really know whether or not going through a competitive bid will result in higher or lower rates in the sense that it depends on the case. it is a case by case basis analysis 3 on the 95 jurisdictions that they looked at.

on average, residential customer rates were actually lower after the competitive bid process was followed. that is not a guarantee, but again, the whole point of the competitive bid process is for us to outline the services that we want. the competitive bid, the request, can be structured in such a way and then you let the market decide and the company that can provide that service that you want at the lowest price, with other considerations, labor considerations and other allies, would get the contract. i do not necessarily think that we should be so afraid of having to go through that process. it is a process that could end up benefiting the city.

the second thing, in terms of the impact on rates by the imposition of a franchise fee, again, jurisdictions that have franchise fees have rates comparable to ours. it is not this is rarely the case that the franchise fee would automatically lead to higher rates for the ratepayers. i would hope that if we go down the road, that is not the defacto position taken by the city. we should make sure that whatever happens, rates are kept as low as possible and to the extent that there is an impact, the impact should not be on the ratepayer. maybe it will mean that the bottom line for the vendor is not as high as it presently is. obviously, we want to be fair. there's nothing wrong with that

being the result. we cannot assume that the higher rates will necessarily happen. with respect to the amount that is paid, ms. nutter, you referenced 10.6%. i think there was a mention of 13% of revenue. that's the first time i've heard from department of environment that it is 13% and i have certainly not seen any numbers that point the 13%. 10.6% is what we have. interestingly enough, in the 10.6%, they include things that other jurisdictions have come in addition to a franchise fee. vehicle license fee, business tax. i do not know that those things are included in the franchise fee calculations that other jurisdictions have. that's why it is important for us to have the budget analyst review these numbers. interestingly enough, when

recology itself made its presentation, they pointed out that they serve 110 jurisdictions. they have franchise agreements with many of the jurisdictions. the fee that they pay goes up to as high as 15%. 15% for san francisco would be an additional $14 million based on the calculations given by the department of environment. in this budget crisis we are facing, we have an obligation to ensure that we pursue every option and that we get our fair rate of return. that's why i think that taking the time to get to a solution that is the right solution for the city, the ratepayers, the workers, and the company, is worthwhile. i look forward, if that continues to happen, to working

with you. supervisors chu: thank you. supervisors mirkarimi. supervisors mirkarimi: some of the data that we have, either from the lafco discussion and some of the numbers before us, it's a little incomplete. that seems to be the emerging cognizance. we are looking for a little more data. to the point that was just made, i think that we could possibly invite problems with the competitive bidding process. in other words, there's no question that in the conventional wisdom, that this benefits the ratepayer by having companies compete for the best rates and the cheapest rate for the best service. i think that's an obvious one. the question that needs to be attached, the service of excellence that is maintained based on the standards that we are already used to in san francisco. that's why i prefaced my remarks

that san francisco stand out in its level of comprehensive diversion and its sensitivity towards its landfill capacity and its environmental goals. these are all trophy points that have to be maintained with the primary pursuit of trying to deliver great rates for residents. keep in mind, some of those people may not care about the environmental goals overall that we are way out on a limb on nationally. there has to be some kind of a convergence on all of this that, i think, speaks to why this discussion is an important one. should have been had months ago. now that it is taking place, we are in the thick of it. a number of colleagues have said these are the points we want to see. do they line up in a way that there is a win-win?

my forecast is that there may potentially be. supervisors chu: thank you very much. i know there might not be any questions at this time, but perhaps later there will be. there's a large number of people in this room. i would like to open it up for public comment. i will call names from cards i received. if you hear your name, please come up to the center aisle and we will do two minutes each. bob gregory, richard neal, marina, david, ken, irene, adr ienne.

go ahead. >> my name is robert gregory. i'm a regional operations manager for a company in san for cisco bay. -- for a company in san francisco bay. i do not know all the history of this issue, but i do know that we were not contacted to explore any of the possibilities of barging the garbage in san francisco bay. as one of the larger tug and barge companies in the bay, i think we can at least offer some information. i cannot argue it would prove to be the -- proved to make economic sense, but i would like to be involved in the studies. i do not know of any other

barge companies that were contacted either. barging has a tremendous environmental advantage over trucking, including taking trucks and rail off the road. our company has done a lot to put the latest engines in our vessels and introduction of hybrid technology in tugboats. there could be a tremendous opportunity to create maritime jobs, something that has been -- something the port has been trying to build three in conjunction with the marine highway, maybe there's a -- maybe this can be worked into a similar path with. and make further use of the

marine highway. i guess that is my two minutes. there are other tug and barge cos. i ask that we be involved. supervisors chu: thank you. thank you. next speaker, please. i believe there's an individual from recology who would like to speak. i would like to call you out of order aafter the speaker. >> i frequently use san francisco's political phrase "this city family." here's an example of city family dysfunction. on page 7 of the report, it mentions that the department of environment's staff indicated that recology that -- indicated that "recology and the city are long-term partners and it's an

appropriate alternative to a competitive procurement process." lines are critically flawed between the regulator and the regulated. a rate structure and procurement process needs to be independent, not a sole source, and not cost plus contract. 57%, or 7.7 million of department of environment's annual budget of $13.5 million is funded by the city's rate peers through recology -- cities ratepayers through recology. this is -- if you care about good government, fairness to ratepayers, you will take leadership to correct this and honor your fiscal and fiduciary duties. you must insure community choice, competition, by

monopolies. there are three consulting groups. overall, the actual analysis needs to continue. you are elected supervisors. you need to be a voice for the ratepayers, not intent on expanding the monopoly to hire lawyers and lobbyists to continue the item. supervisors chu: thank you very much. if i can call out of order mr. legnitto. >> supervisors, in the group manager for all the san francisco operations of recology. based on the testimony we have heard today, i have over 100 speakers here today to speak on our behalf with respect to this agreement. based on the city fathers and

the things they feel that are important, i'm going to ask them to stand down today in an effort to fully vet this process. with that said, i would like to make this comment that we feel very strongly that the agreement before you is a good agreement for the city. it has been competitively bid. it saves a significant amount of money. i believe it will be sustainable and more environmentally conscious than any of the other proposals at this time. thank you very much. supervisors chu: thank you, mr. legnitto. i will call the remainder of the cards. i do want you to know that we are aware of the large turnout that we see. i will be calling the rest of the names. if you are inclined to speak today, please line up in the center aisle. daniel, andrew, cliff, ryan,

brent, jim lazarus, douglas gibbs, debra monk, ashley roads, al norman, rev. arnold townshend. thank you. next picture, please. supervisors mirkarimi: before that, in following normal protocol, i want to acknowledge that judge copp, former supervisor, is in the audience. supervisors chu: thank you very much. >> my name is richard mead. i'm here to ask, again, that a full, clear look be taken at the

maritime option. yesterday or the day before, there was a hearing. an individual pointed out that san francisco is surrounded on three sides by water. that does not mean that you should stick out the airport. the maritime option is feasible. it is a good option. there was nothing in the report about the marine highway and the federal funds that are available. no one has talked to us about our barge supplement and how we make it work in the press of the northwest. right next door at pier 96, we have an aggregate auction. we sat down with them and made the numbers work so that could

come together. there was a lot of talk about the 75% recycled percentage that recology is currently doing. that number will not go down if you ship by barge. you can access five landfills within 10 miles of the bay. the one thing that the current plan has in common is recology from the start to the finish. i do not blame recology for doing that. they're good businessmen for doing that. that does not necessarily mean its benefits sanplease, take a k at the options in front of you. i think there are better ways. thank you. next speaker -- supervisor chu: next speaker, please. >> good morning, supervisors.

this discussion of this morning has gotten derailed from the central purpose, the land contract. it was competitively bid. the department of the environment has done a good job. you have had time to consider this particular contract. it should be approved by this committee. the issue that the supervisor brought up about the franchise fee is a valid subjects for discussion but in a different day. we need to move this forward. the department has thoroughly analyze this and made a recommendation. we are the largest consumers of services and have a long and positive history with that company. as the supervisor pointed out, they have been very good corporate citizens for the citizens of the san francisco. and the citizens -- and the

city. downtown buildings are filled with small businesses. you are looking at franchise fees and raising the cost of garbage collection in the city, it will be passed on to the residents and small businesses. i am here to support our organization, which firmly supports the ecology. supervisor chu: thank you very much. we currently have five people in line to speak. if there are individuals that would like to speak on this issue that are in the overflow room, please make your way to the board chamber. >> supervisors, my name is david cham, from a nonprofit legal defense fund. we are very antagonistic to

landfill expansions. at the previous meeting on the ninth of february, of your committee, we presented evidence that there is a great deal of unused capacity for landfills within the bay area. we believe that it behooves you to look at that. we heard this morning's testimony from mrs. anothes. nu. the city must act now. what is before you is a disaster. a remote landfill in another county, does it have the capacity to handle disaster tonnage? there is 30 times that unused capacity in the bay area. i was glad to defer to mr. cleveland from the building owners' association. he based we supports this contract. yet the study from ms. nutter

shows that you have comparability with other cities. page 170, you can see comparisons of commercial rates. the city and county of seven cisco, 17391 -- the city of san francisco, 173, 91. oakland, $114. fremont, 74. heywood, 105. san jose, about $91. [tone] supervisor chu: thank you. next speaker. >> supervisors, in the director of the [unintelligible] marine division of the iow and

share of the maritime adviser committee. i am speaking to you on behalf of captainship way, who is unable to be here. we support the existing workers and their union and garbage collection for the city of san francisco. the recology facilitation plan will result in a loss of jobs in altamont. we are excited that the opportunity presented here to allow our report to finance infrastructure. barging can be very compelling. we have a tremendous opportunity to create maritime jobs, raise

revenues, and we can take the bay area leadership's in for using container garbage as a baseline for business moving away from the maritime highway, which could be an environmentally sound way to move bardot in the injured. believe it would be in the best interests. thank you. supervisor chu: thank you. >> my name is aileen from san francisco. we are urging the rejection of the current bid process. we have 2000 san franciscans but think the same, they have signed this petition and have circulated a new request for proposal. we strongly feel that the

environmental impact report should be required for any party awarded the 2015 contract. it is appalling that the department of the environment does not feel the same way. perhaps because 50% of their funding comes from recology. if you approve this proposal, recology will have a monopoly. we will be at the mercy of recology. from what we learned, the city has no legal control over franchise fees or service agreements. unlike oakland or other bay area cities. this committee should not move forward until the final findings are complete. as mentioned, the landfill option requires a state of the dark land feel -- state of the art landfill gas recovery.

i urge you to see for yourself the altamont site. determined for yourselves, who has the best mental, gas, methane recovery program -- who has the best landfill, gas, methane recovery program. thank you very much. supervisor chu: next, please. >> my name is [unintelligible] my father and my uncle were early shareholders in protection and the forebear of ecology. however, this proposal, any proposal that the supervisors choose to go with, should be subject to the impact report. the so-called green train will have 180 containers for each train trip, carrying the waste every two days to a landfill

that is 130 miles away. the standard american container is 53 feet in length, again average for this proposal. 1.8 miles of containers. when everything is said and done, that is 2 miles of train moving our trash every two days. our trash will be trucked to the city of oakland. containers will need loading, unloading, storing, dumping. each proposal brings up a series of issues, including environmental and other impacts. minimizing and mitigating impacts. we are turk -- taking the word recology as opposed the eir, who provides independent analysis. a government agency can advertise its judgment in carrying out a project.