we began providing service in san the tail on january 1 of this year. those 12 agencies have a standard form agreement that provides all the legal terms about what we are obligated to do. every city has decided they want some slightly different little services. they all want a different franchise fee. they have others that are added on to that. in that area, where branded state of the art agreements, if you can call of that, no two are alike. sadly, you can look for comparability anywhere you wanted. we look at the arrangement we have with san francisco a lot differently from others here today do. we apply occasionally, and we have tried to make it a fairly

regular process for changes in rates that are designed to cover our costs of business and give us what the city percy's -- perceives as a fair profit. that is a very intensive, long process altogether, including public hearings before we ever file a rate application. members of the public are invited to comment upon the services that we provide, what they might like to see done differently. many open public meetings. we work with a couple of city departments to adjust that, put that into the thought behind a rate request. we work closely with department of public works, with department of the environment to develop the specific programs that we are going to provide. in san francisco, just on our

recycling programs, there is 19 of them. in the other 99 or so contracts we have, nothing comes close to that. we are trying to develop things that accomplish what it is the city tells us they want. we provide that information, and then again go through hearings in front of a hearing officer that is usually the director of public works, the person assigned to that. we get through -- we provide testimony under oath. witnesses can be examined, cross-examine. we can be asked to submit additional information. the city then reviews all that, puts on their take on what is all about. after about roughly a five-month process, we end up with a very detailed rate order. i actually provided a copy of it so they could see in great

detail what we are expected to do. in our mind, that is our contract. it is telling us, "you have to provide these kinds of services. you can use this many trucks of this nature, this many employees. you will be incentive -- incented if you accomplish specific requirements. sometimes there are penalties if you do not achieve them." it is very specific about what we have to do, how we get compensated for what we do. that might not be a contract, but it comes awfully close to one, and is reviewed typically every five years. if you do not have that, we are more than happy to make that available to you. i'm sure the department of the environment could do that as well. also, talk about our facilities. they happen to be in brisbane.

they are in brisbane because they were built there beginning in 1952 after about 17 years of using that property as a dump site. the location in brisbane -- i will tell you over the years, brisbane has taken a lot of abuse from san francisco's garbage. in 1965 or 1966, they got an injunction to prevent us from dumping their any more. as a result of that injunction in 1965, 1966, we build a transfer station. it opened in november 1970. it still sits there, and it is still a model that people from all around the world come to see almost every day. that facility is in san francisco. we have added some other processing capacity. it is in san francisco with one minor exception, and that is we had at one end of the transfer station that have been too sick

-- and add-on building that happens to sit in the city of brisbane. we got their permission a few years ago as we were expanding the food waste compost program to utilize that building to transload organic materials and to transfer trucks to take it to our compost sites. that has been a real issue for us. because now, they are talking about taxing us -- a significant tax. we have a problem with that. we expect they are entitled to something for having our facilities there. we think the amount they are asking for is a little exorbitant for the impact that we have. i have instructed our management team at that location to figure out how we are going to handle that material in a portion of the transfer station so we can

get it out of brisbane and the nexus for the tax is not there. yes, we have been talking to them for years about the need to expand our facility. a couple of years ago, your board of supervisors adopted a mandatory composting and mandatory recycling ordinance. they have been extremely effective in allowing the amount of material that is collected for recycling for composting to be increased rather substantially. we also now have the challenge, as we like to call it, from the city, to help it achieve zero ways to landfills, and we are determined that we're going to do everything we can to get there. to do that, we need more modern facilities, more processing capacity than we currently have. we have looked at the possibility of building those facilities on our property,

which is approximately today, about 49 acres. about half in san francisco and half in brisbane. we have always done of processing, again, except for that little bit of food waste removed a -- reloading. we have been talking about putting that capacity in brisbane because we have no more room to build in san francisco. based on their desire to tax the heck out of that, we have been worrying that we should try to find some other alternative site. board of san francisco is absolutely of interest to us. -- port of san francisco is absolutely of interest to us. pier 96 is not. the reason is when we got the permission to use pier 96 for the purpose of recycling our traditional recyclables -- paper, bottles, cans -- we

committed to the citizens of the bayview that this was going to be recycling only. we told them, we committed that we would not bring garbage into the bayview district. that was important to them an important to us. our facility, pier 96 sits right below the hunters point housing project. while we did not have to do it, we committed and have been voluntarily for the last -- i guess it has been eight or nine years now that pier 96 has been there and processing the city's recyclables -- we voluntarily offered, long before anybody was talking about local hire ordinances in the city -- we voluntarily offered all new jobs to people who live in two zip codes that are impacted in the bayview, and we have hired somewhere around 175 people who come from that zip code -- those two zip codes to work for us. what we heard a week or two ago

from the port that was of real interest to us was the possibility of using peer 84 long-term replacement facilities. that is of interest to us. because it is not in the bayview. it is in dog patch. this difference it could. it is not below public housing. it is not going to create the same environmental justice issues. it is easier access from to the wheel of freeways, so we would have -- easier access from two freeways, so we would have better access, and it is closer to the central, so if it makes sense to the city to utilize pier 84 the replacement -- long- term replacement of existing facilities, we are open to discussing that. we do not know what it would cost. we do have some idea of what it

would cost to build facilities at the property we currently own. we would have to do an analysis with before, and we are more than happy and willing to do that. commissioner campos: i think that commissioner pimentel wanted to ask a question if you do not mind. commissioner pimentel: if you decided to move to appear 80, would you continue hire from bayview, or with a go into a different zip code -- if he decided to move to peer 80, would you continue to hire from bayview, or would it go into a difference of code? >> we committed that if we build anything, even though some of those facilities might be in brisbane, we are going to consider those san francisco, and we will continue to hire from the bayview there. we have not discussed here 80 -- we have not discussed pier 80.

there may be other people who would like to have a say in that, and we owe it to all of them to have that discussion before we make any commitments, but we will certainly look at that. we will make them, for sure, the first offer to san franciscans for a new position. commissioner campos: thank you for being here. just had a couple of follow-up questions -- how many jurisdictions does recology serve? >> last count i remember was approximately 110. commissioner campos: do you pay actual franchise fees, or do you have franchise agreements with any of those jurisdictions? >> we have franchise agreements with the vast majority of them. almost all of them provide a variety of fees, and the percentages are all over creation, and the services that

we provide under those agreements vary extremely greatly. commissioner campos: do you have a sense of what the range of the fee is that you pay? in the study, it said that the franchise fee agreement shrank from 2% to about 20%. >> a tighter range in our experience is more like five to 15. i would just like to comment on the schedule that was presented before. i think came this summer around 10% or 10.5% of revenues. that number is calculated based on our -- and again, this is totally transparent. all this information is provided to the city on an annual basis. that number was -- that percentage was calculated based on our total revenues. although there are some non- collection revenues. franchise fees typically are in our experience calculated on

collection of revenues. there are some non-collection revenues in those numbers. that is an open market, and we actually pay rebox fees that are not included. i would say that number calculated the way i was thinking it should be is more like 13%. commissioner campos: i guess, for me, the final point i would make, and this is why it is important for us to get our consultants to get more information about this -- according to the department of the environment, the amount that recology case constitutes about 10 1/6%. if we are at 10%, and the report shows that jurisdictions pay a range from 2% to 20%, and you

yourself know did you actually have some cases or your range goes to 15%, if you are paying 15% to the city and county of san francisco, that is about $15 million more that would come into san francisco. i'm not saying that is what the amount should be, but if we are getting only 10.6% and some other jurisdiction is getting 15%, we have to ask what is the right amount for san francisco? that is the exercise we're going to. >> the difference, if it is 10%, that difference is 5, and i would argue we think the calculation is more like 13, and maybe the difference is two, and maybe revenues are not to 75, because that includes things that are not covered. the number may be is more like

210. again, the issue for us is not whether we are going to pay the city money or not. we want you to get what you believe is right. we will work with you. we just need to make it all right. commissioner campos: thank you. colleagues, comments or questions? why don't we open it up to public comment? i know we have a number of people to speak. i want to take the time to thank commissioner mirkarimi for being here. he has a meeting. he will be leaving when commissioner avalos is back. you each have tilt wheel of minutes -- you each have two minutes. >> thank you. i am a ratepayer and a member of the good government alliance.

i thank you for starting this process and discussion. in 1932, there were lots of reasons why they needed to consolidate into one entity. however, since 1932, there has been no competitive bid process, and as you know, services have expanded to recycling, to transfer station operations, to landfills. it is an entirely different situation. you also know that there are unregulated commercial rates. businesses and small business in san francisco are critically important. it is a relationship directly between recology and business. there is no interface, and this is a problem. i also would like to urge you to take a look at where ratepayer moneys have gone, which is also the brisbane facility. the brisbane facility has existed because of ratepayer costs, and i think the city should have some equity in that.

please look at the one-stop complex at the port. barging from the port recologyport now is on a cost- plus contract. this is very unusual. not a fixed price per ton. it is difficult to monitor, difficult to articulate and difficult to really have an overview of any kind of financial problems. recology and department of environment -- i am troubled that they would say because they have this wonderful relationship that we should not have a competitive contract overview. i work for the city and county of san francisco. i had to deal with contracts every year. i had to deal with the budget analyst. that is nothing new. why shouldn't recology? they have had a non-competitive process for 80 years, and it needs to be reviewed. commissioner campos: thank you very much. next speaker please.

>> executive director of the san francisco labor council. we represent over 100 unions in san francisco, including the workers who actually work for recology and make a living wage with good health care benefits and a pension plan. sitting here for the last hour or so, i think i am even more resolved and committed to seeing that if it ain't broke, don't fix it. i am more inclined to feel that way now, even after listening to some of the testimony and some of the questions you have put together. we have had a couple of contracts in san francisco, including a sludge contract. we have had 1 south van ness that has gone out to bid. people are getting laid off, thrown out, fired, and i am concerned as we go through our budget process that we open up something that does not need to be open.

these are good jobs. there is a fair process that does seem to be moving forward. i think the questions you asked are correct, but i'm saying -- let's not mess with this contract. let us make sure that we have good jobs, and this is a model program. i go back east to philadelphia and new york or whatever, and when i talk to people back there, they say, "how the heck can you get this much recycling done in san francisco?" this is the one bill that i do not complain about you when i get the monthly bills that come, i do not worry about my recology bill. i think it is fair. so please do not open things up where you do not need to. commissioner campos: thank you. next speaker please. >> san francisco chamber of commerce, echoing the labor council's comments, which is a rare treat for us, and the department of the environment also. we have the best refuse,

recycling, and composting program in america, and i think actually, your report today was an eye opener for many people. because it verify what we sought but perhaps did not know about the quality of service, the value we are getting as business owners and residents of san francisco. rates -- this is not an issue of the total free market. we have a regulated monopoly. we have had it for over 80 years. the city is the rate setter for residential collection, and that becomes the basis for commercial collection as well. the city is getting a fair return in terms of services and cash, in balancing what those rates should be. if you feel there should be a higher franchise fee, we the consumer will pay for it. so there have been decisions over many decades, and i have been around long enough sitting over there 30 years ago as a

deputy city attorney, when these issues were opened up before and put before the voters and rejected by the voters. that old phrase, if it is not broke, then do not fix it, it certainly applies in this case, and we urge you to file a very good reports, refer to it, but let's get on and get to zero their version -- or 100% diversion, and zero ways. commissioner campos: thank you. next speaker. >> i represent approximately 1000 members in the collection, recycling, and transportation of the solid waste for the city, and i'm here to speak on behalf of my members, members who have worked for the city for 40 years, 20 years, 30 years, waiting for the day when they

can retire. the city obviously will have the ultimate decision, but i am here to ask you that these -- the franchise must be left alone. nothing is wrong with a franchise. the company, the corporation has served the city for 70 or 80 years, and it has an excellent record. i happen to be the national director for the solid waste division for the united states and canada, and everywhere i go, everyone wants to know about san francisco, and house san francisco has obtained 75% recycling goals that we have here. everybody from other countries visit san francisco to see the operations. my members work very hard, and i think that they deserve to finalize their careers with a good corporation supplying good wages and benefits, so i ask you

today respectfully that you table this idea. thank you. commissioner campos: thank you. next speaker please. >> good morning. waste management. i wanted to clarify a couple of points that were stated this morning here when asked the question, what is the difference between san francisco and oakland, the difference is competition. there is no way that any other company could come in and try to bid work for the process. that is one glaring difference. it was asked about the flexibility in adding new services. you know, in oakland, the rate review process occurs every year. during that time, if there is an opportunity to ask for more services, they go through an amendment process overseen by the staff and city administrators, so there is

flexibility in any franchise agreement. and also, when talking about the franchise fee and the amount that goes back to oakland, it is more like $31 million, but that does not include other free services that fall under the franchise agreement. to that end, we would be very happy to work with r3 to assist in a more thorough analysis to assist -- to determine how san francisco and oakland are very much different. commissioner campos: thank you. next speaker please. >> good morning. i m a user of the dump facility both in san francisco and in south san francisco, so i have a little different perspective from the fine gentleman that spoke earlier. i feel as though san francisco is being taken over the barrel, essentially. for me, as a user, i pay $144 a ton in san francisco and $89 a

ton in south san francisco, so i think that same discrepancy is being applied to residential users as well as commercial users. my second point is the proposed dump-week lynn, california. as you know, that is a watershed -- dump in wheatland, california. as you know, that is a watershed where they want to located. because trash is not inspected, there is no saying as to the toxicity of users in these dumpsites. although san francisco has a wonderful recycling program, other counties have nothing at all. so their trash mixed with our trash, and if there is a contamination problem, there is no saying where it comes from, and it could very well be laid on san francisco. commissioner campos: thank you.

next speaker. >> ♪ well, hello, lafco and recology make it good, recology it is so nice to have you back where you belong the city is looking swell, recology i can tell, recology you are still going you are still growing you are still hauling strong one of those -- i will take up all those old-time landfill garbage from way back when golly, gee, board fellas

why don't you recycle it up, and then you will sell them make it better, recology, once again ♪ [applause] >> sometimes you need a song to take all the tension out of the room. commissioner campos: next speaker. >> hello. i cannot very well top that. i was president of sun said scavenger company 1965 through 1985. i work for waste management for 10 years and sanitary service after that. toynbee and we had a tremendous amount of experience working with smaller companies and larger companies. when i became president of the company, san francisco was facing a difficult crisis, filling the day with garbage. we were able to work with the city government of san francisco, and the city of san

francisco recognize the scavengers were experts in the solid waste management business, for lack of a better term, and we developed what we called the palace of garbage, which is the transportation mentioned a while ago. the company has grown and expanded, keeping in mind that the city is surrounded three sides by water. has no place even two-part garbage. but working with the city and county of san francisco, and i'm talking about now recology, and we have one of the best comprehensive waste management programs in the world. that is no bread. that is a fact. it is coming from a biased person in a sense because my roots began with the company, the i have seen it grow and prosper, and everything they have done is done exactly right. the more important thing, the rate structure, the way is done, you have to show every expense before a public hearing to get

through. i would like to refer to the point that we get rewarded for the time for our efficiencies because we are able to work with the city and county to come up with programs in existence today, i had to put my 2 cents in. san francisco does in fact have the best solid-waste management program in the world. no brag. it is a fact. 94 allowing me to speak. >> hello, commissioners. -- sank you for allowing me to speak. >> hello, commissioners. you do not want to hear me sing. trust me on that. i want to talk about a statement made by recology a moment ago about environmental impact currently with the station in brisbane. there is garbage being called to the view right now, and what's more, it is double, triple, quadruple handled through brisbane. the trucks go to