by united and american to do maintenance on aircraft and overnight parking. the airport did begin work to upgrade the superbay hangar fire suppression project in 2016 when the existing contract began to fail. the new system will replace the old system with a high expansion foam and fire sprinkler system and this modification will allow us to capture some space for infrastructure, as well as extend the lease. >> how did we lose the space? recapturing? >> we didn't lose it. it was part of american's original rental agreement with us, but we need this land, it's not very much, but just for the infrastructure for the new fire suppression system. >> and this new fire suppression system, it will be owned by the s.f.o.? >> yes, we own the superbay and we rent it to the airlines, so we are responsible for all of the infrastructure costs.

>> ok. thank you. i don't have any other questions. let's go to the budget legislative analyst and hear miss campbell's thoughts. >> item number eight is approving extension of the contract with thyssenkrupp elevator corporation by six months through july of next year, june of next year, and the reason for the extension, because it was not part of the original contract, is to allow them to do the r.f.p. process, the airport has told us they want to align the new contract with the fiscal year rather than the calendar year. so we consider that to be reasonable. the airport sees some increasing costs going forward in terms of the age of the escalators, or the walkways and the escalators, and increased foot traffic at

the airport. we did consider their budget request to be reasonable and are recommending approval. item number nine is a modification to the lease with american airlines for plot 40, the superbay hangar. it does reducing some of the square footage or the acreage, to needing that for the construction crews. the second time the lease has been reduced in size for that reason. rent is going up to -- from 4.6 million to -- 4.6 million to 6 million a year, based on appraised value and being extended through 2023, under the administrative code, the airport does not need a competitive process to extend into a lease, or extend a lease with an airline and we recommend approval. >> are you in agreement with the recommendations from the b.l.a.? >> yes, we are. >> all right.

colleagues, let's go to public comment on items 8 and 9. please come up. all right. seeing none, public comment is closed. thank you. miss campbell, you didn't make any amendments, right? so, i'll make a motion to approve and send to the full board with a positive recommendation. colleagues, take that without objection, thank you, without objection, madam clerk. thank you. all right. on to the big fish. item ten. >> ten, ordinance amending the environmental to require audit every three years of large refuse generators, separation requirements and establish enforcement measures applicable to large refuse generators found noncompliant. >> thank you very much. i wanted to recognize, we have supervisor safai a sponsor, and supervisor tang a sponsor of this, and miss debbie rafael, an

opportunity to make opening remarks and then we will hear -- ok, supervisor safai, please. >> thank you. i'm not going to have long remarks today. i think we had a really deep and spirited discussion last time, i appreciate the opportunity to hear this again. i'm just going to say very clearly, based on the research, based on best practices, based on everything that we know from working in this industry, waste management, and environmental protection and concern, this is about an entry level minimum wage job to help preserve money, save money, for the company that they, this person might be working for, or the non-profit or entity, whatever it might be, but ultimately this is a

position that will pay for itself, it will help save the company money, and ultimately save our environment. we are paying significant cost to send waste to landfill, we are paying significant cost in environmental degradation as it pertains to greenhouse gasses. when we send waste not appropriate to landfill, it lets off toxins that contribute to greenhouse gasses, and ultimately help degrade our environment. rate payers experienced 14% increase in the garbage bill last year. all of that embedded in the cost is the cost to pay for landfill and pay for the work that's being done in this industry, and i think san francisco is a leader. so, what we are saying is in this legislation that we have been working with the department of environment and many in the industry on for almost a year, that if there is an audit, if there is a finding that a

company or entity is not performing well, not participating in our environmental goals, then they will be asked to have someone dedicated to looking at this and helping to facilitate the work to divert more recycling and composting away from landfill. the reason we started this conversation was a year ago, we found out that we would not be meeting our 0 waste goals by 2020, and that 60% of our waste stream was compostable or recyclable. so we said how are we going to ultimately achieve this goal, and so this is the best practice in the industry. we are not making this up. having someone dedicated to doing this work has been done for years now. another thing we will talk about is the impact on affordable housing and food, food serving industries that serve the

indigent, i have some amendments. we worked with the department of the environment, unified school district, city administrator, small business commission, and economic work force development, multiple city agencies. each and every one of them has signed off and is in support of what we are doing. we have checked in with them multiple times, so we feel really comfortable about the way this is headed and we really appreciate director rafael and her team for putting so much time. at the end of the day, this is -- if in fact someone would have to hire a facilitator, this is a minimum wage job that will pay for itself and ultimately save whatever entity that's required to do that money at the end of the day. and they have case studies to show that. thank you, director rafael. >> thank you.

>> thank you, president cohen and members of the committee. debbie rafael, could we have the power point, please? perfect, thank you. it is a pleasure for me to be here today to discuss my role in this is to explain why, why this is important to our department, and then jack macy will answer some of the questions laid out before. this is the total tons disposed to landfill over time, and what you can see, since 2000, we made great strides. reduced our amount to landfill in half. and during the recession, there was a dip that continued, and as we pulled out of the recession, that, we call that the hockey stick. the number is going in the wrong direction. at the same time, we have signed on to the world, on the world

stage, that we are committed to refusing what goes to landfill in half, by 2030. so, we've got a major commitment that we have joined with cities from around the world in cutting where we are now in half. so, when i take a look at that graph, i say all right, we are going in the wrong direction. what are the tools that i have that we have as a department to help us change that direction, and what tools are missing for us? so, the first question, why is this going up and who is contributing to that. a small group of generators, less than 1% of the generators are actually 20% of the waste to landfill. who to tackle first, that's where you go. the small number giving the biggest input, that's the most efficient way to go. so, these large quantity

generators, large refuse generators are not mysterious to us. we know who they are, we have been working with them for 20 years. the last ten years since mandatory composting and recycling was passed by the board, we have in fact invested hundreds of thousands of dollars in staff time, in consulting time, at no cost to those generators, to hold their hands, to help them do a better job. and what we have found of those large generators, many of them are willing partners. they are willing to work with us to try and do a better job. there are a handful, there are a number of them who won't let us in the door. and when we raise their rates, when we take away diversion discount, when we start to do what we call these contamination charges, they simply pay their way out. to them, it's the cost of doing business in san francisco. so, for us, when we look at that, it's a tool of technical assistance, the tool of rate signals are not working, we need

an additional tool in our toolbox to deal with those large generators. and again, as supervisor safai said we look around. where do we have proof of concept, what tool we need and what we have seen is successes are often because somebody in that building has a responsibility to make sure that 0 waste paid attention to. not spread out over the janitors or asked of the tenants to simply do the right thing. there is someone who owns that task, and we call them 0 waste facilitators because their job is much more than sorting at the end of the line. it's going back up to tenants and making sure they understand the rules, it's putting signage in place, giving a feedback mechanism to know what's expected. there are some other consequences of not doing a good job. this graph is a problem for us on many levels. the wasted resources is one, of

course. we are sending things to landfill that shouldn't go there. tlu already other problems and those are the problems in the green and the blue bin. in our green bin, our compost, that is important resources for our agricultural systems. we have had loads of that contaminated with glass, some restaurants or hotels were not careful and put in bottles. that ended up on ag land and costs tens of thousands of dollars, they had to go out to the vineyard and collect that compost and bring it back. with the blue bin, hearing about china shutting off its recycling markets because they want it clean. and if anyone has ever looked in a blue bin, maybe in their own homes, sometimes they are contaminated with food. they are not clean and dry. well, that food contaminated material completely gums up the system at pier 96, that we just

invested $14 million to upgrade. so, when our blue compactors are contaminated, green are contaminated, we have real problems at the end of life. and when our black compactors are contaminated with recyclables and composting, we are not meeting our goals and serving the climate. so, that's the problem statement, why i as director are looking for opportunities to give our staff more tools to address the problem. now, you last time this committee met, you had a number of questions and they were fully legitimate questions, and i apologize that we did not come to you in advance with those answers. but we want to be responsive and so jack macy and his team have spent a lot of time trying to figure out what are the answers to those questions. we also understand that when this law was originally written, it was too broad. and we have worked to narrow the focus so that we work with the

affordable housing, the food pantries, get rid of the smaller restaurants and businesses so we are honing our sites on the large generators that are the problem. with that, i'm going to pass it along to jack macy, unless there is a question. >> i have a couple questions. if you don't know the answer, that's fine. we will pass it on to mr. macy. i want to say thank you for coming to committee and being a part of this. your voice was notably absent and give you an opportunity to be present and aware of this. as a director, it's really important. the other thing that i want to also highlight, we are on the same page. we want to get to 0 waste. that is the ultimate goal, and i think it's important for us as the city and county of san francisco as a leader, not only in the state of california, but argue possibly the entire world to be, to making sure our walk and our talk are congruent with the wrdz we put out there.

i have a couple questions for you. these are fairly specific. how many tons a year are going into landfill outside of the recology system. >> it's a great question. what the question is getting at, is that there are, if you look at what is going to landfill, it comes from the inside of buildings, which is what this ordinance is dealing with, and it comes from outside of buildings, which is the construction and demolition world. that is very heavy material, incredibly important, and so i will get you the answer to that question but i want to acknowledge, two different pots, if you will, of waste, and they require two different answers, but it's a very important to understand the graph i showed wasn't talking about the construction and demolition waste, that's what recology is handling and so it's very important to be, to have that distinction and understand that

we are not done with this, we are not done. >> before jack comes up, thank you. that's really important distinction that i did want to get on the record, and i wanted to hear. we'll get to the tonnage in a second. in your presentation, talked about having tools in order to do a better job of bringing the generators, large generators into compliance with our policies. for what reason have we not considered increasing the fees, or increasing the penalties so that these large generators are no longer at the point where they can factor the fee in to where it's just a cost of doing business, but actually becomes punitive and adverse effect on the bottom line. >> beautiful thought, and exa exactly where we went in the last rate process. >> we, it's not the city,

recology had the authority by the rate board to penalize generators, if their black bin, and i use black as a -- if the black bin was contaminated, then they would get an extra charge on their bill, and the way the charge would work, would be up to 50% of their refuse rate. after last year, the rate board approved to go to 100%. so, if they were paying $100,000 a year in their refuse rate, they could pay $200,000 a year. now, for many people, for many companies it's sufficient to get their attention. but there are some who even with those charges, for whatever reason, they are busy, they don't care, i can't ascribe why it has not motivated them, but

it's not sufficient. albeit that rate process has only been in the last year. so, what's good about the structure of this is because it goes over a three-year period of implementation, that rate process should be sending signals to people between now and then, so that they will start seeing different motivations for taking, paying attention to what they do. but that's exactly, and that's something san francisco has that is unique. there are cities around the world that are jealous of the signals we send through the rate structure itself. we have a discount and we have penalties. unfortunately for some, that's not sufficient. >> all right. so, another piece of the legislation a little troubling for me is the cost benefit analysis, whether a sorter would actually save money.

i don't know if you have an answer, but i suspect mr. macy certainly would. and also want to talk a little bit about allowing yourself as the director, the director of this department, the discretion needed to determine, discretion needed to have some flexibility to built in how you want to go after these bad actors. one thing that does concern me, i think you will be lobbied heavily, i'm sure you don't want that. >> so, yeah. you raised two very good points there. the cost benefit analysis, i just want to say, that we have seen because of our rate structure, and so this might not be true for other cities, but because we have penalties and incentives, that together makes the cost benefit analysis very helpful to hiring a 0 waste facilitator. other cities who don't have the incentives and the penalties, if

you will, it might not pencil out. in san francisco it did hes and we have seen it over and over again and jack macy will be able to show you some case studies. issue of discretion is important and i've been in government over 20 years and i believe that, and so i have a lot of sympathy for the regulated community when they don't have certainty, when they don't understand what is expected of them. that to me is a very fair statement. so, when you start to give a nonelected official like myself discretion, it can get funky after a while, problematic. it can be dependent on who is in my position. >> exactly. >> also then be overwhelming to me personally, because we have 400 accounts and if i am deciding on each of those 400 as individually, i'm spending way too much time on this issue compared to all the other things that i need to pay attention to. having said that, i do believe that one size doesn't

necessarily fit all. and so what we have -- there are two pieces of this legislation that i think are positive, and came across after discussion. one is that upon failure of the audit, we will give a very detailed report to the failed business, the business that did not pass on what the problem is. and so they will be able to see where they need to work and what they need to do. that will be tailored to each business. it's not the same reason that everyone is failing. it will be different for a restaurant versus a hotel, versus an apartment building, versus a commercial office building. so, there is discretion for me, for the department to list the terms. there is no discretion on hiring a facilitator, i get that, and that is a policy call, but that is where the discretion stops. >> ends, right. >> the other place there is discretion built in here is on the fines. so, it says the director may issue fines, that was changed

from the very first, to shall. because we heard loud and clear that those fines were incredibly onnerous and only used under, you know, extreme circumstances where someone is truly blowing us off. they just are not wanting to pay attention to this issue. so those areas have been addressed given the one area that hasn't. but those are addressed. >> the one area that hasn't, i -- i will, at some point, will direct the, have already been in touch with the deputy city attorney to start to draft some language. we don't have it here today in this committee to actually go over and to present with you, but when we do have them, when we do have the language, we'll present it to you as a department head and then also to the sponsor. >> ok. >> ok. very good. >> i have another question. how are we enforcing fees? how are they enforced? because i understand, and i want

to just confirm this, that they are not very well enforced. >> i don't know what well enforced means. i would say the way that the fines, or extra charges happen as recology and there is someone from recology here that can speak more specifically than myself. they are pretty communicative in terms of people's performance and they will just start charging on their bill. so, i don't know what not enforce means. >> okay. supervisor safai. >> thank you, president cohen, appreciate the questions. those were really to the point. one point of clarification that i want to add in terms of when in this instance where the director is giving all their orders, spent a lot of time, the legislation says, you would have to have someone dedicated. for instance, we have been in conversation with the flower

mart. flower mart is 40, 50 vendors, all under one roof. they have one operator. we explained to them. they already have a 0 waste facilitator, some one dedicated to doing the sorting, sop one that goes around, looks at the waste stream from each of the respective vendors, says ok, you are not doing the packaging here, you are not doing this here, you are not sorting it properly. sends it back, they end up fixing it, it comes back out. so, the point is, in that instance, if they were to fail, they would not, part of the director, correct me if i'm wrong, director rafael, but would not be required to hire a new sorter. they would probably have to retool some. so, when i talk to the operator there, jeannie boaz, she said waiting and working with recology, need new equipment. it might require department of

the environment to retrain the individual or is the person knowledgeable of how things are. sometimes and i know you all have been doing this very aggressively, where things are sorted changes, right? one, you know, wet paper versus soiled paper versus lining, and part of the legislation, what levels of contamination are, where things are. they allow for that to be updated on an annual basis. that may be part of the reeducation. a place like the flower mart, if they were to fail, they would not be required to hire an additional staff person, but retool, identifying, additional equipment. >> originally written if you fail, i think the word is audit,

then you have to -- then the legislation requires you to hire someone, is that -- has that chan changed? an a that has nodding chaed. we talked a lot about drafting the legislation. first the universe was larger than 424, universe was up to 6, 700, right? we originally had it at 30 cubic yards of waste. slightly different definition and so when we talk to recology, and we have been in negotiations with recology and the department of environment since the spring, since it started, even before the spring. we changed the definition, right? and we also talked about -- >> changed definition from what to what? >> from 30 cubic yards and rolloff compactor, to 40 -- shrunk the businesses. it's no longer on the list,

because of the level of waste they are doing. >> that's where we get to the 424. >> yes, i think it's down to 419 now. >> 419. >> so, we are down to universe of 419. one thing we heard from depending upon the time frame recology said to us, well, and this is another thing we did, we rolled back the start date from january 1st to july 1, 2019. we org in a lly were going to go for a 2 or 2 and a half year period, all the audits would happen. we extended that out to three years, we wanted the appropriate spacing. recology does not want to spend all of the time doing audits of businesses that have rolloff compactors. so we spread out that time and we also know, and again, this is just, i know there are some folks from the industry, know that if someone has an audit, fails that audit, and then knows that they are going to have an audit in a very short period of time after that, it's very easy

for them to temporarily reorganize themselves on bringing some additional staffing and then know the audit is coming and then potentially pass that audit and release these folks. so, we are also concerned about gaming the system. so, one, the amount of time the department of environment and recology would spend on this, two, and i'm sure with a smaller universe, recology would say we can do additional audits, right? but we also are very concerned about false positives, and very concerned about people that are not necessarily going to really be changing their culture. so, this is another thing we would change to your question. originally we required it to be a two-year period the 0 waste facilitator would have to be there, we reduced it to one year. after one year they have the ability to go and have an additional audit, and at that point they can see if they are doing better. but i mean, when jack gets into his slides --

>> interject a question. where are these changes codified? >> the changes i'm talking about are all already changed. >> in the legislation. >> all changed -- i have a couple of additional amendments today but i can -- >> you have language for your amendments? >> i do. >> would you like me to talk about them now? >> circulate them. >> i was waiting to hand them out, after the presentation. >> you can still do that, that's perfectly ok. >> those are the two things i wanted to jump in and clarify on, i'm glad the director talked about the discretion piece. another point to your point about discretion, we did also make some amendments, they are reflected in the legislation already, and this is in a previous version with regard to the city, on the city side of equation. some consideration given to our budget process. so, the audits happen outside of the budget process as it pertains to city agencies, and we give consideration to the budgeting and hiring process

that the city has to participate in. so they would not be required to have the same turn around of 60 days as everyone else is, and so there is more discretion in this realm, in city agency realm than there is to your original point. and director, not to put words in her mouth, felt more comfortable as it pertained to the city to have that discretion to work with city departments. the truth is, as the budget chair, it has not been authorized, not required to hire additional staffing. so we wanted that discretion, and that is already reflected in the legislation. >> all right. supervisor mandelman. >> happy to be here, my first meeting in budget committee, learning my way along the way.

i have a question for supervisor safai about the legislation, stemming from the flower mart issue. so, the folks who already may have 0 waste facility, heard concerns, hire another one, and that's generally the case -- >> let me be clear. someone like the flower mart that has the appropriate level of staffing, and this is -- that this is the analysis and the review that the department of environment will do. they will be able to come in and see, because they are already operating, doing a really good job, might just be the day it happened or the person in the position. it's not going to be part of the director's orders. but if you are talking about for instance the embarcadero center, it's five large class a buildings, five distinct. and i don't know what the level is today, but if they had ten

waste facilitator for that entire universe of 60 story buildings, or 50 story buildings, it's not the right level. >> an at the director's discretion. >> analysis to come up with the appropriate level response. >> yes, yes, absolutely. >> but the reason i gave the example of the flower mart, i think there's been some concern for those on this list, but on the smaller scale. the reason the flower mart is on this list, it's 40 vendors collectively on one garbage account. if they were separately on separate garbage accounts, they would absolutely not be on it. but, and i don't want this to be lost, and i think the recology has hit this point, it is in their interest to have someone doing this work, it saves them money overall. >> mr. macy, are you prepared to quantify that? not yet. >> good segue.

>> i just wanted -- ok, teammates are saying yes. so -- >> assume -- >> and through the chair, did that answer your question? >> a couple more questions. do the large refuse generators, hire facilitator dribtly or contract it? i'm unclear on that. >> i'll say something and the director say something. a lot of times when you are talking about a large class a building, they have janitorial service companies, so they are contracted with those companies. with -- with the flower mart example, might be someone on their staff already doing the work or have a service company. if it's affordable housing and wall talk about that today, they might have a non-profit there working with like green streets, and green streets is going to look at formally incarcerated residents and they will put

those folks to work. it depends on the respective industry that's impacted, but -- does that answer your request he? >> yes, thank you. supervisor mandelman. >> i think there is -- i'm confused about the level of discretion the director has around the hiring of additional waste fa sill tay -- facilitators. >> deputy city attorney. ordinance requires the director or allows the director to adopt regulations setting out further parameters, but if, if a large refuse generator fails an audit, the director consistent with those regulations issues an order requiring the generator to hire one or more facilitators,

match up with the findings of the audit. it may be the flower mart or emba embarcadero has one, the director has the discretion to order the larger number. >> thank you. so -- miss rafael, i don't know if you have any other remarks. >> no, i don't. those were -- no problem. >> bring up mr. macy for the presentation. thank you. >> good morning. jack macy. so, director rafael was talking about the large generator, and to answer your question, supervisor cohen, and the total generation, so, recology is handling about 900,000 tons of material, and out of that, over

400,000 tons are being disposed, that includes construction, demolition, debris, out of that, about a quarter of a million tons is trash, part of the regular collection. and these generator, only a quarter of a percent of the 167,000 accounts, including residential, have an impact of about 20% disposal of trash and the refuse recology handles. does not include construction demolition debris. this is the list of these -- now 419, looking at more up to date data from recology, fine tuned that. also provided a more detailed break down of the different types of accounts, so the largest category are office, and then we have multi-family, and then we have hotel, medical, school, university, supermarkets and markets. retail nonfood, city government

agencies, restaurants, largest of those at 15. convention theater, stadium parking, affordable housing, pulled out separately. only five left after moving up to 40 cubic yards. and we have a few state and federal buildings, some wholesale. we pulled out the non-profit food pantry, five of those, and a couple industry. so, those are the break down of the types, and we actually have a detailed list, up to date list i want to hand out. the list i just handed you has the name of the account, the property, also indicates whether as i'll talk in a minute about -- if there are -- if they

have or under extra charges, so i'll get to that. so, regarding, this is part of why we are focussing on the largest generators. where are those that have had their trash compactors audited, 77% of those audits find ore half the material is recyclable or compostable. should have gone in the blue or the green bins, and end up in the trash. a lost opportunity. 22% of recycling and 12% of composting compactors were also contaminated. and we had, we have about 42 have 0 waste facilitators, the most recent count might be 38 to 40, but this is out of previously at the last hearing talked about 80 properties that had 0 waste facilitators already, so about half of them are large generators, and that's

being driven as the director said by the financial incentives in the rates through discounts provided by recovery rate and by extra charges. so, out of those 419, 32 of them are paying extra charges based on contamination and 14 of them have been paying that for over a year. and that is thousands of dollars a month. so, we see a big financial impact and value for 0 waste facilitators, and i have some case studies. business model for 0 waste facilitators, go to a property and say we can, in a combination of either in crease your diversion or recovery rate, giving you greater savings or get you off contamination charges, and make it, provide you a net savings. that's really the business model that the facilitators work

under, and we just have some examples here, a large high rise apartment building before and after they saw a net savings of $28,000 a year, that's after paying 0 waste facilitator. and we also have some affordable housing examples, mercy housing, increase the recovery rate, same as diversion rate, and net savings of over 8,000 a year. here you can see what the refuse charges, savings were, minus the cost of the 0 waste facilitator. with a smaller unit, smaller property, also saw a net savings of over 6,000 a year. and there are many more examples that we could give. there was a detailed analysis of nine residential properties and among those nine, on average they were able to, with the 0

waste facilitator, reduce the trash service by 66%, increase the recycling composting by 150%, increase the diversion of recovery from 30 to 75% and create, have a net, average net savings of 25%. so, this is really being driven economically at this point. and sfmta gauged a 0 waste facilitator at three of their yards and were able to increase the recovery rate from 29 to 42%, but very in press sievely, net annual savings of $116,000. i would like to pause to see if there are any further questions around the economics, cost

benefit of 0 waste facilitators. >> supervisor stefani: i have a question, the chart you handed out with those accounts that have current contamination charges, do we know the source, do we know why? have we followed up with them to understand why they are facing contamination charges? >> yes, they have gone through quite a process of getting numerous warnings. they have failed audits. and after numerous warnings they were not able to clean that material up. they may have had additional audits and then the way it works with recology, after giving a property warnings and time to remediate it, if they don't take action, unable to clean it up, they can get extra charges. >> what is the typical excuse for that, offer any reason as to why? >> it varies. you know, these tend to be

multi-tenant properties. so, a lot of times property management may say i can't get my tenants to sort properly. and that's why, with -- the biggest benefit with 0 waste facilitators are the multi-tenant properties and most of the large refuse generators are multi-tenant, in that even if you have a well-designed program and we work with properties to have a well-designed program, adequate bins and signage and training, if we don't get adequate separation, we have the ability to do quality control clean-up. so, and that's why we list those who have 0 waste facilitators on the list. so, it's a variety of reasons. but we offer them lots of help. whatever help they are willing to take, you know, we have as the director mentioned, a whole team of experts in the field working with these properties.

>> you gave two examples of 1390 mission and britain court. are these -- how are they different from multi-tenant properties. aren't these multi-tenant properties? >> they are. >> mike, i guess my question is, for a property owner to say i can't get my tenants to do it, but you have examples of at least two in this presentation where you have a property owner who is getting their tenants to do it. >> yes, so these are examples using a 0 waste facilitator. >> i see, got it. properties saying i can't get my tenants to do it, they are not using the 0 waste facilitator. >> the property owners had a facilitator going through, then that's where the costs would happen. >> the whole cost benefit, they pay for the facilitator, but saving even more. >> i understand. right. right. thank you. continue. >> ok.

>> we have a list of 9/11 companies, currently identified, others in the course, but these are currently nine we know -- >> i'm sorry, one more question about the facilitators. how long has mercy housing, and for a city entity, how long have they been using these facilitators. >> yeah, well, as a city agency, they had a contract and they were able to do a one-year contract and saw the big benefit and the contract ended, and then they worked to secure the, so the up front funding. they have been in the bidding process and hope to secure a new 0 waste facilitator. >> my question is, how long did they use -- how long -- >> the sfmta was a full year, i understand. >> what about mercy housing?

>> i believe it's been in place, trying to think -- i think, i believe it's been in place over a year. >> so these are new facilitators put into place, a relatively new concept. >> well, facilitators out there, some, we have seen facilitators out there for at least, i would say, in buildings, at least half a dozen to maybe ten years. it's been a while. >> legislation is almost nine years old, right? >> mandatory, yes. over nine years old, and we actually had, as you may recall two weeks ago, started talking about how this industry was, we helped create this industry and part came out of special events we have been working with long before where they were so difficult to get people to do the right thing on a street fair and so forth. so, back of the house sorting there made a difference and some of the entities started to work in buildings. so, about a decade we have had

this, and it's been growing, over 80 properties now and examples like the flower mart where they are not, they don't have the 0 waste facilitator companies, so they are doing it in house. so even more beyond sort of the outside companies. >> thank you. thank you very much. >> so, here are nine companies, and we have this, i think a comment last week, someone could not find it. it is on our website and we keep it up to date. we got an email from somebody that said please add me to your list. >> so the 0 waste facilitators available to be contracted with. >> so looking at 9, 10 now and i think an opportunity -- three janitorial companies here, two of the largest, and more than that, and i think there is an opportunity for them to get more engaged in the work, especially if the legislation passed.

so, i want to close and happy to answer any questions, but i think the key point here is even though these are very small number, the largest accounts in the city, they do have an impact of about 20% of trash disposal of the refuse stream and we do see where we see audits, and a lot of contamination and big impact. on the trash, if they put recyclables, we are not sorting or recovering the trash. looking at technologies to do that, but it's difficult and the quality of the material is lower, so seen as a world leader, we need to keep it separated at the source so we can recover that material and market for best economic environmental benefit, and finally, you know, we are seeing the 0 waste facilitators have a great success, and we are seeing

they in large part can offer economic savings. >> how long is that track record as success? >> as i was saying, i would say in these types of properties, the order of a decade. and even longer if you look at special events. >> thank you. colleagues, do you have any questions? mr. macy, thank you very much. two weeks ago we had a lot of questions and appreciate you answering most of them, at least the ones i had. that you've made, that you and your staff have made yourself available to answer questions and i'm grateful for that. i particularly like the list that you provided of us of the 419 businesses, initially when this legislation was introduced, i was concerned about small businesses. how the small businesses would be affected by this. if i'm not mistaken, the language has been changed and so they are no longer considered

due to the change of the cubic tonnage. >> everybody with a rolloff compactor, and 40 cubic yards or more. previously, threshold of 30, supervisor safai was mentioning, and earn 550 account, and knocked 150. >> now 40 cubic rollout, learning the language here. >> that, we would consider those, those are all large generators, and maybe some of those restaurants might consider them a small business but the largest in the city, the largest markets and so forth. >> ok. on this list, how many have, i guess i can do the count. my question is, how many with current contamination charge. looks like there is -- >> currently about 32.

>> so, it's not that many. these are the -- these are the worst offenders, the ones that keep offending, factor the fees into a cost of doing business. >> that's right. so, those, the 32, they have been paying for months, well over a year. >> and they are paying because they don't want to come in compliance of the law? >> well, you know, they are given opportunities, they say, we offer any kind of assistance they want, and they are generally just blowing us off. >> ok. all right. it's a problem for me. >> 14 of those paying well over a year, and thousands of dollars a month each one of these in extra costs. >> and who are they paying? who gets the money? >> part of the refuse bill they pay recology. >> recology gets it. so this legislation would hurt recology bottom line. >> yeah. well, i guess --

>> if you think about it. generating a fee, i mean, businesses are not in compliance, paying a fee for it, that has an impact on recology bottom line. yes or no. >> yes, small percent of the bottom line, but yes. >> and i'm not saying that, we'll call it the recology representative and get her on the record without a doubt. i want to make sure i'm following this correctly. so, in your conversations with your point person over recology, working with 13, 14 companies, how do the conversations go? are you in conversation or recology? >> both. my team is very engaged. there is phone conversations, there's multiple written notices. >> just sounds so -- it does not sound aggressive. >> well, i mean -- what are the

different ways of communicating? you know, you send people letters, you call them up, meet with them. doing that as much as we can to offer, offering the assistance that they need. >> ok. so, how do we increase the fees again? i know you talked about in your presentation, the director did, remind me. how do we increase the fees, penalties? >> the way it works is that there is just to review, two parts. one, that the recovery or diversion rate that an account has, shown on their bill, which is the level, the volume recycling composting divided by all three streams, they get a discount based on that. so, three-quarters going to recycling -- >> three-quarters is reduced. >> 50% off all their three streams. that's significant. many thousands of dollars a month for the generators. in addition to that, if they end up contaminating, they could use

that diversion discount. in addition, they can get contamination charges, if contamination is bad and they are not taking steps to remediate it. if somebody is taking steps, we give thep the time. if they lose that, if they end up not taking action, then they get the contamination charge, starts at 50% of the service and up to 100. >> how do we get -- how do we break the cap of 100? how do we get to a top level of fee, to bring it to 150%, for example? >> basically, escalates over time. >> yes, i know. what's the process? >> well, it's all part of the rate process. they have notified an account, talked to them, they have gotten warnings and then they get the 50%. if they are not taking action, a letter later on saying it's going up to 75. >> who has discretion for that.

>> rate board that gave the authority to go up to 100. they have the ability to go higher than that. at this point, they go up to 100. >> the rate board, cpuc? >> no, its own rate board. public works. >> it's the city controller, it's the city administrator, and it's the p.u.c. director. and this was actually, rate board created out of 1932 legislation. so it's -- it's a very robust process, like a year-long process with many public hearings. >> and i would just like to comment and say you are right, it does not sound aggressive, and because it's, what the tools we have. so the tools we have had before this rate process were simply asking, please, that's all we had. then when the rate, or we have the ability to remove, we, meaning recology, the diversion discount, that was it. it wasn't enough.

we went to the rate brd and how about if we send the signals with the penalties. penalties are in place, 50% for several years and 100% for a year. still seeing it's not sufficient. >> if it's insufficient, what reason are we not targeting this and making it sufficient? >> it appears for some the cap is unknown. and what we really want to do is rather than just get more money into recology's budget, with he want to get people on the ground to pay attention to the problem and fix it. >> i totally agree with you, and not an advocate. >> the way i see it, punitive damages is a huge motivator to get people to comply with the law. or they factor it in, if it's low enough, but probably

discounted or on their taxes, filing the taxes as cost of doing business. i'm frustrated, the conversation is very illuminating. sounds like the rate board needs to, we need to turn the fire up on them a bit and petition them to increase rates so that we are getting the response that we want to see from these, what, 30, 40, i can't remember exactly. >> and it could be more than that. those are just once audited. as the audits continue, we expect those numbers to go up. >> and the trash auditing has been quite limited, and one of the benefits of this legislation is that it's going to drive more trash audits. everybody would have the trash audited, at least every three years. >> one more question about the

legislation. basically if you, you go through an audit and you fail, that means you are required to hire someone. what makes me uncomfortable about this, is that even in baseball you get three strikes rule. here you mess up one time and there's no forgiveness, there's no -- we'll work with you? it just seems arbitrary. i don't fullyp understand and follow that reasoning, that logic. maybe one of you can help me understand why there is no second or third. i mean -- baseball, i think about criminal justice, the three strikes you're out, o he -- >> from the department's perspective, we can implement it in many different ways. so i think that's a decision, that's a question the author needs to -- >> supervisor safai. >> that's a great question, one of the things that have gotten everyone's attention, the fines.

reason for the 0 waste facilitator one audit and move, we are trying to change the culture of these businesses, and as they said, this is -- you see on the list, 30 plus. that's only the ones that have so far been audited in the last year, choosing to just pay more money. but this additional person, again, this is not just one strike. if you talk to recology, they work with the account holders, they will leave them notes, send them letters, talk to them and say -- we are experiencing contamination. so, there is not -- this is not just a one strike and you are out piece of legislation. this is something that the industry, recology, department of environment, has been working on for a decade with these account holders and to the point of 20% of the waste that's generated by this less than 1% of the entire population of account holders sending that to

landfill, that's the information we got today, and that's not even talking about the construction and demolition. so -- >> which we should probably be talking about. >> we are, and that's what i had said in the last meeting and i know there was so much going on, that's another piece of the legislation that we are going to work with the department of environment on because that's a matter of where they, where the construction materials goes is really important. we have facilitates that can recycle them, but what ends up happening is contractors, builders, so on, they will go out of county but we pay, we end up getting dinged because it says city of origin, has to say san francisco. so we are working with them. they have asked us to wait until we get through this, and the next step is construction and demolition. but to your point, there's been a decade, been a lot of education, there's been a lot of attempts by the department of the environment and recology to talk to people about contamination. this is the result of ten years' worth of work. te