>> we're going to call this meeting to order. >> hello the refuse board is now called to record, today is april 13, 2023. the time is 12:35, please call the roll. >> thank you. please respond here or present. chair chu. >> here. >> board member herrera. >> here. let's test our mics really quick. >> there we go. here. >> chair chu. >> here. >> thank you.

>> with two board members present, we do have a quorum and we'll move on to the land acknowledge today. we acknowledge that we are on the unseeded land of the ramaytush ohlone. as the indigenous stewards of this land, the ramaytush ohlone have never lost or seeded their land as well as all their people who reside in their traditional territory. as guests we recognize that we benefit from living and work oning their traditional homeland. we wish to pay respect by acknowledging the ancestors of the ramaytush ohlone. >> the next item is 2, opportunity for public to comment on any matters within the board's jurisdiction that

are not on the agenda. this item is general public comment. this is an opportunity for the public to comment on any matters on the board's jurisdiction. comments may be heard. general public comment may be continued to the agenda if speakers exceed 20 minutes of public comment. do we have any inperson public comment? seeing none, we will move to the remote public comment session. members of the public who wish to provide, looks like we have no members who wish to provide public comment. for the record, there are no in-person public comments. members of the public who wish to provide public comment on this item should call

415-665-0001 access 25970393965. the password should not be necessary but if prommented enter 3228 then pound, if you have not already done so, please dial star-3 to line up to speak. for those using web ex, please use the raise hand icon. please wait until the system indicates you have been unmuted and you may begin your comments. please note that you will have two minutes. moderator, do we have any public comments on the phone? we have one person who has raised their hand. >> caller: can you hear me now? >> we can hear you, please wait one moment while we start your time.

your time that's begun. >> caller: good afternoon, david for purpose of today, just to introduce although, i think most people here know me i'm a residential rate payer and a long time follower of the most minute things, things like refuse rate setting. this is not my first time out as in following refuse rates for probably 30 years or so. this is the first time with this particular configuration on board and staff. so i understand there may be a little fumbling but i think we'll do a great job given there are only 2 members since the third member has yet to be appointed and since you're both

necessary to the forum, if this goeses until 4:30 maybe we can think about a break between so everybody can stretch. thank you to everyone involved for all the work which has been considerable and you'll be hearing more from me on various agenda items. thanks for listening. >> thank you, that concludes your public comment. do we have any other callers on the line? confirming we have no additional callers on the line. and chair that concludes general public comment. >> thank you very much let's call item number 3. >> thank you, chair. item 3 is to call a code of conduct and ex parte communications limitations

procedures. this is an action item. this is to ensure that sufficient noticing is provided with the code. now this item is open for board discussion. >> thank you very much, there is going to be a presentation from staff quickly on the code of conduct and guiding principles. >> jay leal, refuse board administrator, since code conduct has three provisions first as a guiding principles and second and third ethic rules. we kept it fairly basic. the first guiding principles outline the first principles outlined in proposition f. and ex parte communications is ensuring that the board does

not communication with refuse rate companies on manners within the subject matter jurisdiction of the refuse rate board at the beginning of the rate process. and lastly is the ethics rules really around, complying with state and local ethics roles including those concerning actual and potential conflicts of interest. >> code of conduct was worked and called in consultation with the city attorney's office in particular because of the rule that i may have with the city administerer office with the municipal contract, correct? >> that's right. we have somebody here from the city attorney's office. >> okay, i just wanted make sure that the members of the public are aware as one of the responsibilities with the city administrator, i have the office of contract administration within that body

and the office of conduct administration is currently undergoing a active solicitation process with various organizations with regard municipal waste contract. so i just want to make sure to communicate. i don't have any direct communication with the bidders. however the purchaser who is is the delegated authority does and she does report to me. i just want to make sure that i communicate that publicly in this forum. anything the city attorney would add to that? >> city attorney: no. >> chair: except that you have reviewed that there is no conflict and i can continue to serve. >> city attorney: i can confirm that. >> chair: thank you, any other discussion from the board? okay, let's open up this item for public comment. >> thank you, chair chu. members of the public may address the board with comments

specific to the current item that will be limited to 2 minutes of speaking time per person and a total of 20 cumulative minutes for this item. members of the public who wish to provide in-person public comment please line up at the podium now. each person will have two minutes to speak. seeing as there are no in-person public comments, we will go to the phone lines. i will read the details information again. members of the public who wish to provide public comment on this item should call 4156550001, access code 25970393965. password should not be necessary but if prompted please enter 3228 then pound. if you have not already done so, press star-3 to fine line

up to speak. for those using webex, please use the raised hand icon. please wait until the system indicates that you've been unmuted. please note that you have two minutes. i see that we have one public commenter on the line right now. >> caller: great, david again. can you hear me. >> let me restart your time. >> caller: no problem. >> david, we can hear you thank you. >> caller: so on this item, pretty good language. i think we had a specific typo in the principle paragraph the end of the third line, it

should read ensure rates are not and reasonable unfair. i'll take another pass on the betting principles and get back to staff if there is anything. on the second paragraph on ex-parte communication that is limit today board of members and refuse companies. i think during the course of these proceedings, i think that's fine. but i think we did it may be appropriate to modify that language slightly to also limit communications with any party who might submit a rate application since members of the public not just myself may submit a rate application and not just regulated entities. i'll look at that language a little bit more carefully and as i say if i have anything, i

will speak to staff. but i think these are good principles for limiting ex parte communications and imposing or reminding us of the appropriate ethics rules and requiring disclosure on the record of any type of communication that's might create any inappropriate appearances. thanks for the work on this. and thanks for listening. >> clerk: thank you mr. pelpel. that concludes your public comment. checking to see if we have anyone else on the line. we have no more public commenters on the line. chair chu, that concludes the public comment. on item 3. >> chair: thank you very much, we'll close public comment on that. this is an action item and i will look on a motion with an amendment to correct the typo

to substitute the word and with the word r. >> thank you. i have moved and seconded. >> yeah, can we do a roll call. >> chair chu. >> aye. >> board member herrera? >> aye. >> we have two ayes. >> chair chu: thank you very much that item is approved. announce item 4. >> item 4 is presentation of proposal for rate funded city report. presenters may begin their presentations when they're ready. >> good afternoon, rosenfield city controller and i wanted to be briefly at the opening of the session for this recon executed process. as you're aware along with the city attorney have spent a lot

of time the last couple of years working on these requires with recology. i think that work over that two-year period to implement the changes that the voters a doptd a little over 9 months ago. since then, we brought on staff because we know that voter initiative shifted responsibility for rate administration oversight staffing to the controllers office. and it constitutes this board and we're pleased to be here now and the board phase of the process. so we'll look forward with you over the coming months. this is a quick sprint that we're engaged with here. the last rate order that was adopted under the former process, that rate order remains in affect until it is replaced by something else. and that rate order will

continue to trigger being replaced automatic escalation until a new rate is put in place. hence our efforts to get new rates adopted in place by the beginning of fircology. i'm proud of staff working on this so quickly and i look forward to more in june and july. thank you. >> good afternoon, jay leal rate administration controller's office. since this is our first hearing i want to introduce my team working on and also the refuse

rate analyst becker and we also have supporting us claire stone who has been helping with the clerking. thank you, clerk. and i also want to note that our office is also contracted with hf and to help with the analytical work moving forward here. before we go through the rest of the presentation, i just want to reiterate the responsibilities of the board under proposition f. so the refuse rate board is responsible for adopting a rate order, they must also adopt performance standard while taking consideration of the city's environmental goals and the responsible for setting residential rates and allowed but not required to set rates. so in our, in the refuse report there are really four items. first is a summary of our

process, including our analytical review in our building. we'll also do a quick review and analysis summary of our review and analysis of the department proposals for dpw and department on environment and review for recology. filed on march 7, 2023 and these are for rate years starting october 1, 2023 and october 1, 2024 and we'll refer to rate year of 2024 and 2025. seeks increase of 3.9 percent for rate year 22024 and the request assumes same rate increase. the last item that we'll walk through really quickly is next steps. so jumping into our process, this is kind of a flow chart to give you a sense that there is

pieces that we're working on. sol it starts with us releasing the schedules for rate change requests, recology has submitted those their submission for rate change request. departments can also request that request changes to to programs, to programs executed by recology, recology can choose whether or not they want to include those requests. departments can also request from our office for any changes as well particularly for any rate funded city service that they are providing. so these will flow into our, our analysis and our analysis include, a review of recology

submission, department submission comparisons with other cities and profit margin and also a review of potential performance and service standards to support the board in that responsibility. as part of our review a lot of questions crop up and in order to make this process transparent, we're building a public record. and this includes i'll go into a public record looks like. we'll have interrogate incontinued process. and the commission hearings to really build that record. and lastly, our rate order. this rate order will also

consider commission input as well as public input and i'll talk a little bit about the public input later. the commission input, the refuse rate required under proposition f to present in front of the sanitation and streets commission as well as commission on environment and then along with taking their input we're also responsible for not just considering this input but also bringing it to the refuse rate board during hearings so the refuse rate can hear that input. lastly is the refuse rate board in june and july we have a series of hearings to hear our offices proposed rates, rate changes and then the refuse rate board is responsible for adopting a rate order. i'm happy to take questions during and after the presentation also. so diving into the process, we

have what we call interrogate tory process. we have a tracker as well that kind a tracks the progress of their responses to our requests that is posted online. there are three categories of request for star schedule request. sol when we received their submission there was a number of incomplete schedules or schedules that needed further validation. and this was expected given the short time frame and they've been bringing, quickly really, sending additional schedules to fill-in the gaps. the second series of requests are exhibits and some parts of recology require additional detail or explanation that is

not captured in the schedules. for example, they are looking at enhancement for bend and materials programs, these are captured and we're looking for additional detail to support that enhancement. questions? these are clarifying questions or requests to answer or justify certain assumptions made. so as of friday, we had made 17 schedule requests with nine responses, 14 exhibit requests and 6 to 8 questions with 59 responses. we received exhibits and more answers to questions and schedules since that time. the second part of the public record building is really utilizing these hearings. this allows for realtime question and answers and additional participation. so this first refuse hearing is, really around focusing on

the rate and program requests and what we're asking the departments and recology to show us, what is the current state and what is the delta and request and what is a change from that current state from a service perspective from a fiscal perspective and a head count perspective. we're also using the refuse rate administrator hearings. we have two of those, the intent of that is to focus a little bit more in on operational assumptions. for example, do tonnage trends warrant this level of labor. so we've hired hf to help us bring in their expertise and sort through some of these questions. and then we have the commission hearings, the last two commission hearings allow us to ask additional questions of recology and also the department of requests and to get some commission input on those department requests.

thsz a time line that really shows the points, touch points for public input. so the first was submission, the second phase is what we're seeing a lot. we're going to get a lot of public input. each of these stars indicate an opportunity for public input. there is 13 total. we have two public hearings, we had two commission hearings and this is our first rate board hearing. and then we'll have additional more commissioner hearings and two more administrative hearings coming up in may. once those hearings are complete, we'll be issuing our refuse rate proposed refuse rate order. that will trigger the refuse board to hear our proposed order and that will happen in june and july.

and in addition to these hearings, there is opportunity for written objection under prop f. and opportunity for protest, written protests through prop 218. and the intent is to hear these items in the july 24 refuse rate board hearing. a little bit more public input to date. so far we received a written comments, 8, 7 is especially rates. any objection to see increases in rate and a few comments, one is recology that has been raising rates for years and this contracts to high costs of living and other utility increases. the second is customers should

receive credit to offset costs. in the rate model, at least the one that recology, has proposed, they show recycling sales offseting costs. the third is not trust after the corruption scandal, fourth is recology received a cola in january already and should not receive increases in rates again. one customer noted that they don't produce enough for pickup and allow options for less frequency. we also have some public comments from public workshops and hearings. these are a sample from the last commissioner on the environment hearing. but caller requested more information. there was concerns about nexus and use of account funds for rates. sxl that they just wanted see

reasonable and fair rates for rate pairs. --payers. last about public input we've been doing a lot of out reach. we've done a public website. we have a social media campaign and we've asked related city agency to see support this including oawd, slow business commission and we have public records auto mation where next request is funneling any refuse rate related items to our website. and then we have targeted to out reach and also targeted neighborhood groups and districts and listening to support of board members board of supervisors members as well. we'll also be doing in the future some press releases and additional email campaigns.

>> chair: can you speak to to how well attend the workshops have been. >> we've only had one public comment. i think the second one which was virtual, i think there may have been 10 members of the public present just looking at the list of folks online but we only had one speaker. >> chair: and do you have fund to go do more robust? >> fairly limited and we're utilizing the controllers communication team to support that. >> chair: thank you. >> so, for taking the analysis or building of the public record and all of this public input to help build our rate

order, i just want to give the board a sense of our vision of what the rate order proposed order will look like. we're imagining kind of a report format which is different from the previous rate order. so it will include just level outline here, background and context. summary of the procedures, i think the heart will be the rate proposals which will include costs, tonnage between current state and recology requests and our proposal. and it will include comparisons of other cities and it will take into account input from the public and from the commissions. and we'll also do the work to tie any of the recommendations program operational changes, special account proposals to the public record we're building. >> you talked about the record, i just want to understand, when we get to may when you put

your, your proposed order, what comprises the record? and what are we allowed to view? anything that we have to look at will be included in that record? i mean, it's a question, or the background materials that have gone into some for lack of a better term, the discovery are we allowed to look at that or are we limited to the record presented by a jay. >> i would suggest that any record the members look at would be part of the public comment. >> so it will be part of the rate order that is issued in the may, would that be exhibits? >> yes, so we're building it in three pieces, one are the schedules and kind of amendments to those schedules that the recology has been submitted will have the exhibits. >> all through the process?

all through the process. >> what is comprised in the record? >> yes, i think everything and we're posting everything online as well. so i don't think there is anything that we're receiving or sending to recology that is not available. >> thank you. >> and i commit to work withing jay and claire that what is in the record is reflected. >> thank you. >> the next part will include standards, typically, developing standards is a pretty involved process but since we're in a truncated timeline, we'll work with the department recology our consultants to come up with a set of i think basic performance stand adser for this rate order and the next we'll look for a more process that involves a little more

public comment and more alignment between the different entities. the next part of the rate order will include administrative provision that's we want to memorialize. and as been mentioned, since there is a sprint, there are a number of items that we'll want to tackle after this rate order. and a few items for example our capital infrastructure couple of big ones along with the performance standards process. lastly we'll propose schedule for the next rate setting process as well. this is just to reiterate what the next board hearings will look like. the board will hear our rate order from commissioners and the public. adopt the rate order and set order for the upcoming rate years. and hear prop f written

objections and prop 18 written protest. so that kind of sums up our rate setting process. i'm going to move into our review of the department proposals. so the departments receive rate payer funding through the solid waste fee account, swia. this has service frz public works and environment department including refuse related clean service for public works and services support, the city waste goals for the environment department. so solid waste and impound request for the department amount to 24.2 million for fiscal year 2024 and 24.6 million for 2025. recology current submission assumes 23.3 million so there is a small variance here if

these department requests are, are adopted, there will be a slight increase in costs. as of july i want to note that there is fund balance in this account. so as of july 2022, there is 5.12 million and 6 million of inappropriate available fund balances so total of 18 million. we'll have the projection for that updated later this month in the 9-month report and we can update the board on what that amount looks, we'll probably look like at the end of the fiscal year. lastly, we're considering uses of unspent funds for one time expenditure or ways that we can use in rates. these are just a couple of exam pals that costa lo occasion

studies for 218 noticing. and one recommendation that came from the pc that we should probably outline some guidelines for future rate orders in terms of how to use these unspent funds. the city has a number of reserves so we can look at these as models for some of the guidelines. >> chair: 12.5 million and 6 million is not for both. >> that's correct, this is total for both. so first we'll dive into proposal from the impound account. thiessen for three existing programs.

this fund would support 17fte and they're requesting one new position. it's a trash can manager. the other findings is requesting the use of 15 million for the command of new trash cans and sensors. and also memorial new agreement with recology in the past. so this includes removing illegal dumping, and frequency and dpw will have a presentation to go through this in more detail. during our review we had a number of questions and we requested dpw to provide in their presentation answers to some of these questions for the hearing today. what we're asking them is a

table showing expenditures and fte from proposed budget. like i said this hearing what we're trying to get at is what is current state and what is delta. we're asking for description of the program. for the trash can cleaning, we had a special question, street cleaning services with the trash can. we had a number of questions around the trash can pilot as well. expect of use of all funds for the next two years and amortizing the cost over multiple years instead of spending the 15 million all at once. if the dpw stailted, we're asking how the lowest cost and

how the new cans would compare to the existing cans. and what is expected in replacing cans. and what is the expected life compared to existing city cans. for the department of environment they're requesting a budget of 7.4 million. that would support 45.5fte across the programs, zero waste toxic environmental justice, clean building and out reach. sf, the department of environment has also structured a waste by version account. recology has adopt thised model in their proposed rate order or rate submission.

but they can draw down if certain are met. in addition to this department of environment is requesting a certain reports to create upon the past and memorialized within this rate order. we also had questions for department of environment, we're asking them to show current state in the deltas, description of their programs, how they relate to the climate action plan and how impact is measured and how they are required. we had some questions around the zero waste incentive account since this was their design. we've asked them to describe and how the targets are set.

whether or not they consider monitoring and the likelihood of achieving over the next two rate years. and the justification for allowing recology for new diversion programs. so if recology does not reach the higher tiers of this program, they can request from the city to use those funds for for diversion programs. the question here is if the environment has considered proposing that new diversion programs are funded through the rates directly rather than through unearned funds. so this moves us to recology proposal. and before we jump into this, i

want to outline what the questionsed look like. there are six questionsed, the rate terms last a minimum of two years and a maximum of five years. there have been a greed upon or in pass practice there is been a greed upon cost of living adjustments between rate terms. and on the left are uniform rates which includes refuse rates. and then a tipping fee. the tipping fee is embedded in the residential rates and the apartment building rates. however, it's a rate that we set and for any non repairs bringing refuse to recology transfer station sites, they will also pay this fee. on the right, are recology set rates or negotiated rates and these are commercial rates and box rates and extra service

refuse rates. just as an example to give you a magnitude, this is an example for a monthly charge, for a single family unit, recology is charging, current' charging 1.71 and rate is 7.33 and recycling 64 gallons at 14.66 and organ i can minimum size 32 galans at 7.33. so if the household is receiving minimum service it would cost them 46.47 monthly. recology charges for example, above is just a minimum level of service and this monthly charge can vary if rate payers

get larger bins or more frequent service. rate payers can also be charged additional fees for access or key charges. and these are all charges in the rates as well. so our initial findings recology is requests 3.9 percent increase in 2024. 2.17 percent in 2025. they're assume allowable profit is 9%. they have a calculated expense of 2.1 million--375.5 million and 383.9 million requirement to meet that 9 percent margin. for the tipping fee, they're requesting a 16.63 increase.

again, assuming the allowable margin. 137.9 million, 132.8 million to meet that 9% profit margin. recology is assuming the same increase for residential rates. >> with regards to the rate increase short of a new order coming in, what would be the allowable percentages that we would have to apply? >> this would be, >> under the current rate order. >> under the current rate order there would be a cola affect and that's not calculated.

we asked recology to talk about the cola, i think right now it assumes the same kola adjustment as the previous rate order. and there are a number of different factors for labor. they're based on their bargaining increases. so they can layout these sources for the different factors. and if the board needs, we can show what those amounts were from the january cola adjustment. >> thank you. >> included in the request are balance account, last december there was a settlement for the 2023 year. and this assumed a 50%

adjustment. if, if we're below the 91% or or above it, there would be a 50% adjustment. under recology current proposal, it would be 100% adjustment. there is also zero waste incentive account. there is an impound account, the request 23.8 million for both years which is 400,000 over the same two rate years. in march 2021, there was a settlement for around $100 million in restitution to rate pairs. there is 4.25 million remaining in that account. that is being proposed to use to reduce rates and again the

cost of living adjustment is assumed in this rate order as, or this rate submission. a few major assumptions that we've seen as we're going through this, the first is for projected 2023 rate year, it's mostly ex trap lated. for most operated costs, 3.65 and 3.5 percent and this is on the financial plans in terms of inflation. i think since this has been put out the city has inflated the numbers. in addition, there is a cap what has exceeded.

the landfill disposal agreement has its own auto matic cpi circulated. another mention will be fully funded. this is a question that we have not pose today recology yet but we have an open question whether or not they're required employee and employee contributions to the pension. and then there is, this request is a two-year request and it allows a two-year maximum of 5. other changes in the rate proposal, aside from regular growth, recology is requesting some changes and certain costs and revenues, recology makes some assumptions outside of these major assumptions, for example fuel costs. recycling prices, these are items where there are different

forecasts. similar to the departments, we've submitted some questions and questions for this hearing that they can answer. first we're asking them to walk the board through. high level break down, summary of their rate proposal and comparisons to their rate changes current changes and assumed profit margin, description of rate payer right and description of their cola and the balancing account, this one is particularly of interest to us, whether or not they made other consideration for the balancing account. or even more in the profit margin, it does guarantee that 9% profit. we typically don't see it, risk

free 9% profit margin. we're also asking for summary of costs. and program enhancement and operational changes and cost changes. these are their stated in their summary and their narrative assumptions enhancement to programs they're proposing. and we're asking similar to the department what is the current state, what is the delta and so we're asking about. in addition to that information, we're asking for additional information on the items. i will not read through all the questions but we're asking questions on can collections, out reach and education, apartment diversion, clean up events and contamination

program and fees. sorry one thing that i should note is the contamination fees are not part of the rate schedule. so there is one question into the rate questions. operational questions, again same requests, we have additional questions here. this is related to prop g and the question here is around, prop g is only activated during a public health emergency and that ended february 28th so the question is whether or not the need should continue after the end of that declaration? tenderloin coverage they have

been working on the city on increased coverage. and this is a pilot to do trash processes better trash processes so we have to do some impacts and where this would be implemented if it were to be implemented. other cost changes, they have a number of ft changes and wage increases determined by the agreement. and also questions around the pension cost, whether or not they considered other levels of pension costs. and the previous questions

whether or not there are employee contributions or if this is xloetly rate payer funded? questions of disposal and process. in other we're asking in our cost costs and how they're eliminated. we get audit financials, we're asking them to walk the board through that. c2c is a new customer software that they're wanting to implement. and also capitol questions around capitol which they are projected how the projected rates are determined. lastly, we've asked for a taonage assumptions as well. in terms of whether or not

their tonnage warrant the level of operations that they're asking for. and finally we'll continue our analysis and our public building process, we'll drop our rate order in completion and we're anticipating a two-year rate cycle. we'll be identifying additional areas for review after this rate cycle and we'll be taking guidance for identifying any other areas for review analysis. so that concludes my presentation. >> chair: thank you jay for the presentation, i do want to express my appreciation for the controllers office. i know this is new requirement to have the administration live and reside within the controllers office, so i want

to thank ben and previous sponsor for their leadership and driving this change. i'll open it up for any questions that this board may have. >> no questions. >> no questions, at the moment, so why don't we open it up for public comment. >> thank you, chair chu. we will now take public comment. if there is any members of the public who wish to provoid in-person public comment on this item, please line up at the podium now. each person will have two minutes to speak. thank you, it looks like we have no members of the public in-person for public comment. now we will check the phone lines. we do have one member of the public who would like to speak

from the phone lines. i'm going read the reminders now. members of the public who wish to provide public comment on this item, should call 415-655-0001, code 2597093965. press enter 3228 then press pound. if you have not done so, press star-3 to line up to speak. for those using web ex, click raise your hand icon. a system will indicate to you you have raised your hand. please wait until the system indicates you've been unmuted and you may begin your comments. please note that you will have two minutes. moderator are we ready for our first caller? >> great, david can you hear me okay. >> we can hear you, please begin.

>> caller: thanks, very briefly, the website has lots of documents and resources available and it's being added as items are create asked submitted in realtime, that is great. i am pleased with the public input so far and i have found staff to be available to discuss these issues in a in a non contentious way. so i'm pleased for things to be going well. i also agree that a list should be kept for items that can't get review that they need in the next couple of months. for future work in the next couple of years, preparing for the next rate cycle. and i'm sure we'll be hearing about those items whether we call it the parking lot, that there will be a list and hopefully the final rate order

will include reference to those items and some required dates for inturn reports and progress. i wanted to take what time i have left to raise a few major concepts, some of which the staff touched on. i think what is key for the environment, is diversion, diversion from landfill to other uses recycling, compost, reused waste reduction, ultimately. the question is how do we achieve better diversion in part through reducing contamination and the question there is, is it more cost o februarying tiff to reduce contamination through customer facing programs incentives. >> thank you for your comments,

they have been received. thank you. we have no public commenters in-person, we do have five people on the line. if you would like to comment on the phone lines, please press star-3 now. we have no additional public commenters online. chair chu that concludes public comment for item 5. >> thank you very much. given that we will close public comment on item number 4. this is only a discussion item. so no action is required here. i want to thank jay for his report and dpoer his summary of the items yet to come. lelts move on to item number 5. >> thank you chair chu. item 5 is presentation of rate change proposal from recology. this is a discussion item only.

there will be two presentations. department of public works may start their presentation. >> good afternoon, public works. i'm going to turn the mic to bruce our cfo who will go through the details of our proposal. but i want to highlight, for the most part we're presenting no major changes. there is one exception, we are asking as jake mentioned, a trash can manager position. i want to talk about why that is necessary. we hosted a trash can summit last year. and really tried to identify what were some of the challenges around cleanliness in san francisco and our trash can program in general. one of the things that we found, we don't have an easy

way to keep records of all the requests that we get from removal of trash cans when we do remove a trash can whether it's for construction or at the request of the community, we have a hard time keeping track of that. and now that we're proposing to install new city wide, it will help us monitor delves of refuse and the need for collection. we felt it was going to be important to have somebody who will keep track of all of that. requests for removal or placement and really have somebody focused on that rather than relying on staff. that's the primary new request that we have in this proposal thank you. and with that, we'll turn it over to my colleague bruce robertson. thank you. >> good afternoon, members of the refuse rate board city

administrator chu and board member herrera, i'm cfo at public works and i'll walk through the proposal of the funding in the upcoming rate process. so brief overview of what public works gets out of the current refuse process and what we hope to continue. we really have three key issues that will help keep the city clean. when the recology presentation comes a little later, they will go through the abandoned materials program where the recology picks up debris. also another key program that we want to make sure that conditions in this process. four times a week, recology partners with public work staff and we do a dumping operation

in the bay view. this is a proactive program that works to minimize and reduce the illegal dumping. finally we want to continue the trash can collection, the pickup of city cans has they're commonly called is an important program not just for public works for but for wreck rolling to ensure cleanliness. internally the refuse rates get programs. we get about 5.6 million dollars annually and through key areas. we get out reach enforcement team and i'll go through that in more details that funds for about ten staff. picking up litter and then we have funding for a nonprofit contractor that we have that does specific trash can steam cleaning.

director short highlighted the one position that we're asking for refuse manager. and i'll highlight something i want to spend time on something in our proposal, we want to repurpose one-time saving and use that for procurement of 3300 trash cans. >> david can you quantify the amount of service, what increase calls over the last five years for to work on that? >> general manager herrera, i don't have that data at my fingertips, i can say that across the board in particular we've seen an increase in our 311 request.

that's why it was a approach. but the specific numbers i can provide that to you sometime next week. >> moving on to the budget, this shows what the major funding is for for public works. and it's that out reach and enforcement team, internal staff, trash can maintenance, trash can cleaning and new trash can monitor. so you can see in fiscal year 22, we spent about 4.4 million of the 9.5. and the same patterns continues in fiscal year 22. and i'll adjust the reasons why which are vacant positions. if you look at the budget submittal for fiscal year, 24 and 25, they remain unchanged. i do want to highlight the trash can maintenance and replacement amount, if you look

in fiscal year 24, you'll see the 14.5 million dollars, the 15 million dollars is the use of the one time saving and balance. >> the on going maintenance and replacement costs is normally about 49,000. but what you see in fiscal year, is still that 144,000 but the one time use of 1 million dollars in fund balance to procure the 3300 new trash cans. >> i was comparing to the 2022 actuals at 400,000 and $200,000. >> we've been under spending to be completely candid and honest. the contractor was doing that, is not a contractor that public works wishes to work with any

longer. we have not been contracting out and we're look to go put a new contractor in place. but it's been put on hold. >> this is an area that we should get more information on. >> i can certainly provide that. a little more details again about refuse rate proposal. the one thing, none of these programs asking to continue and remain are new. the one team started in 2013, no change in staff levels, they started back in 2005, we're not asking for any additional staff there. the procurement of new trash cans all continue. so i want to go into a little more details in which they received funding.

on the one team, it's a team of staff that really go out to educate on the acceptable waste disposable methods and what the code requirement are. we do a wide variety of objections and we really work to hold repeat offenders accountable, we can issue notice of violations and through the citation process can offer citations. the one team is guide through 311 service requests as well as input and community benefit district and public and neighborhood organizations and we really try to do proactive out reach and reviews and commercial corridors. it's common to see our staff on grant street or geary or sunset or in west portal in the middle of the night or early morning hours really look to go see the resident and residents and

commercial interests really are adhering to the requirement of refuse disposal. so one of the questions i know, the controllers office asked and i'll highlight, what is the impact of the work is the one team successful? and prior to fiscal 2020, that is a resounding yes. and if you look in the first three fiscal years on the left of the chart, you can see how much notice of violations were sent out, what the out reach efforts and what the overall sitizations were. and you can see we were over 13,000 and then in fiscal year 19, we were above 16,000. and then the pandemic hit. this entire team was deployed for pandemic work and working in the covid command center and that lead in the decline which this chart shows. and then after the pandemic ended, we had some staff turnover and we had a hard time filling these positions.

we went to fill these positions, we exhausted the list for this classification and we entered up being a plus one. so one of the things that we're doing is look at the classifications that we have to see if we can try to get a classification that more in line with the work is. i will say that we're having a lot of positive out reach and we look to have this team fully staffed by the end of the fiscal year or very early in next fiscal year. i will highlight two issues of the impact of the staffing. the staff really worked to prioritize the neighborhood that were most impacted, china town, the mission, tenderloin. and the other thing, we did we were making sure that we were really focusing on the bad actors, whether or not it was a commercial or resident that was not adhering to what the requirement were for refuse disposal.

this shows the impact of the staff on the litter patrol. so the efforts of litter patrol are just part of many areas and programs we have that helps keep the city clean. if you look at the brown brown part, however if you look at the multi color bars, that is all manual pickup. and you can see the dramatic increase 13,000 tons and we're projected to be even higher this fiscal year. so it's really important that the litter patrol staff remain part of our overall cleaning efforts and impact of this dollar amount is critical. moving on.

>> just a quick que, on the litter patrol are they cleaning litter off the sidewalks or streets? >> a little of both, but it's in the public right way so maybe a combination of debris or next to the curb. they don't venture into the mid-ling of the street but if they do debris but i don't want to say mainly sidewalk. and that's main if the sweeper has not come or it's a schedule where they may be 24 hours away from coming through. >> when, as we're thinking about performance measures going back to your previous slide, one thought is ideally we try to work ourselves out of this job, right? that people are not repeat

violators and so on. once they have received education, they will not do it again. do we have any statistics whether those repeat offenders, do they ever become non repeat offenders? >> we do have data on that, but i would have to look it up. anecdotely, they do have an impact versus the notice of violation. but without pulling the actual data which i promise i can do, i don't want to answer that, yes, we hear that, especially on the commercial side, we hear that. >> are those issued by dwp? >> public works. >> and i'm guessing both of your teams, both are under staff right now? you've got vacancies in both. >> the litter patrol is fully staffed and it's really the one team, that's what the command

center and just some departures that we've had and hiring challenges. >> thank you. >> moving on in the 2017, refuse rate process, a new program was start today partner with a nonprofit organization to do trash can steam cleaning. and we're not asking for any additional increase in this. the continued funding level. and what we did is go through a rfp process and community youth center of san francisco cyc is the non prove pit providing this. and they do two main things, they pressure wash and steam clean the cans, pressure wash maybe a little bit around the trash can and remove litter within the vicinity of the trash can. and this program was add today address operation deficiency issues. what was happening is our staff

was most focused on that. and not being able to focus as many on cleaning the trash can. a very dirty trash take up to 30 minutes to clean. so by having staff clean, it was making more. by having somebody else it allows more efficient debris off the sidewalk and finally a workforce development work engine. it allows cyc staff to get additional train anding these may be formerly employed, criminals--and it can help fill some of our vacant positions. highly successful program.

moving on again, interim director short mentioned the trash can manager. what we're receiving in refuse rate. it's for an 1824 position, annual salary of $170,000. we have pending review and potential approval. and really, i will not reiterate of what intern director said, but it's going to manage the new city trash cans and help work with recology to develop a pickup schedule with the aim of minimizing overflow trash cans and making sure the surrounding sidewalks are clean. and we'll monitor the scheduling of trash can pickup and it will monitor the schedule of trash can steam cleaning as well. and it will work to facilitate request to have trash cans,

moved adjusted, based on 2 and 1 request. and then we'll also provide if there is a damaged trash can and do visual inspections as well. so i'll talk about the data analysis that we think this position will be doing in realtime, that's one of the key exciting components of this new position. so then the biggest change that does not have resolve an increase in rates. really the proposals that i'm going to talk about which is the procurement of 3300 trash cans. many of the old trash cans are at the end of their life, they're in the 20-year useful life. we want through a lengthy lengthy process to review the various trash cans options. as director short, mentioned we have the trash can summit but also took feedback and talked to people who talk about what

the performance criteria is public works is looking for? we needed them to be rumage resistant and tamper proof that would make our staff more efficient and reduce staff needed to maintain and repair. we also want to make sure that they're easy to maintain and repair and sensor ready, i'll highlight the senses in a minute. we need to make sure that they accommodate the same existing 32 ga lon liner that they currently have. and department of environment will talk about the impacts of their goals and this would help address that as well. >> i know this is, people have had these discussions for years. do we need, this is just replacing existing trash cans. >> it would be replacing the

3300 trash cans. so we developed a pilot with 6 different designs, three customer off the shelf and three design. we did a two-month strategy, we had over 66,000 responses on social media. we took that feedback and also solicit thed feedback from staff cleaning the streets and recology and partners in the community benefit district. and overwhelming on every criteria, the chosen can was the silhouette that you see. so now comes the hard question. how do we fund it. we found roughly 15 million dollars to be repicked uper for the procurement of the cans. we originally did some analysis and thought that the cans may be under that 15 million total but what we failed to include

was the shipping, the installation and manufacturing. so it looks like, just over 4500 per can tha. would put us in line with what the cost when new york did similar exercise for their 55,000 cans a few years ago. so we have started to meet and develop the rfp. we are meeting discussions with new york city. and as the rfp, manufacture drawings and don't need to build the prototype and they will handle all the fabrication. so in addition to the approval by the board of supervisors and the mayor's part of the process, we need additional reviews from the board of supervisors again since this will be a contract that exceeds 10 million. we also need additional civic review approval for the third

phase and then in the planning department, history hick preservation review. so one of the exciting things about the trash cans, is they will all have censors. so the sensors will know when the trash can is full or the goal would be 80% full. if you look at the chart on the bottom right of the slide we've been piloting about 960 of these city wide. and you can see the data that we received when the trash can hits 80% full, you can see the per siptuesday. not every trash can is going to fill up the same amount. the trash canon mission may fill faster than sunset. so it's helped improve our performance and operations and

ensure that the trash cans are emptied in the most affective manner possible. so that's one of the key design elements that we wanted to, that the censor can go in and track and monitor the trash cans. the pilot of 960 is exciting. the accuracy of location continues to improve. so we're excited about this. >> how is debris that is outside of the trash can not wicked? >> it's 311 and you're ahead of me. that's one of the items that i want to talk about on this slide. so in the proposal that you'll hear from recology, in a minute, they talk about the cans and changes for the refuse summary. and one of the items that we hope to get out of this process

with our manager position, proposing extra weekday and service. but the specifics are not outlined. we hope to make sure that during this process, those service levels are outlined and we want to make sure that the five-feet area surrounding the trash can is included in that. and then we'll continue to track and monitor that with the senator data with any 311 calls we get. they will trigger a 311 request to recology and recology will come and pick this up. if we get a 311 ticket and we get all of that information to empty a trash can. and let's say we get another call because there is debris outside of the trash can, we can cross rfrns. --reference. we're excited that recology is

willing to do extra work and weekend service. so really formalizing and outlining that. that's what we hope to do during the coming months and that specific item of debris around the trash can is one of the items. >> there are some that are not covered. for example, cans along the ocean beach possibly may not be in this jurisdiction or rec park? which ones should we know are not included? >> those are the main ones. i'm not sure if some of the community district, i would need to confirm whether or not those are or not included. i need to confirm that. >> how about the port?

>> let me check on that as well. >> thank you. >> so that's something that i will provide on that board. and with that, i'm happy to answer any additional questions you may have. >> i think some of the questions that arise with regards to the litter team. i hope that you see more on that as we go forward. i want to make sure that it's still appropriate and at the right level. >> that's a great question, we look forward to working with those questions. >> thank you. okay, why don't we open, we

have one more presentation? with department of environment? >> that's correct, we have now completed dpw presentation and we have one more presenters, from the environment may begin their presentation when they are ready. >> while ben is pulling the presentation, i'll get started. members of the refuse rate board, city administrator 2, general manager herrera. i'll be presenting and opening up for jack macy who will be giving a presentation on our budget as well as the prescriberities going into the recology rate application in front of you. but i did want to take a step back, because one of the questions that was asked of our department was what was statutory required and what is included in here? so zooming out for just a

moment, we do have city climate goals and also our 2021 climate action plan which was adopted by the board and signed by our mayor. so our target overall is to be net zero emissions by 2040, it's set for 31 strategies and 159 actions which include zero waste actions in order to accomplish these goals. developing this plan was a two-year process that involved thousands of san franciscans as well as incorporated the feedback and input from many of our city departments. so as the world looks at understanding what our environmental impact is, the conversation has shifted back towards inventory model. so you think, what is our emissions from various sectors. what we've done in our climate action plan is to look beyond into the overall impacts that

are created through the consumption of goods wnt city. that's a better measurement of what our overall carbon footprint is or i am panting. so it's not just about recycling it's about the way to begin with and we see this across the sector whether you think about what is use today construct our buildings, food, how do we get food and redirect food towards the best and appropriate use. and inter lacing that with our concerns. you're going to be hearing the details of our proposal from our zero waste manager jack macy about the city adopted zero waste goals and supporting various departments within the department. and our environment alt rate priority and proposals that are included all designed to advance our city's environmental goals. and i did want to take a moment to thank my team, jack of course, alexa hillary and joe for their work in preparing

this information. also this was done in a very short time with this new process, so i want to thank the controllers team and recology team for their work. and i'll pass it on to jack. >> thank you, and good afternoon, rate board members, chair city administrator chu and general manager herrera. it's my pleasure to present about the environment department impound funding request and our priority in the refuse rate process. as our acting director chu just meption the climate action plan was for works and ties in the climate goals with our zero waste goals. and i don't think i need to

elaborate more but there are six sector and one sector is strongly connected and integrates our zero waste goals and targets recognizing the products and dhr consumption. and this includes the consuming lens of looking at that was just references. you're looking at the lifecycle impact of the products that we use. so what was adopted, includes reducing generation that means all discards everything going into the three bins. as well by 15% by 2030 and

reducing disposal by 13% and that's based on 2015 base line. so getting to the impound budget that you heard that the request is 14.7 for rate year-ending 24 and 25. that of course is looking at the new rate year being october 1 to september 30th to these numbers don't match exactly our fiscal year as we had to look at how salaries are escalating through the union agreements to transfer that. but you can see here the break out program attickly and the out reach that supports all of our work. and then small portions of some

other programs climate environmental justice and green building. so this slide, which is not showing the totals at the bottom, i'm not sure if there is a way--do you see the totals? >> i will thank you. this is the funded budget and this is 22 actuals, 23 projected and 24 budget and all by fiscal year.

that was not easy to separate out quickly. but that reflects all includes utilities. >> invoices or doing it for all programs. and it's about 2 thirds the for

staff funding, even though the impound is 35%. it's a little higher on staff funding. so the yeah, so i just want to talk about each of these program areas.

according to the state on all of our refuse related efforts. in addition, zero waste funding supports a grant program of two community base organizations. and that has a fund of range of projects that helps advance zero waste.

>> yes. >> why the dramatic, in a zero waste from your actuals to projected this year, sizable increase yet it goes back down for your budgeted from 24 to 25 to something more in line with your actuals for 2022, item big increase and projected 23? >> good question, thanks for that. that's largely due to the shift in the timing of the grant program so that we now looking at an overlap this year.

so even though, you know the grant program has been on the order 360,000 a year, that is spending ended up doubling this year. we have been fixing clinics and a lot of work to helping improve participation in our programs working across different sectors and organized by audience sector, city agency. we also work we coordinate with recology, monitoring their programs and services. >> jack? >> yes. >> can i ask you to be more succinct about the programs. >> yes, in fact i'm going to

jump ahead and show you the, and come back, show you the full-time equivalent staff that we're looking at. so for zero waste we have 12 full-time equivalent which is 70% of the staff as we have some other funding. toix reduction about 11 full-time equivalent, green business 2 and a half, and talks about 80% of the staff. it's a third of their staff, environmental justice, three fde, 70%, climate program, two and a half, 40% and out reach 85%. so. >> are the ftds the total number and 85% of the 19 are funded by the impound account. is that what you're saying.

>> no, i'm saying that the impound funding covers 85%. >> so you have more people not included on this list, it's just the ones that are funded? >> correct. >> and then can you go through what each programs do. >> yes. >> so as i mentioned zero waste it covered a lot of that around implementing policies and programs to deal with to handle refuse, reducing, reusing recycling composting and when we look at the measuring impact, we're looking at number of residents and businesses that were contacted and engaging the percent compliance in our mandatory composting, making sure all properties have adequate service. looking at how recology

interacted with them on contaminated charges, we'll be monitoring that. and also looking at the number of tons and percent recovered, looking at reduces city wide. and that comes from the state and then we have, some of the new state law sb1383 mandates around edible foods. we're looking at percent of targeted business that's are compliant for donating edible food. and community base organization that's are receiving that food and environmental justice communities. that's an example where we've seen especially from the state increase mandates.

including ordinances for green purchasing, flame retar dants and green business and healthy nail salons. they also have several waste laws that they have to comply with and report to the state with.

they also have a grant program, community base organization to see help reduce exposure of san francisco resident to see talk and to reduce the amount of hazardous material that needs to be disclosed. they also use professional services for help conduct annual third party audits, recology household hazardous waste and associated household waste programs and to help provide some technical support research and out reach. and they also manage a agreement with recology to operate household hazardous waste program. and we also have a landfill agreement that we've been managing. the toxic measures that they're looking at numbers of businesses that contact engage and user programs, quantities

of how hard us material is collected and, and reporting to the state. and moving to a couple of smaller program areas that are of funded by impound green building works to help reduce the use of building materials increase materials recycle and reduce the carbon, this really working up stream and facilitating greater reuse can all of this can help reduce disposal and they also have a set of actions in the responsible chapter of the climate action plan. we're also looking at materials sent to nonprofits. in the environmental justice program, working with the

communities that are disproportionately reduced such as a bay view and looking at how to help target the communities get better access to zero waste programs. particularly the affordable housing properties, this has been a challenging area historically. and they've been under served and now there is a lot of direct assistance being provided to those properties to better participate. ej program also helps with the racial equity plan and development and that really is about help to address equity in the implementation of our programs has we try to integrate, equity considerations in all of our work. their program impact, related to the impound funding is really being measured in the

affordable properties that are being assisted and that we can determine are compliant with adequate refuse service for the three streams. and also looking at the properties that are getting audits that tash gets very large generators.

also there is a part in there on the healthy ecosystem, using compost and the success of our programs how had helps benefit that. so they have a statutory requirement with chapter 9 of the environment code and they have a pretty comprehensive impact packing for every set of actions with each of the plan. finally the out reach program is a program that is supporting all the other programs that you see above. and this out reach program

includes comprehensive marketing and out reach, multi lingual door to door to out reach, multi media campaigns, school education with development, school assemblies and composting program support, data and crm for all programs. this program is instrumental in helping our department get the word out on the many policies that we're implementing and helping residents and businesses understand and comply with those policies. many different campaigns to engage the public. the impact of the programs are measured in many ways depending on the project. such as doing before and after market research surveys can on campaign engagement. looking at the number of businesses that are reached door to door or that are

participating in a project. looking at social media, engagement and user behavior. i want to go back to the previous slide and just talk about, what the people here on line may not be able to say, but the fy22 actual is about 13 and a half million, our fy23 projected is 12 and a half million. that drop is due entirely to increased vacancies in the department. we actually if you look at the non personnel areas, they have gone up a little bit. but they overcome pen sated. --compensated. they are hiring a lot. and for fiscal 24 we're projecting just under 14 and a

half million. and for fiscal 25, 14--i cannot see it from here, i'm doing it off memory, 14 and i think two-thirds million. those numbers as i noted before, are lower than the rate year numbers because those are three months later and incorporate renegotiated staff increases. >> related to the slide a few things that we should look at includes the level of staffing again. you had 22 people in out reach, that's quite a lot. i want us to take a look and make sure that that is reasonable for the body of work that is done here. that's pretty high as well. i would like to us to get more

information on the areas. >> okay, we can get back on any additional details you may need. if there are not more questions, i will move on to talking about the priorities that are our department has four work that we want recology to do in the coming rate years. we've identified a number of priorities and engage recology on them and these are the priorities that we have come to agreement on a associated set of actions that would be included in the new refuse rates. all of which is to help the city advance towards meeting its zero waste goals and climate action goals related to that. the recology has an important role to play in helping san francisco achieve compliance with the numerous tate and

local policies, service levels and participation, making sure that people are putting the right materials in the right can, that impacts how they processes. and reporting to us on that. as well as performing audit to target generator and ensuring safe management. so you know, this includes increased out reach by recology to compliment what we're doing. and we've identified as having them help print and mail materials that we jointly develop. we actually have in-house gravities that is part in our out reach team. so we're able to produce a lot of it but they have a role to play in that. and we're looking for residents, there has not, in

resent years there has not been a resent years. we want every resident to get a piece come pretense i have piece--comprehensive piece every two years. and our goal of course is to help reach all san franciscan and address equity inaccess issues and language issues is another way to provide that access. i'm going to advance to give some examples here, you know one example of helping to meet statutory compliance is to be conducting one is improve monitoring and specifically conducting audit for compliance and out reach. we have one ordinance that requires that, but for the largest generators about 500 properties.

in terms of better monitoring, the trucks are out there every day. collecting from businesses and given the nature of collection, it's often hard for the driver to see what is in the bins. so recology has tested a number of camera technology and found that is pretty affective in taking pictures of materials going in and whether the materials are impossible so that can be documented and they can follow-up. they can provide us that information and we can follow-up with properties and residents and businesses to provide additional assistance. another key piece that we have and i understand there is interest to go in more depth here, is continuing a zero waste incentive but changing it from the past. this is a financial incentive

for recology to do what they can to help the city advance towards zero waste and climate goals. and particularly we're looking at the 2030 targets. the incentive targets are being proposed to be changed from one base on disposal tonnage that we've used in the past to one based on recovery rate. recovery rate is like diversion, instead of diversion we say recovery. it's just a percent of total tons that recology is handling that is not being disposed, that's what they're recycling composting, that they're able to keep out of the landfill out of the disposal. current retheir recovery rate of everything that they're handling is about 39%. and what we did is we looked at where we need to be, we originally i originally had proposed tonnage basis.

we know where we need to be tonnage wise by 2030 and share of toted al city discards we're able to equate that to a 70% recovery by 2030. so we looked at where we are now and where we need to be in 2030 and two options. one is a straight line and one was a bit of a curve. the straight line was a little bit, a little bit more ambitious that needed to be. improvement are not an incremental even, because there are certain investments in the future.

so i thought it was more rational to have a curb that would give recology a better chance at achieving their diversion targets, because to make this affective, they need to be able to meet them. and i believe they do. and so, this is just a table that is showing us how this breaks out. these targets, as you probably understand they are based, it's a separate fund that is based on two percent of their or or profit that goes into the dedicated fund. and then out of that fund, is divided into four, four tiers. and for the rate year at the end of the rate year, we look at the total tons, that they report and we verify and then we can then determine if they met tier, 1, 2, or 3 or 4, and

if they meet just tier 1, they get a quarter of what is in that fund, if they meet 1 and 2 they get half of what is in that fund, et cetera. as in the past, the proposal is if they don't meet tier 1 and 2 that would go go back to the rate payers, subtracting from a cola increase. and for tier 3 and 4 also as in the past, recology has been able to propose additional investment. and that has been instrumental in past years to respond to rapidly changing conditions. you may have heard that there were big impacts in markets particularly in asia where where most of our recyclables

were going. and the standard for those dropped dramatically from a 5% contamination down to 1%. recology would not have been able to respond and continue to market all the materials that are going into the blue bin if they had not been able to make those fairly rapid investments and that process involved putting together a comprehensive proposal, kind of what the impact would be, tonnage et cetera. we review that and we gave a recommendation to public works, they reviewed that and if it was approved, they were able to tap in to whatever portion of those funds that they apply for. and you had a number of questions, so one of the

questions putting into rates. and identified, range of program improvements. that we were able to identify in the quick time frame of this rate process. and what recology could figure out. there are some other things that are being looked at that would need more time. there is been discussion around how to recover more at pier 9. and engagement with some of the market out there there that is interested in the material. and if the market change quickly that is valuable back up avenue to potentially make

those changes. recology has seen a biggest challenge that lower their recovery rate because they were at a higher recovery rate in resent years, has been, there is the market considerations that they're dealing with but also increases contamination and there is a reflection that needs to be better monitoring. so the investments that they're making in the cameras they're also going to be instituting which they had done before but to do it more widespread to commercial and apartment dwellers, a contamination charge system. so they find that a property mixing material up, which is contaminating and we give them

warnings and they continue, there is an ability to add a contamination charge. we felt that has helped. if we reduce contamination, they can increase their recovery rate. so i do think that these targets are achievable. you know with the tools at hand and proposal for these new efforts in the rates. i want to pause to see if there is anything else that i can discuss. >> something that jumps out is the 70 recovery rate that seems a far cry from a tier of 47% of achieve amount level. >> if it would be helpful, i can show you a table of what it would look like going the rest

of the way to 2030. i have a table to how you get to 70. as i said, there is a straight line it's slightly curb, it's not like we're relying on huge jumps later. as i get to now, we believe getting to ultimate waste goal, we need to process the material and the trash and trash processing, will result in a big jump. but to do that large scale is going to take several years. and in fact, if you're ready i can talk a little bit about trash processing. so this is a view, we do, we've been doing about every 7 years and now we'll be doing it every five years. what is a called a waste characterization and that includes having a third party firm sort through the materials

that recology is collecting, the trash stream, the composting stream, recycling and looking at you know; what the composition is and the materials going there. this is what was found in the trash stream. you will see here, what was readily recyclable and compostable of what was half of what was put in the trash. so and then you have limited compost ability and depending on how we recover and market that. we're seeing evolution of that, we looked at a lot of technologies with recology, we tested a number of number of modular systems and now we have a newer more state-of-the-art facility that waste management has built and operating and its second year where they all of

oakland's trash is being processes there. and you know, some were on the order of 45% of trash is getting recovered. the vas majority being organic material. so we feel there is a real value to look at that facility and we've talking with them to do a big enough test so that they can run just san francisco material for a few days through the system and create existing products. our mix and materials is a little different than oakland since we have a more comprehensive collection. so that we feel is an important step to look at the latest technologies and then based on that testing and other

information, work with recology to come up with a longer determine plan. --term plan. we did have a longer term plan, if you go back and look at the 2017 rate process, there were contingencies there where they can come back and get additional funding for. but that was getting land that they were not able to. so now we need to look at off site options. and i will leave it there to see if you have more questions. >> thank you very much for the presentation, just to be clear on the zero waste inventives, so i understand, if the recology were to meet the goals of getting to tier 4, that instead of a profit margin, they would have 11%? is that what they would get? >> they would get two percent additional. >> what is that worth?

>> well the latest numbers are about 8 million. >> per percent. >> at 2 percent is equal now to about 8 million. >> 8 million. recology may have it when they present but they were also in the controllers presentation earlier. >> thank you. going to take a break after this presentation but why don't we open up to public comment at first. >> thank you, chair chu. that completes the presentations for item 5. we will now take public comment, members of the public who wish to provide in-person public comment on this item, please line up at the podium now. each person will have two minutes to speak. as you line up i will read the reminders for those on web ex or on the phone. members who wish to provide

public comment, should call 415, 655, 0001, access code 259, 703, 93965. a password is not necessary by if prompted dial 228. for those using web ex, please use the raised hand icon, a system prompt will indicate that you have raised your hand. please wait the system indicates you're unmuted. you will have two minutes, i see that we have no in-person public comment. so stating that for the record and for the mon raider, let's check to see if we have any callers on the phone.

>> it looks like we have two callers on the phone. >> caller: if you can give me a 30-second warning, that would help. i'm and maybe we can recover some of the general fund costs that are supporting that work through the rates. i understand there is some

concern about doing that, otherwise, we should explore that dph certainly collect these for permits and leans and that sort of thing, but i have no idea what the cost and revenue are with the refuse related work. and finally, i would think that we can try to determine the program out reach and enforcement work that is best done by the city through particularly through the environment department and by recology and i heard the question from chair--thanks very much. i heard the question from chair chu about out reach group and whether the 19 staff and 85% whether that's really the best mix. so exploring that further and what work should be done by whom is useful. thank you very much for listening and i look forward to the break. >> thank you for your comments

mr. pelpill. chair chu, let's see if we have anymore callers. does not appear that we have any other callers in the queue, how long would you like to reis heser for? >> chair: thank you very much, given that we'll close discussion on item number 5. >> thank you. item 6 is the presentation of the rate change proposal from recology. this item is discussion only. presenters may begin their presentation when they are ready. >> thank you and just to note for folks we have a hard stop today of 4:30, so i want to make sure that folks are aware of the timing. >> thank you, chair.

>> good afternoon, i'm dan of the recology companies. it's my privilege to represent recology at this meeting today. we have provided careers. it's one of the many reasons we feel so connected to the city and take pride of the work. provides comprehension processing. and rate year 2022, the recall, sorry, we collect tons of material from the landfill to be recycled or turned into compost. we're proud of the sustaining one of the highest rates and in partnership with the city, we can do better. this allows us to innovate how we handle material.

today we'll give you an overview of our rate submission including the background of our business structure and operations, the rate setting mythology, the key components of the rate. our proposal to adjust rates and program enhancement and changes we are proposing. with me to discuss the application of the members of the san francisco team, mr. john the director of business process improvement, anthony, general manager, and maurice the manager of san francisco along with many others who put a lot of work in today's presentation. we hope it will reenforce the commitment to san francisco. and our dedication to enhancing programs that will help san francisco clean and support the city's climate action goals. i'm going to start with the business overview.

when we say recology, we are referring to the three companies of rate changes. sorry, i have have to start off. starting with the business structure. before we dive into the rate setting process, a few words. subpoena serve is san francisco recology scavenger, recology golden gate and recology san francisco. recology sunset scavenger and golden gate are companies, responsible for operating the routes that pickup recycling. in addition the collection company operate numerous programs that serve rate pairs. through our waste zero specialist, we conduct our rate to understand proper sorting and i object crease diversion rates.

anthony will talk about these programs in our presentation. recology san francisco is responsible for processing and disposal materials. material that are taken into san francisco facilities, this critical infrastructure includes recology central at peer 96 and debris processing. the tunnel transfer station, the west wings organic processing facility and public and reuse and household hazardous waste. the materials are then sorted and transported into the appropriate facilities. recyclable right side bailed and shipped to the appropriate recyclers and transported to organicking north facilities in modesto where it's turned into compost.

as you can see from the area, we serve 128 residential residents, 8400 apartment customers and 61600 commercials. as you can see, from this chart here, it's a look at our revenues, approximately 80% of recology derive from the operation, serving the residential apartment and commercial sectors. remaining 20% include revenues from recycling sales, contracts with the city and a few state and federal contracts.

the top three include labor and exposure. business impacts, we're here today because there have been major economic services that change how we operate. most of the changes are due to the long term affects of the pandemic. our collection activities are down recovery in san francisco have been the slowest of any major city in the country. the on going economic challenges add to the economic outlook of rate year 2022. the collection companies were down. with the slow down of business activity in san francisco recology san francisco are receiving lower tonnage. the volume is down by about 25%

from prepandemic levels. recology san francisco revenue right side sharply lower as a result. at the same time, recology has scene increased cofs and what pandemic related changes in the market. for instance, complying regulations has increased our labor cost. also incurring for truck replacement to comply with the board regulations on top of the regularly scheduled truck replacements. i think it's important to point out that our annual cost of living adjustment known as cola only address the increases they do not address the loss associated with the economic changes that we're all experiencing post pandemic. this is resulting in a higher cost per unit.

in combination they have have performance and major drivers for seeking new rates now. fewer tons translate into lower, those revenues most support the same costs that is why we need higher tipping fee of recology san francisco. the rate change questions. we're proposing a rate increase of 3.9% rate near 2024. these are the rate increases that the customers will see on their bills. because we operate the process and disposal system we're proposing the tipping fee of recology by 16.3%. in rate year 2024, it 08 percent and rate year 2025. most of the increase the collection customers will see on their bills is driven by the

tipping fee increase. those tipping fee increase large in rate year 2024. the impact on the rate pair is not as great because it's only a portion of the cost that go into collection rates. for the application we're proposing the set rates for two years, rate year 2024 and 25. based on the discussion with the rate administrator, we're proposing to adjust to the living rates which we'll discuss in the presentation. i will now turn it over to charles to talk about the rate setting background and some of the key components of the submissions. >> good afternoon, rate board members, chair chu and manager herrera. i would like to provide some

background on how rates are set before we squus the components of the rate submission. under the city's refuse and disposal ordinance rates must be just and reasonable. they have always been guided by these principles. the rates charged refrekt expenses that recology incurs to provide services. our submission is based on projected expenses for rate year 2024 and 2025. it's important to note that certain expenses are disallowed for rate purposes. these are rates that should not be passed such as advising. they full into two weighings,

op railting or or expenses that is expenses in which recology can earn a profit and non or eligible expenses. these slides present information in a few different ways. we'll start with a visual representation with the rate setting process moved to revenue requirement and finally show you the math behind the calculations. the basic steps of rate setting are shown. we start with projected orl eligible cost we then apply the operating ratio to determine

target profit. we then add non or eligible cost again cost with no profit. we then add tax through collections these are funds for incentive account and impound account. we then apply any other revenue that offset the rate increase. such as recycling revenue s and for recology san francisco s the revenue requirement is divided by the tonnage to get a tipping fee per ton. the new tipping is divided by the current tipping few to get a percentage. the revenue requirement is divide by revenue at current rate. this results in the needed rate increase percentage. we've used the term operating ratio. let me explain the concept of

operating ratio. an operating ratio is a standard mythology used to calculate profit. to come up with a target profit in recology proposal, we use 9% on a category of expenses that are or eligible. this is consistent with past rate setting and generates a dollar amount of profit. it's low by industry standards. other jurisdictions use operating ratio between 85 and 92% with the average of 89.8 which translates to higher allowable profits in those jurisdictions.

no profit is earned on some categories including processing. that means a laura februarying tiff profit margin. this level of profit, recology needs a renable return on its invested capitol. being and will be asked to make capitol investments to serve rate pairs. those investments are not risk free. recology also needs to return value for shareholders who is employee owners. le the revenue requirement chart for recology san francisco provides a visual representation of how the revenue requirement is built. starting on the left hand side, we take or expenses add a profit, those are the blue

bars, we then non or eligible expense sxz pass through collections, the blue hash bars. then the revenue offsets are subtracted to obtain from the rate pairs use today determine the rate increase. this slide has got a lot of detail, the text in red has labels. a quick reminder of how rates are set and target profit, plus non eligible expenses plus pass through collections minus offset equals a requirement, divide that by the tonnage and you get a new tipping fee. reduced the retirement to the tipping fee. some highlights to point out n.line g, both regular 24 and

25 are recycling growth assumption of 2%. recycling is used to offset the revenue requirement which lowers the rate. in line i, both 24 and 25 are tonnage, i'll talk about growth assumption in a moment. there is a revenue offset of 3.2 million for the zero waste incentive funds collected in 2023 that ally for the rate year. has lower expected offset for the zero west incentives, as 50% of the cwi funds are expected to be retained. the assumption in the rate model is the incentive targets will not be met and the zero waste incentive from rate year 24 will be rebated to customers in rate year 25. the revenue requirement chart

for sunset and golden gate provides a similar preparation of how the revenue requirement for those companies is built. again starting on the left websinger take the or expenses and avenue a profit then add non or and pass through collections. then the revenue offsets are subtracted. the final result is the gray bar, the net revenue use today determine the rate increase. again a lot of detail on this side. target profit, non or eligible, pass through, less offsets. that gives you a revenue requirement, we divide that by revenue and you get a rate increase percentage. subtract other offsets that are available.

there is an additional revenue of 5 million dollars shown online i for incremental contamination fees. you'll hear from our operations team. in terms of rate setting, the additional contamination lower the revenue requirement and thus lower the rate. there is also 2.9 million of other revenues and other non rate revenues. the revenue for 2024 and 25 includes a 2% growth assumption. revenue offsets are revenue sources that are used to offset rate increases. you'll hear more offset in a moment. the rate increase currently projected at 3.9 percent would be 6.62 percent and it would be 2.86 in rate year 25. one thing you cannot see in this calculation, is the

contract, open market debris box and services costs. in a change from prior rate setting practice, this rate submission separated the revenue and expenses related to these activity which are now outside of the rate setting process. the expenses were removed from the or and non or rate expenses based on the revenue. the zero waste insented i have from rate year is for tiers 1 and 2, this is shown online m as part of the rate year 25 rate calculation.

this annual adjustment would include cost of living adjustment and other components including adjustments based on a balancing account. i cola allows for changes. a cola has several benefits including the time and expense of rate change proceedings each year helping to reduce the large jumps and rate when a new rate order is issued. cola has been used for san francisco rates since the 2001 rate adjustment cycle with some changes over the year. since this rate application is proposed to set rate for two years, a cola only apply. doing so would help stabilize rates until the new ones are in place. the cola uses a number of expense categories or factors

to create a combined annual add jutment. these factors include six labor costs fuel, healthcare costs among others. the weight of the factors was last set at the at the same time of 2017 rate application. in this rate submission we're proposing that the wait of the cola factors be adjusted annually. doing so would provide a more accurate annual adjustment. the other part includes rebating zero waste incentive rate pairs. changed in projected contributions and adjustments based on the balancing account. balancing account or mechanism. at the rate of the end year,

recology reports on the profit earned during that rate year. if the profit are above the profit that would have been earned applying the operating ratio used to set rates, recology would increase the balance of the balancing account by that amount. if the actual profits are below, that would have been earned applying--question. >> you talk about operating ratio and that, for recology, it's low by industry standards. but most other isn't recology unique that it's employee owned compared to other companies in the industry? am i wrong in that? >> it's even unique is

employee owned. >> the pass throughs of money and profit when you have an employee owned entity versus not, correct? >> i assume in the question the difference is that, you would ultimately pass through to the employee owners essentially the value of the company overtime. >> thank you. >> again if the profit is below, we decrease the balance of the account. a positive balance is used to decrease future rates, a negative balance would increase the rates. and ensures that both rate

pairs and recology receive a fair deal. i'm sorry? >> on the balancing account, does this exist now? is it different the proposal is different in what way, if it exist already? >> it's different from the balancing account and the settlement agreement as that included 50% of the difference between the actual profit and the profit that would ber calculated. that's a primary difference. the other difference is we're proposing that the entire balance used in the balancing account be used in the next following year. in the settlement agreement, there is a five-year amorization period for any balance in the account. because in the proposal, we would be adjusting the balance each year. we felt it would be best to

amortize that amount in the next year. >> that does not result in more swings? >> not necessarily, the function of the balancing account is to make sure that overtime, that the companies earn the profit consistent and only that amount. >> i understand that a deficit or surplus you'll have a swing in the next year as opposed to longer period as a consideration here. >> right. and it really depends on the economy which is the largest actor that moves the variance between our actual profits and the profit based on 91%. since we're setting that in the rate setting process.

so there would be sources that would move it. if the economy moves it down, they would stabilize the rates. >> again we're proposing to use 100% of the difference. we believe that both rate pairs and recology are best s*efshd. it ensures that rate payers will see lower future rates. it also helps recology earn a level of profit sufficient for the risk it face sxz to provide a fair return to its employee owners. there is no guarantee of any dollar amount of profit in my year. recology could face inanticipated costs.

the operation of the account is complex, particularly as it inter acts with other components of the rate. the full details are in our balancing account exhibit. >> we've included a two-percent growth assumption. we based our growth assumption in the data in the city's five-year plan. the both from table 7 project business growth at 5% for rate year 2024 and flat for rate year 2025.

we apply to our business to calculate a growth rate. commercial revenue is approximately 48%, residential and apartment revenues are 50%. pension cost include contribution to see a pension plan for recology for san francisco union employees smaller contributions to local 3 and matching 41k. the rate submission includes 22.2 million for rate year 2024 and 17.6 million for rate year 2025 for the recology plan contributions. that plan is projected to reach 100% funding in june of 2025.

for proposing that there will be no contributions as long as the remains at 100% funding. however if it dips below 98% funding, contributions would resume. raitsz for 2026 would be adjusted downward as part of the adjustment ie, same time cola or next rate is set by the board. the balancing account would be used to capture any contributions necessary to maintain that funding at 100%. as in the past we've included funding, as you've heard we've

included 23.8 million dollars for the impound account. the funding in our application does not include the proposed adjustments from environment or public works. as you heard this is equal to 2.4 percent and 8.4 million in 2025. managed by environment department. i want to talk for a moment of a rate change tax payers. first let me explain the rate structure. there are separate rate structure, residential apartment and commercial. this is because the fix and variable costs of serving these

customers vary by class. the rates have been for years. residential, the fix cost to serve residential customers sing the family dwelling and two to five multi family dwellings who share service are higher than customers. there is a unit charge that is designed to cover the fixed costs. the metrics vary by size of container and frequency of collection. incentivize to recycle and compost. a gallon for trash costs twice as much as a gallon of capacity. apartment customers designed as

result' dwellings are also charged based on a unit charge. apartment customers, the volume metric charge is the same for trash recycling and organ i can. to encourage the version, they provide a discount that rewards greater recycling and/or organics. dividing by the total container volume and subtracting 25%. for commercial customers, under the renews ortd nans, commercial rates were historically not reding. commercial rate increases however have largely followed the approved residential and apartment increases over the last 30 years. with the passage of prop s in 2022, the rate board may also regulate commercial rates. rates applying to all premise

that are not residential and apartments. these customers are businesses, large residents with more than 600 rooms such as high-rise buildings, compacter. commercial rates are set based on volume only. and therefore the fix cost of serving each customer or lower. our submission proposes and 2.17 in year 25. these are the rate increases customers would see in the

bills. due to the change economic environment, we're also proposing to increase the tipping fee that recology san francisco by 16.36 percent for and 0.08 percent in 25. as dan explains tipping fee increase is needed because revenue base to support the fix costs at recology san francisco. so you can see the rate and the example is 46 and 77 cents. in year 2024, it would results 48.77.

in rate 25 increase is the apartment of 7. individual rates will vary by a type of service. the monthly charge is currently 136.27 with the rate increase it would go up by 5 approximately 32 or a 1.33 per unit. in rate year 25, the monthly increase is 307 or 77 cents per unit. here's an example for 100 unit apartment building. the customer weekly collect and earn a 43% diversion discount.

43.93.22 per month, this would increase by 175 or 1.71 a unit for 25, the increase would be 99.04 or 99 cents per unit. this is an example of a small restaurant with twice weekly collection and 35% diversion discount. the net monthly charge is currently 373.82 per month. this would increase in 24 for rate year 2025, the crane crease 8.46 cents a month. >> average in san francisco. >> i think i would have to differ to the team when they come up to speak. >> you're using it as an example so i want today understand why.

>> we picked example of different types of customers this was in conversations with the refuse rate administrator. we went through a number of examples and then selected some for illustration purposes. so here's an example of mid-size hotel. it receives a 50% diversion discount. the net park is currently 5861. the increase would be 2.2860. for 25, 132.16. now i would like to turn it over to anthony our general manager of sunset scavenger to talk about some key changes.

>> good afrp, over 100,000 businesses receive collection service from two companies, sunset scavenger and golden gate. they have workforce of 650 employees. the core of the collection service is 3 stream system of refuse recycling and organics. size and type of container to meet their needs while at the same time supporting increase diversion. in addition to our core service recology offers 25 other programs to support their service needs. the customer service needs. these problems are listed here. include the recycling service.

abandon materials, to serve material illegally left in the public of right away. initiatives are also offered to increase. these initiatives include recycling processing facilities at peer 96. comprehension are also available to all customers. this includes numerous forms of customer engagement and how to properly sort materials. to meet the environment in customer needs. adjustments to these programs are necessary for cleaner streets and more vibrant san francisco.

first we're providing more proactive service and improve response times. dispatched via the 311 system. 2022, public works equated to 13% and addition to the 311 recology receives. we looked at three areas.

first, combined 2022, 311 request and public works directed sweeps total about 130,000 requests putting the program at capacity. second the materials team saw 2.89 increase from 311 for 2022 compared to 2021, additional 3071 requests. third, declining 311 response time in calendar year 2022 which averaged 8 hours compared to 6 hours in 2022 and double our goal 4 hours. >> on all service requests. >> it would be accounted in the service, yeah, if we had duplicated requests.

i'll node where we have partnered director to provide additional services. they will be rerouted into existing zones. which would exude actual requests of 130,000. it would allow to serve as material and be able to move closer to our goal responding to our 311 requests within four hours. to provide this additional service, two drivers and two vehicles are required, head count 474,000 a year and trucks 493, 000 for the trucks. >> can i ask for clarifications.

your increase in 311 calls for service levels, so you can have multiple calls for the same site. do you have any other information that backs up the 170 percent service capacity, like you're collecting on the ground, you're seeing actual tonnage increase or other statistics that help us. >> actually 311 has decreased. pandemic move out resulted in higher tonnage amounts. during that period so when we look o year over year, tonnage has began to normalized, indicating that the nature of the material being abandoned happens to be lighter and more numberous. >> that's why i'm asking if they're not necessarily unduplicated, why would i trust that number?

>> that's a very fair question, it wards us making sure that we pull out the duplicates out to understand the number. >> thank you. >> second pass service. with a passing currently there are 30 providing 2000 101 public receptacles. this service is in addition to the regular routes on a first pass. and that will be shown on a map. we need to increase our routing capability. currently, receive a second pass service.

public works has made to be completed on specific cans in more residential areas of the city such as the mission district. recology is proposing to increase the cans to 80% to account for the additional service requests. next recology receives 311 requests for public receptacles. there are 9,000 311 requests received for january of february of 23, 7% came at 11:00 amor later, showing that usage was increasing. finally the public works has rolled out senator that's determine their need for service. while the data is yet to be verified, to be able to respond to realtime. capability does not currently exist.

to illustrate the additional impact of the senators on just 20% of the total cans has been an increase. as data is analyzes we'll determine if there are any further adjustments to the program needed. here's a map illustrated the 3000 plus cans across san francisco. provide for additional high use of receptacles as well responding to new censor technology. to provide this additional service on two routes, there will be two head count needed.

and acquisition trucks of 410,000. >> did you say that you're proposing 80% of the 3300 cans >> yes. >> 69% and does your existing route, so you're folks are out there collecting trash service in residential and commercial locations? >> the trucks that you see in the blue and green depending on where you are, they pickup in the first pass. we have dedicated routes that start later in the morning that

provide second pass to high use cans because the cans will not make it a full day without additional service. >> thank you. also offer of clean up events for san francisco residents. and donate gently used items to a local charity. this has offered resident to see properly dispose of these tapes of wastes. the collection companies propose offering total clean up events, receiving 2 clean up events per year. we work in partnership with the public works and the department of the environment and areas within the same district. highlight opportunities and

proper disposal. they do not require additional staffing with the return of the program additional program include labor for weekends and disposal approximately 500 a year. >> going back to the recyclable. did it include week eppsed? >> it does include weekends. 7 on saturdays and 8 on sundays. we would add proposing adding two additional routes on the weekend as well. >> i think that will be helpful to have ob what that will look like. thank you. >> next i would like to discuss our waste zero program offered to all customers.

and one wayman jer. the team conducts presentation, to educate our customers on how to properly have wastes. the team made over 600 contacts in 2022. other activity includes the distribution of kitchen pails, diversion collateral, refuse separation and ordinance auditing for all large quality generators. we also conduct cures of pier 96 and environmental learning center. proposes a number of activity initiatives which were developed in the line and priorities and requests.

we're developing new commercial and residential service prodaours to educate and inform customers of all service and program offerings. another addition would be out reach to all customers below 50% diversion. to 567 percent in pursuit of the climate action goals. and cost associated with mailings and printing. we're proposing to enhance our control through education and point of collection. we're proposing enhancement in following areas, education and out reach we're looking for additional organic being

collateral and training and site visits. most to identify contamination at the source and on board camera systems to be. with this system and our existing on board drivers will have the ability to capture contamination and note ate customer accounts. overtime lead to a decrease in the same charges. costs is to be 220 per year and costs of cameras--contamination of organic has been a challenge. which is high by industry

standards. our application contamination protocol, by simplifying the steps and reducing the time and increasing the amount of customer engagement. contamination on to those responsible. the charges will not impact charges. protocol consist of steps before there are sigz charges incured and those steps are listed here 1 through 4. during this step by step process, the zero team are engaging by customers who are receiving these charges to improve behavior and approve additional charges. our residential customers will continue to have the same as

they're serviced as trash for each occurrence. currently contaminated, as john mentioned earlier, proposele contamination are additional 5 million dollars in annual fees. we do anticipate these fees to decline overtime as behaviors change for the better. changing gears, i would like to talk about impacting drivers. an increase our employee owners have pace. in collaboration with the union we have worked to make changes and reduce the likelihood of incidents occurring. we're also in the process of organizing training with the san francisco on how to manage the difficult situations on route. one of the significant changes

is to eliminate certain routes in impacted areas. these changes have resulted in additional drivers being added in these affected areas and one additional supervisors. these additions reduce the time our drivers work alone and leave the direction vehicle unattended while retrieving carts. dedicated to the impacted areas to improve our presence and respond more likely to emergencies to require more attention. the costs are projected to be 860,000 per year. we have connected, during and

after the pandemic, we did right size our business. as we are seeing more increase in collection activity and additional program demands from the pandemic lows we have begun to add head count. existing informations being filled and will be shown on the next two slides. we have 8 new hires in rate year 2023 compared to rate year 2022. next we have a total of 13 new hires all for new programs in rate year 2024 compared to rate year 2023. if there are no questions i would like to turn it over to

maurice to discuss our processing operations. >> good afternoon, i'm maurice general manager of recology san francisco. and recology san francisco is the operation that disposes of the trash and processes all the recyclables in the san francisco region. this afternoon i would like to speak about some of the programs in recology san francisco flt organic contamination. we are facing serious issues with contamination in the feed stock. during 2021, conducted a waste characterization study to collect representative sam

samples and analyze based on nearly 90 material types. the study sample and it was determined that 24% and brought to the composting facilities non compostable. it was also determined that 2.2 percent essentially 26.5 of every ton delivered is not belong in the feed stock or does not contribute to the finish. requiring recology to clean up prior to being delivered to the facility by december. the film that adult trait the finish compost creating a

nuisance. recology has been working with sf environment with this issue. through the highly contaminated nature, we are in jeopardy of use losing the ability unless recology can improve the quality of the material being delivered. the state recently noted that there may be an increase tonnage being generated. recology san francisco is very concerned that if we lose our ability to deliver organic may be difficult and expensive to reposition tonnage into the marketplace. at the same time, they have

dedicated to successor began i can program. current standards for compostable plastics do not align with facilities continues including processing times. therefore the organic processing cannot state that these materials can be processed and covered. as a result, they cannot be processed as organic. exceeds our current processing xas ilt and recology san francisco must take steps to remove the plastics and contaminates being collected in san francisco. proposing to remove food plastics to the feed stocks prior to delivering them to the

facility. it's the most challenging part of the process. the ability of the feed stock presents the facility with challenges. because of the nature of the product. the biggest consideration for organic presupposing system is balancing yield loss. the organic preposing system is composed of a bag breaker, separating the system bag. and removing on to the tipping floor on to the station. the available representing the individual components, required

upgrade and the installation expense. 2.5 million of the projects will be included in leases over ten years and the rest of the cost will be depreciated in over 10 years. rate years application. the following image represents a con tep seoul design provided by one of the vendors. the blue image is screening system and transfer conveyers. large scale trash processing test. recology understand that we need to process trash in order to meet the city of san francisco's goals. sf environment has requested

that recology deliver 1200 tons of solid waste to the organic recovery facilities for testing. they will be looking at loads to the organic facility in the east bay. that they would be able to load 22 tons into the trucks and deliver just over 55 loads of material. in order to maintain the most accurate, they will be void of tonnage based upon reports presented to oakland by the operators in 2022, san francisco environment estimates materials covered once through the organic. we believe that the san francisco waste stream is different than the waste stream from oakland.

the test should be intiff and should include data. trash processing objectives. ncaa similar fashion for san francisco. while the solid waste will be processed, environment will be performing a de tail analysis recyclable commodities. committed to providing all the professional staff required to process the material and provided sf environment with technical proposal covering all aspects of the operations as well as define analytical objectives. the test will provide for recology and san francisco the opportunity to obtain detailed waste stream characteristics and present us with the opportunity to better

understand the recyclable ability. processing test will be then be at the composting facilities. believes that this is the most logical way to under real world conditions. thed cost will be 5--disposal and transportation from the landfill represents reducing the expensive of the pilot to 7499 or 400 dollars per ton. peer 94 sustainable crushing.

sustainable crushing is located on pier 94, asphalt and concrete for use and recycling in this facility. in 2021 due to economic and regulatory challenges. we have not included any substantial, we have not currently assigned to this operation will return to recology san francisco where they will fill existing vacancies. the following table representing head count over the past few years. the table demonstrate recology san francisco was able over the

course of the pandemic. for the positions or replacement or for a new positions that we're projected to increase during rate year of 2024. there will be no additional rate increases. this is a deplete rate. combination new positions and open positions filled in 2023. if you have any questions, i can answer them now. if not i can turn the presentation over to wrap up. >> on the trash processing pilot, i want to make sure that i'm reading it right. in your built point, it says

that 400 per ton. >> correct. >> and currently your tipping fee is $200. >> yes, 2 19 dollars. >> so this is twice as much to run the test. >>tially. --essentially. >> it does not seem like it's feasible. this does not really represent a long term price. this is just a controlled test where we would be taking our tonnage to another facility. and then process the san francisco tonnage. in addition there will be a team of engineers hoping to

gather information. so it's an extraordinary expense. >> three times. >> device. >> well added to the tipping. >> the tipping fee, that we would collect essentially would be offseting this. >> okay, thank you. >> i would like to turn the presentation back to dan shaver. >> thank you, on the behalf of the employees i would like to express the appreciation to the board. our commission is provide value to the community. our employee owners take pride in their work and the role they play in keeping the city clean. during the pandemic, san francisco is one of the only

that did not experience service interruptions, thanks to recology and the cities. despite the dense environment and traffic and lock gates, rates that are lower those. in rate year 2025, after two years of rate increases, service will remain below $50 per month. enjoyed many enhanced services during this rate. such as and bulky item pickup to name a few. with that i would like to conclude and take any questions you may have. >> thanks, dan. i'm not sure if this question is for you or the gentleman that followed you earlier. >> we can divide them up. speakers come on up. we'll have the appropriate first answer. >> it was a gentleman that i asked a question about.

so we talked about employee owned company. i would like to know the profit that you get presumably on most of that is passed back to your employees, correct? >> i think the profit becomes the value. generally profits that are earned on operation are used to pay for your capital and interest. do the entities themselves pay for their income tax or is that passed through employees and they pay it? >> the income tax for because we're an e sop is a pass through, because we are because of the corporate structure.

we pay an excise tax, it's a small excise tax. so the way that the tax law is structured is to encourage employee ownership and essentially, we replace that federal tax with payments to former employees that have reached their retirement status. so essentially, it's actually pretty close in terms of the magnitude. >> okay. is that fairly unique, i would imagine that's fairly unique in the industry. because most other employees are not employed? >> it's fair that most others are not employee owned. okay, thank you.

>> question in general, if there is always a, and this is how it's been for a while. what is the cost? >> so recology and it's in our best interest to remain competitive to expand the business. and the fact that we can driver than san francisco and oakland is testimony to the fact na we are remaining competitive. and our goal is to always share the business. >> there is another element to that that i do want to point out in the question you said, you said there is a 9%

guarantee. it's not really 9% because it's a smaller number. and there is no guarantee in a profit. and in looking at it as we stand and and sit here today, it is a public process, it's a process that renews every few years or couple of years. so in two years it could be something very different. the reason i point it out is

that we are it's important that we generate adequate profits to attract capitol with other folks that we deal with that look at the long term. we don't believe the balance account reflects a guarantee but the companies earnings in any period consistent with the target o.r., that is asset. >> i'm assuming that the information is being shared with the controllers office, all the information that you mentioned during the course of the information, all of that data is being shared with them, correct? we'll continue to provide any

information. >> including the comparable municipalities? >> there is information actually, it was information contained in the forms that the refuse rate administrator contributed. initially that requested some comparable data. we provided some data and we believe that the controller has and will be gathering some of their own data with respect to that. we'll also be preparing an exhibit as i mentioned. we had a survey public comment from 29 jurisdiction that's layout the range of operating ratio what is included and what those levels are.

>> in the presentation, i thought it was clear, i want to thank you for provoiding that information including where the cost increases were, that is appreciated. you also had a pretty exhaustive list of positions changes. i would hope that that data will also include for the controllers office a justification for those positions any that are new and why a new position is required as oppose today reallocate an existing function. that would be helpful to know what you're not doing anymore. the o question is related to commercial areas. we understand that there is less activity in the downtown shown because more people are around in the neighborhoods. and so the question is, are the

roots also reflective of those increases in need and commercial areas? >> thank you for the question, that is the justification yet. have generally received less public reacceptable service than the more dense downtown where many know has seen a shift. and those downtown have matched what is necessary for the cans. we do not add any grouting capability but we plan to do that as part of the process.

>> it would be helpful to see, if you're running more routes, what that will look like. >> yes, we will make sure we provide that. >> thank you. >> one last oncinger i cannot resist. a ton of out reach is being done by different entities, you do some out reach, all with the same goals of diversion, is that affective? is it efficient? >> i think if you look at san francisco department, you can see where the one team was not providing the out reach. there was an increase which leads to more rate payer costs. out reach is the most affective way. and most cost affective way. so yes, i do think it's affective and we've coordinated and know where those sort of who is doing what.

and i expect that coordination to continue but i do believe it's affective. >> it's something for us to explore and make sure that the gaps are the right ones and the rules and responsibilities are the right ones. thank you. >> thank you. >> all right o i don't see any other questions, why don't we hope up public comment. >> members of the public who wish to provide in-person public comment on this item please line up at the podium now. each person will have two minutes to speak. for the record, there are no in-person public comment. we will move to the phone lines. members of the public who wish to provide public comment,

should call 415-655-0001, and a being ses code 25970393965 a password is not necessary but if prompted please enter 3228 then press pound. if you have not done so, please dial star-3 to line up to speak. for those using web ex, press raise hand icon. please note that you will have two minutes moderator, we do have one speaker in the queue. that speaker may begin, i will start your time now. >> caller: can you hear me okay. >> yes, i can hear you. >> caller: great and a 30-second warning would be great. i would like to see the

implications on or and risk for risk for both the companies and the rate payers. i'm start to go understand it but there are a lot of dimensions. in city cans instead of additional drivers for a second pass i suggest having more cans in those areas that have more use and perhaps reducing the number of city cans elsewhere that are not filling out on a daily basis. so i'll have that of a more allocation.

is agree with recology and disagree with environment. i do not think that we will see anything like a 46% recovery rate at davis street during the trash pilot. i may be wrong. but san francisco has cleaner black bin material to begin with and different from oakland. and i alluded earlier to some big concepts, i talked about diversion and you heard about contamination. i think that requires processing, facilities, we can talk more about that and we, i already mentioned operating ratio. i really do think that figuring out. >> thank you, that concludes your public comment. i see we have no additional public commenters in the queue. chair chu this concludes public comment for item 6.

>> thank you very much. given that we will close public comment for item 6. i would like to thank the commentaters, it was a good ging of the demonstration understanding the processing and what we're about to embark with. let's go to item line 7. >> item 7 to propose future agenda items and possible action by the board. would any member of the board like to propose a future agenda item. >> seeing none. >> seeing none, we will now take public comment on item 7. members of the public who wish to provide in-person public comment please line up at the podium now. each person will have two minutes to speak. for the record, there are no inperson public comment. we will move again to the phone and webex. members of the public who wish

to provide public comment on this item, they will provide they should call. if you have not already done so, please dial star-3 to line up to speak. for those using webex please raise your hand icon and a system will indicate that you have raised your hand. please wait until the system indicates that you have been unmuted. please note that you will have two minutes. the moderator has notified us that there is a caller in the queue. >> caller:last time today. i have a number of written comments and objection frz last proceedings, i encourage folks to look at those.

i intend to follow-up with detailed comments in writing and will continue to communicate with staff. the board acted on item 3, the code of conduct, i believe you acted to adopt, i thought you were going to continue it to a future meeting, that's what i lead to believe. i'm going to assume that that action was to adopt the vote as a interim code with the future agenda item to adopt as a final code of conduct. i think there were some minor changes compared to what was on the website. after today's hearing that would be fantastic. thank you very much for all the work prior to and today and to follow. thanks for listening. >> thank you for your comment. seeing that there are no further public commenters in the queue, chair chu this

concludes public comment on item 7. >> item 7 and it is 4:18, we are adjourned. >> thank you. >> thank you. >> i'm connie chan district one

supervisor and welcome to the richmond. >> i'm an immigrant and came to san francisco china town when i was 13 years old with my mom and brother. my first job is at the community organizer for public safety with san francisco state. and land in the city hall and became a legislative aid to sophie maxwell. went through city departments when kamala harris was our district attorney i'm proud to represent the richmondad district supervisor.

[music] we have great neighborhood commercial corridors that need to be protected. the reason why we launched the neighborhood business for supporting the [inaudible] for 15 years special more. we have the legacy business program the business around for 30 years or more and thought, you know, we gotta make sure the next generation contains for generations to come. am i'm ruth the owner of hamburger haven we came back on july 11. we were opened in 1968 at that time i believe one of the owners of mestart today went through a guy named andy in the early 70s and my father took it mid 70s. >> originally was just a burger

joint. open late nights. then it changed over the years and became the breakfast staple. we specialize in breakfast, brunch come lunch now. i love this neighborhood. i grew up here. and it feels like home. i walk down the block and recognize people of people say hello. you say hello you talk and joke. has that familiar environment that is enjoyable and i have not experienced anywhere else. there are many things i would like to see improve ams the things we might see are making sure that our tenants stay housed our small business in tact and those are the solutions that will contain to push to make sure that you know our communities can take root, stay and thrive.

>> i'm proud of you know, welcoming folks to the richmond. everyone loch its we got farmer's market every sunday there. the you see really business at the noaa. ice cream at toy folks and going to chop for book like green apple. and that's when you like the deal is pizza place haall families love. you will see a lot of great chinese shops that is readily available for everyone. >> and that is just thein are richmond there is more to do in the richmond. what is love is the theatre. >> i mean adam and with my wife jamie, own little company called cinema sf we operate the balboa theatre. the vocabularying theatre on sacramento and soon the 4 star on clement. >> balboa theatre opened in 1926

and servicing this outer richmond neighborhood since then. and close on the heels the 4 star opens since 1913. >> when you come in to a movie theatre, the rest of the world has to be left behind. but you get e mersed in the world that is film makers made for you. that is a special experience to very much we can all think of the movies that we saw in the big screen of with everybody screaming or laughing or crying. it is a shared human experience that you get when you go in to places that are gatherings and artist presented to you. >> a shared experience is the most precious. and the popcorn. [laughter]. at the balboa especially, we stroif to have movies for people of every generation from the pop

corn palace movies on the weekend mornings, for families and kids. this is for everybody of all ages. >> what is great about the richmond is it is a neighborhood of the immigrants. belongs to immigrants not ap i immigrants you will see that there are also a huge population of rush wrans and ukrainian immigrants they stay united you am see that the support they lend to each other as a community. and cinderella bakery is another legacy business. if you go on the website it is known as a russian bakery. the first thing you see their pledge to support the ukrainian community. you will see the unity in the richmond i'm so proud of our immigrant community in the rich monthed. >> my dad immigrate friday iran

the reason he stayed was because of the restaurant. has more centamential value it is the reasonable we are in this country. when he had an opportunity to take over the instruct he stayed that is why we are here part of our legacy and san francisco history and like to keep it going for years to come. >> another moment i'm proud to be supporting the richmond and the only asian american woman elect in the office and as an immigrant that is not happen nothing 3 decades. you see it is my ability to represent especially the asian-american community. in my case the chinese speaking elders in our community that really can allow me to communicate with them directly.

i'm program director of adult day centers. i have been here for 7 years i love to help the communities and help and the people with disability. i foal a connection with them. i am anim grant i love helping our community and new immigrants and improvements. >> if you want nature, richmond is the neighborhood to go we are between ocean beach heights and golden gate park. >> i love the outer richmond. for me this is the single best neighborhood in san francisco. everybody knows each other. people have been living here forever. it is young and old. the ocean is really near by. and so there is that out doors ocean vibe to it.

there are places to seat golden gate bridge it is amazing. businesses are all small mom and pop businesses. houses get passed down generation to generation. it has a small town feel but you know you are in a big city at the same time. it's got a unique flavor i don't see in other neighborhoods j. it is about being inclusive we are inclusive and welcome the communities, anybody should feel welcome and belong here and shop local, eat local. we believe that with that support and that network it come in full circle. it is passing on kinds knows. that's when richmond is about that we are together at once. welcome to the richmond. [music]

>> you are watching san francisco rising with chris manners. today's special guest, carolyn mante. >> hi, i'm chris manners and you are watching san francisco the stow about restaffing rebuilding and reimaging the city. the guest is carolyn manteto talk about the organization is helping to preserve the city cultural heritage and architecture. welcome to the show. >> thank you for having me e. >> good to have you here. >> can we talk bat the history of your organization and the mission. >> sure, thank you. san francisco heritage started 51 years ago and the main mission is to preserve and enhance the architectural and cultural identity of san

francisco. when it started out the focus was really on the buildings, historic landmark listings and really concentrated on downtown area with all the development happening. our organization was raising a reg red flag with historic landmarks in danger and victorian mansions so a hallmark of our organization is moving these victorian mansions in the way of development to inwestern addition neighborhood and other areas to get out of the way of development and preserve them. our organization was around before there was the historic preservation commission of the city so we were at the forefront drawings attention to historic preservation, landmarking and over the last 51 years we have seen how there are more then just buildsings in safeguarding the city cultural resources, there is also small businesses

and the different neighborhood icons that make a neighborhood special, so our outreach has really-it is really come full circle in a way because it moved downtown into the neighborhoods and now with the covid epidemic it is really going back to downtown again looking at how we can play a role in the economic recovery and revitalization of downtown san francisco. >> that's great. so, now i understand your organization is also responsible for maintaining a couple properties. could you tell us a little about those? >> yes, our non profit was gifted in 1973, the historic (inaudible) house. it is now a historic house museum but this was a family since 1886 built this victorian mansion in the same family year after year and one of the last resident of the family when she passed way

gifted the mansion to san francisco heritage so since then we have been running this historic house and the home of our office. in 2018, one of the long time members nor aa lasten gifting a building on the e h-as hate polk became a commercial corridor after the earthquake, the owner at the time, he raised the house and put 6 store front underneath in order to take advantage of the commerce so we are in charge of the house on the corner and it has been a wonderful way to get new numbers, new audiences interested in the work of our organization. during the pandemic, we have been using it as a artson residents and partnering with different bay area artists as well

as cultural institutions, cultural districts and then one of the storefronts we converted into a pop up galleries so gives a opportunity to raise awareness of the importance of the art and cultural resources in san francisco. >> that's fantastic. so, now, let's talk about legacy business. what does the designation mean? how does somebody get add today the legacy business registry and what benefits does being named a legacy business? >> i love this program. it was started by san francisco heritage and adopt ed by the city and run by the office of small business but the program looks what are the businesses really contributing to san francisco and the neighborhood. when we started the first focus was bars and restaurants but over the years it exb panded to include other businesses so these are places that contribute to the character of a

neighborhood, so sam's grill downtown, the amazingarian press in the presidio. book stores like city lights oergreen apple recently named. this year we had a lot of attention on the legacy business program. we put out a contest to the public of what you think should be the next legacy business and one of the businesses that was recommended was the club deluxe, jazz club on the corner, and 2 or 3 days after we launched the contest, the owners announced they would have to close. the rent was driven up, they couldn't afford it, coming out of the pandemic so we worked at speed to get that application submitted with them and that status convinced their landlord to negotiate with them a lower rent and this way they have been able to stay, there was a lot of social

media support around this, so when you become a legacy business, not only do you get marketing and business support from the office of small business, but you also eligible for grants and we work closely with the legacy businesses as we do our work for san francisco heritage. >> that's great. so, apart from architecture and buildings, you also work with cultural districts, and the castro theater strikes me as a place that is both. a beautiful building and cultural hub and center. what has been happening with the recent acquisition by new owners; >> it is leased to another planet entertainment and been in contact with planet entertainment by the castro theater is historic land mark building. it is recognized as a very important architectural

monument. one thing-one of the main activist organizations of the preservation of the theater we work together with supervisor mandelman on a interior landmark historic landmark designation for interior, but what happened over the is summer and people learned is there is a lot of concern not just by san franciscans but people all over the world, movie directors, stars who are very concerned about the risk to the lgbtq and film programming at the castro theater. another planet hosted community stakeholder in august, and it was so moving to see the number of people who took the microphone-everyone had two minutes to say their testimony of what

castro theater meant to them and those testimonys showed this building is contributing not just as a architectural monument but plays a role in the lgbtq community that is irrelaceuble able. >> it is beautiful theater. >> it is. my involvement in the theater raised awareness to not only the castro theater to be emblematic of the lgbtq culture and history but also there are many other sites in the city that also contribute to the identity. that is why so many people come to san francisco as a place of freedom and diversity so in my previous work i worked at the world heritage center, so when i joined san francisco heritage i was thinking why isn't san francisco a world heritage city? for the architecture alone it could be

inscribed. golden gate bridge to name a few but the city is so unique in the architecture, the mansioned and historic landmarks so hoping to start a conversation on that with city stakeholders this year. >> that is great. let's talk about your relationship with other agencies. you mentioned economic and office of work force development and planning commission. how do you unt integrate to them? >> these relationships are essential. we are working with office of small business for the legacy business program and the planning department is really one of our most crucial relationships. we meet quarterly with them and we really see how we can support not only historic land mark listings and historical cultural context statements, strategy for culture

districts and city survey among many other activities that really are of concern to both of us. for the office of workforce development, i attended a etmooing recently that the chamber of commerce organized with them on the downtown revitalization and a key goal in that meeting and in the downtown revitalization is to make sure that the city historic culture resources play a key #r0e8 in the economic recovery and revitalization especially after the pandemic. the office of workforce development has the city build program which is admirable program where youth are trained in construction techniques for rebuilding and especially with the new housing legislation, and we really want to see how can that workforce be expanded to include training in historic preservation. we have so many victorian homes, historic buildings and other places that really need a skilled

labor force to make sure that they are preserved and that they help keep the special identify of the city. we really value these relationships, we meet quarterly with the various organizations and we are really grateful for grants of the arts we receive and other supports so definitely that is a key relationship for san francisco heritage. >> the city build is great. i like that a lot. thank you so much for the time you have given today. appreciate you coming on the show. >> thank you so much raising awareness about san francisco heritage. we hope the people watching will join us in the mission to help keep san francisco special. thank you. >> that's it for this episode. we'll be back shortly. i'm chris manners, thanks

>> so we are live whenever you're ready commissioner. >> great. good afternoon, everyone and welcome members of the public and my fellow commissioners, today to the april 18, 2023 commission meeting of the health commission. please call the roll. >> commissioner green. >> present. >> commissioner chong. >> present. >> and commission christian. >> present. >> and we'll -- ~>> yes, i will. the the