mailer mailer campaign to all account holders. >> general manager kevin flanagan and i are going to provide additional details for a few of these programs. >> one of the notable enhancements i'd like to cover is our proposal to extend recology to ban a material collection service into the afternoons across the city, the department of public works requested the additional routes to have resources available to more immediately address street cleanliness issues that come up in the afternoons. >> currently recology operates six abandoned material zones across the city during the morning when the majority of calls are received. >> these results are dispatched via the 311 system and are proactively collecting material and conclude the day in the early afternoons. these rules have been effective in their existing shift to address 311 calls that were received during the morning hours and or more quickly able to respond. >> our new proposal for this rate application is to create three afternoon abandoned material sweep routes seven days a week with each route consisting of one driver and one collection truck with an estimated cost of $700,000 per year for the additional three drivers. we would utilize existing equipment for the vehicles. >> these routes will be dispatched daily to serve as impacted corridors, neighborhoods and hotspots across the city. >> these routes would provide a sweep service to these areas as well as respond to requests for service by dpw. >> the routes will not be primarily dispatched by the 311 system but would respond to priority requests as determined by recology and dpw. >> when analyzing the 311 abandoned materials data over the last two years we confirm that the additional afternoon resources would be beneficial given that about 1 in 3 abandoned material calls are being received after 1 p.m.. in the chart on the screen. it depicts the average calls per month received in two different time frames. >> morning and afternoon. over the last two rate years during the morning time frame is when the majority of the 311 calls are received and when our current 6 a.m. c zones operate across the city. with the additional zone added as part of the last rate order we see the benefit with a reduction of approximately 1000 less 311 calls received per month in the morning hours. conversely when we look at the afternoon time frame we do not see that same reduction in 311 calls between the two raid years. >> adding the afternoon sweep results will mean that more of the material that is coming out onto the streets and sidewalks after 1 p.m. would be collected sooner as opposed to sitting until the following morning for service. >> the increased service will lead to enhanced cleaning street cleanliness and remove piles that likely draw additional band material to them or anticipated benefit would be a reduction in 311 complaint calls for abandoned materials received after 1 p.m. . >> we do not necessarily anticipate that the additional routes would be leading to additional overall tonnage collected as the material is already being collected by recology routes. although happening the following morning if there are no questions i'd like to turn it over to kevin flanigan to discuss the additional program enhancements. good afternoon. >> my name is kevin flanagan. i'm the general manager for recology golden gate. and as anthony mentioned there are several different enhancements in our rate application. i'm going to highlight four of the more significant ones. for the collection side. so we are proposing to add cameras to our commercial routes that utilize air accompanied with human review to identify overloaded containers. this enhancement would streamline the daily processes our drivers currently perform to capture and document overloaded containers. this is an industry wide standard process that in recent years has started to utilize camera technology to capture instances of overloaded containers and extra material that's placed next to the container for service. this enhancement creates equitable customer treatment by streamlining the process. it reduces distractions for our drivers and helps ensure customers who overload their containers are charged the level for the level of service that they require. this enhancement will also assist in right sizing a customer service level and improve cleanliness by reducing overflowing containers which leads to litter on the streets. these cameras would be installed on 168 of our routes and would be phased in over the first two years of the rate cycle. >> the costs for this enhancement includes all equipment subscription fees. one additional headcount to facilitate the program and other administrative costs for processing the overload events. the total cost for this enhancement over the three year rate cycle is 1.84 million projected revenue from this enhancement is 2.73 million over the three years which you can see fully covers the cost and generates projected net revenue of close to 900,000 over the three year rate cycle. >> it's also important to note that the projected revenue from this enhancement would be used to support the overall cost of service. >> the next enhancement i'm going to touch on is contamination cameras. i believe everyone's aware that we are currently piloting contamination cameras on several of our commercial routes and in partnership with sfe. we've explored other vendors that offer similar technology to expand the pilot. >> the vendor we identified is prairie robotics and similar to our current pilot. these cameras would be installed on six different routes with installation occurring during the first year of the rate cycle. >> the costs for this enhancement includes all equipment, subscription fees, technical and functional support from the vendor one additional headcount to validate and process events for all contamination cameras and other administrative costs associated with notifying customers according to the contamination protocol. >> the total cost for this this enhancement over the three year rate cycle is 716 thousand dollars. projected revenue from the enhancement is around $412,000 for the three year rate cycle. >> as anthony mentioned, public receptacle service verification. the next item i'll touch on. so in partnership with dpw we're proposing to add cameras to the routes that collect public receptacles. these cameras are intended to be utilized as a service verification tool for the 12 dedicated routes that we operate. the cameras would be installed on the working side of our trucks in position to capture footage of the receptacles throughout the city. footage would be stored and be able to be reviewed upon request. then the total cost for this enhancement is just over $44,000 for the three year rate cycle. >> the final enhancement i'd like to touch on is outreach and in partnership with sfe we have included cost to expand outreach to all customers. >> this enhancement includes outreach to apartment customers for bulky item recycling residential customers for battery collection and a service brochure commercial service brochure and outreach for a very small quantity generator program. >> the total costs for this outreach over the three year rate cycle is 1.56 million. and moving on to head count this slide details the combined headcount for our excuse me combined change and headcount for sunset and golden gate that was submitted in the rate application. there are new these are new additional headcount to support the program enhancements we discussed which are two way zero staff one to validate and process contamination and the other to facilitate the overload program. there are also three additional drivers to cover the proposed abandoned material collection routes at&t spoke of. there aren't any questions. i'm going to pass it off over to maurice quillen to cover our post collection operation. thank you. good afternoon. maurice quillin, general manager for recology san francisco. i manage their post collection operations which is a recycling and transfer station. the slide illustrates the headcount changes contemplated in the recology san francisco rate submission. four additional full time employees have been requested and the distribution of the additional headcount is as follows. two mechanics are being requested for shop operations one to be added in rate year 27 and one in rate year 28. the additional mechanics are being requested to perform anticipated powertrain repair work associated with the deferment of the vehicle replacements. the two additional material handler headcount are being requested and rate year 27 due to programmatic enhancements related to the low cost mattress recycling and reusable lumber recycling programs. >> the post collection program enhancements are as follows. as part of the 2023 rafi's rate application recology proposed installing machinery at the tunnel avenue transfer station to remove contamination from the organics. recall you san francisco installed an electric trommel screen in an effort to clean up the organics while the trommel screen is proving to be effective in separating contaminants from the organics waste stream. it has a major drawback specifically a high rate of organic material yield loss of highlighted the need for more advanced separation methods to address the shortcomings of the trommel screen. recology is proposing to install a deep packager at the organics processing facility. the deep packager offers several advantages over the trommel and real world deployments have demonstrated that the deep packager can remove from 90 to 95% of all the available organic material from a source separated load. to evaluate the effectiveness of the packager on the san francisco feedstock we arranged the processing test. the test results were very promising 66.8% of the total tonnage process was successfully recovered. the recent waste characterization study showed that the commercial source separated organics contain around 73.5% food waste. this means that the dip packager performed at the lower end of the recovery claims from the manufacturer and recovered 90% of all the available organics. there has also been a test where a significant improvement over the trommel screens demonstrated a 32% better organic material recovery than the trommel screen. >> recology san francisco proceeded to work with several of our vendors to design and price a dd package for installation at the tunnel avenue site. we understand there's concern over the cost of the deep packager acquisition and the pricing and the rate application not only contemplates the installation of a deep packager but also includes an end feed hopper conveyor system material takeaway conveyors removal system slurry storage hoppers and a pump driven trailer loading system to take residual away from the system. additionally we've got a literal upgrade concrete work and engineering is all part of the application. from my experience with equipment installations i believe the installation is fairly priced and thoughtfully designed. additionally the chosen vendor propose a proposal represents the lowest bid and better the competition by over $1 million recology san francisco believes that the package represents a superior alternative to the trommel screen and represents a major step towards higher organics recovery and reduce yield loss by replacing the trommel screen with a deep packager. we would easily be able to recover an additional 10,400 tons of organics annually. the next program enhancement is the mattress recycling. san francisco environment has requested that recology fully participate in the state sponsored mattress recycling program managed by the mattress recycling council or mrc. recology has a long history of recycling mattresses in the bay area and the early 2000s recology san francisco, in partnership with the san francisco environment pioneered mattress recycling. today recology san francisco operates one of the few independently managed mattress recycling programs. unlike the mrc model which offers free drop off services, recology currently operates on a fee based model. the proposed transitioned masses free program would mean residents would no longer be required to pay fees while dropping off mattresses at recology facilities. recology would restructure its mattress recycling operations to align with the mrc guidelines which will benefit from a no cost recycling system and receive a per mattress recycling fee from the mrc to help offset loss surcharge revenue. recology has projected with the implementation of the free mattress program the number of mattresses will significantly increase during the rate cycle. recology is model the financial impacts of the elimination of the revenue associated with them mattress surcharges, the recycling fees and operational impacts related to programmatic growth and one additional material handler isn't an add to the overall head count on the rate application. to facilitate the projected increase in mattresses, another program is the enhanced wood recycling program. the public reuse and recycling area or the prc as we call it at tunnell avenue serves as the collection site for for all material from san francisco residents and businesses. san francisco environment has requested that recology and its rate application consider the implementation of a dimensional lumber recycling program to explore reuse opportunities for recovered wood. recology san francisco conducted a pilot program in partnership with the reuse people. the recovery pilot was conducted over a four week period and totaled 25 hours of salvaging efforts over different parts of the day. 9.85 tons of lumber was successfully recovered. the average recovery rate was 2.68% of the daily tonnage for the public disposal and recycling area. based on the successful pilot results, recology is proposing to include the salvaging program into its regular operations at the public disposal and recycling center. one additional material handler has been added the overall head count on the rate submission to recover the reusable wood from the waste stream. >> another program enhancement that was proposed and a contingent schedule is the trash processing system in support of san francisco's. is there a waste goals recology is planning to repurpose the existing 48,000 square foot integrated material recovery facility at the 501 tunnel campus to accommodate mix solid waste processing in an effort to increase diversion rates by extracting recyclables and compostable materials from the trash that would otherwise be landfilled. >> the existing building structure, size and location make it well-suited to msw sorting system which would process material currently received at the transfer station pit adjacent to the facility. a key component of the equipment installation that relies heavily on the realization of some of the existing immersive equipment such as the commodity storage bunkers material take away conveyors, load out systems, bag breakers, density separations screens and optical sorters. the existing cnd sorting activities would be relocated to the ptarmigan line and will minimally disrupt the rcf operations. >> recology has worked with its vendors to design a facility capable of processing a minimum of 504 tons daily over two shifts at a conservative 35 tons per hour. the facility is planned to be operated five days per week. >> the processing system design is very consistent with other msw processing systems currently in operation. the processing approach integrates a combination of manual sorting, mechanical and optical technologies stop surmised material recovery. >> recovery estimates are tied to the city's waste characterization study and the mass balance projections indicate that 49% of the tonnage or 245 tons a day could easily be removed from the landfill bound material. the pie chart on the slide shows the projected recovery rates for the recyclable materials. the recycled materials are comprised of cardboard mix fiber containers and metal. the compostable will be food waste and food soiled non-recyclable paper and the organics would be vegetative matter. >> based on observations from processing tests that we can ducted in 2024 it was determined that not all the material collected and disposed of is conducive to enhanced mechanical sorting or will yield significant recovery. we firmly believe we have a mature residential recycling program in sorting single family household trash would not be as cost effective as compared to other segments of the waste stream. furthermore, heavy commercial industrial tonnage is present processing equipment with challenges that will impact our overall recovery efforts. >> for these reasons recology will focus its efforts on the apartment and commercial waste streams which we believe is more conducive to sorting and will maximize our recovery efforts also while minimizing downtime. this project was submitted in the rate application as a contingency schedule and the triggering of the funding is predicated on receiving an authority to construct from the bay area air quality management district and obtaining commitments to have the recovered msw derived organics process at an offsite location. as part of the rate submission, recology analyzed the costs of sending 500 tons of municipal solid waste to an offset facility for processing. upon performing the analysis it was determined that installing the msw processing system co-located alongside the san francisco transfer station was a significantly cheaper operation than sending the tonnage to an offsite facility for processing per ton. cost estimates for delivering the material offsite was $10.66 million annually. processing the tonnage in san francisco would be 35% cheaper and cost $6.96 million annually. it's important to note that this calculation includes the cost of a $35 million capital investment and all the operational costs associated with the facility's operation. in addition to the overall operational cost savings of $3.7 million, the proposed municipal solid waste processing facility will be a local asset for san francisco and its ratepayers and represents a critical and cheap moment in san in advancing san francisco's waste recovery efforts. an ambitious zero waste objectives. >> the following slide shows the proposed mixed waste processing operations schedule that supports the startup assumptions that were included in the rate application. the chart outlines all of the associated permitting engineering equipment acquisition installation milestones contemplating a facility commissioning that will go live in eight years 27 the schedule contemplates a two year cycle and recology acknowledges that this is a very aggressive timeline. in order to meet this deadline it will be necessary to initiate the permitting process and equipment acquisition process as soon as this rate approved. do you have any questions? >> if not, i'd like to turn the presentation back over to evan boyd, the san francisco regional manager. thank you. >> thank you, morris. as we conclude, i want to take a moment to reflect on the key takeaways from our discussion. >> for nearly three years we have successfully maintained stable rates while continuing to deliver the high quality essential services our residents expect. even with the necessary adjustments ahead, san francisco's rates will remain lower than those of similar sized cities reinforced our commitment to financial responsibility and community support. >> the majority of the first year increase is due to one time troop items strategic adjustment that ensure we are setting rates at the appropriate levels. beyond this we remain focused on preserving and strengthening our core services and programs ensuring that every dollar spent directly benefits our residents. >> at the same time we are making targeted enhancements that align with both department priorities and broader city goals. >> we are investing in additional routes and new technology to keep our streets cleaner and to operate more efficiently. >> we are also creating a capital reserve fund to plan for the future ensuring we have the resources needed for long term infrastructure investments. >> finally, we continue to build on the strength of our long standing public private partnership an approach that has consistently delivered sustainable solutions for our city through careful planning, strategic investments and commitment to service excellence. we are ensuring that san francisco remains a leader in innovative and cost effective delivery of essential waste and recycling services. >> thank you for your continued support and collaboration as we move forward together. >> and our team is available to answer any questions that you may have. thank you. >> thank you very much. i know there's other other presentations that we will be having but just quickly for the presentation that covered some of the proposals, both the enhancements as well as the bed new material collection etc., the reading of the comments went very fast. i wonder if you can submit also those written comments that you the spoken comments if you have it in written form so that we can also hear it. i think it's one thing to kind of hear it but also another to perhaps read it and understand kind of what what the their proposals would involve. and i think especially as you were talking about the trash processing enhancement, we have one slide here. but there was a lot of information covered through the public comments. i'd love to see that in detail if that's possible. >> yeah, understood. we can do that. great. thank you. sure. thank you. >> any questions from members of the board? okay. thank you. turn it back over. you can take perhaps just one other thing. >> this might be for our rate administrator or one of the. on page two of the presentation they spoke about some of the key assumptions. i know you're going through that but i definitely want to make sure that i'm understanding more of the payroll workers compensation components as well that are embedded in the cost. >> sure. we can talk a little bit about that so this next part of the presentation were really just kind of looking at some of the adjustment consideration lines that our office is looking at. you know the intent is to get direction in the board if this is the right direction we're taking it. we're certainly in kind of a cost cutting mode and a lot of ways. and so when we're doing this we're keeping in mind a few things rate fairness. and so it's validation the appropriateness of cost levels, appropriateness of for rate payers to bear those costs. we're thinking about rate stability as you've seen there in their presentation the the especially the first year that rate increases very high. and so this is really forcing us to look at what kind of cuts are deferrals we can make to either you know reduce the rates or smooth out the rates over the long term. but and we're also thinking about mitigating projection risk. >> so we don't want a situation where we're in now where we're looking to make up rates in the falling rate cycle. and then the last thing is really transparency and this is not just from a process standpoint but also from monitoring. so we're looking at mechanisms to help us monitor expenditures, making sure we have the right reporting requirements as well makes making sure those service level agreements are memorialized. so just kind of looking at kind of confirming what a lot of recology has presented in terms of their rate proposal. as you can see the first two years the rates were pretty flat. that second year rate year 2025 the rates came down by 1% and that really represents the adjustment to the rates after the material mistake that was we talked about back in september. without that material mistake this rate would actually have been a 2.55% increase for the rate application years. there proposing an 18.18% 7.53% and 3.86% for each of the three rate years this three your request represents a 32% rate increase. and so that's an average annual 10.7%. so that does not count for the trash processing on the contingency schedule. you know, given the size of these rates we are looking hard at anywhere we can find savings. i did want to do a quick breakdown of how we recology presented their kind of breakdown of what the components of the rate are. we have a slightly different cut. our numbers aren't too too different but we think about it a little differently. so in our initial analysis and this is just based on their numbers not any adjustments we've done to to the base based on our validation but this is based on their numbers. we see about 8.8% of the rate year 2026 increase to be structural. and what i mean by structurally is that you know, if these aren't corrected this would be an ongoing deficit that we would end up having to correct in future years. so this includes the prior year over projection of revenues in the last rate order recology assumed a modest growth of 2% each year. we accepted that that did not come to be realized and so there is kind of a revenue shortfall here. the second is a payroll correction payroll projection correction. so there was a projection mistake materialistic that was also made that was to the benefit of the rate payers in the last rate order and so there is some makeup there. and then the city also passed a new business tax that created additional tax burden. and so this is another another another increase that's that's that's structural as well. >> the other components of the rate to a little over 2% is related to account or fund changes. so the largest i think account driver is the impound account about 1.14% and this is due to new funding being requested by environment around 3 million. also the addition of our office into the rates we had been previously supported by fund balance in the last rate setting process the rate board made it clear that we should be in the rates as well. so we've moved our cost into the rates. >> the second largest account driver is the proposed amortization of the balance in account. as records show they're projecting a fairly large negative balance in account and so some of that is a little bit frontloaded in the first year. >> the third component is program enhancements a really small portion of the rate increase and so they've laid out the various program enhancements. and then the last is remaining changes around 6.26% of it are you know includes assumed wage increases and other cost increases as well. >> so when we're thinking about our adjustment considerations we really think about five things. first is the rate model you know what kind of assumptions they're making in terms of cost increases, how they're developing their base. >> the second is payroll costs . third is administrative costs. fourth is operational in the last is kind of our various accounts and how they how they impact the rates. so in this first slide and looking at kind of we were looking at a few rate model changes in terms of general assumptions there's cpi and tonnage growth with cpi will likely adjust the cpi projection to be in line with the way the comptroller's office does their cpi projection tonnage growth recology is projecting modest tonnage growth based on our discussions with our economist and other other forecasters. there doesn't seem to be a whole lot of reason to adjust this adjust this projection. we're not expecting a lot of growth and unless there some real changes in terms of you know, work from home policy is increased increased population growth, increased business growth over the next three years model adjustments we're doing base year validation. we've found a few adjustments will be making there. and then also we are reviewing operating ratio applications or what's eligible for our we think there are some items that may not may not be appropriate in terms of receiving for and so this is something that will likely be proposing. we're also looking at other technical solutions looking use of escalators and possibly revisiting those use of escalators and outyears and maybe extending this rate order payroll costs. >> so when we're looking at the payroll cost, i think there's a lot of uncertain t in especially in the out years 2027, 2028 around wages, health cost and compensation. you know as you've seen there, health costs assumptions are pretty high that the city is also looking at high projections there. but this is significantly higher worker's comp as well. and then there's uncertainty around wages due the timing of of their cba. >> the payroll costs account for approximately 43% of their total cost. so we feel like this poses a large risk for mis projection. and so our recommendation is exploring technical solutions, looking at some combination of escalators and funds to mitigate that risk and uncertainty so it can protect us both on kind of the under projection and over projection by using certain funds and escalators and in tandem. the second adjustment we're looking at is pension costs. we do need to complete our validation of the appropriateness of these costs in the application they are looking at a 94% target fund level. we just we have only just received the third party actuary actuarial report on the pension costs that we're still reviewing that and seeing if there's any capacity for adjustment there. and then the last thing is vacancy validation. we've just kind of started receiving the information around vacancy levels. they're not high vacancy levels but we're complete that analysis and again since we're in kind of this mode of trying to smooth out rates, are there any of these vacancies we can defer or eliminate to help create some savings? the second kind of cost center is administrative costs and so these represent about 7% of total cost. most of these costs in projections have been validated and then analyze. but there are two items where we feel like we still need more information and the largest of those are corporate allocations. they make up 15.2 million in cost and rate year 2026 grow to about 6 million by the third rate year and accounts for over half of the administrative costs. so we're still complete our validation for corporate allocations. we don't feel like we have enough information to justify those costs. i should also note there is a line item there specifically for recology ready which is their new it system. we've been funding this for several years. we're still don't feel like we have good information on you know what the benefit will be when the roll out is and so i think there's some questions about whether or not we should continue this funding. the other thing that's not mentioned in the slide is professional services is something we just started digging into their professional services costs particularly we're looking for better information on drivers of this costs on the recall gee, san francisco side i think some of that is related to probably engineering consulting engineering estimates and costs and so we want to just kind of tie that back on what the need there is because we did see a fairly large increase in professional services. >> the next cost center we're looking at is operations and so this is the largest category of costs and makes up about almost 50% of the total costs we are we've hired each of in each to help look at benchmark doing a benchmark analysis on these operational costs and so they're working on that and we'll be using that to advise us on where we might be able to find savings and to validate kind of that their cost levels are appropriate. one area where we're really looking into is the intercompany cost piece, you know, and really trying to understand what's driving that tip for you know recology is proposing or including in their intercompany costs for recology san francisco a new tiered rates for their organics processing costs the idea i think is that if we're processing organics we can receive a lower rate for for pre-processing in organics at the transfer station before sending it to their organics processing site. we should probably receive, you know, a lower rate and then for unprocessed material it would be a higher rate and so we don't have i feel like enough detail there to really understand how that's being applied and so we're looking into that and the last thing is program enhancements. they've talked through several of those most of these enhancements it's not a large portion of the rates but they are mostly requests from public works and environment. so public works is made a couple of requests related street cleanliness environments made several requests associated with their diversion goals related outreach compost events dickering and recology also included in the application investment overload container cameras and so we actually have it shipment actually will be coming after me to talk a little bit about capital, their analysis of some of the capital investments which include these cameras as well. >> but you know since we are kind of looking for savings will be working with the departments to really kind of understand what their priorities are and whether or not we can shift or defer some of these. >> next thing i'll get into is accounts. so we have several accounts. the first was the programmatic reserve that recology mentioned. nothing's been withdrawn. we've reserved about 2.5 billion over the last two rate years. the intent of this reserve was at the request of public works is to give us some flexibility if there are situations where we need additional service, unexpected service that's not built into the costs further in the rate order none of this has been withdrawn. >> recology has used that to offset rates in the first rate year. there may still be some need for this and we'll work with the departments to determine if there's any need for this but if there is likely it will be some diminished de minimus de minimis amount you know and that more like the tens of thousands rather than 2.5 million to cover any kind of unexpected costs. did you just just to clarify you're saying that the programmatic reserve was applied to the upcoming rate cycle and that still results in the 18.8% increase? >> that's correct. thank you. so just to give the board a sense of what a percentage increase amounts to in the first year about 3.5 million is is is about a percent to the rates. the next is a balance in account. so that's the 50% above or below the operating ratio above hits the balance count as a negative and so the first two years they were they were below their profit margin essentially. and so the balance in the account i think proposes 13.3 million. we need to reconcile their amortization on this but it's pretty close and the application based on their project, their amortization over five years this is what the schedule looks like as you can see slightly we built up in the first year higher than kind of the following four years but spread the remainder of that spread across evenly so we'll be validating the base and the projected shortfall and we may propose a different amortization schedule this another piece of the count that the impound account and so we have a second agenda item for this where the departments will talk in detail about what the requests are. but just this is just a summary of what's in there. so this is an account that supports environment public works and our office in terms of works we do that are rate related or excuse me so environments request they do have a new request for additional 3 million in additional funding on this includes two new fte and so you can see jumps from 12.9 to 15.9 million and in the first application year public works is not requesting any new costs, any cost increase you see there are kind of adjustments to wages that are in labor agreements. >> they do have an 1824 trashcan manager that was approved in the prior rate order. it remains vacant and then an additional 15.3 million that was set aside from fund 15.3 million fund balance that was set aside in the prior rate order for trashcan replacement . >> our office was previously funded through fund balance and now we are in the rates as you can see we start at 1.7 million. that higher costs that you're seeing there is mainly do we're in a rate setting process and we need additional support . >> yes dio is there presenting today are they not? >> yes, we have a separate agenda item to discuss the various costs on impound account. >> yeah. so just give you a we kind of broke out the impound account because we wanted to focus on recology cost requests. we thought that was separate. those are kind of department cost requests so we separate them into two agenda items the last piece so this is just a summary of this. >> so our last piece is we were previously funded through funds. now we're in the rates part of our request includes one new fte. we think this will actually allow us to reduce consulting and temp costs and actually lower the overall impact to rates across the three years. we think it's about the $331,000 savings if we're if we add this new position. lastly i should note there is a fund balance and in the last fiscal year about 3.8 million we think this will likely be higher in fiscal year 25. so we're also looking at places where we can apply this fund balance you know really looking at one time expenses so we're not trying to play catch up and in future rate years the last account i want to talk about is the capital reserve and so the intent of this was to mitigate long term costs. this was created by the report in the last rate order. so in rate year 2024 we increased rates by a cumulative of 1% for that year. so that was about 3.5 million that is currently in our capital reserve recology is looking for additional funding for this about 21.3 million across great years 27 and 28. >> the impact to the rates is about 1.75% just in the collections companies that they own but the combined the four the three combined companies that total 21.3 million that amounts to we think 2.4% and a 2.6% increase in rate years 27 and 28 respectively. you know we're still evaluating the appropriateness of this funding level in the rate application. the intent of the funding is to account for the ecf requirements for the advanced clean fleet since the application was submitted there have been some changes in policy that make it uncertain about that mandate, particularly for high priority vehicles. so i think this changes the calculus on what we need to reserve in the short term for issue of costs. and so we're still trying to think about how to how to navigate that this is this driven by a state requirement? yes, this is so there's a yes, this is advanced clean fleet is a state requirement requiring over it's a scheduled shift from to zero emission vehicles . the state applied for a waiver from the epa to allow them to implement certain policies that allow them to actually allow them to implement this policy and they rescinded that waiver. since the new administration has come in the new federal administration has come in they i'm sorry they rescinded the waiver to delay the implementation of this. the waive the intent of the waiver was to allow them to implement the this is out of my wheelhouse but allow them to implement the ecf policies for for high priority vehicles which include waste hauling trucks. >> yeah i see yeah and i saw some of the articles from the federal government about some changes there. yeah. our consultants from each ship and each can talk a little bit more about that. i think they're a little bit more expert on that than i am. >> the other change we're looking at here is more technical and it's looking at the use of this capital reserve fund not just as long term cost mitigation but also as a cost control. we wanted to see we're thinking about an expanded use of the capital reserve to include current capital costs within the rate application. i think this will provide us with greater oversight on expenditures having a withdrawal mechanism. so you know we can confirm that the capital expenditures they're projecting are being spent in that way and this is just to be clear not to make this into an annual fund. we still think there should be funding in here for long term costs but we want to be inclusive of current costs as well. >> i think that's it and so i think we'll invite each up in each up here to talk about some of their capital cost analysis and we'll be pretty interesting while we get ready for the next presentation. colleagues any questions of our rate administrator at this time ? thank you. good afternoon members of the board and james rob hilton and the president of asia and consultants and i'm here to talk a bit about some of the capital requests specifically focusing on trash processing contamination and overage the zero emission vehicle update and i'll be able to provide a little bit more color on the regulatory update. there are some upgrades at tunnel avenue and then the organics pre processing much of which you've heard from recology. so we'll start with trash processing. recology is proposing to construct a trash processing facility here in san francisco as of environment has talked about continuing to pilot using green waste recovery down in the south bay and scaling that starting with one truckload per day and then scaling it up based on the performance. and it's worth noting that the disposal contract for landfill disposal services is coming up and is being considered right now as well. and there are some thought of whether to include trash processing or in any event to consider the potential for trash processing in that agreement. so that's a bit of the context for it as we evaluated it. you know there are certainly some benefits to the trash processing systems where they work. they can recover somewhere between 40 and 60% of the material that's in the msw stream sent for disposal when the pilot was done last year it demonstrated towards the low end of that and there were some issues with how the pilot was conducted that may have contributed to that on an environmental impact basis. >> you know the compost quality testing during the 2024 pilot was not good. there was high salinity, there was high ammonia, didn't pass some of the pathogen tests but again there may have been some specific issues to do with that pilot and how it was done and how the testing was done that may have led to that. there are environmental benefits from reducing the methane generation from organics that go into landfill and so that is one of environment's big goals here. one potential issue with trash processing is if you have a really effective source separation system people are putting things in the blue and green containers really well. there's not a lot of that good stuff left in the black container to recover through trash processing and san francisco went through a program with an or x system which is low tech similar version to try and extract organics from the waste stream years ago and it failed to the point that you sold that piece of equipment to another agency and they've now been struggling with making that work. we've seen similar things in other high performance communities where they've got a good level of source separation that these systems don't work as well and so it's something to consider on the cost effectiveness side. however you might do trash processing it is a quite an expensive investment on a cost per ton basis relative to other things that you might do to achieve diversion. it is also the case that there is some technology risk in it. the city of san jose back in the early 20 tens embarked on a program to process all of the trash from its commercial sector and after a few years of doing that the program failed. there was a dispute between the city and the two party contracting parties that resulted in a settlement where they're no longer doing the program in santa barbara they've spent over $80 million trying to get their trash processing to work and it still isn't working every time they turn on a piece of equipment it catches fire over across the bay in oakland, waste management has been operating the operating their oma if it caught fire and they're unable to process the organics fraction from that until they reconstruct it. i say all of that to say that as you embark in this lots of folks have thought ooh, this is an easy thing to do and we'll get the recovery and it tends to be that there are additional costs, additional labor, additional technical issues involved. and so our recommendation is to go slow, continue piloting a sort of as safe environment has suggested through the third party facility don't yet commit to building your own facility. it's a large capital investment scale it at that 20 to 25 ton per day rate because that's about one truckload is 20 to 25 tons to get it down there and as you do that i to the suggestion that was made by recology you should be focusing on those organic rich loads not places where there's high performance in the system. so maybe the multifamily roots that may be the commercial routes that have a lot more organics to get out of them but scale this up and continue to test the diversion. and when you get to that point of diminishing returns that may be the scale that you want to proceed on on a permanent basis. the other thing that is important to think about here is the connection to the disposal agreement and really as that disposal agreement is prepared it needs to be thought about how this will work so that you aren't committing tonnage to a disposal facility for example that you are then going to go and process. >> otherwise i want to make sure i understand something here. you talk about continue piloting okay but as of the beginning you're proposing to repurpose the facility at tunnel avenue. is that is that our suggestion is to defer any decision about processing in the city to a later rate cycle when you're of the piloting. the piloting is something different. it's not tied to doing that. >> correct. the piloting is going to a third party facility that's already constructed and can take material on a merchant basis. >> thank you. yep. so that's a trash processing project. next thing that we looked at was the contamination and overage program. oh sure. any questions on trash processing? >> yes. just quickly you mentioned that there were alternatives that were potentially more cost effective. can you just talk a little bit about what those alternatives would be? >> yeah, it's hard to be honest. it's very difficult to get the level of recovery that you can get from trash processing. however, there are behavior change campaigns that you can be implementing. there's additional leaning into the source separation programs that you've already invested in. there are things you could do around c and recovery that will get you some tonnage doesn't solve the methane problem but we'll get you some tonnage to get towards those goals. but as we benchmarked trash processing cost per tonne versus any other processing cost per ton sometimes it's you know a2x to get to the trash processing and we talked about source separation. >> you're probably speaking about instances where you have the as you mentioned organic rich loads essentially. >> right right right things all right there are no other questions. i'll move on to contamination and overage and you heard the proposal from recology so i'm not going to restate too much of it but basically six trucks for contamination and 168 trucks for overage. you'll note that they have one staff person to cover six routes for the one and one staff person to cover 168 routes for the other. we're concerned about the staffing ratios on that. we've seen these programs implemented by other companies and the staffing ratio to the truck count is not 1 to 168. it's more like 1 to 10 or 1 to 12 and that will have some staffing costs that that change the pro forma that they presented. on whether the cost recovery is there in terms of the zero waste goal certainly contamination management is a high priority and doing effective contamination management would be really important and so you know continuing to look into ways of doing that and using technology to do that is a great idea. the reduced overloading obviously improves the local environment. here you have less trash on the ground, less overloads, less spills that go on because of that and the approach that's being proposed fits pretty well with your system given the level of source operation you have and the years of maturity of your programs. one of our concerns is the way that they're structuring the costs for this system and the revenues for this system and how that impacts payers rate payers will view these charges as punitive and you will have a at least initially relatively high instance of people contesting the charges and that's where having staff to review the footage and the video to understand you know was this a real contaminant or was it a false positive and then to do that communication becomes a larger customer service investment. i think that has been suggested here and there are some technology risks. the air will be great in a few years just like a lot of things with air it's not great now the object recognition is actually quite poor in the systems right now and they they really have to do a lot more training. so continuing to monitor that to see how that trajectory works. >> so our recommendation would be to approve recology proposal on the contamination pilot but we would suggest closer involvement of both environment and the refuse rate administrator in the pilot. the last one was conducted by recology and they sort of shared the results but the study design the the progress along the way was not very interactive and i think if you're really going to dial in how to do this, i think all parties need to be together on that. i would recommend that you reduce the scope of the overage program and focus it on education first that overage program will get a lot of community pushback and scaling it up slowly and measuring the amount of pushback you're going to get and measuring whether you need to invest in additional customer service or waste your specialists to do the handholding with that i think is important. there are a lot of false positives in the system and so i would suggest a period where you're testing the amount of false positives and until you get that better than a 90% accuracy rate i would not start charging people because the charges are really what elicit the reactions. there are a couple of cities in southern california that were threatened with a class action suit when waste management turned on this overage system and they were falsely charging people for the overages. they're working through it. the technology is better today but again i think testing it before you unleash this on the community is good. >> the false positive is driven by what by technology not quite capturing correctly the overage or is it like somebody co-locating their trash next to an existing trash can. >> so the worst example ktvu news ran a story a couple of years ago in oakland where a driver was putting a bag that may or may not have spilled out of the truck someplace else may or may not have been the customer's bag but on closed circuit camera saw him stuffing it into the bag and then the customer got charged with an overage customer said that wasn't mine, this is invalid and it turned into a big thing . then a bunch of other merchants in oakland start looking at their cctv and they see the same thing and so that's the sort of thing that you want to be careful of and it could be any number of things not malicious necessarily just inadvertent. the other thing that i would suggest is that the overage charges and the contamination charges to the extent that you use them are intended to create behavior change. they are not necessarily reflective of covering the company's costs of operating the program. and one concern with these programs statewide has been they're being used as revenue enhancement vehicles for the companies and so we have included in a number of contracts around the state provisions where the city retains the moneys from the overage or contamination and can use those to educate on those issues in the community. and there are trip wires in some of the arrangements where if the revenue exceeds a certain threshold then the program is suspended on the basis that we're we're not accomplishing what we're looking for. we're just charging people a lot. so we would suggest having some of those guardrails and having the rafi's rate administrator oversee that process. so before i move on, any questions on contamination or overage hearing on zero emission vehicles this has gotten to be a complicated subject. so california air resources board adopted sweeping regulations around electrification of fleets, private fleets, public fleets, passenger vehicles, heavy duty vehicles, the full range and they set milestone schedules for the implementation of the zero emission transition. now california has relied on a waiver from the u.s. epa basically since the beginning of the clean air act to allow california to have stricter standards than the rest of the country in order to clean up our air quality. and it's frankly the reason that the l.a. basin looks as good as it does now and isn't as smoggy as it was in the 50s and 60s. so california has always had that waiver. air board always thought we'd get to have that waiver and the new trump administration has said no for the purposes of the advanced clean fleet rule in the electric vehicle conversion we will not be granting that waiver. and so the air board rescinded its request and for now we are sitting in this awkward position where a california regulation stands. they will not rescind it but they cannot enforce it without the waiver granted from the federal government. and so we could have a flip of a switch one day where the federal government grants that waiver and now all of a sudden these regulations are alive. you would imagine that the state would give us some time to acclimate to that if that happened. but it puts us in this strange position where we don't know is this going to be two years? is this going to be six years? what are we looking at before we have these requirements? >> so recology scaled back its proposal a bit from i think what it would have originally submitted had the full acf been in place but still requesting 20 zevs as evan indicated they're focusing on lower cost light duty medium duty vehicles . obviously there's great alignment with city policy around clean air clean environment on this. you as a city are electrifying a lot of your fleet so there's a lot of system fit there with you. there is an issue with power availability particular really power availability of that type at the tunnel avenue site and so if we were to put in all of the power that was needed for all of the heavy duty vehicles there, we probably would need a new power substation and put in across the street to be able to handle all of that power there also fairly expensive vehicles and recology quoted some numbers to you earlier it's about as they described you know, you might pay 5 to $600,000 today for a front line refuse vehicle. and when we talk to the manufacturers of the zevs, they're 900 to 1 million and hopefully some of those costs come down as they develop . but it's you know, it's a much more expensive technology, much more material rich to put into the trucks. so we we expect that there should be some improvement on that cost curve but it's not going to be tremendous. >> can you clarify if we granted this request for the additional zevs is there enough power availability for that? >> i believe for the light duty vehicles that are being discussed but i have not personally conducted a power audit of this facility but the requirements are more on those heavy duty vehicles. >> so our recommendations here are to focus on the low cost compliance. we would even go lower cost compliance than what recology proposed. they have a mix of pickup trucks and box trucks, medium duty vehicles that they would replace. we would actually recommend doing all pickup trucks for now stay on the compliant schedule by the amount you need for the compliance schedule but i would avoid getting into the medium duty and the heavy duty until you have to and that may be in the next rate order and especially since you're looking at where can we save? >> so that's our proposal there. we would also recommend phasing the implementation of them over the three year period. currently their front loaded in the schedule and what we've observed in the current review is recology doesn't necessarily acquire all of the vehicles in the first year of the rate cycle and so having it phased may more accurately represent how they come by the vehicles. we also think that there should be a better process for managing the equipment purchases and prices. they're getting quotes and then they're going out and actually acquiring a vehicle or maybe they're delayed in acquiring the vehicle by a year but they've been compensated for the depreciation of the lease costs for that year. and so we would we've talked with administrator and we would suggest some closer relationship around the ordering of equipment, the validation that they've been receive the validation that the price for the equipment was what was intended and perhaps that's a way of thinking about how to work with that capital account where somebody comes in with a request it's validated, approved and then the moneys are dispersed based on an actual actual expense. >> we also suggest starting to reserve for future heavy duty compliance. this is not going away one way or another. this will come back. and so you know, to the extent you can pre-fund some of these obligations you'll smooth out the rate impact when the time comes. as we've been modeling this for a lot of the public operators that will still have to make this transition. they're looking at 20, 30, 40% per year rate increases as they phase this in. >> and then finally continue to pilot heavy duty trucks. recology was the first to get to pilot that hyzon hydrogen truck here in san francisco. when those opportunities are available to test out that equipment so that you've got an idea of what we'll want to buy when the time comes and certainly sharing that information with the administrators office so that they're up to speed on it. >> any questions on the ev is all right. next discussion is tunnel avenue and we've been talking with recology for almost a year now about needed upgrades out at that site. they have requested about $2.7 million in upgrades for the current rate application period and another 4 million or so to engage a consultant to do a site master plan effectively the the site has been around for a very long time. when you go to some of those buildings, many of them are much older than i am and you know they are oc nothing's falling down. nothing's going to hurt anybody today but they are aging facilities and as you start to think about fleet electrification, as you start to think about the efficiency of how that site is laid out and how people work on that site, there certainly could be improvements to that. the zev infrastructure is probably the primary driver because when you put those heavy charging infrastructure in ultimately you're basically going to dig up most of that yard to trench for those electrical lines and you'll be doing a lot of this anyways. so it's sort of in preparation for that. what might you do while you're in there? >> so recology has engaged a consultant to look comprehensively at the site and what improvements would be needed. certainly maintenance and development of the private infrastructure is not typically a city policy priority. typically the city is focused on maintaining its own public infrastructure and allows its private contractors to do that on its own. but you have a unique relationship with recology that puts you in this position from an environmental perspective over time there could be worker safety issues and there are already and they're managing them things like stormwater issues at the site that need to be managed and maintained and improved some of the operations. one of the things you need to think about while their site master planning is done is that it will disrupt operations as you're under construction, right? and so thinking about how to phase the construction and how to do this in a way that they can continue to operate at the scale that they do without significant interruptions. we don't have cost effectiveness at this time because the study from that consultant hasn't come back to say what the needs are and what the costs of those things are. it will be significant though you don't get away from these things for much less than 10 or $20 million and so we would expect that this would be another thing that would be good to reserve for in the future and again until we know what the specifics of the site are, we don't know what technology risks may present. so we would recommend that you approve the current tunnel avenue improvements that are suggested. we think that those are probably appropriate and that you improve the consultant costs but conditioned on the engagement of the refuse rate administrator in the process and particularly if the rate payers are going to be asked to fund this infrastructure that the refuse rate administrators should have enough scope to be able to ask for things like value improvements, right and to to save money on the project not just say well here's something more that we need and then last requiring some cost controls around that the 4 million is a lot for a site master plan like that. we've looked at what some public agencies have done for their site master planning. l.a. spent about that much to do five of their operating yards so it may be appropriate and i just suggest monitoring it as there are fees rate administrators engaged in it and then you know, if there are savings if they've projected $4 million and it ends up being two that shouldn't be shared with recology that should come back to the rate payers. >> any questions on that? >> all right. question. question oh please. has there been any any analysis to determine what improvements would be cost effective that would actually provide a savings? >> i don't think that's been done yet because the consultant has just been engaged. so i think that's hopefully part of the study. and one of the things i'm suggesting the refuge rate administrator might be able to lean into in that study where where are their cost savings to next issue is on the organics preprocessing and morris talked a bit about that while he was up here recology is proposing to put $3.8 million into a d packaging system at tunnel. those systems are being used throughout the state to varying effect on varying waste streams. they've tested it on your waste stream and believe that it works. i've got some concerns because these particular types of d packaging machines don't work well when there's leaves and branches and grass and you have some of that in your mix and so there are some questions about that. they've also proposed to put a three tiered rate in at beaven as jay described based on clean versus unprocessed versus processed organic materials and that is common to have those tiers in the pricing. in fact i just negotiated a deal with beaven for another client that has tiered pricing around the cleanliness of the material. so good good mechanism to incent that we just need to make sure we understand how it will work day to day here. >> clearly getting cleaner feedstock out of the organics stream is really important. as morris said the trommel was recovering a good bit of material but it was also taking a lot of good material and sending it to the landfill with the contamination and we want more recovery and we want cleaner stuff going into the soil. so that's all good. there are perhaps negligible transport emission differences from taking this stuff, handling this in different ways at different places but again shouldn't be a significant difference on environmental impact other than recovering more organics and reducing the methane on a system fit you know this is very compatible with your source separation system plus containers being out on the street and getting contaminated at a fairly high rate. this is something that san francisco service environment requires in a way that suburban environments don't need as much . the $3.8 million is higher than we've seen from others. morris spoke to. there's a concern there. we've seen a similar installation at a client site last year in 2024 for about $2.3 million and included all the end feed conveyors included the electrical included the stuff. so there may be some factors that are different here in san francisco than at that other site but that was the basis for our concern and we just suggest doing some due diligence around that and making sure that that's a good number. >> and then on the technology selection side, making sure that this really is the right technology, the oryx was not the right technology. this is not a lot different than the oryx and so making sure that we're doing the right thing here and and not getting into a $3.8 million expense that's then going to need to be sold off would be good. so we would recommend approving the concept for the d packaging unit but having some cost controls or again as we've discussed on other things that if it comes in under that 3.8 that we can reap the benefit for the rate payers and have some reconciliation around that . i would also suggest that the packaging equipment be installed out at beaven rather than at tunnel. a few reasons for that and it's not you know the company has good reasons for why they want to put it at tunnel. one of the concerns that i have is that you need different types of trailers to convey the slurry material he water type trailers to convey the slurry material as opposed to the transfer trailers that they already have to convey the the co-mingled material that's dry air. and so i'm concerned that you would get into this and then incur additional expenses needing to buy specialized equipment to be able to transfer it. it's also the case that beaven is a site that handles more users than just san francisco and so potentially other users of that site would benefit from using that equipment and it could be amortized over a broader set of tons than just san francisco. so those are my primary rationale for suggesting we consider a different location there and then certainly consider recology proposal for tiered pricing. but we need to understand it better. it is very common in merchant agreements but in your arrangement for deriving an average per ton amount that goes through tunnel that would need to be untangled and we would have to come up with precise mechanics for how this would work. and i note that the tiered pricing system works really well when you have a different collector than your processor because they are a check and a balance on each other and if we have a tiered pricing system where the collector is the processor and there's an incentive for the tons to come in at the highest rate you need to guard against that potential outcome. >> so that's organics preprocessing. any questions on that one? all right. >> well that concludes my presentation. thank you. thank you so much. i think the presentation was really interesting and really helpful for for me if we were to accept all of your recommendations, what is that worth to us and rate reduction by the way, i haven't done that math yet there but we look forward to hearing about it. >> yeah we'll have to come back on that. >> thank you. we are going to invite environment come up but i know recology said they want to make a few comments about some of the report from each of evan boyd region vice president for recology yeah just a couple of points of clarity regarding the recommendations and we we have saw these for the first time when they were published a few days ago on tuesday and so we haven't had an opportunity to talk these through with and age or the rate board but i think we can answer maybe at a very high level some of the some of the questions that came up. a couple of things relative just to the headcount ratio on contamination cameras versus overload cameras, the contamination camera technology is not as advanced as the overload camera technology and just in very basic concept the overload technology only has to capture material that's over the brim of a of a bin or container whereas the the contamination technology has to look at the waste stream and pick out points of contamination. so that's the reason for such a different ratio. another point on that is and would agree with some points about not charging before the assurance of the technology being there and the and the success rate of the technology being there. >> but i do want to make it clear that overage charges exist today manually, right? so a driver drives up, they see a bin that's overloaded, they record that and they bring that back to our dispatch office and and that overload charge is then applied to the appropriate account that happens manually today. what we're proposing is that we automate that that process. secondarily in the programs that i've seen elsewhere outside of san francisco is that before a charge is accounted for, before when a customer gets a charge there is a picture with a date stamp time and location of that overloaded bin to say here is your bin mr. or mrs. customer and here's the associated overload charge. so it's it's i don't want to give anybody the impression it's a sort of automatic scenario that happens there in regards to to hcf. again we're open to discussion on on the schedule for sure. i wanted to answer one question chair two that you had relative to infrastructure and upgrade electric electricity upgrades at the facility would agree with mr. hilton in that you know the upgrades for front line would be fairly substantial require over 24mw of power which is a substation and in among itself we would have to do some upgrades to the facility even for the for the what we call easy to adapt smaller duty vehicles. but in regard to that schedule i had mentioned one of the comments i had made is we have extended the life of a number of vehicles and so our replacement schedule just like any other fleet at times is predicated on age and and trucks timing out so there may not be an operate we may have trucks that are only five years old that are smaller support vehicles that don't need to be replaced. so then we'd be spending money that you wouldn't otherwise spent because you want to you want to take advantage of the full life of those vehicles. in regards to some of the comments about capital recovery costs, i want to make it very clear that if there's a cost projection difference for example in a truck where we get a certain cost for a truck and it takes 12 month lead time to order that vehicle or for that vehicle to arrive and is when we actually pay the invoice any variances in those costs first the capital comes from recology and the recovery is and i'll have our finance people they could give you but the recovery is not the capital investment itself. it's the the lease expense over time and the depreciation of the vehicle any variance between that projection and the actual actually flows through the balancing account. so it's not a scenario where if we quote or we get a quote for 500,000 for example and we actually get a truck for 450,000 that recology keeps 50,000, that's not how it works. that variance flows through to the balancing account and is adjusted accordingly either as a surplus or a deficit and that that's the way the system works at a very high level whether it's fleet infrastructure or the like in regards to the the capital plan or the master plan that was referred to and the the $4 million that's in the rate application. i just want to be clear that that's not entirely all for a site master plan. a lot of those costs are actually seismic studies that have been required at the port of san francisco for the site that we lease to run the facility. so a lot of those engineering costs that are in there aren't just site master plan specific but they include other costs that we've been required to do by the city or by the port in previous years to to look at seismic retrofitting in regards to the organic d package or i might have a little debate with you rob about the or express being similar to the mega thaw we like to use cool names for our organics equipment not a very sexy industry. i understand. so there's there's a pretty substantial difference in how those machines operate and i don't want to get into the details of it but in regard but what this system will do we believe it will do is is increase recovery by about 18% over where we are and i understanding more study needs to be done. and then in regards to the capital investment and the areas mr. hall is right there's additional trailers or specific special types of trailers that are required to haul this type of material. >> we have 12 of them sitting empty right now that we can we can employ and use for something like this and those costs aren't in there. i understand that that more discussion needs to be had but i think there's explanations for a lot of the questions that were brought up and and and discussion that could be had. >> the last thing i want to comment on is in regards to the location of that d packager there are a lot of permitting requirements as you might understand we think we because we do this process already in san francisco we think those permit hurdles in san francisco are going to be less than they would be if they were done out of urban location that's out in stanislaw county. that's number one. number two, there's a there is a capacity in a throughput scenario that we have to look at. >> these systems only do about 20 tons an hour. >> and so if we implement one of these these pieces of equipment at beaven on and utilize it for all customers is san francisco isn't going to be able to process the amount of organics that that we feel like should be process based here in san francisco to clean up the composable materials that get sent to beaven. >> and i guess the last comment i would make on that is there was some talk about the effectiveness because of the brushy woody type of material that would that doesn't go through these this type of equipment are intent is not to process every ton of organics material that comes from san francisco these again would be organics rich load primarily from commercial routes that are restaurant heavy that we know have a lot of food waste within those within those those routes. and so we're going to optimize the effectiveness and the feedstock that that go into those materials. so just wanted to add those points of clarity and thank you and happy to answer any questions if you have any other questions. >> no, thank you very much for that and i expect we'll have additional conversation going forward. >> but i just wanted to note with a bit of a smile that having a a less of a permit hurdle in san francisco versus stanislaw is the first time i've heard that. >> so thank you for that. >> thanks. afternoon board hillary near she her i serve the environment department as senior zero waste coordinator so i want to share a update and share some context uniquely from the environment department about our zero waste goal our mandates under a climate action plan and others . some recent data from our characterization study funded by the rates that just concluded and our perspective on some of our college's proposed enhancements the remainder about our climate action plan which involves many strategies to reach net zero by 2040 zero waste circular economy among them and we are particularly positioned around the generation reduction pieces that's much of our empowered focus work is going upstream promoting generation reduction which recology is not positioned to do so they do impact especially the disposal reduction goals 50% by 2030 and if you look at you know our progress to date we're not going in the right direction. >> so the green line here is the 200,000 tons per year we would need to recover additionally in order to meet those 2030 goals. recology this is just the material that they touch are still landfilling 400,000 tons per year and about 35% of that or 35% of their total material they touch is recovered through recycling composting. >> so we did a study of all landfill of material that recology touches through cards, containers roll off compactors recently and still see that 64% of what's going to landfill could be recycled and compost. so nobody in this room i'm sure but we still have a lot of work to do to recover more and that's where we're going to get the 200,000 tons is by source operation upstream. some of these enhancements as we mentioned to get at that material. one last slide on context is that we see that this is the recent characterization study 10% of the weight this is weight not volume is still the wrong stuff glass plastic. some of the stuff we want to pull out with these pre-processing equipment and some of the upstream messaging around especially plastic bags. >> so reiterating this is environment's perspective on several of the key environmental enhancements that recology has proposed and so we'll cover all six of them in brief because we've heard from kevin in particular on the camera as we do support this because in particular we've been piloting we've seen some progress on this technology piloted by third eye prairie robotics has a unique perspective and has the ability and proven to be able to generate unique image based messaging to the generator specific specifically you know taken inside the inside the hoppers. so we're really excited about that possibility to give timely ,timely feedback and equitably. so one constraint is that right now it's mostly driven by driver initiative and that has some some downsides. >> you can see that the sensitive material is blurred out in these images so they're not capturing personal data. it's really just the offending material in this place plastic bags we do support this overloaded container strategy we've seen i've seen it work in oakland to help especially drive conversations about adequate source separation if businesses primarily businesses are overloading containers then it can really drive the conversation oh you know where else can this go? and the waste zero team at recology is uniquely prospecting uniquely positioned to have that conversation but they need the consistent information that can be generated by these cameras throughout the 168 outs as proposed. >> i want to reiterate we're really excited about the compost giveaways coming back. we've seen these be really popular drive ratepayer value the connection to the green card that people are participating in in their homes and businesses. we need a little more detail especially around our mandate from the state to procure or distribute these organic waste products. so we've asked for that from recology and we're hoping to codify that clearly so we get that procurement credit called through the state last year. >> with that, can you can you just share what is that requirement? >> what is that state requirement? sure. it's called sb 1383. you might hear it summarizes or a short lived climate pollutants reduction act that mandates among many things that that cities, jurisdictions, the city and county of san francisco in this case procure or buy or mandate on our behalf that a hauler distribute organic waste products and it's part of the initiative to close the loop on our organics if we're going to take more out of the out of the landfill in this case or generate more compost we need to find a market. >> so it's a it's an attempt to mandate jurisdictions to create this market. so we've been working we've gotten a grant that won't go into it but this is part of our meeting those statewide commitments is working with recology to distribute material that we helped make. so we're excited about the complex giveaway. the last thing i'll touch on is the organics reprocessing. you've heard a fair amount about it from each other for recology i'll just reiterate from some of the data that marie shared we're losing a lot of good material. this is from the characterization study where we sampled what was still going to landfill after going through that trauma which is effectively a screen and you can see some of the pictures we're losing, you know, bulky items we losing a lot of, you know, food scraps and generally that's in order to capture the 5% residual so in short, we would we really support instituting in this packaging technology which has been proven especially on material like our foods corporate commercial loans and to remove plastic bags and other contaminants and we would hope to see it in rate year one in order to optimize our climate reduction and organics recovery goals. so i'll invite alexa unless you have questions about those enhancements in particular and our perspective great. >> good afternoon refugee board members. my name is alexa kelty. i'm the residential zero waste senior coordinator. we're going to continue the conversation around recology enhancements in their rate application that we support and why. >> so first up is the word reuse program which you already heard about. this supports our circular economy goals that we have in our climate action plan. for folks who don't know what that is, that is basically our goal to move away from the take make waste economy to a more circular economy where we take goods and keep it in circulation as much as possible as opposed to sending it to landfill. >> this program also supports a position that we're going to be requesting through the impound a to deconstruction position. >> and this will work in concert. this program will work in concert with that new position which is based basically taking dimensional lumber out of the landfill that was previously mulched and sending it to a nonprofit partner that we work with in san francisco where that can be resold as lumber to san franciscans. the cost of that program, as morris mentioned, is basically one fte at recology to handle that material. >> as morris mentioned, we are looking we support the free mattress recycling program and we are the only county in san francisco that does not have free mattress drop off. and as you could see we see mattresses all over the city. we are hoping this will reduce the amount of illegal dumping if we have more free options for people to drop off their mattresses. >> we're looking we're projecting it's going to double the amount of mattresses we'll be accepting. so right now there's about 5000 mattresses that recology recycles. this may bring in about 10,000. so that's roughly 250 tons of recycled material per year. this also supports our circular economy goal and as morris mentioned there's one fte at recology that will support this quickly. >> does the bulky item pick up process doesn't capture? yes that one that program currently picks up mattresses and that's through a schedule program so the resident has to make an appointment call if if a resident wants to drive down to 501 tunnel they will now have a free option to get their mattress recycled if they don't have time to make that appointment. for example. but yes the bulky currently does and will continue to accept mattresses and recycle those. and how does it support a circular economy? >> what is reused here? well yeah the circular economy goals are partly reuse so there is there's box springs that are dismantled so there are springs that are reused and recycled. and then there's also the polyurethane from the mattress padding gets recycled. >> so it's it's not reuse but it is recycling. so that's also part of our circular economy goals. yes. and no rate impact which you will like. so this program is at no cost but i will i do want recology to include it in their service level agreement that that we do have some metrics around reuse and so they have committed to including a reuse program in their bulky item program. >> we did some analysis with in a consulting firm that determined about half of what is put out at the curb could in fact be reuse through st vincent de paul. as kevin flanagan mentioned, they recology is asking for almost a approximately a million to do outreach and education of their programs to their customers. so i think it's very important that recology speaks directly to their customers and tell them what goes in the bins including household hazardous waste information particularly lithium in battery proper handling because those have continue to be at risk. and this also supports our circular economy goals. >> so as you know we're trying to get to net zero climate. our climate goal no emissions by 2040. this is a codified goal in chapter nine that was passed in 2002. if you just look at what how many emissions are coming out of our landfill and this is primarily organics we're at over 185,000 metric tons of co2 equivalent. that's roughly 45,000 gas powered vehicles on the road annually. so that the only way we're going to really significantly drive this down and meet our climate goals and our zero waste goals is through trash processing. >> so we are in full support of recology proposal sorry fast. >> to set the record straight a little bit i wanted to get on the record. we are not putting forth an alternative proposal at this time h.f. nh said that we had discussed a green waste proposal which has been in discussion but at this juncture we are not putting that out there. we are in full support of recology proposal if they refuse rate board would like to see a lower cost plan. we're happy to put that together with our partners working with recology and the refuse rate administrator to establish that. >> but in terms of recology plan we did conduct some pilots with a another facility in san jose and we know what is possible and they're projecting a 50% recovery rate. >> we do believe that is doable if we focus on the organics rich material and the climate impact is significant, we can bring it down that would be avoiding 35,000 metric tons of co2. that's roughly 8000 gas powered vehicles. and as you can see it's on a contingent schedule right now recology proposal and 35 million. so like i mentioned, we are confident on their estimated 50% recovery rate goal base if they really focus on the organics rich material and it will create and maintain local teamster jobs which is a priority for many folks in san francisco. it is a lower cost per ton than other facilities that we've looked at and we do have a few outstanding questions. one is, you know the permitting and construction timelines which can be so up in the air in san francisco so better understanding that beaverton is the composting facility that stands for blossom valley organics north. i want to better understand how when they remove the organics portion how well can beaven process that material and how well can recology mark at the end product? so those are some outstanding questions and we're looking at potentially working with a consultant to help us evaluate that in terms of active markets from the compost derived from msw processing that's trash processing and there are very robust markets. >> this is a picture of an actual farm in the central valley utilizing 4900 tons of compost derived from trash processing currently. and then this is not new technology i know jeff and just kind of brought to your attention to facilities that didn't work out. >> there is 20 different cities in california that are currently using trash processing this is not new. >> can it continually improve? yes. are there always new technologies available? this is a very evolving market with optical sorting and i so it's not a stagnant program. this will continually evolve and i think it's it's in the process of improving and we want to continue to to lead the way in san francisco. and i just want to leave you with the 400,000 tons of landfill bound material that we're producing annually in san francisco. >> so that's the pit at in san francisco so we can do something about that and trash passing along with our other programs that we're proposing here can help reduce that. >> thank you. i'm happy to take questions. thank you. thank you. public works is going to make a few comments to. >> good afternoon chair to vice chair herrera and member baudry i'm rachel gordon, the director of policy and communications for san francisco public works trust a very few comments on this portion of the meeting today. public works is very much in favor of a few of the initiatives that recology is proposing the mattress free mattress collection. we do see a lot of mattresses on the streets so any opportunity to give people a free way to get rid of their mattress is welcome. another opportunity for that certainly the abandoned waste collection in the afternoon as recology has shown we haven't had as much success in the afternoons as we have had in the morning so that's very important as well as the cameras on the trucks to make sure that the cans are being serviced as the service level agreement is looking at. so we have a combination of sensors in the trash cans, our trash can manager we're hoping to bring on board soon as well as the cameras. so we're very pleased with what those initiatives are that recology has come forth with. that's the last presentation so we will now take public comments members of the public who wish to provide public comment on this item please line up at the podium now for the record there are no additional public comments. >> this concludes public comment. >> thank you very much with no public comment will close on this item and this is a discussion so we're not taking action today. please call item number four. >> item number four is a discussion item on city departments impound account requests refuse rates administrator regalia will begin the presentation jay leo refuse rate administrator comptroller's office so so today we're going to talk a little or this item we're talking about impound account requests. >> these are the department requests. the goal again is to get feedback on what's appropriate for our proposed rate order. >> so while the focus is on going down the requested costs from departments i just want to remind you that we also have some fund balance of at least 3.8 million so we'll look for ways to use that to offset some of the costs in the current rates. so we'll start with our budget and then we'll invite public works and then environment to speak quickly on their portions as well. >> we just have two slides. the first here is to outline our work and the second is show you what that looks like in dollars. our first two items here that we do is our bread and butter. it's rate monitoring rate setting rate setting is periodic work for us but this is managing the rate process and administration and ministry in administering the rate application, doing analysis on the rates and then providing a refuge rate administrator's report, developing a proposed rate order and then doing stakeholder engagement as well and then doing a lot of the coordination here. the second is rate monitoring so this is ongoing work for us . this includes performance metric development that will be rolling out a performance metrics program in the next hearing. we also plan on conducting a customer satisfaction survey so our work here includes reporting report analysis. we've included a lot of new reports in the last reorder so doing a lot of analyzing and analysis and monitoring of that and then order order implementation monitoring. >> so this is not we don't just look at some of the financial aspects but we're also kind of monitoring the implementation of certain programs we're doing site visits, ride alongs and all of that. the next item here is report and other hearing management. so we essentially act as the rate board secretary with that includes all the logistics noticing requirements as well and then we're also required to present to the environment commission and the street and sanitation commission on the last two items here engagement and outreach we respond to public information requests that can actually be a huge time for us and then we respond to some complaints and present queries and then we do some rate setting outreach and community engagement as well. the last is just administration stuff that you would expect of any division and departments. so we do our website update and development and we do administrative functions such as budget and contract management. so what that looks like in terms of our costs you know our team right now is two full time fte given the kind of level work we have it's does require us does kind of strain us in terms of capacity and requires us to hire a lot of consultants temp workers to in some cases really do some staff augmentation so we're requesting one new fte. i think this will allow us to reduce those consulting costs and the temp costs and it actually we think it will lead to we're reducing it in a way that leads to rate savings cost savings. >> the second is rate setting. like i said, it's periodic support and so you can see we're doing rate setting this year over half a million in the budget no rate setting for the next two years and then the last rate year a much reduced cost due to what we think we can reduce in terms of having the new staff the the higher cost this year also is due to some of the some one time analysis that we needed as well for rate monitoring this also consists mostly of consulting costs. what we're showing here is recology is application one of our adjustments and that adjustment is mainly a change in strategy of how we're going to be implementing our customer satisfaction survey. initially we were thinking of doing this annually after talking to some survey experts. we think periodic is better and we can do a more comprehensive survey and so we'll plan on doing that in the second rate year for rate year 2627 and then the the additional rate monitoring costs are still some consulting work we think will still need some of that for additional benchmarking and potential capital cost analysis moving forward hearing noticing costs this is also periodic. it's really tied to the rate setting these are up to 18 mailers that's i think the largest portion of the cost there. and so you see that in that rate year 2425 and then again in 2728 last is overhead mainly these are controller so office overhead allocations we we i think under budgeted our prior year overhead costs and that was absorbed elsewhere in the department so we're just trying to right size that here but as you can see we do think there's some cost saving if you compare kind of our budget year which is a rate setting year to 2728 it's about flat and that just accounts for the fact that we're saving due to the new position and the reduced consulting costs and term costs. so that's our presentation there. and you know any other questions i'll invite public works. hello again rachel gordon, director of policy and communications for san francisco public works one two also before i get started, big thanks to the controllers office j and ben particular our budget team finance manager jennifer marquez and budget manager donna lee. cfo bruce rob