San Francisco residents are due for some payback after embattled refuse collector Recology admitted that it incorrectly calculated its rates and would have overcharged city customers by some $24 million.
This came about, the company says, due to accounting errors that led to the rate being set too high in Rate Years 2024 and 2025.
This discrepancy came to light at the Sept. 30 meeting of the little-known Refuse Rate Board, a body created after 71 percent of voters approved Proposition F in June 2022.
San Francisco residents will see a credit on their November bills, with an average benefit of $18 per year for two years, according to Jay Liao, the city’s refuse rates administrator. Recology also lowered the rate for the forthcoming year.
“In the wake of the public corruption scandal between Mohammed Nuru and Recology and the Parks Alliance, I brought all the parties together and crafted Proposition F, which Recology opposed, but the voters saw fit to pass,” said Board of Supervisors President Aaron Peskin. “While they went kicking and screaming, I’m delighted that we now have a rate administrator and a rate board that is scrutinizing all of Recology’s costs and expenses and ensuring that ratepayers are not being cheated.”
Last year, former Recology vice president John Porter was sentenced to three years’ probation, and former community relations manager Paul Giusti was sentenced to six months of home confinement for their roles in a bribery scheme. Nuru, who used Recology money deposited in a Parks Alliance account as a slush fund, was sentenced to seven years in federal prison in 2022.
At the Sept. 30 hearing, Jon Braslaw, Recology’s director of business process improvement, said, “This is one that, quite honestly, we missed, and I missed.” Braslaw revealed that Recology discovered two “material” mistakes in its projections resulting in Recology overcharging customers for one full year.
“This is the first time since 1932 that the oversight structure was finally changed. It’s something that’s benefitting all San Franciscans, and we should be proud of,” said Peskin. “It shows that we can crack down on corruption and hold Recology to account.”
Braslaw said that vehicle-lease costs that should have been terminated were “inadvertently extended,” and revenue calculations did not “fully consider” a significant 8 percent cost-of-living adjustment for salaries and operating costs. He said that, upon discovering the errors, Recology proactively contacted the city attorney’s office and the refuse-rates administrator, a position created by Prop. F: “We did this in an effort to be proactive, fair, and transparent.”
The office of the refuse rates administrator, led by Liao, conducts quarterly discrepancy checks of Recology reporting. “The good news is that the additional rate monitoring and reporting is working,” Liao said at the Sept. 30 meeting.
Ed Harrington, San Francisco’s former longtime city controller, agreed: “In the old days, before Prop. F, Recology would come in, there would be some scrutiny, but nothing really happened,” he said. “Then, three years later, they’d ask for more money. So clearly this is important.”
This is not the first time in recent memory that city residents will get rebates from Recology. Rate payers received checks in 2021 following Recology’s $94.5 million settlement deal.That followed a lawsuit from then-City Attorney Dennis Herrera regarding the company’s collusion with Nuru to hike rates. In 2022, Recology reached a further $25 million settlement with the city after the company earned more than its agreed-upon profit margin.
So will renters whose trash removal is included in their rent payments receive this from their landlords? Or will the greedy speculative landlords unfairly pocket these sums?
Landlords probably won’t make a penny with the cost of insurance rates doubling.
I know, it’s just so hard to see any other side if you only ever been on one side but most mom & pops worked multiple jobs to buy a place.
Seriously $18 is hardly a windfall considering water rates and PGE have been skyrocketing too.
You’re assuming a whole lot…and wrongly. It seems you’re the one having a hard time seeing another side.
BN – renters never cover the true cost of inflation. You say Frisco-Disco is wrong; but how do you know that increasing insurance and water costs (just two among so many others – including the Rent Board fees) won’t have a net-negative effect? Do you realize that the “fair market return” was set by a court almost 90 yrs ago with the assumption and dismissal of “bad business decisions” for those who weren’t making a “fair” return?
Received an email stating my next bill is a credit amount that is due 01/15/2025. So, they want me to pay them what they owe me. There is no options on how to get the credit. Calling them means, I always get the message that they are experiencing high call volume, so no answer that way. Sending a message via their website means it goes in to a blackhole. Congrats to anybody that gets a refund.