Recology might owe San Francisco customers even more than the nearly $95 million that the waste management company already agreed to reimburse them, a city supervisor said Monday.
Recology last year agreed to pay San Franciscans back after city lawyers investigating the corruption scandal surrounding former Public Works Director Mohammed Nuru found that the trash hauler had improperly raised rates.
But Supervisor Aaron Peskin told The Chronicle that the $94.5 million refund might cover “only a portion” of what city customers were overcharged.
The exact amount that Recology could still be on the hook for is not yet clear because city officials still are investigating the issue.
In an emailed statement, Recology spokesperson Robert Reed said the company had “not seen any analysis” to support the notion that the company still owes San Franciscans more money than was agreed to in the settlement with the city.
City lawyers and prosecutors have alleged that Nuru, who had a central role in authorizing Recology’s prices in San Francisco, took bribes from the company. Officials have also said Recology failed to account for expected revenue, which in turn allowed it to obtain a 14% rate increase when rates should have only increased 7%.
“We have ongoing questions and concerns regarding past Recology’s rate setting and charging practices,” San Francisco Controller Ben Rosenfield said in a statement.
Rosenfield’s office provided a copy of a Nov. 16 letter he sent to Recology asking for more information about the company’s reported expenses, revenues and supporting financial documentation. In the letter, which was responding to Recology’s latest annual rate report, the controller asked about a difference between actual and projected personnel costs and an apparent 300% increase in building and property rental costs, among other matters.
“It would be premature for us to provide figures regarding the value of any potential overcharging, as that process is continuing,” Rosenfield said in the statement. “When we come to conclusions — which we don’t expect will be in coming days given the complexity of the analysis — we will report our findings to the Mayor, Board (of Supervisors), and rate-paying public.”
Reed said Recology “has been working closely with the Controller’s Office to provide complete and accurate responses to all their questions.”
Recology has a monopoly on San Francisco waste collection that dates to a 1932 ordinance passed by local voters. The ordinance says that any company collecting refuse in San Francisco must have a city permit — all of which are now owned by Recology and its subsidiaries.
In light of the revelations arising from the Nuru scandal, Peskin and other San Francisco officials have sought to reform the city’s waste management practices. At Tuesday’s meeting, Peskin and Mayor London Breed introduced a potential June 7 ballot measure that would provide greater regulation of Recology. Peskin said it would “reform the broken system that has been the law of this land for almost one century.”
Recology already is working to put its own measure before voters, as reported by the San Francisco Standard. Peskin said the company’s measure would be more favorable to the company than what the city is considering.
“They’ve really got a lot of chutzpah at this point for thinking they can buy their own meal ticket on our ballot,” Peskin said of Recology.
Reed said the company “agrees that improvements to the system are warranted” but it objected to a proposal from a city-backed working group that “would completely remove voters’ authority over the rate-setting process and transfer voters’ power to City Hall instead.”
“We remain committed to reform and would still like to work toward a consensus measure ... but it is essential that the will of the voters be preserved,” Reed said.
J.D. Morris is a San Francisco Chronicle staff writer. Email: jd.morris@sfchronicle.com Twitter: @thejdmorris
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San Francisco supervisor: Recology might still owe city's customers more money - San Francisco Chronicle
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