The battle to win San Francisco’s lucrative garbage disposal contract turned nasty as city officials tentatively recommended it go to Recology (formerly Norcal Waste Systems), causing its main competitor, Oakland-based Waste Management, to claim the selection process was flawed and bad for the environment.
Recology is proposing to dispose of San Francisco’s nonrecyclable trash at its Ostrom Road landfill in Yuba County, which is double the distance of the city’s current dump. The contract, worth hundreds of millions of dollars, would run until 2025.
For the past three decades, the city has trucked its trash 62 miles to the Altamont landfill near Livermore, under an agreement that relied on the services of the Sanitary Fill Company (now Recology’s SF Recycling and Disposal) and Oakland Scavenger Company (now Waste Management of Alameda County).
That agreement allowed up to 15 million tons of San Francisco’s municipal solid waste to be handled at Altamont or 65 years of disposal, whichever came first. As of Dec. 31, 2007, approximately 11.9 million tons of the capacity had been used, leaving a balance of 3.1 million tons, which the city estimates will be used up by 2015.
Currently Recology collects San Francisco’s curbside trash, hauls it to Pier 96, which is owned by the Port of San Francisco, then sends nonrecyclables to the Altamont landfill operated by Waste Management.
After SF’s Department of the Environment issued a request for qualifications in 2007, Waste Management, Recology, and Republic Services were selected as finalists. The city then sent the three companies a request for proposals, asking for formal bids as well as details of how they would minimize and mitigate impacts to the environment, climate, and host communities, among other criteria.
Republic was dropped after a representative failed to show at a mandatory meeting, and Recology was selected during a July 2009 review by a committee composed of DOE deputy director David Assmann, city administrator Ed Lee and Oakland’s environmental manager Susan Kattchee.
The score sheet suggests that the decision came down to price, which was 25 percent of the total points and made the difference between Recology’s 85 points and Waste Management’s 80 in the average scores of the three reviewers. But the scores revealed wide disparities between Kattchee’s and Lee’s scores, suggesting some subjectivity in the process.
For instance, Kattchee and Lee awarded Recology 15 and 23 points, respectively, for its “approach and adherence to overarching considerations.” Kattchee awarded 13 points to Recology’s “ability to accommodate City’s waste stream,” while Lee gave it 24 points. And Kattchee awarded Waste Management 13 points and Lee gave it 20 for its proposed rates.
When the selections and scores were unveiled in November, Waste Management filed a protest letter; Yuba County citizens coalition YUGAG (Yuba Group against Garbage) threatened to sue; and Matt Tuchow, president of the city’s Commission on Environment, scheduled a hearing to clarify how the city’s proposals was structured, how it scored competing proposals, and why it tentatively awarded Recology the contract.
Emotions ran high during the March 23 hearing, which did little to clarify why Recology was selected. Assmann said that much of the material that supports the city’s selection can’t be made public until the bids are unsealed, which won’t happen until the city completes negotiations with Recology and the proposal heads to the Board of Supervisors for approval.
YUGAG attorney Brigit Barnes said Recology’s proposal could negatively affect air quality in Alameda, Contra Costa, Solano, Yolo, Sacramento, and Yuba counties, and does not attain maximum possible reductions of greenhouse gas emissions. Barnes pointed to a study commissioned by Waste Management showing the company’s biomethane-fueled trucks emit 68 percent fewer greenhouse gases than Recology’s proposed combination of trucks and trains.
Barnes further warned that Recology’s proposal might violate what she called “environmental justice strictures,” noting that “Yuba County has one of the lowest per capita incomes and one of the highest dependent populations in the state.”
She also claimed that awarding the contract to Recology would create a monopoly over the city’s waste stream and could expose the city to litigation. “Every aspect of garbage collection and waste treatment will be handled by Norcal’s companies,” Barnes stated, referring to antitrust laws against such monopolies.
Deputy City Attorney Tom Owen subsequently confirmed that the two main companies that handle San Francisco’s waste are Recology subsidiaries. “But it’s an open system,” Owen told the Guardian. “Recology would be the licensed collectors and would have the contract for disposal of the city’s trash.”
Irene Creps, a retired schoolteacher who lives in San Francisco and Yuba County, suggested at the hearing that the city should better compare the environmental characteristics of Ostrom Road and the Altamont landfill before awarding the contract. She said the Ostrom Road landfill poses groundwater concerns since it lies in a high water table next to a slough and upstream from a cemetery.
“It’s good agricultural land, especially along the creeks, red dirt that is wonderful for growing rice because it holds water,” Creps said of Recology’s site. “I’d hate to see that much garbage dumped on the eastern edge of Sacramento Valley.”
Livermore City Council member Jeff Williams said the Altamont landfill has the space to continue to dispose of San Francisco’s waste and he warned that Livermore will lose millions of dollars in mitigation fees it uses to preserve open space.
“Waste Management has done a spectacular job of managing the landfill and they have a best-in-their-class methane control system,” Williams said, noting that the company runs its power plants on electricity and its trucks on liquid methane derived from the dump.
Williams pointed out that the Altamont landfill is in a dry hilly range that lies out of sight, behind the windmills on the 1,000-foot high Altamont Pass. “It’s many miles from our grapevines, in an area used for cattle grazing because it’s not particularly fertile land,” Williams said. “We are filling valleys, not building mountains.”
Waste Management attorney John Lynn Smith told the commission that the city’s RFP process was flawed because it didn’t request a detailed analysis of transportation to the landfill sites or fully take into account greenhouse gas emissions, posing the question: “So, did you really get the best contract?”
David Gavrich, who runs San Francisco Bay Railroad and Waste Solutions Group, testified that he helped negotiate the city’s contract 35 years ago, saving taxpayers hundreds of millions of dollars, and that the city needs to be smarter about this contract.
Gavrich and port director Monique Moyer wrote to the Department of the Environment in June 2009, stating their belief that shipping trash by rail directly from the port “can not only minimize environmental impacts, but can also provide an anchor of rail business from the port, and a key economic engine for the local Bayview-Hunters Point community, and the city as a whole.” But Gavrich said DOE never replied, even though green rail from San Francisco creates local jobs and further reduces emissions.
“Let the hearings begin so people get more than one minute to speak on a billion-dollar contract,” Gavrich said, citing the time limit imposed on speakers at the commission hearing.
Wheatland resident Dr. Richard A. Paskowitz blamed former Mayor Willie Brown’s close connection to Recology mogul Michael Sangiacomo for the company’s success in pushing through a state-approved 1988 extension of its Ostrom Road Landfill while assuring Yuba County residents that the site would only be used as a local landfill.
“The issue is that Yuba County is becoming the repository of garbage from Northern California,” Paskowitz said, claiming that the site already accepts trash from Nevada.
Members of the commission told Assmann that they wanted an update on the transportation issue, but they appeared to believe the process was fair. “One guy got the better score,” Commissioner Paul Pelosi Jr. said. “The fact that they may or may not have permits or the best location, that’s for the Board of Supervisors to take up.”
Recology spokesperson Adam Alberti told the Guardian that its bid was predominantly about handling the waste stream. “Everybody’s bid included transportation, so you include the cost of getting the trash there. But primarily we were looking at the cost of handing the city’s waste,” Alberti said. “Recology’s Ostrom Road facility has more than enough capacity to hold not only San Francisco’s, but also the surrounding region’s, waste.”
Alberti said Recology is still pursuing a permit for a rail spur to get the waste from Union Pacific’s line, which ends some 100 yards from Ostrom Road site. Still, he said the company is confident it will be awarded, calling this step “a pro forma application with Yuba County.” Alberti also noted that it’s normal for host communities to object to landfills but that Yuba County stands to gain $1.6 million from the deal in annual mitigation fees.
Assmann told the Guardian the selection process took into account issues raised at the hearing. “The important thing in a landfill is to make sure there is no seepage, no matter how much rainfall there is, “Assmann said. “And there are still two hurdles Recology needs to clear: a successful negotiation, and the approval of the board.”