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SF Residents Will Get About $190 Back from Recology Scandal

Recology SF must reimburse ratepayers $94.5 million in overcharges and interest
By - posted 3/5/2021 No Comment

City Attorney Dennis Herrera just announced that Recology San Francisco, the contractor for the City’s waste and recycling collection, will lower rates and reimburse ratepayers for overcharges that were unearthed as part of a wide-ranging investigation into public corruption tied to former Public Works Director Mohammed Nuru and others. The investigation is part of an overarching public integrity review with City Controller Ben Rosenfield.

The total savings to ratepayers from today’s agreement is more than $100 million and covers a four-year rate period from July 1, 2017 to June 30, 2021.

Recology will reimburse ratepayers $94.5 million in overcharges and interest as part of a negotiated settlement with the City Attorney’s Office. Under the settlement, Recology will also lower residential and commercial refuse rates starting on April 1, 2021, which will save ratepayers $6.1 million from April 2021 through June 2021.

Together, this is more than $100 million in direct benefits to San Francisco refuse ratepayers. In addition, Recology will make a $7 million settlement payment to the City under the California Unfair Competition Law and the San Francisco Campaign and Governmental Conduct Code.

Thanks to SF Supervisor Matt Haney for crunching the numbers and estimates that the “average garbage residential ratepayer will get back $190.“

City Attorney Dennis Herrera notes he isn’t through yet in this broad investigation. “I want to note that after we began looking into Mr. Nuru’s dealings, Recology was forthcoming and cooperative with our office about this matter,” Herrera said. “As I have said since the start of this investigation, we are not going to stop until we get to the bottom of this. This is broader than Recology. We are not done yet.”

Reimbursing Ratepayers
As part of the settlement, Recology and its affiliate companies will refund San Francisco ratepayers for the over-charges plus 5 percent interest. The agreement covers residential and commercial ratepayers — with the exception of a few limited commercial contracts not based on the approved rates — with active accounts at any point between July 1, 2017 and March 30, 2021.

Refunds are required to be paid to customers with current accounts by Sept. 1, 2021. Recology will be required to do robust public outreach through Dec. 31, 2021 to inform former customers they are eligible for a reimbursement. Recology must submit monthly reporting of all paid and unpaid balances to the City and provide a report by Jan. 31, 2022 detailing the efforts they have made to disburse the restitution payment to active and inactive account holders. By July 1, 2022, any portion of the restitution balance that has not been paid directly to active or inactive refuse collection customers will be placed in an interest-bearing account to be used to offset any future refuse rate increases.

The case is: People of the State of California et al. v. Recology San Francisco et al., San Francisco Superior Court, filed March 4, 2021. Additional documentation from the case is available on the City Attorney’s website at: sfcityattorney.org

Read more at the City Attorney of San Francisco’s website.