Transcripts For SFGTV Refuse 20240704

Caretakers of this place, as well as for all peoples who reside in their traditional territory. As guests, we recognize that we benefit from living and working on their traditional homeland. We wish to pay our respects by acknowledging the ancestors, elders and relatives of the roma and by affirming their sovereign rights as first peoples. Thank you very much. Please call the next item. Madam clerk. This item is a presentation from the refuse rates administrator to adopt an order memorializing the refuse rate boards approval of a code of conduct on june 12th, 2023. It is a discussion and action item. Thank you very much. Ill turn it over to j. But just so members of the public know, the refuse rate board already approved a code of conduct, this is simply housecleaning to make sure that were actually doing it in the form of, i believe, a resolution. So ill turn it over to j. As the chair said, this is a housekeeping item. The City Attorney advised that the code of conduct should be approved as a as a resolution. So thats what was included in the packet and noticed a few weeks ago. Thank you very much. Given that, why dont we open this item up for Public Comment . Well start with members of the public who are in person here. Good afternoon, david. People, i was waiting for the handout so i could see it in writing. I understand thats coming soon. I think this is a third time. The code of conduct has been for the board and yes, it was approved in june. I just wanted to reiterate my belief that it should be amended in the future to state that all parties should be covered by the ex parte, a limitation. So that would limit members of the board from speaking not just to recology, but any other party to a proceeding. So that could be a citizen like myself or someone else who might file a rate application or to the extent that the city or any other entity files a rate application with this board, but only limiting that limitation on ex Parte Communications as to the substance of the rate application during its pendency. So to the extent that the members of this board relate to recology or any other party with regard to any other matter, in my view, they shouldnt be limited. But again, if anyone else submits a rate application and not just the recology companies, i believe this rate board should also be limited in its ex Parte Communications with those parties, as the term has been used in the past. I hope that helps. Thanks. Thank you for your comments. Are there any other members of the public in person who wish to speak on this item. Here . Yes. Im a Property Owner marketing castro. Ive had a lot of trouble with sunset scavenger. I sent in a letter somewhere in all of this, im sure. But i feel so strongly about it that i wanted to mention it in person. I have a two unit building at marketing castro and ive been here 30 years and ive always had two garbage cans and a recycle can and weve had a lot of trouble with the collectors who damaged the property. The doors open and the vagrants come through. And then, of course, i have bigger problems. The manager at the time and the supervisor some years ago had sort of set my rate at 107 for two garbage cans and a recycle can. And they told me that i didnt need to have the compost if i was a generic generating it because most of our stuff goes through garbage disposals in regards to food and things like that. And they dont have much of anything in regards to plants. What i do get once or twice a year, i take it, and dispose of it or have somebody come and get it and dispose of it appropriately. That way back then they said i had to pay for the compost bin, but i didnt have to have the can because i have very minimal , minimal space. In the back where they come in to get it. They have to im being charged. A key fee and a distance fee and they charge it for every can, yet they only use the key. Well in the beginning they only use the key once, but i have to pay four times for a key fee for each can and then they usually end up consolidating it anyway. Because i have cameras. Thank you for your comment. Oh, i didnt. I didnt. Tell me how much. All right. Let me get to the chase, if i can know. The Public Comment is limited to two minutes per individual. Unfortunately but you will have an opportunity to speak again at the next item in the next what . You will have more opportunities. There are additional opportunities for Public Comments at other items. Okay i guess a little bit out, but not to the chase of their improprieties. Thank you, sir. All right. Are there other members of the public who wish to speak on this item, which is about the boards adoption of a code of conduct . Seeing none in person. Madam clerk, can you check to see if there are any members of the public who wish to speak online. There are no callers in the queue. Thank you very much. Given that we will close Public Comment on this item number two, do we have any discussion or emotion. Move that we approve, approve the motion . All right. There has been a motion. Ill second that. Well do a roll call. Number two, i remember herrera. Hi thats two votes. Thank you very much. The item is passed. Madam clerk, would you read the next item . Number three, please . This item is a present and action item from the refuse rates administrator to adopt a refuse rate order for rate years 2024 and 2025. Thank you very much. We are going to turn this item over to j. But just one second. Member herrera. Madam clerk, just as we go through this process, i think it would be helpful to remind the public that they the Public Comment is for the item that theyre speaking on. If they have general Public Comment that could come earlier just to make sure that were speaking to the item thats before us. Thank you, jay. Good afternoon. City administrator and cher chu and general manager member herrera jay liao refuse rates administrator with the Comptrollers Office. So this is our fourth rate Board Hearing for this rate setting cycle in the last hearing, the rate board directed our office to make changes to our proposed rate order to be included in a potential final rate order for the rate board to consider and potentially adopt today. Over the last month, our office worked with department of public works Environment Department, recology to address the changes requested from the board. So i want to thank the departments and recology for the response and support and thoughtfulness throughout the whole process. In particular over the last few weeks as we work through many details to draft this rate order in the hearing packet, the board will have received the rate order, which is the resolution, a separate executive summary of the rate order, a detailed report of all the rate order components and a presentation from our office. We do have one more scheduled hearing if theres a need for more discussion. But our goal today is to provide the information the board needs to take a vote on a final rate order. So to that end, we have three topics for this agenda item. The first is the prop 218 protests will first allow any Property Owners to comment on this. On this topic. Then well share the tally for protests. The second item is for prop f written objections and comments. The ordinance requires us to consider all prop f written objections and address them at the hearing. At this hearing. So weve coded and group the written objections and comments. Weve identified three main groupings and so well share our offices consideration of the comments and objections and then well a lot time after each grouping. So three, three opportunities for anyone to comment on that on that topic. The last item is the refuse rate order. So we will summarize the changes made by the board to the refuse Rate Administrators proposal. This presentation will also summarize the refuse rate order included in the hearing packet that the board can choose to adopt or make amendments. Weve also prepared a potential alternative that adds back some funds so theres an alternative resolution and report and i can share the details of whats in that as well. That would go towards possibly addressing any contamination, outreach or additional street cleanliness, investment. After the presentation, id invite, id like to invite public works, Environment Department and recology to comment or present if they wish. They will then move into Public Comment after which the board can discuss and potentially vote on the rate order. So this first topic, prop 218 protests. We wanted to allow Public Comment here. So well take a pause from this presentation. And if there are folks that want to include additional protests before we do the tally, this is opportunity to do that. Are there any members of the public who wish to speak on their protests . If so, please line up at the podium now. Sorry, clarifying question. David pell will this be the only opportunity for Public Comment on this item or will there be opportunities for each of the three segments . Okay. And the copies are coming from downstairs. Great. Seeing as there are no, um, Public Comments, we will move to the next item in the agenda. Should we check to see if theres any online or is that encompassed online . Yes great. There are no callers online. Thank you. So the next topic in this agenda item. Sorry we have to do the tally so as part of agenda item three, this will constitute the public hearing on proposal adopt refuse rates for rate year 2024 and rate year 2025. In accordance with article eight d, section six of the california constitution also known as proposition 218, proposition 218 requires that the board consider all protests against proposed rates and provide that the board shall not impose the proposed rates of written protests are presented by majority affected Property Owners. So on june 1st, 2023, our office provided affected Property Owners with written notice of the proposed rates and the date time location of this hearing. The written notice advised Property Owners of their right to protest the proposed rates and instructed that any written protest be mailed to the refuse rates administrator or be handdelivered at todays hearing in order to be counted. This also instructed that any written protest must one state that the Property Owner or customers and opposition to the proposed rates increase to provide the location of the affected property by assessors parcel number, street address or customer count, and three include the name and signature of the person submitting the protest. The notice stated that the oral comments at public hearing would not qualify as a formal protest unless accompanied by a written protest. So weve just welcomed any input. Additional input from the community during this hearing. The commission we. Received 200 and 263 written protests. We received additional four today. This morning. And so four of those written protests were handdelivered today. This morning, the refuse rate board has. 146,572 residential refuse customer accounts, which means 73,287 protests are required for majority protests. The total number of written protests receives thus does not amount to a majority of the affected Property Owners or customers. Having counted and considered all protests against proposed rates in accordance with proposition 218, the board may act to adopt the proposed rates. So i think that closes out this topic for proposition 218. The next topic on this agenda is the prop f written objections and comments. So well first summarize as what weve heard and then will allow within each grouping for Public Comment. So as i mentioned, we coded written comments or objections from 220 ratepayers and we identified three major themes. The first is that of the 220 ratepayers, 167 or 79. 70 5. 9 of respondents rejected any rate increase or rejected increase to components of the rate. 21 ratepayers. 9. 5 of response identified issues with service. Some of whom tied this to rate increase objections. Others did not pose a rate increase, but use this form to share issues with their service and request for potential changes to service. And then third category d 19 ratepayers or 8. 6 of respondents supported some form of a rate increase. So in the first grouping of the response who reject objected to a rate increase. The most common reasons cited was that San Francisco is already an expensive place to live and that the rate increase compounds other Cost Increases. 37 responses cited the fact that recology had already raised rates in january 2023, 28 response objected because they felt rates were already too high. 18 respondents objected only to recology proposal 15 response objected to any increase because of the recent scandal. 15 response objected to any increase because they were experienced Service Issues. These Service Issues are varied and well go into more detail in the third grouping. And then one respondent objected to increase specifically to the base rate and one objected to any increase in the tipping fee. So the refuse rates administrator would not recommend no rate increase in our analyzes of recology finances, operations and Service Levels. Some amount of rate increase will be needed to cover increases in cost of doing business as well as improvements to Service Level in certain areas, such as abandoned material, pickup, public receptacle pickup to improve overall cleanliness of the city , also to provide Driver Safety and certain areas and to address the additional administrative needs due to the new process and new reporting requirements. Our rate proposal recommended no increase in year one and a modest increase in year two. That would allow us sustain, improve Service Levels. The boards recommended changes would also add funding to begin addressing long term capital costs. So this would necessitate some increase in year one. So we believe these increases are reasonable and fair and moving to no rate increase for both years would likely require reducing Service Levels, addressing Service Issues. That subcategory will go into later with regard to the base rate, this base rate is there to acknowledge fixed costs of service and based on the information provided by recall, e. G. On fixed versus variable costs, we believe its appropriate to apply the same rate increase factor to the base rates. Lastly with regard to the tipping fee, this fee is embedded in the collections rates. Our analyzes of the tipping fee as a cost to residential collection is that it represents a fair and reasonable increase given the recent Cost Increases in Capital Improvements, given the recent Cost Increases in Capital Improvements being included in the rate order. So those are considerations for each of these objections. And we would also like to invite any members of the public to comment on this on this grouping, which is objection to any rate increase. All right, madam clerk, we will now take Public Comment. Members of the public may address the board with common specific to the current item and will be limited to two minutes of speaking per time. Uh, per person. And a total of 20 cumulative minutes for this item. Members of the public who wish to provide inperson Public Comment on this item, please line up at the podium now. Each person will have two minutes to speak. Great. David phillips again. I did not submit either a prop 218 objection or protest, nor a prop f written objection. I worked on it for some time. As to the prop f objection, it just became too complicated. I have discussed a number of my concerns before this board and staff and city staff and recology staff over the last several months and a number of changes were made in part in response to some of my comments before this board and with the staff. Nevertheless, i was noted to call attention to the this issue of the written objections and the prop 218 process. For me , as someone whos paid very close attention to this, i think its been a bit problematic that the recall originally submitted a rate application. The city departments proposed changes to the impound account that funds their operations. There was a prop 218 mailing that fairly summed rised those proposals and the impact on rates. But since that time of june 1st, when that mailing occurred, there have been a number the i believe the draft rate order was not out at that time. And since the draft rate order was issued, there have been further discussions and what was made available this past friday. Thanks includes some entirely new elements. This idea of a change on january 1st of 2024 to my way of thinking, is entirely new and so i think in the future, and i will wrap up on this point, i think if i can just wrap up on this point, i think i weve weve got to respect time, given that we also cut off the other Public Commenter at the to the two minute mark hell have another opportunity in a moment. Can i just finish my sentence where we have to move the next speaker . Please dont make me unhappy. All right. Thank you very much. Are there other members of the public and i will comment that there was an individual who wanted to speak about some of the written objections earlier. So i just want to make sure this is the opportunity for someone to be able to provide their written objections or comments and some of the elements that other folks have provided comments around Service Levels as well. So i just wanted to do one more call for Public Comment at this moment in person for any other member of the public who is here. Seeing none. Theyre online. Are there other members of the public online . Madam clerk, there are no, uh, comments in the queue. Okay. So the next grouping. Is related to any objections or comments that actually supported some form of a rate increase. So 19 ratepayer supported some form of rate increase. 11 ratepayers supported the refuse Rate Administrator proposal. Six ratepayers identified as owners of rental properties wrote in to advocate for increases align with the allowable rate increase for rent controlled units, which was set at 3. 6 effective march 20th, 23. Two mailing ratepayers supported recology proposals so with regard to the refuse rate, administrators proposal, while we do support our own proposal, we also believe that the change changes directed by the rate board in the last hearing result in improvements to our rate order that would help us evaluate contamination mitigation efforts and also help us begin to address long term capital costs. So our recommendation would be to support our proposal with rate boards directed changes regarding alignment with allowable rate increase. Our preliminary analysis of data provided by the board would suggest that tenant occupied rent control units where the cost of refuse or recycling is paid by the landlord accounts amount to about 7. 5 of all tenant occupied rental rent controlled units. So thats what account for 10,691 units. The current proposed increase by the rate board in year one is an average of 1 across the year, which is below the allowable rate rent increase for the year of 3. 6. And then year two is also below that. That that 3. 6 increase at 2. 32. We also just would not advise aligning refuse rates to allowable rate increase. Lastly with regard to college support for colleges proposal, we believe that the current proposal and the boards packet today represents an improvement over recology proposal due to changes based on our analyzes rounds of negotiations and refinement of the proposal between our Office Departments and recology. So we would not recommend adopting recology proposal. So that constitutes our consideration of this topic. And so well invite members of the public to address any of these items that would support a rate increase. All right. So we are going to open it up for Public Comment again in person on this item. Mr. Pell this is an opportunity to continue or further your conversation. Thank you. Appreciate it. And im still waiting for the agenda and any other handouts. I was saying a moment ago. David pell again, my concern is when the recommended rate order is a bit of a moving target. I think publishing the prop 218 notice in the past has sort of frozen the process at that time to allow the public to respond to the draft or proposed rate order at the time was the directors recommended order and report. Given the number of changes and the fact that there were things in the works, it is difficult, in my view, for any member of the public to appropriately respond to what is that moving target. And as i was alluding to this idea of a rate change or no rate change on october one of 2023 and october 1st of 2024 was already in the works. The idea of making further changes on january 1st of 2024 is a brand new idea that i had not seen until this past friday. And so it is near impossible for the public or effectively impossible for the public to address that and whatever else is in the report that underlies that. So in the future, im encouraging you to have a process where the staff recommendation, whatever it is, is frozen in time to allow people to meaningfully respond to that. In addition, if theres going to be an ordinance to clean up the code setting some of these deadline or adjusting some of the deadlines that are in the code to provide for a deadline for written objections, i think would be in order, because right now i dont read that there is such a deadline. And i could have walked in today with a written objection prior to or at this hearing that i think you would have been required to address. And i think thats a problem in your comment. Thank you. Thank you very much. Any other members of the public in person who would like to add their comments , seeing none. Why dont we check online . Theres no online callers in the queue. Thank you very much. Well turn it back over to jay. Okay. So the last topic is around response. Who made comments around Service Issues of the response . Who made comments around Service Issues . The most common was request for a lower minimum level of service with 11 respondents. So this is request is for smaller bins at lower rates. At this time, we dont recommend allowing a lower minimum level of service. Our understanding is that smaller bins do not necessarily lower the cost of service and that they would potentially require Capital Investments because lift arms cant easily accommodate the smaller bins. The next most common cited issue was around Collection Service. This was mainly missed pickup or changes the consistency of pickup. At this time we dont have recommended changes to the Collection Service operation. Weve included new metrics to help track Operational Efficiency as well as better monitoring and reporting on customer communication to help us better understand these issues when theyre raised. Three respondents cited issues with billing. The rate order includes funding to their system to improve Customer Support and billing, to respond site issues with abandonment serials. Ratepayers were concerned about abandoned materials not collected from sidewalks in a timely manner. This order included, includes funding that would increase capacity for band and materials by about 20, as well as metrics and reporting for better monitoring of performance. Two respondents cited issues with bulky item recycling ratepayers were concerned about. Bulky item recycling not being collected in a timely manner or collected at all. Weve included metrics and reporting for this program to monitor performance. Weve also reinstated the we can clean up events which would give ratepayers another opportunity for bulky item recycling. And then one respondent cited issues with public receptacles collection, meaning around overflow. With this rate order, weve also included an increase of 20 capacity increase for that service. So that constitutes our consideration of the objections due to Service Issues. And so well invite members of the public to comment on this if they wish. Thank you very much. Are there members of the public in person who wish to comment on the service component. Seeing none, why dont we check online. There are no comments online. Thank you very much, jay. So the last topic for this agenda item is the report itself. And so well summarize, ill summarize the. Components of the rate order and the changes that the board directed us to make in the last hearing. So the refuse rates boards rate order sets rates to no change at the beginning of rate year 2024 and october 1st, 2023. Then on january one, 20, 24, three months into the rate year, the rate order will increase rates by 1. 33 so the average annual, if you look at the cumulative change below that 1. 33, thats a 1 cumulative 5 change for that rate year. The rate order would further increase rates by 2. 32 in rate year 2025. Thats the furthest column on the right. So that would amount to a cumulative 3. 68 to year increase. This is lower than recology is proposal of 6. 15 cumulative rate increase and the refuse Rate Administrator proposal of a 3. 92 cumulative rate increase. What is included in this rate order are seven items here. One maintaining Service Levels as we estimated that 3. 4 increase in rate year 2024. In terms of general costs to service an additional 1 in rate year 2025. So this accounts for things like negotiated salaries and benefits and growth in other costs to operations. Were also enhancing Service Levels and a number of areas abandoned, most notably abandoned materials and public receptacles, both programs were increasing capacity by 20, adding two new drivers to additional routes for public receptacles, two new drivers and additional zone for abandoned materials collection. Were also enhancing some operational and administrative, some administrative costs. So weve included two relief drivers to ensure adequate and regular collection. Weve included two cardboard pickup drivers, additional supervisors and managers to support the new drivers, improve safety and efficiency and collections and maintenance, and then analytical support to address the new reporting requirements. One of our other goals was to ensure safety. Three additional drivers were provided to establish 2 2 route as well as new supervisor for increased supervision, particularly in the tenderloin area. Improving contamination diversion. Weve included an organics pre processing investment, trash processing pilot not included here on this tables. Also additional waste zero fte and replacement of six onboard cameras to provide us the ability to evaluate the contamination mitigation program. We built in some flexibility with a Program Reserve to allow for city requests beyond this rate order finding cost savings where we look for cost savings were places where we would not Impact Service delivery. And then lastly, is improving reporting. So increased reporting requirements for Greater Transparency and tracking of operational and financial performance. In terms of the Rate Adjustments made, the refuse rate board was in concurrence with most of the refuse Rate Administrators proposed rate order. So this includes five major changes. The refuse rate ministry made to recology rate change requests. So the first is around pension costs, which were adjusted so that annual contributions aligned with target normal costs resulting in a five year fully funded target. Corporate allocations 5 cut in corporate allocations, resulting in a savings of 761,000 in rate year 2024 and 70 784,000 in rate year 2025. Programmatic reserve. This would establish a reserve account to allow city departments to make requests when needed beyond those established in this rate order. This would reserve would be funded at 761,000 and rate year 2024 and additional 784,000 rate year 2025. The balance in account which would ensure that any unanticipated savings or surplus revenues are used to offset subsequent years costs and that unanticipated expenditures or revenue shortfalls are smoothed over time to mitigate risk rate shocks. This balancing account will have a 50 adjustment of over under allowed profit, and then the zero waste incentive account was suspended. We found that this is not correlated with landfill diversion for at least the last ten years. So the rate board made two major requests to two major programmatic changes to the proposed rate order. One is a contamination enhancement, the refuse rate, administrative schraders proposal had no new investments to the contamination program. The refuse rate boards request in this rate order will include the replacement of six onboard cameras and would include one new waste zero specialist to support additional outreach for low diversion accounts and to monitor and study the impact of the new Camera Technology and identifying contamination. This enhancement is also expected to generate additional contamination fee revenue. The net impact is a Net Operating Income increase of 22,000 in rate year 2024 and 18,000 in rate year 2025. So we essentially expect the new revenue to cover the cost of the new cameras and the new fte with we can clean up this rate order will enhance the original proposal to include three bin Revenue Source separation at the event. However, the rate board also reduced this program from 22 events that would be two events per district to 11 events per year, which would be one event per district. So this results in a net savings of 194,000 a year, 2024 and 201,000 in rate year 2025. And just to clarify on that piece, its not a reduction in the current level in prior years, it always has been 11 events. So just to be clear, its a difference from what was proposed, but its not a difference from status quo of what people experience in the community. Yeah, thats correct. The refuse rate board ordered two other major changes. One is a rate setting delay trigger. So if the next rate setting process is not initiated by february 1st, 2025, our office will request the refuse rate board to convene to consider an october 1st, 2025 cost of living adjustment. So this provision would have no impacts on rates. The second is to establish a zero waste capital reserve. So this would support future Capital Infrastructure investments, prioritizing, prioritizing zero waste goals. So during the proposal would fund the capital reserve one time at 1 of net revenue and rate year 2024 to begin january 1st, 2024. And then one other change was not discussed during the hearing, but it was a Rate Stabilization fund update since our Office Issued our proposed rate order, the Rate Stabilization fund 2022 balance was updated, the balance of the fund was increased from 230,000 by 230,000, from 4. 25 million to 4. 84 million. The refuse rate boards rate order. Thats presented here today takes into account this balance increase and applies the entirety of that increase to rate year 2025. So that would lower effectively lower rates. Um, one of the questions that came up during the last hearing was around public receptacles pickup, whether or not it was sufficient for the need. So this rate order includes additional investments in public receptacle pickups, two new drivers trucks, two new routes. This adds to existing ten drivers and trucks for a total of 12 drivers or trucks. This enhancement allows recology also to modify routes across the same area to include two new routes to existing ten routes. So this effectively increases the capacity for public receptacle pickup by 20 for all seven days of the week. In addition, the rate order memorializes Service Level agreement where recology will pick up all over full bins when notice places on time performance standards for both censored and non censored notices up to a certain number of pickups and establishes maintenance requirements, clean up service around the bins and reporting requirements. So ill talk a little bit more detail of the Service Level agreement that weve modified since the last hearing. So the recology refuse rates administrator in the department of public works has come to agreement on public receptacles collections, Service Level agreement. And so this provision includes pickup requirement for 241 notices per day. Thats 87,825 notices per year. For those notices. There would be an on time performance of within two hours for full or overflow non censored notices for bins with sensors. There will be an eight hour notice when the sensor notifies recology when its at 75 capacity, theres no cap on pickups, but any notice in excess of that 241 notices per day or 8725 per year recology will not be held to those response time, but will continue to pick up those overflow bins. In addition, weve included memorial agreement around debris cleanup, so materials, bag, box, bundle or contained will be collected within a five foot radius of a public receptacle. Can maintenance liners will replace for all city cans. In the previous agreement, it was only for the existing cans, not new cans. Doors are currently being replaced by outer receptacles with outer facings of concrete. And so that will continue the reporting requirement includes pickup numbers on time performance tons, as well as tracking of the replacement liner and door use for maintenance. Okay. The in order to be responsive to the boards requests, we also asked recology look at areas where we may include additional investment to support cleanliness of public right of way. So this is a broad outline of where we could possibly include additional investment and its focused more around abandoned material sweeps under recology advice, this would probably be the best use of funds in terms of street cleanliness. The annual cost would be around 640,000. So it would implement two additional abandoned waste sweep routes. Theyd be deployed to collect materials in highly impacted areas and address urgent material issues run seven days per week, sweep routes to run it, create a pond times estimated to be 12 to 8 30 p. M. To provide afternoon coverage at impacted areas such as neighborhood, commercial or corridor areas. Sweep routes to operate and sweep fashion and select neighborhood corridors, including but not limited to bayview, soma tenderloin, chinatown mission, excelsior, castro, sunset in richmond and it assumes using existing trucks for this rate period in addition to this, theres not a slide for this, but it was discussed at the last hearing. The Environment Department requested to add back funding for mailers to do outreach to customers to augment our contamination program. This estimated cost is around 200,000. So so given these potential enhancements to whats already in front of the board, our Office Thinks there are two good options. One is to adopt the rate order as is evaluate these programs over the next 18 months or so to determine if additional investment is needed. And we can do that in the next rate setting process. The other option would be to place this proposed amount in the programmatic reserve. In year two. We can evaluate these programs for contaminate and for street cleanliness over the next nine months or so. And determine if additional investment is needed. If so, we can draw down from the programmatic reserve to cover those needs. But this would effectively increase the year two rates. Our recommendation in the second option is to include 750,000 in the programmatic reserve in year two. This would bring that programmatic reserve in year two. The cost from it would bring that reserve cost from 7 to 884,000 to about 1. 5 million. And that would increase the rates in year two from 2. 32 to 2. 55. So this would amount to a two year cumulative increase of 3. 92, which still is keeps us in line with the original refuse Rate Administrators proposal rate increase amount. That concludes our presentation. If there are any additional questions about this, if not, i would invite the departments and recology. Go ahead. So if i understand the difference between proposal one and proposal two would essentially just wed approve it. Youd have it on programmatic reserve and you can implement those items in year two if you deemed it necessary. Three as opposed to waiting an additional period of time to just evaluate during this time to include it in the rate setting process several years from now. Correct thats thats correct. And then if the funds from the programmatic reserve arent used by the board in the next rate cycle will have the option to either roll it over, roll all over the programmatic reserve, use it to lower rates or put it in a capital reserve fund. Okay. Thank you. Um so ill invite the department of public works and the department of environment and then recology to make comments. Good afternoon, chair chu, general manager herrera. Im rachel gordon, the director of policy and communications for public works. So theres been a lot of good work done on this. I want to particularly thank the Comptrollers Office and the City Attorneys office for their work on it, and members of the public for their input. Public works does support this agreement as it is, as jay stated, especially the Service Level agreements. We think for the public and the public right of way, we will see benefits with abandoned materials, pickup , with the servicing of the public garbage cans in particular, and going for the proactive routes that are happening with in the bayview in particular and other neighborhoods where theres a lot of illegal dumping. So thats our support for this. If you have any questions, please let me know. Ill go to the department of environment. Theyre here. On. Good afternoon. Refuge Board Chairman and member dennis herrera. Jack macy is your Waste Program manager with the Environment Department. The one issue id like to address and have, i think, a slight adjustment to what the administrator addressed was the issue that weve talked ive talked about before, which is around the outreach to residents, the printing and mailing to all residents over the two rate years, Single Family and then multifamily. And i want to say that this is a practice, this is a best management recognized best management practice that many jurisdictions follow, that have really good participation. And weve weve done it in the past , but we are really lagging behind in recent years. You know, given the resources that are available. I also want to state that the state of california through calvert cycle in the implementation of sb 1383, their regulations require jurisdictions do annual outreach , and theres some flexibility there. But its a recognized best practice to be able to have a printed guide brochure that residents can see. And theres a lot of information, key information, both in terms of participating in the three streams, as you know, the recycling, composting and trash , but also other programs like bulky item collection, battery collection and so forth. So i understand from ecology, you just heard from jay, thats around 200,000 a year. I understand their their exact calculations about 232,000. And i understand some of the options. What i just heard was, well, we could do it out of the programmatic reserve and maybe it would be implemented in the second year. But as i said, we really are behind on this. And so were really strongly requesting that those funds be in the rate so that recology can do this starting in the next rate year. So basically doing it each rate year to cover all residents over that two year rate year and then thats something that we really should be doing. You know, each resident should be getting this kind of a guide, at least every other year. And i also just will repeat what was i mentioned before that we have a lot of turnover on the order of a third of residents every year turning over. So really, this is a real weak point in our current programs and were really seeing a significant need to better educate the residents with with this comprehensive guide and this very small investment. I suppose we have an option of taking it out of the programmatic reserve in the first year, but our request would be that it would be in the rates going forward, and thats just for the printing and mailing. We have inhouse Graphic Design capability to do the design work. So thats really the only, you know, ive talked about a lot of issues before and understand where the rate board is sort of hoping that theres an opening here to address this. One last issue to kind of help bring our programmatic outreach up to a minimum requirement, just a quick question, save without having this funding, would there be any other Funding Source to be able to cover this mailing, this annual mailing . Yeah. I mean, well, we dont have it in our budget. I mean, so the only option i see would be to use the programmatic reserve and im not entirely clear if thats an option. The first year because it sounds like it may just be the second year, in which case were just losing another year. Is this funding . Is this program and outreach completed by recology or is this done by doe . Well, so we work with recology. And in putting together the content and doing all the Graphic Design inhouse and then their role, which theyve done in the past. But not for a good number of years, is to, to is to print and mail. And they have the mailing lists of their customers. So thats kind of a logical role for them. Thank you. Thank you. I should note that there is, i think, 768,000 in programmatic funding year one that they could draw down from, i think the cleanest in terms of adding back funds would be in year two, in terms of how we would do this operationally. So theres funding in the first year if we want to draw down from that to address the mailers cost in the first year and then well have more in year two. So if i understand and i dont know if its you or mr. Macy, but i heard mr. Macy say a couple of things, that were behind the april and we havent done this. These notifications before. And id like to know a little bit of the history of that. Number two, i also heard him say that he once you gave an initial mailing, he would like to see that happen every other year. So in theory, if you drew down this year on the existing programmatic funding, you would then in the programmatic reserve, you would do in a second or so, you get two two years right off the bat of communications. And then we would see what happens. So i guess it seems to me, madam chair, that item b or lets just say option b as laid out by the Comptrollers Office, should, you know, with the existing funds that we are there and was being proposed should give more than enough to give the communications that mr. Macy outlined. Thank you. Actually, i did have some clarification questions for you, jay, because i, i dont quite understand it just yet about what the two options are. So i would just ask you to reiterate. So the first option, just to say is that based on the corporate allocation, the programmatic reserves already has close to 800,000 in balance that we would expect for both years. And one option is to leave the rate order as is not increase any allocation to accommodate this mailing and just draw upon that corporate allocation redesign to programmatic reserve reserve. Thats the first option, correct . Yes and then can you explain the second option . The second option was really partly to address, if we wanted to do that, as well as additional investments in cleaning of the right of way. And so in the kind of broad, Broad Strokes of the proposal that we worked with recology on that would be an additional 640,000 investment. We feel like that would draw down a little too much from the programmatic reserve. So our suggestion was to in the year two to augment the programmatic reserve in the second year by additional 750,000. Where would that come from . It would come from the rate so would increase the rates in year two back to the level that the Rate Administrator first provided. Thats correct. Yeah still a little less though, correct . Right so 750,000 would get us exactly to the original proposal if we but we can also bring it down from that as well. I think from from my perspective, i appreciate number one, i just want to say thank you to you and to the team for really helping to establish the Service Level agreements, because i think thats something that is really important for all of us to make sure that we memorialize what is expected in terms of service delivery, but also the zone in which theyre picking up trash next to trash cans, the maintenance of our cans, what the public receptacle pickup levels should be and at what time period. So i want to thank you for that because i think thats helpful. I think given the fact that our current rate order already includes an enhancement of 20 for public receptacle pickup seven days a week, and it does also include additional funding for abandoned materials pickup. Im not at this moment inclined to make that investment of the additional 600,000, but i do think that because we have a programmatic reserve that if we determine in the course of this two year cycle that the levels are not enough, were able to draw upon that to be able to enhance. And weve got a running start given that weve got a proposal in front of us that provides one one place to start with, it. So im not as concerned with adding additional funding for the 600,000 at this moment. Of course, i welcome board member herreras comments to our thoughts on that, but i am interested in what we do with the 200,000 for outreach. I wasnt aware that we didnt have additional funding or that that wouldnt be covered. I think as a the compelling piece is that if San Francisco over time sees a transition in people who live here, youre just simply not going to have the same information. And so if a one third of our residents and folks are transitioning or moving, its really important for us to continue to make sure people are aware of the programs that are available to help improve recycling. Bulky item pickup, all of our zero waste goals. So i think because of that, were really talking about a price tag of about 200,000 or so. Okay um, and im wondering because we had we had found some savings associated with returning the district cleanups to the existing base level, whether we can just simply apply that to the programmatic reserve. So i think thats about roughly two, 200,000 or so. It would still be below the Rate Administrators, cumulative rate increase over two years, right . Thats correct. And well have to work on if thats something the board wants to do. Well have to work on the amendments here and we can do the calculation. Now so i did i did want to give recology an opportunity to make comments as well before we go into full discussion. Here is. Good afternoon. Chair chu and board member herrera. My name is evan boyd, Vice President and regional manager for recology San Francisco. We have just a few remarks today, but before i get to them, id like to thank the ra team, especially jay liao and ben becker for their hard work throughout this process. Id also like to thank our contact acts at public works and sf environment for their collaboration. Recology looks forward to continuing its Long Standing Partnership with San Francisco and we are committed to delivering Excellent Service to San Francisco. A competitive rates and we think this rate order helps recology accomplish that goal with that said, wed like to bring a few items to the reports attention this afternoon. As with many rate setting processes, we use projections to set future rates. We know that actual results wont match. Exactly and some give and take here is expected. We do think that there are several areas where the risks of being below our two year projections are greater than usual. Wed like to highlight these areas briefly as a way to identify components of this rate order that may need to be revisited in the next rate cycle. The first is the projected growth rate used in the rate order. This includes a 2 Revenue Growth assumption for both rate year 24 and rate year 25 based on 5 volume growth, which was what what was used in the citys fiveyear plan. We are hopeful these growth assumptions will be achieved, but we do think there is a substantial amount of uncertainty around these numbers given recent announcements of business closures and departures as news of Downtown Business closures, tech sector layoffs and increasing commercial vacancy rates lead us to believe that 2 growth may turn out to be overly optimistic. Second, using a fixed dollar funding mechanism for several of the reserve accounts as opposed to utilizing a percent of revenue funding methodology for these accounts could prove to be problematic. The rate order requires funding the impound account cap, reserve fund and programmatic reserve at fixed dollar amounts. Rather than funding these accounts based on percentage of actual revenue earned, as is done in many other jurisdictions. This means that if Economic Growth does not occur as expected, a risk we have previously mentioned and recology earns less revenue than projected, the funding requirements for these accounts will not scale appropriately and adjust with actual results. This would result in a deficit to the balancing account and ultimately would have a negative impact on ratepayers and future rate years. Lastly, i want to talk about rent at pier 96, the recycle central facility operates at pier 96. Our multi year lease expires at pier 96 this year and we are currently in the final stages of negotiation with the port of San Francisco for a new lease. When we submitted our rate application back in march, we used our best estimates for rent expense at pier 96, but we did not have the final terms of the lease at this time or at that time unfortunate due to a late change during these negotiations, the port is requiring an additional 292,000 per year in rent additional rent expense that was not known during the submittal of our rate application and an expense which is not included in the current rate order. These are the specific areas of the rate order that we wanted to speak with you about this afternoon. Once again, we would like to thank the r. A and his team for their collaboration during this process and we would like to thank the board for their consideration. We look forward to continuing to deliver Excellent Service to our and to our continued partnership with San Francisco. Thank you. So i think that concludes the presentations. I believe we go to Public Comment now. Thank you very much for the presentations and for the comments. Well open this item up in general for Public Comment. Are there any members of the public who wish to speak on this item . Number three, in public, in person . This is the substance of the recommended rate order, correct. Could i maybe have three minutes on that . Its agenda. Its up to the chair. During the meeting. Two minutes, please. Ill be as quick as i can. Okay. David, people, the fundamental flaw that i think ive identified here is on the notice for todays meeting and the proposed rate order. The notice fails to include the required language under administrative code. Section 31. 08 f as to the sequa approval action that this is the approval action under chapter 31 and the appeal rights that members of the public have to the board of supervisors with regard to exemptions. In addition, the exemption determination made by the Planning Department was dated june. Ill pause. Ill i really need to be heard. You can confer with counsel after and ill need some additional time to make up the seek would determination made by the Planning Department in case number 2020 3005364 env was dated june 13th, which was prior to the issuance of the draft rate order or the proposed rate order that was issued. This past friday. So i believe that the proposed rate order should be resubmitted to the Planning Department to ensure that the uses of the funds under the rate continue to comply with the applicable code. Section 2188 and sequel guidelines section 15 273. In order for that determination to be current based on the latest recommendation, there are a number of other items that i could speak to, but i certainly cant. Within two minutes ive suggested some edits to the rate order and i wont. Ive suggested some. Thank you. Are there other members of the public in person who wish to speak on this item . Seeing none in person . Why dont we go to online . We do have one, um, online comment. You can begin your comments now. Hi. My first comment is ive called into this several times over the course of the meeting and this is the first time ive been able to speak. So something has been wrong with your system and its likely that a lot of people that would have wanted to call in before this meeting were not able to. Im not sure why it worked just now and it didnt the rest of the meeting. My comment is i like that the use of a rate increase would be applied towards keeping San Francisco streets clean. But im not overall in favor of a rate increase. I was paying 75 and 2718. Now im paying 140. Thats a huge increase. Its Something Like 85. And also when the gentleman earlier was saying only Something Like 275 people are again at the rate increase. I think thats a little bit ridiculous. Theres no way that that small of a number of people are only against a rate increase. I think that you need to make your communication method to the public as far as how to protest the rate more clear. I personally dont remember receiving that. Im a new homeowner, so perhaps you could explain that process better. If you want to have a more representative idea of how many homeowners are against a rate increase. Thank you. Thank you for your comment. Are there any other speakers in the queue. We dont have any more speakers in the queue. Thank you very much. Given that we will close Public Comment on this item, i believe that this item is open for discussion and also possible action, but i believe also that our council would like to request a short recess for us to be able to confirm, make sure that we have all of the legal noticing correct. So before we go into the recess, ill ask board member herrera if theres any other comments or questions that you might have at this moment. Not at this time. Okay. Given that, um, about how much time would you need . Okay, why dont we do a 15 minute recess . Yep come back at madam clerk, are there any members of the public online who would wish to comment on that . Moderator do we have any callers in the queue . There are no callers in the queue. Thank you very much. Madam clerk, were going to now open this up item up for a Public Comment on prop f written objections or comments for an instance where a person would like to speak about Service Issues. Are there any members of the public who wish to speak online on Service Issues. There are no callers. Thank you very much. Given that we will close Public Comment on that and then colleagues, if i can invite our rated administrator back up for just a minute. Uh, we i believe that we are prepared to provide guidance to the Rate Administrator with regards to the final rate order. We did speak prior to the recess about the potential of providing additional funding into the programmatic reserve in order to allow for the possibility for the department of the environment and ecology together to be able to provide annual notices to the accounts in order to provide information about the types of services that are available for waste pickup and other environmental programs. We spoke also about the possibility of providing additional flex ability in case the city would want to require Additional Service in the future from recology and so i think that one of the things that we would like the Rate Administrator to go back into consider is to take a look at the amounts that we were able to save within the limits of what theyre Rate Administrator notice and the level of increase. So not exceeding the Rate Administrators proposal and to potentially take a look at putting that additional balance into a programmatic reserve for those purposes. Is there anything else that you need in terms of direction on that in that front. Okay and then given that the board has made some comments, although most of these items are requested, some changes of the Rate Administrator, most of these areas we dont believe would trigger any additional review. But in the abundance of caution, we do want to direct the Rate Administrator to go back to the Planning Commission just to ensure that the final rate order that we are going to potentially vote on does is eligible to not have sequel review. So thats the next direction that we want to provide to the Rate Administrator. Anything else you need on that element . No. Okay. City attorney uh, this is deputy City Attorney. Just to clarify. Chair chu, the planning determination might be possible just from the Planning Department rather than Planning Department. Clarify apologies. So just to clarify the previous action that our Rate Administrator did conduct was that we went to the Planning Department to receive a review and assessment about whether or not applied at the time that the Rate Administrator put forward their proposal. The apartment had indicated that a sequa exemption applied or that it would not apply in this situation. What we are asking the Rate Administrator to do is based on the boards change to the rate order to go back to the department to also complete that to ensure that it continues to be exempt from sequa review. Okay. Thank you. To the City Attorney for that clarification. Okay. So given that colleagues, i think we are going to continue item number three then, and so do we have a motion to do so . So moved . Okay its moved. Madam clerk, can you call the roll on that . Ill second it. Chair chu. Hi remember herrera . I thank you very much. That item is now continued to our next meeting. All right. Were going to reopen item number two. Given that we also again had noticed that there was difficulties with Public Comment on this. And so im going to ask if there is a motion to reopen or rescind the vote on item number two. So moved. Okay. Ill second that. Madam clerk, can you take the roll on that chair chu i member herrera. Aye. All right. So that item has been or that vote has been rescinded. Lets open this item up for Public Comment now online. Are there any members of the public who wish to speak on item number two online . Moderator do we have any callers . We have no callers in the queue. Thank you very much. Given that we will close Public Comment online for item number two. Now, do we have a motion to approve that item . So moved. Okay, thats been moved. Ill second it. Can you please take a roll on that . Chair chu, i member herrera. Hi. All right. That item is passed. Well move on to item number four, which is a discussion, discussion, possible action item, opportunity to propose future agenda items with discussion and possible action by the board. I dont have any additional items , nothing here. And no additional items. So with that, well open Public Comment up. Are there any members of the public who are in person who would like to speak on item number four . David, people very briefly, on one of the items that you just mentioned, i dont know if this is a possible item for discussion by this board in the future as to mailings to account holders or residents. Im happy to talk with jack macy or others after this meeting. I think there are different audiences for mailings, some of which i think are captured with bill inserts, but those only go to those who receive paper bills. I think theres again, theres a different audience with those who actually pay bills and have accounts as opposed to residents. There are many residents in the city that receive service but dont pay a bill because they live in a rental unit or a multiunit building. So i think we should be careful about mailings to those separate audiences. Bill related things i think should go to account holders and Service Related things. I think should go to residents where possible. And i would use that opportunity to explain to some extent what goes in which bin bulky item collection, the 11 district events, you know, kind of the panoply of services that recology provides as part of the various programs that are funded by the rate. So im happy to follow up on that with staff and perhaps thatll come back to the board at some point in the future. Thanks for listening. Thank you very much. Are there other members of the public in person who wish to speak on this item . Number four, seeing none. Lets move on to online Public Comment. Any members of the public online who wish to speak on item number four, we have no callers in the queue. Thank you very much. Given that will close Public Comment on item number four, this does not have an action item at the moment and so well move on to item number five. This is an opportunity for the public to comment on any matters within the boards jurisdiction that are not on the agenda. So not items that are on the agenda. Any members of the public who wish to speak on this item. Number five in person. Hello it looks like im the only one representing the public, so im going to be anonymous resident of San Francisco. I would first like to make a suggestion and then talk about the current situation. The best solution to the waste problem is extended producer responsibility or epr program. Well, establish it in europe, canada, japan, south korea and even in many developing countries. But not in the us. It makes the manufacturer responsible for the entire lifecycle of the product and especially for its takeback recycler and final disposal. Epr is based on the polluter pays principle by moving the cost of managing waste from local governments and consumers to the producers, most importantly, it will cut public spending on Waste Management producers will pay collectors that will provide pick up Services Free of charge to residents like in san diego for over 100 years, taking back products encourages innovation, redesign and reuse, reducing overall Waste Management costs for collectors like recology while raising its recycling revenue. Thanks to increased volume of recycling, collectors will negotiate their rates with industries delineating the government from private sector producers, importers, manufacturers and brand owners are given the legal responsibility for collection, recycle and end of Life Management of materials, freeing the city and its funds to city not Waste Management. Adopting epr might take a while in the meantime, despite zero waste policy, residents who do achieve it are forced to keep paying recology for nothing. Unlike other utilities with low income programs that reward customers with lower rates for less use, recology scrapped ratepayers who produce little or no waste and low income households are paying the same high fees, subsidizing others. Thank you very much for your comments. You can leave your comments with us if youd like any other members of the public who wish to speak on this item. Number five in person. David people i think the last time today i agree with the previous speaker about epr. I did have some earlier edits on your resolution on the code of conduct. Its just to change the date, but ill pass that up for the file and i did just want to raise a couple of minor brown act concerns that perhaps can be addressed in future notices. The agenda for today just says hearing room 408 city hall. I would add the address one carlton be good to place there is reference on page three to explanatory documents, but theres no parenthetical for each item as to the specific explanatory documents. Draft rate order proposed resolution, draft rate schedules, that sort of thing. Thats standard elsewhere. Im concerned about combining items into to what ended up being a very large item three today. I agree. Acknowledge that there are different ways to handle that. But i would encourage as much as possible where there are separate and able items to handle those separately. Again i understand there are different ways to address that. And just finally, as to Public Comment time, i would encourage chair chu. To consider 2 or 3 minutes the floor, not the ceiling. And depending on the number of people interested and the complexity of the item to consider allowing a little more time where possible and i will try to be as concise as i can. And with that i say thank you. Thank you for your comments very much. Thank you very much. Are there other members of the public in person who wish to speak on Public Comment . I would like to finish you. You actually have only one instance to do so for this item. And so please do provide you. Its a different item though. We are on item number five. Still, im sorry, we are on item number five. Agenda item number five. Each member of the public has two minutes allotted to speak on each item. Thank you. All right. Are there other members of the public in person who wish to speak on item number five . Okay. Why dont we move to online Public Comment on item number five . Moderator do we have any we have no callers in the queue. Thank you very much. Given that we would close Public Comment on item number five. And then i think this brings us to item number six. We are adjourned at 240. Thank you. Long it was in fashion, oshaughnessy water system has been sustainable. In addition to providing water for the bay area, it also generates clean hydroelectric power to run city buildings and services. And more recently, some San Francisco homes and businesses. Satellite electricity is Greenhouse Gas free, so we see a tremendous benefit from that. We really are proud of the fact that, weve put our water to work. Even with the system as well coon received as hetch hetchy, Climate Change has made the supply of water from the sierra vulnerable. And requires new thinking about where and how we use water. We have five hundred million gallons a day of wastewater being dumped out into San Francisco bay and the ocean from the bay area alone. And that water could be recycled and should be recycled for reuse through out the bay area. Were looking at taking wastewater and reading it to drink watering standards. Were also looking at our generation and looking at onsite water reuse looking at the technology and strategies we have available to us today. The very First Recycling plant in the state of california for landscape irrigation was built in San Francisco. Weve just developed a new recycled water plant in the ocean side wastewater facility for irrigation purposes in golden gate park, lincoln park and the panhandle. A century ago, San Francisco built a dam to create bunched znswer of fresh water to ensure the future and ensure the taps will flow for future generations, it will take as much vision when it reflects a fundamental change about how we think about water. I think we recognize theres going to be change in the future. So were going to have to have the flexibility and the creativity to deal with that future as its presented to us, its a matter of how to see it and say, okay, lets make wise use of everything we have. This oshaughnessy centennial moment is made possibbbbbbbbbbbb good afternoon. An announcement for asl viewers. Due to the importance of showing unobstructed videos, we ask that our asl viewers use the webex link provided in the description of the live stream. For viewers who would like this town hall meeting to be translated, please click on the webex link in the live stream description and click the icon in the bottom left corner to select your preferred language. Good afternoon. Were here today for a virtual town hall regarding an officer involved sot