Refuse rates board adopts amended 2026–2028 rate plan after protest tally falls well below threshold

San Francisco Refuse Rates Board members voted unanimously June 25 to adopt an amended three‑year refuse rate order for rate years 2026–2028 after the refuse rate administrator reported that written protests from property owners fell far short of the 50% threshold required under Proposition 218.

The vote followed a public hearing in which the city’s refuse rate administrator, Jay Liao of the Controller’s Office, presented the administrator’s revised recommendation — which reduced Recology’s initial first‑year increase request from 18.18% to 12.59% — summarized hundreds of Prop F objections and reported the tally of Prop 218 property‑owner protests. “Our proposal brings that first year down from 18.18% to 12.59 percent,” Liao said during the presentation.

Why it matters: Proposition 218 (referred to repeatedly as “Prop 2 18” in the hearing) allows property owners to file written protests that can block rate increases if a majority of property owners affected submit timely protests. The administrator reported that the city mailed notices to 198,663 residential property owners and that a simple majority would require 99,332 protests. The administrator’s tally — including mailed protests, in‑person submissions and other counts — did not approach that level, allowing the board to proceed with the amended rate order.

In the hearing, the refuse rate administrator described the office’s validation work and the changes that drove the recommended reductions. Liao said the administrator’s review included 59 formal information requests, 94 detailed schedules, a performance audit and third‑party accounting procedures. He described program funding that would remain in place, including weekly curbside collection and household hazardous waste collection, and new or enhanced programs such as free mattress and wood recycling and expanded outreach funding. He also said the board’s adopted cost controls and monitoring changes would strengthen oversight of recoverable costs.

Public comment was extensive and sharply divided. Dozens of small property owners, landlords and representatives of tenant and owner coalitions urged the board to reject or reduce any increase, citing rising insurance, utility and living costs and arguing Recology operates as a de facto monopoly. Aaron Peskin, who identified himself as the author of Proposition F and a ratepayer, urged more stringent cost reductions and a longer rate horizon. Other speakers, including members of environmental groups such as Sierra Club and supporters of the Department of the Environment, urged the board to fund the city’s 0‑waste efforts and related programs.

Tally and legal threshold: The administrator reported the following tallies in public testimony: 252 in‑person written protests, 974 mail‑in protests and 36 electronic protests, plus 4,298 return‑to‑sender envelopes. Counting return‑to‑sender envelopes and other submissions inclusively produced a reported total of 5,560 Prop 218 protests. The administrator also reported 820 Prop F written objections or comments (732 described as objections to the increase). Even with inclusive counting, the administrator said the protests represented about 3.17% of the 198,663 residential property owners — far short of the 50% (99,332) threshold that would prevent the board from approving the rates.

Board actions and amendments: The board approved a series of motions during the meeting to refine the administrator’s proposal and to strengthen oversight. Key actions the board approved by unanimous roll call (3‑0) included: - Acceptance of the refuse rate administrator’s reported count of Prop F objections and Prop 218 protests and a finding that the protest threshold under Prop 218 was not met. (Chair Chiu, Member Herrera, Member Boudre — all voted Aye.) - Adoption of technical adjustments and program modifications recommended by the refuse rate administrator that marginally lowered rates (the administrator described these as a roughly 0.24% first‑year reduction from his prior draft of the recommendation). - Suspension or substantial reduction of the proposed 0‑waste capital reserve in this cycle after updated information about federal/state timing and a Port Pier seismic study that reduced estimated capital needs; the administrator said the change would lower rates in years 2 and 3. - A partial add‑back of Department of the Environment items (a 0.5 FTE on toxics reduction to be funded on the rate and a $153,000 port rent item on fund balance), while declining larger requested add‑backs that would have further increased rates in the cycle. - Strengthened cost‑control rules: the board approved lowering select variance review thresholds and maximum caps for non‑operational cost centers (payroll/related, contract services and administrative costs) — from a 5% review threshold to 3% and a top‑end cap from 10% to 7% for those categories — to give the city tighter controls on recoverable costs.

The board then voted to adopt the final amended rate order resolution as modified during the meeting. City staff advised that because the Prop 218 notice covered only a three‑year cycle, the board could not lawfully set rates for additional years without issuing a new Prop 218 notice and a new 45‑day protest period.

Quotes from commenters and stakeholders were mixed. Aaron Peskin, speaking as a ratepayer and the author of Prop F, said the proposed nearly 30% increase raised “serious concerns, particularly around transparency, economic impact, and alignment with the city's long‑term planning goals.” Jay Liao, the refuse rate administrator, described the process and validation work that underpinned the recommendation and framed the adopted package as preserving service while adding regulatory safeguards.

What the adopted order does not do: The board’s action does not give final endorsement to Recology’s full original request; it adopts the refuse rate administrator’s adjusted proposal with the board’s amendments and the new regulatory and reporting requirements. The board also affirmed that the Prop 218 protest threshold was not met so the board could legally adopt the rates at this hearing.

Votes at a glance: - Motion to accept the refuse rate administrator’s reported count of Prop F and Prop 218 submissions — Outcome: Approved (3‑0). Roll call: Chair Chiu Aye; Member Herrera Aye; Member Boudre Aye. Legal threshold (Prop 218 protests >50% to block rates): not met. - Motions approving technical adjustments, program reductions (including suspension of the 0‑waste capital reserve) and strengthened cost controls — Outcome: Approved (each item passed by unanimous roll call 3‑0). - Motion to adopt the amended rate order resolution for rate years 2026–2028 (as modified in meeting) — Outcome: Approved (3‑0). Roll call: Chair Chiu Aye; Member Herrera Aye; Member Boudre Aye.

Next steps and context: The adopted rate order includes expanded reporting and service‑level agreements intended to give the city stronger tools to monitor costs and enforce performance. The refuse rate administrator and board said those regulatory improvements are intended to reduce the risk of future material mistakes and to make the rate‑setting process more transparent. City staff also noted that any substantial changes to the multiyear horizon for rate setting would require a new Prop 218 notice and another 45‑day protest window.

The hearing record includes extensive written objections and letters from coalition groups; the administrator and board recorded that many protest letters came from groups representing tenants, property owners and community organizations. The board’s action preserves existing core services while making targeted adjustments intended to limit first‑year rate impacts and to increase regulatory oversight going forward.