Committee advances amended Recology MOU capped at $40 million to full Board

The Government Audit & Oversight committee on Monday advanced an amended Memorandum of Understanding with Recology to the full Board of Supervisors, recommending a reduced contract cap of $40,000,000.

Jackie Fung of the Office of Contract Administration told the committee the MOU would cover collection and disposal of solid waste for the city from 12/01/2014 through 11/30/2020, with a six‑year term and a not‑to‑exceed amount originally set at $44,000,000. Fung said the agreement reflects an 11.4% negotiated increase in refuse rates spread over the first four years and annual cost‑of‑living adjustments beginning July 2015. “The MOU provides for the collection and disposal of solid waste generated by the city for the period from 12/01/2014 through 11/30/2020,” Fung said.

The Budget and Legislative Analyst, Severn Campbell, recommended lowering the contract cap to $40,000,000 based on projected expenditures. Campbell said the city paid about $5,700,000 in fiscal 2013–14 and anticipates about $6,000,000 in 2014–15, with a six‑year projected spend of approximately $37,900,000. “We are recommending reducing the not‑to‑exceed amount of the contract from $44,000,000 to $40,000,000,” Campbell said.

Fung told the committee that Recology Group companies are the only licensed refuse collector in San Francisco and that, at the Department of the Environment’s request, the proposed MOU was not competitively bid. The Office of Contract Administration recommended approval of the MOU with the amendment to reduce the cap; Fung emphasized the cap is an agreement ceiling and does not itself obligate the city to spend the full amount.

Public comment was not offered on the item. President Chu moved the budget analyst’s amendment and the item was moved forward to the full Board as a committee report without objection.

The full Board is slated to consider the committee report at its Nov. 25 meeting.