San Francisco Controller reviews refuse rate setting process amid Recology bribery scandal

The San Francisco City Council meeting on July 4, 2025, focused on the refuse rate setting process and the ongoing investigations related to the Mahab and Nuru cases. The meeting highlighted a preliminary report issued by the Controller's Office, which aims to address internal control weaknesses and improve transparency in the refuse collection and disposal rate setting process.

The report revealed significant findings regarding the city's long-standing contract with Recology, a waste management company that has operated as a monopoly in residential refuse collection since 1932. The contract lacks competitive procurement processes, raising concerns about potential corruption and inefficiencies. The report also noted that Recology's rate application for refuse collection from July 2017 to June 2021 resulted in overcharges to ratepayers, leading to a settlement of over $100 million, which includes $94.6 million in refunds and $7 million in civil penalties.

Key recommendations from the report include reassessing the refuse collection model to enhance competition, clarifying the roles of city officials in the rate-setting process, and improving the transparency and accountability of the ratepayer advocate's role. The report emphasized the need for more rigorous oversight and documentation in the rate-setting process to prevent future errors.

Commissioners expressed concerns about the culture within the Department of Public Works and the need for a comprehensive overhaul of the refuse rate-setting process to restore public trust. The meeting concluded with discussions on the next steps for implementing the report's recommendations and the timeline for the next rate-setting cycle for Recology, which is expected to occur in the coming year.