Controller outlines Prop F rate process as Recology requests increases; department details incentive tiers and impound funding

The Controller's office and the Department of the Environment briefed the San Francisco Commission on the Environment on March 28 about the new refuse rate‑setting process required by Proposition F and a rate change proposal filed by Recology.

Jay Liao, the refuse rate administrator in the Controller's office, said Prop F moved the administrator role to the controller and requires a more transparent, publicly accessible rate process that includes multiple hearings and a proposed rate order from the controller. "We plan on having a proposed rate order from our office by May, early June," Liao said, noting the office is operating on a compressed timeline to meet an Oct. 1 effective date for new rates.

Recology's submission requests a 3.9% increase in collection rates in rate year 2024 and 2.17% in 2025, and asks for a 16.36% increase to the tipping fee in 2024 (0.08% in 2025). Jamario Jackson, Recology's government and community relations manager, said the company's request reflects lower commercial tonnage after the pandemic, higher per‑ton processing costs, and rising labor costs, and that the company is also seeking funding for expanded abandoned materials collection, more frequent servicing of public receptacles, and investments in contamination management including outreach and camera technology.

The Environment Department outlined how refuse rate revenues (the impound account) fund departmental programs. Jack Macy said the department is budgeting roughly $14.7 million from the impound account for rate year ending 2024 and about $15.1 million for rate year ending 2025 to support 0‑waste, toxics, climate, environmental justice, green building and outreach programs. Macy described a tiered 0‑waste incentive account (about $8 million per year) that pays Recology additional margin if it meets incremental recovery targets; the department reported a recent recovery rate of about 39% (calendar year 2022) and proposed tier targets at 41%, 42%, 43% and 44% for successive tiers.

Controller staff said their initial review flagged incomplete submission schedules and requested additional exhibits and justifications (pension assumptions, contamination fee revenue, program‑level support for line items). The controller will post public documents and accept written protests and comments during the Prop F‑required notice and protest period.

What happens next: the Controller's office will continue its analysis and expects to publish a proposed rate order in May/early June, which will trigger refuse rate board hearings. The process includes multiple opportunities for public comment and a 45‑day protest period before rates take effect; the office identified a July/August schedule for adoption in time for an Oct. 1 effective date.