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Politics & Policy

Why San Francisco Recology rates are rising again in January

Recology is raising rates for San Francisco customers starting on Jan. 1 | Camille Cohen/The Standard

Most Recology customers in San Francisco will see their rates increase starting in 2023 for what the company says are cost-of-living adjustments to handle higher wage, fuel and health care costs.

The San Francisco Controller’s Office authorized the fee hike, which will raise rates by 8.86% starting on Jan. 1 and apply to all collection services provided by the company. 

According to Recology, a typical residential customer with bins for recycling, curbside composting and trash will see their monthly rates increase by $3.81 from $43.04 to $46.85.

The Controller’s Office became the arbiter of Recology rate hikes after the passage of Prop. F earlier in 2022 following a number of corruption and overcharging allegations against Recology. 

Prop. F put the Controller’s Office in charge of administering the rates for waste management, as well as related financial compliance monitoring and reporting. In July, Recology announced it would forgo its annual rate increase as the department continued its comprehensive review of San Francisco’s rate-setting process.

Mohammed Nuru leaves the Phillip Burton Federal Building and U.S. Courthouse in San Francisco. | Paul Kuroda for The Standard

The damning report from the Controller’s Office investigation found that the company collected $23.4 million more in profits over a four year period than its agreement with the city allowed. Profits from the $200 million sale of the 900 Seventh St. property to Amazon, for example, were not returned to customers. 

In November, the company agreed to a settlement that puts $25 million in a so-called balancing account to use excess profits to stabilize rates for residents going forward.

That deal was on top of another $94.5 million reimbursement paid by Recology in 2021 to local customers after the company was ensnared in a federal corruption case involving former Public Works head Mohammed Nuru.

In early 2023, a new rate-setting system managed by the Controller’s Office will be introduced in time to authorize new rates by October.

Recology said it is notifying customers of expected changes on their billing statements and how they can reduce costs if eligible.