S.F. residents to get refund after $24M Recology overcharge

San Francisco residents are due for some payback after embattled refuse collector Recology admitted that it incorrectly calculated its rates and would have overcharged city customers by some $24 million.

This came about, the company says, due to accounting errors that led to the rate being set too high in Rate Year 2024, which ran from Oct. 1, 2023 to Sept. 30, 2024. 

This discrepancy came to light at the Sept. 30 meeting of the little-known Refuse Rate Board, a body created after 71 percent of voters approved Proposition F in June 2022. 

San Francisco residents will see a credit on their November bills, with an average benefit of $18 per year for two years, according to Jay Liao, the city’s refuse rates administrator. 

“In the wake of the public corruption scandal between Mohammed Nuru and Recology and the Parks Alliance, I brought all the parties together and crafted Proposition F, which Recology opposed but the voters saw fit to pass,” said Board President Aaron Peskin. “While they went kicking and screaming, I’m delighted that we now have a rate administrator and a rate board that is scrutinizing all of Recology’s costs and expenses and ensuring that ratepayers are not being cheated.” 

Last year, former Recology vice president John Porter was sentenced to three years’ probation and former community relations manager Paul Giusti was sentenced to six months of home confinement for their roles in a bribery scheme. Nuru, who used Recology money deposited in a Parks Alliance account as a slush fund, was sentenced to seven years in federal prison in 2022. 

At the Sept. 30 hearing, Jon Braslaw, Recology’s director of business process improvement, said “This is one that, quite honestly, we missed, and I missed.” Braslaw revealed that Recology discovered two “material” mistakes in its projections resulting in Recology overcharging customers for one full year. 

“This is the first time since 1932 that the oversight structure was finally changed. It’s something that’s benefitting all San Franciscans and we should be proud of,” said Peskin. “It shows that we can crack down on corruption and hold Recology to account.”

Braslaw said that vehicle lease costs that should have been terminated were “inadvertently extended,” and revenue calculations did not “fully consider” a significant 8 percent cost of living adjustment for salaries and operating costs. He said that, upon discovering the errors, Recology proactively contacted the city attorney’s office and the refuse rates administrator, a position created by Prop. F: “We did this in an effort to be proactive, fair, and transparent.”