San Francisco residents will receive refunds after Recology overpaid by $24 million

San Francisco residents should get some compensation after waste collector Recology admitted it miscalculated its rates and would have overcharged city customers by about $24 million.

This was due to accounting errors that resulted in the rate being set too high in 2024, which ran from October 1, 2023, to September 30, 2024, the company said.

The discrepancy came to light at a Sept. 30 meeting of the little-known Waiver Standards Council, a body created after 71 percent of voters approved Proposition F in June 2022.

San Franciscans will receive a credit on their November bills with an average benefit of $18 per year for two years, according to Jay Liao, the city’s waste collection administrator.

“Following the public corruption scandal between Mohammed Nuru, Recology and the Parks Alliance, I brought all parties together and crafted Proposition F, which Recology opposed but voters saw fit to pass,” said Board of Supervisors President Aaron Peskin. . “While they are kicking and screaming, I am glad that we now have a rate administrator and rate commission that scrutinizes all of Recology’s costs and expenses and ensures that taxpayers are not defrauded.”

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

At the Sept. 30 hearing, John Braslaw, Recology’s director of business process improvement, said, “Frankly, we missed it, and I missed it.” Braslav said Recology discovered two “material” errors in its forecasts that resulted in Recology overcharging customers for one full year.

“For the first time since 1932, the structure of supervision has been permanently changed. This is something that benefits all San Franciscans and we should be proud of it,” Peskin said. “This shows that we can fight corruption and hold Recology accountable.”

Braslav said vehicle rental costs that should have been discontinued were “inadvertently increased” and revenue estimates “did not fully account for” a significant 8 percent cost of living adjustment for wages and operating costs. He said that after discovering the errors, Recology proactively contacted the city attorney’s office and the denial rate administrator (a position created by Proposition F): “We did this to be proactive, fair and transparent.”