According to the settlement announced Tuesday, the funds will go into a new balancing account dedicated to protecting San Francisco customers from cost of living rates higher than the rate order set in 2017. Additionally, any future excess profits will be automatically deposited into the account.
Recology CEO Sal Coniglio said in a statement that the company strongly supports the increased effort to improve the rate-setting process and transparency. He said the company is working toward a "new era of accountability" with the help of the San Francisco Controller's Office and other city officials.
The agreement also requires the company's audited financial reports to be publicly posted and for the rate year to coincide with the company's fiscal year, so it is easier to compare the two financial statements.
In March 2021, Recology previously agreed to refund $100 million to ratepayers for issuing higher garbage rates for residents in 2017. The settlement followed a subpoena from the San Francisco City Attorney's Office, after former Public Works Director Mohammed Nuru was arrested in 2020 for accepting bribes for preferential treatment in city contracting.
The new settlement satisfies the recommendations set by the Controller's Office in a Public Integrity Review report in May 2022 that revealed Recology made $23.4 million above their profit target. A balancing account was created to ensure Recology's targeted profit level can be met and adjusted if need be.
