Sludge Watch ==> SanFran judge overturns supes' pact with sewage sludge firm

[Maureen Reilly]

S.F. judge overturns supes' pact with sewage sludge firm
Robert Selna, Chronicle Staff Writer

Thursday, December 27, 2007

A San Francisco judge has ended a powerful and politically connected 
company's monopoly over local sewage sludge hauling by ordering the city to 
honor its contract with a smaller competitor.

Superior Court Judge Patrick Mahoney ruled Monday that the San Francisco 
Board of Supervisors overstepped its authority when it reviewed - and then 
blocked - a multiyear contract with S&S Trucking that could have saved 
taxpayers $5.5 million, and instead extended a decades-long agreement with 
Norcal Waste Systems.

"The court ... declares that the Board of Supervisors was not authorized to 
disapprove the contract and that its resolution purporting to do so is null 
and void," Mahoney stated in his six-page order.

Norcal has held a monopoly over residential and business garbage collection 
in the city - now valued at approximately $200 million per year - since the 
1930s. The company also has had the contract to haul the city's treated 
sewage, which had not been put out for competitive bidding until this fall, 
when the San Francisco Public Utilities Commission requested applications 
from qualified companies.

Five firms applied, and S&S came in with the lowest bid. Norcal's bid was 
the highest - about $3 million more than S&S over a five-year contract 
period. The city Office of Contract Administration issued a conditional 
contract to S&S on Aug. 7 and sent it to the Board of Supervisors for 
approval.

Mahoney's ruling was limited to the narrow question of whether the board 
should have reviewed the contract in the first place, given that it was for 
five years and $8.5 million. The City Charter states that the board only is 
authorized to review contracts that have "required anticipated expenditures 
by the city of $10 million," or will last for 10 years or more.

The Contract Administration office believed the board needed to review the 
agreement with S&S because variables in it could have pushed the cost beyond 
$10 million, including the distance needed for trucks to travel to 
alternative dumping sites, increased fuel costs and the use of alternative 
fuels.

S&S lawyer Neil O'Donnell said he was pleased with Mahoney's ruling.

"The charter generally says the board should stay out of public contracts," 
O'Donnell said. "This ruling makes it clear that if they want to get more 
involved, they have to take that issue to the ballot and get approval from 
voters."

The city attorney's office, which represented the Board of Supervisors in 
the case, had not decided Wednesday whether to appeal Mahoney's order.

"We're disappointed with the decision, but we also recognized that a narrow 
reading of the facts and strict application of the law could have gone 
against us," said city attorney spokesman Matt Dorsey.

The case also raised questions about whether board members turned their 
backs to competitive bidding - which helps ensure the best deal for the 
public and is considered a bulwark against patronage and corruption - in the 
face of political pressure.

The sludge contract was to haul 240 tons of treated sewage from city 
treatment plants to landfills. San Francisco Public Utilities Commission put 
the contract out for bid after a call in 2004 by Mayor Gavin Newsom to 
overhaul the city's contracting program.

Newsom said - and many board members agreed - that competition could be 
injected into the system by eliminating sole-source contracts, which are 
consummated without competitive bids on the grounds that only one qualified 
provider is available.

But, on Nov. 13, the Board of Supervisors disapproved the agreement between 
the SFPUC and S&S and gave Norcal an extension of its existing contract.

In the weeks before the vote, Norcal, whose workers are represented by the 
Teamsters union, complained to a board committee that S&S would not pay the 
prevailing industry wage to workers. S&S has said it does pay the prevailing 
wage.

After S&S filed its legal challenge, Supervisor Ross Mirkarimi said the 
board was particularly concerned that S&S was not a union business. And he 
said supervisors were more familiar with Norcal because of the company's 
long, successful history in the city.

On Wednesday, Mirkarimi characterized Norcal as "the devil you know," but 
conceded that S&S may have been the better choice.

Mirkarimi said he did not believe that Mahoney's ruling would have 
far-reaching implications.

"We will want to confer with the city attorney about the board's future role 
in reviewing contracts, but the court order does not preclude us from 
reviewing contracts that may not be of benefit to our ratepayers and 
others," Mirkarimi said.

E-mail Robert Selna at rselna at sfchronicle.com

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/27/BAFMU504H.DTL