$30 million tax buried in Oakland garbage contract

Oakland trash hauler Waste Management pays the city a $30 million fee, which comes out of residents' pockets. Oakland trash hauler Waste Management pays the city a $30 million fee, which comes out of residents' pockets. Photo: Michael Macor, SFC Photo: Michael Macor, SFC Image 1 of / 9 Caption Close $30 million tax buried in Oakland garbage contract 1 / 9 Back to Gallery

The tug-of-war over a new Oakland city garbage contract has uncovered a smelly little secret - residents are being charged what amounts to a $30 million-a-year garbage tax.

It's called a franchise fee - basically, the company that wins Oakland's contract to haul garbage pays $30 million annually to the city.

The $30 million, however, comes out of customers' pockets as part of their bill.

"So it really amounts to a hidden tax," said City Councilman Noel Gallo.

With the contract up for renewal, the city has proposals from two companies: the current contractor, Waste Management, and California Waste Solutions. Either way, the city is looking at a major bump-up - the City Council is hoping to push the price under the proposed $111 million - but whichever company gets the deal, the $30 million franchise fee is likely to remain.

It's not just garbage - and it's not just Oakland. Cities routinely tack on franchise fees when they award exclusive deals for services like trash collection.

In Oakland's case, about $17 million from the garbage deal goes to the Department of Public Works, $7 million goes into the city's recycling program, and $5 million goes into the general fund.

The rub for Gallo is that the new contract would keep the cut for the city - even though the deal is likely to hike fees by 50 percent for single-family homes. If the city skipped its $30 million, he says, residents and business owners should know where the money is really going.

City Council President Pat Kernighan, however, says that like it or not, the franchise fee is a fact of life.

"I'd hate to think of the cuts we would face if we lost that $30 million," Kernighan said.

Stressed: The on-again, off-again talks over a long-term Coliseum lease extension for the Oakland A's are back on again.

Alameda County Supervisor Nate Miley and Oakland City Councilwoman Rebecca Kaplan - both members of the city-county Coliseum Authority - met with A's co-owner Lew Wolff a couple of weeks back. We're told that lawyers for both sides are trying to work out a new, 10-year deal that could be presented to the authority's board as soon as Friday.

No one is talking for the record, but we did receive a late-night voice mail from Wolff, who was traveling in Europe. He didn't get into specifics, but he praised Kaplan for getting involved in the talks.

"We are very appreciative of her intelligence and her desire to get things done," he said. "It's really wonderful dealing with someone who understands what both sides are trying to accomplish."

End of the line: San Francisco police Capt. Greg Corrales - the Marine veteran who ran for sheriff and the Board of Supervisors during his time on the SFPD - has finally turned in his badge after 44 years, eight months and 28 days on the job.

"It was clear (Chief) Greg Suhr has kind of a youth movement going, and I don't fit in," said the 66-year-old Corrales.

Corrales, who could have retired a dozen years ago, got the hint it was time to exit when he was passed over in the latest round of promotions, and the chief sent his good buddy, old-school Cmdr. Joe Garrity, to the airport - long considered the department's Siberia.

Corrales will long be remembered around the station houses as the tough guy who once swallowed a bullet. He was also one of the 10 senior commanders who were briefly indicted in 2002 for allegedly conspiring to obstruct justice in the "Fajitagate" affair, in which three drunken off-duty officers allegedly attacked two men for their takeout steak fajitas.

While the criminal charges against all the commanders were dropped in short order, Corrales spent years clearing his name. It took him until 2009 to beat back disciplinary charges that he had jeopardized a police investigation by talking to the media about the incident.

As for what's next?

"I haven't thought about it," Corrales said.

Suhr, by the way, described Corrales as "a great guy" and "close personal friend" - but said the promotion he wanted just wasn't in the cards in the latest round of staff reassignments.

"I know he would have loved to have been bumped up, and it just didn't happen," Suhr said.

And finally: From Chicago Alderman Bob Fioretti, on Mayor Rahm Emanuel's offer of prime real estate for George Lucas' planned museum of Americana art: "How many Norman Rockwells are you gonna look at after you've gone through your magazine on the front cover every month since we've been growing up?"