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141 17 Growing the Business By 1970, the new board of directors and I had accomplished many things, including: •  establishing new, good, and positive working relationships with Golden Gate Disposal Company; •  incorporating a new fleet of trucks designed to improve working conditions for waste collection services; •  converting hand collecting 136,000 garbage bills to data processing; •  providing better service to customers; •  improving relationships with the City and County of San Francisco, as well as with the state and federal governments; •  getting the respect rightfully due to the men who provided this unglamorous but necessary service. Other accomplishments, all of which added to the economic sta­ bility of the company and equity among the shareholders, in­ cluded: •  developing and using the controversial Sierra Point site; •  developing a new alternate site in the City of Mountain View; •  creating a huge transfer station, the largest in the world at the time, which eventually developed a thirteen-year disposal program at that site; and •  signing a twenty-year contract with the Oakland Scavenger Company. Rate increases were sought and approved by the City of San Francisco; there was little or no resistance from the public, as people began to appreciate and, more importantly, respect the services the companies were providing with new and modern equipment and improved means of collecting waste. Wages in 1965 were $9,200 a year for shareholders; in 1975, wages were in the area of $28,000. We significantly enhanced the pension programs and medical and health benefits for the shareholders and all the employees of the company. Company shares at one time sold for $14,500; by 1975, shares were commanding 142 Growing the Business prices in excess of $35,000 because of better wages, employment security, working conditions, and benefits. The lingering fact that stood out in my mind, though, was that Sunset Scavenger Company had no growth potential because, for all practical purposes, every available square foot of the city had been covered with housing. Sunset Scavenger was actually losing revenues because of increased freeways and redevelopment programs that failed to preserve any additional land for housing or for our company. Hunters Point Naval Shipyard was closing and the city’s population was decreasing. Because the cost of doing business was “fixed,” so to speak, we had to seek rate increases to offset the loss of revenue. The other company offering garbage-collecting services in San Francisco was Golden Gate Disposal Company, which serviced high-rise buildings and businesses. Golden Gate Disposal was experiencing a growth factor, not necessarily in square feet, but in “airspace.” Downtown San Francisco was experiencing signi­ ficant growth and many tall buildings were being built, while Sunset Scavenger was losing business. I tried to explain this new development to my shareholders during a “How Come. . .?” questionand -answer period. Why did Golden Gate Disposal have better benefits? I sarcastically referred to the fact that we used the same 29-cent postage stamp to collect $10.50 for two months of service in the Richmond District, while the same 29-cent stamp brought in a $10,000 check from some high-rise building. This was a difficult time for me, as we had 280 shareholders while Golden Gate Disposal had only 152. Therefore, a Sunset Scavenger dividend of $100,000, for example, had to be split into 320 parts with each shareholder getting $357.50. If Golden Gate Disposal had the same $100,000 dividend, each shareholder would get $657. I tried but I could not demonstrate the logic and math to my shareholders. It was very hard for Sunset Scavenger’s Boss Scavengers to comprehend why Golden Gate’s Boss Scavengers got bigger dividends, even though it was a simple matter of mathematics. At the same time that Golden Gate Disposal was experiencing substantial growth by selling “air rights,” Sunset Scavenger was losing revenue. The San Francisco Garbage Rate Control Board used Sunset 143 Growing the Business Scavenger Company income to establish the rate structure for the entire city. When this board was established in 1951, the city deter­ mined that it could regulate only residences, such as houses and apartments. The “commercial” component was served by Golden Gate Disposal and was unregulated, with commercial account rates designed essentially on an antiquated “time and motion” formula. Back in those days, residential scavengers had to break cardboard boxes by hand, collect the garbage, carry it to the open truck, and more. The commercial account rates at that time were set by the time it...


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