Santa Rosa may benefit by extending trash deal

For cash-strapped Santa Rosa, its garbage may soon be smelling like roses to city leaders.

A proposal by North Bay Corp. to extend its garbage contract with the city, an idea on hold since it first surfaced 19 months ago, could generate an extra $1.7 million a year starting as early as January.

Deputy City Manager Greg Scoles said a proposal likely to go to the City Council for consideration Nov. 17 would extend the company’s franchise from 2012 to 2017 and would provide an option to extend it five years beyond that date.

In exchange, Scoles said, North Bay would share 4 percent of its annual gross revenues with the city that would generate an estimated $960,000, be amenable to the city raising its franchise fee an additional 1percent to generate another $240,000 and would take over the city’s street-sweeping duties that is now costing the city $500,000 a year.

North Bay’s current 10 percent franchise fee generates $2.4 million a year for the city.

North Bay, which originally proposed the revenue-sharing idea in April 2008, initially preferred a 15-year extension with a five-year option.

But Mayor Susan Gorin said City Council members are sensitive about closing the door on putting the contract out to rebid in the near future.

Prior to newcomer North Bay winning Santa Rosa’s garbage contract in 2002, the city had not put it out to bid for 54 years.

Once it did, the resulting switch to North Bay resulted in substantially lower garbage rates and a more intense citywide recycling effort.

“I think there is some community sensitivity about extending the franchise without competitive bidding,” Gorin said of the reason for the shorter length of the proposed extension.

City Manager Jeff Kolin said without the added revenue the extension would generate, the city will be looking at an almost $10 million budget deficit rather than the $8 million shortfall it now faces.

While the extension could generate $8.5 million for the city over the next five years, it could cause garbage rates for Santa Rosa home and business owners to rise.

Scoles said North Bay would have the right to recoup from ratepayers the $240,000 generated by the 1 percent increase in franchise fees and the cost for street-sweeping it would take over from the city.

He said those added costs, tacked on to the $11.41 rate homeowners are now charged for weekly emptying of a 32-gallon garbage can, would be about 33cents, an increase that would be spread over three years.

Scoles noted that Santa Rosa’s garbage rates are already among the lowest in the county.

You can reach Staff Writer Mike McCoy at 521-5276 or mike.mccoy@pressdemocrat.com.