Interest groups oppose Santa Rosa garbage deal

A deal between Santa Rosa and its garbage hauler that would generate $1.8 million more a year for the cash-strapped city is coming under increasing attack by conservation interests, labor groups and potential competitors.

The focus of attention is the City Council's consideration today of an agreement to extend North Bay Corporation's contract, set to expire at the end of 2012, by 10 years in exchange for company financial concessions that could generate a minimum of $23 million for the city through the year 2022.

"The $1.8 million will definitely help. It's a big drop in the bucket," Councilwoman Jane Bender said, referring to a city budget deficit of nearly $10 million.

But representatives of a half-dozen organizations are urging the council to dump the proposal and seek competitive bids when North Bay's contract expires. The opponents include Sonoma County Conservation Action, Curtis Michelini, owner of a small garbage and recycling company, the North Bay Labor Council and the International Brotherhood of Electrical Workers.

North Bay, a non-union employer wrested the contract from Empire Waste Management in 2002 when, for the first time in 54 years, the city put its garbage franchise out to bid, a move that resulted in substantially lower rates for Santa Rosa home and business owners.

Santa Rosa's residential rates currently rank among the lowest of Sonoma County's nine cities. City officials said that under that contract North Bay pays the city $3.3 million a year in franchise fees and other contributions.

Deputy City Manager Greg Scoles, the city's lead negotiator, said the proposed revised agreement would do several things, including:

-- Increase the annual franchise fee from 10 percent of gross revenue to 11 percent, raising the amount the company pays from $2.4 million to $2.64 million.

-- Require the company to pay a 4.5 percent franchise extension fee, also on gross revenues, generating $1.1 million annually for the city.

-- Have North Bay take over city street-sweeping operations, which cost $500,000 a year. North Bay would operate it for free over an 18-month period to compensate the city for revenue that audits indicated North Bay had not properly forwarded to the city between 2005 and 2007.

-- Restrict North Bay from passing on most of those added costs through higher rates. The company could raise rates 1 percent in July 2011 and in July 2012 to recoup some of the costs for street sweeping services.

Opponents have sought to spread their message through newspaper ads, gathering 3,000 signed postcards from opponents and mailing flyers 2,500 businesses. They say the deal could result in higher rates for North Bay's garbage customers while continuing to restrict local recyclers from bidding on portions of the city's commercial debris box business.

The council was scheduled to review the proposal in November but it was put on hold by councilman Gary Wysocky, chairman of the council solid watse committee, to give the public more time to comment.

"I like the numbers coming our way," Wysocky said then of North Bay's proposa]. "It's a significant amount of cash."

Hiss stance appeared to change somewhat Monday when he said he still has problems with recycling diversion rates, composting and the unknown impact on ratepayers.

"Competitive bidding is preferred but these are not usual times," he said. "It's a weighty issue. It should not be rushed. I have to hear the public."

North Bay's contract generates $24 million in gross revenues from its customers. Barring rate changes, the remaining three years on North Bay's contract and the 10 years extensions would generate at least $312 million for the company.

North Bay is the parent company of Santa Rosa Collection and Recycling, owned by Jim and Deana Ratto. Local financier Clem Carinalli and developer Dennis Hunter were brought on as the company's chief financial officer and vice president, respectively, in 2002 as the company prepared its winning bid. They left the company two years ago, according to Pam Davis, North Bay's director of governmental affairs.

Dennis Rosatti, executive director for Conservation Action, is among those calling for open bidding. "It's a $300 million contract, why shouldn't the city and ratepayers see what would happen on the open market," he said.

Among those helping fund Conservation Action's ad and mailing campaign is Michelini, a member of Conservation Action who runs family-owned Industrial Carting and Global Materials Recovery Services.

Michelini's attorney, John Moore, said his client is interested in bidding on the commercial debris box portion of North Bay's contract, once open to smaller companies until North Bay took over exclusive control in 2002. He also said Michelini, with possible out-of-county partners Moore declined to name, may be interested in bidding on the entire contract in 2012.