County's deal with garbage company extended to 20 years

The Sonoma County Board of Supervisors voted unanimously Tuesday to confirm an existing 20-year franchise agreement for garbage collection with Redwood Empire Disposal.

The waste pickup firm, which is part of the Ratto Group of Companies, has been operating under the agreement since last year. The franchise gives the county an annual cut of up to 10 percent - or roughly $2.8 million by 2014 - of the yearly revenue collected from the company's residential and commercial customers in the county.

A clause included in the deal when supervisors originally approved it last year, however, allowed them to revisit the agreement and possibly shorten its length, down to 12 years, depending on the outcome of discussions to sell off the county's central landfill.

After a split board decided late last year not to pursue the sale of the 39-year-old facility off Meacham Road, and later moved to temporarily resume disposal at the once-shuttered dump, county staff recommended that supervisors confirm an amended 20-year deal with Redwood Empire Disposal.

The revised agreement includes additional services for the county at either minimal or no cost to ratepayers.

The garbage company will perform roadside litter and large dead-animal pick up duties, both of which have been suspended by the county due to budget cuts.

It also will ramp up recycling efforts at two waste transfer stations, in Sonoma and Healdsburg, in a two-year pilot project. If that project proves feasible and continues for the full 20-year term, the litter and animal pickup will come at no charge to customers. If not, and the pilot program expires, customers will see a .77 percent or roughly 16-cent increase to their bills. An average residential monthly bill is about $27, Ratto officials said.

The deal also includes annual caps on rate increases related to inflation, fuel costs and landfill fees, county officials said.

Supervisors praised the amended deal Tuesday.

"It absolutely meets all of our priorities," said Supervisor Shirlee Zane, who chairs the county's waste advisory group.

One particular benefit, Zane noted, was that it gives the county the ability to factor in recycled and reusable waste materials into its fee system in the future. Because those materials currently aren't weighed in setting garbage fees, any increase in recycling results in a decrease in money collected by the county. County officials have called that trend "the death spiral."

A shift in the pricing strategy that factors in recyclables will have "negligible effects" on household bills and is likely more than a year away, county officials have said.

The garbage collection agreement is a lucrative venture for Ratto, securing the company long-term service for nearly 40,000 mostly residential customers. Annual revenue from the deal is projected to rise to more than $28 million by mid-2014.

Redwood Empire Disposal has been the primary garbage collector in the county since 2008, when it bought out contracts held by Waste Management. It also performs trash collection for every city in the county except for Sonoma, which contracts with Sonoma Garbage Collector. That company serves some areas west of the city of Sonoma, while Industrial Carting collects garbage for county customers near Lake Sonoma and those south of Highway 37 near Infineon Raceway.

Ratto also holds a contract to operate four of the county's five waste-transfer stations and haul a portion of the county's trash to a Solano County landfill. The first-year value of that current two-year deal is $7.47 million.