Santa Rosa garbage firm facing millions in fines

It’s been a rotten couple of months for the region’s largest garbage hauler.

In September, Sonoma County rejected the North Bay Corp.’s request to operate a regional recycling center in Santa Rosa, upping the stakes in the standoff over the company’s unpermitted Standish Avenue facility.

Then earlier this month, Santa Rosa informed the company that it faces $13.4 million in potential fines from years of alleged contract violations.

While neither action is final, combined they illustrate the increasingly uphill and expensive battle North Bay owner Jim Ratto faces as he struggles to keep his garbage and recycling empire intact.

Company officials say Ratto will need to invest at least ?$4.5 million to upgrade one of North Bay’s two Santa Rosa recycling centers, both of which have operated for more than a year despite a cease-and-desist order from the county Department of Environmental Health.

To date, the county has fined Ratto $496,500 for running facilities that, because more than 10 percent of the material they take in is not recyclable, need a solid waste permit.

The upgrades, expected to begin next month, will force the company to halt operations for several months and haul recyclable material to other counties while the work is completed, said Eric Koenigshofer, vice president of special projects for the company.

“When we’re all done we’ll have a brand new sorting line and that will make a huge difference,” Koenigshofer said.

The company plans to close the larger recycling center on the west side of Standish Avenue next month, clean the entire facility, and prepare for installation of the new sorting line, pieces of which begin arriving from Europe this week.

The process should take about three months, meaning the center will be closed through February, Koenigshofer said. The facility on the east side of Standish will stay open until it is upgraded later, he said.

That’s to minimize the layoffs required from the shutdown and because it is challenging to find a facility nearby that can process all of the 27,000 tons of recyclable material collected at the centers annually.

The company plans to outline its plans in more detail in a new solid waste permit application to the county health department in coming weeks, Koenigshofer said.

Its last application fell far short of county expectations. After four months of analysis, the county on Sept. 19 rejected the application as inaccurate and incomplete.

Officials found it “does not provide a detailed and exact road map for how the existing noncompliant facility is going to be transformed structurally and operationally into a compliant facility,” according to a letter from Christine Sosko, the county’s director of environmental health.

In her letter, Sosko detailed more than 20 shortcomings in the company’s application or violations discovered over the course of 51 inspections since the county issued its cease-and-desist order in August 2015.

They describe the recycling operation as dimly lit, dirty and dangerous. Workers don’t follow basic safety rules; the buildings, roads and trucks are dilapidated; the operation is poorly supervised; and garbage piles attract rats and other vermin, Sosko wrote.

She urged the company to refile an application on an “expedited basis.”

The permit challenges come at an inopportune time given that Santa Rosa and Windsor are both in the process of re-evaluating their garbage and recycling contracts with North Bay.

Santa Rosa, following a scathing audit that found the company was mismanaged, underfunded, and failed to meet recycling goals, recently invited other companies to bid on the contract, which expires at the end of 2017.

The existing contract contains penalties for failing to perform, and when the city tallied them up, it came up with $13.4 million. Most of that - $11 million worth - comes from per day fines for operating trucks that didn’t meet the age and service requirements in the contract.

Other penalties are for seemingly less consequential items, such as $1.4 million for employees not having uniforms or $50,000 for failing to answer customer service calls within five rings.

The company’s attorneys will be talking to the city’s attorneys about what penalties are fair in an effort to resolve the issue, but Koenigshofer said he doesn’t see city math holding up.

“We don’t think that amount is in the ballpark,” he said.

You can reach Staff Writer Kevin McCallum at 707-521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @srcitybeat.