Five bidders for Santa Rosa's garbage contract

Five companies are bidding to take over Santa Rosa’s lucrative garbage contract, including the San Francisco firm buying the county’s dominant garbage hauler.

Nine companies had expressed interest in bidding for the exclusive right to collect garbage, recycling and yard waste from Santa Rosa homes and businesses.

But by the time Monday’s 3:30 p.m. deadline arrived, just five companies had submitted bids to the city, said Gloria Hurtado, deputy city manager.

The contract held by The Ratto Group since 2003 runs out at the end of 2017.

“I think five is a really good number,” Hurtado said. “There are some national companies and some more local groups, so I think it’s a good combination.”

The bidders include Recology, the San Francisco-based company which last week agreed to purchase Ratto’s entire North Bay operation, including contracts for eight of the nine Sonoma County cities and its unincorporated areas, plus Novato and West Marin.

Another is Waste Management, the massive Houston-based company that served Santa Rosa for 33 years as Empire Waste Management before James Ratto, using a combination of low rates and political influence, convinced the city to turn the contract over to him. Waste Management subsequently got out of all its contracts in the county.

Also in the hunt are Green Waste Recovery of San Jose, which serves a number of communities in Santa Clara, San Mateo, San Cruz and Monterey counties; Waste Connections Inc., a Toronto-based company with operations in 37 states and Canada; and Sonoma County Resource Recovery, a new partnership about which Hurtado had no additional information, but which sources say includes Marin County garbage interests.

City staff are reviewing the bids, and will schedule interviews with the companies, visit their existing operations and then present their findings to the City Council sometime in April.

The goal is to have a new provider selected at least six months before the Ratto contract runs out to ensure a smooth transition.

No matter who wins the contract to serve Santa Rosa’s 50,000 residential and commercial accounts, rates are almost certain to go up.

Ratto officials had previously said the company would not exercise its option to extend the contract for another five years because current rates – $17 per month for the most common 32-gallon can size – were too low.

While the city knows rates are heading up, it’s looking to get a good value from its new service provider, Hurtado said.

“We want to have good service at as low a rate as we can get, but we don’t want to sacrifice quality and compliance,” Hurtado said.

Mike Sangiacomo, chief executive officer of Recology, said his company’s rates will be higher than those charged by Ratto for good reason. He said Ratto’s entire fleet of trucks and cans will need to be replaced, a large investment made in its Standish Avenue recycling facilities, and its workers, whom he said are underpaid, will likely become unionized and see wage increases.

“From what I’ve seen so far, I would consider compensation for most of the employees to be substantially below market,” Sangiacomo said.

Since the sale is planned as a stock purchase, employees of The Ratto Group will become Recology employees at the close of the sale.

While he didn’t rule out staffing changes, Sangiacomo indicated the plan is to keep most employees.

Sangiacomo said the purchase of Ratto’s company is not contingent upon winning the Santa Rosa contract.

Asked what Recology’s purchase of The Ratto Group would mean for existing customers, Sangiacomo said “it means a consistent, high-quality of service that is designed to meet all the environmental standards that a community like yours should expect.”