Santa Rosa drops contract extension for garbage hauler after critical audit

Santa Rosa is opening up its garbage contract to new bidders following an audit that raised questions about the management and performance of the garbage hauler.|

Santa Rosa is opening up its garbage contract to new bidders following an audit that raised serious questions about the management and performance of Sonoma County's largest garbage hauler.

The City Council on Tuesday voted not to extend North Bay Corp.'s contract for another five years and instead invite other companies to bid on the exclusive right to pick up garbage and recycling for the city's 48,000 homes and businesses.

The move will very likely lead to higher curbside rates for garbage and recycling services, given that the company's charges are widely acknowledged to be very low compared to other communities.

Councilman Chris Coursey said he, like most residents, appreciated that “my garbage gets picked up and my bill is low.” But he said the council's job was to determine if the contract has been followed.

“And it appears from this report that there's been a lot of shortfalls on the part of the hauler,” he said.

Coursey said he cared less about minor items highlighted in the audit, like the estimated 2 percent of cans left tipped over, and more about the claims of older-than-allowed trucks - raising pollution and safety questions - and recycling rates below minimum levels.

“I'm talking about a recycling rate that is hugely important to this community to keep as much out of the landfill as possible,” Coursey said.

The audit questioned the company's claim that 45 percent of the material it picks up is recycled, putting the number closer to 36 percent. The auditor said the company had inappropriately included construction debris in its figure.

The company disputed the auditor's calculations, and claims it is in compliance with the contract but hasn't been given sufficient time to clarify the issue.

Its attorney, Richard Norris, even offered a thinly veiled threat of legal action when he suggested the information he was providing to the council could be confirmed through “verifying declarations, if it comes to that.”

City Manager Sean McGlynn strongly refuted the impression the company was treated unfairly, saying it made him “hot under the collar” to hear it and because the city has been “more than accommodating” to the company, which operates in the city as Santa Rosa Recycling and Collection.

Mayor John Sawyer indicated he has always been very pleased with his garbage service, and has never experienced the long wait times for those calling customer service because he's never needed to call.

He said he wondered how ratepayers would react to paying substantially higher garbage rates for service improvements such as cans being left upright.

“I'm wondering where we start to have that conversation about you get what you pay for,” Sawyer said.

The current residential rate in Santa Rosa for the most common 32-gallon garbage can is $16.83 per month - 30 to 50 percent below the Bay Area average, according to North Bay Corp.

The lead auditor, William Schoen of R3 consulting, agreed the city enjoys “incredibly low rates.” But he said such low rates can create problems, and he suggested they were behind the numerous managerial and operational issues his firm identified.

“If the company is not able to make a fair and reasonable rate of return, then the company is going to cut corners,” Schoen said.

The vote was the latest blow to the Ratto Group, the parent company of North Bay owned by James Ratto. It came after the sudden departure last week of Rick Downey, a veteran solid waste official who was brought on in October as general manager - the company's first general manager in a decade.

“That's unheard of in my experience,” Schoen said.

He said good people work at the company, but years without a general manager was likely to blame for the shortcomings.

In many cases, the auditors couldn't figure out if the company was in compliance with the terms of the contract because the records didn't exist, hadn't been turned over, or were lost, according to Schoen.

Fleet maintenance records prior to three years ago had been accidentally destroyed, the auditors were told, an explanation that didn't wash with Councilman Gary Wysocky.

“That sounds to me a lot like the dog ate my homework, in all honestly,” he said.

The council authorized $150,000 for the production of a request for proposals from qualified garbage companies.

You can reach Staff Writer Kevin McCallum at 521-5207 or On Twitter @srcitybeat.

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