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City Approves New Garbage Contract

Rates to increase by July 2013, but more funding for city streets

 

The Petaluma City Council voted 5-2 on Monday to award a contract to Petaluma Refuse & Recycling in exchange for more than $12 million in revenues over the next decade and a half.

Last year, the city amended its municipal code in order to terminate the existing garbage contract, which expires in 2016. In exchange for giving PR&R exclusive rights to haul the city’s solid waste, the company will pay Petaluma $500,000 in the first three months of the contract, followed by $750,000 each subsequent year.

Petaluma Refuse & Recycling, an affiliate of the powerful Ratto Group, which calls itself the Wal-Mart of garbage haulers, will also pay the city a $250,000 Road Impact fee.

That cost will be passed on to residents, resulting in a rate increase of 6.5 percent starting July 2013.

The idea is to generate cash for the city, including money for repairing streets, which are heavily impacted by not only cars, but garbage trucks.

Councilmembers Teresa Barrett and Michael Healy voted against the contract--for different reasons.

Barrett said she was fundamentally opposed to the deal because it amounted to “special interest legislation,” while Healy said he thought it was unfair to pass the costs of road repairs onto residents via rate hikes.

“We should be asking voters upfront to fund street repairs through a tax instead of just imposing them on ratepayers,” Healy said.

Barrett, who has opposed the plan since it was introduced last year, said changing the city’s municipal code in order to give PR&R a contract without taking other bids was undemocratic.

“I understand why the city has done what it has done…because I know the city is desperate for money,” Barrett said. “But I don’t think desperation should be an excuse to skirt around democracy. It’s wrong to accept a no bid contract…this is not the way for cities to run.”

But Mayor David Glass and other council members defended the plan as having the potential to finally fund road repairs instead of just complaining about them.

“Nothing is certain and nothing is forever, but you take whatever is the best deal you can negotiate at the time,” Glass said. “We can’t want to fix potholes, but not want to ask anyone to pay for it. You can’t have it both ways.”

Vote on the new contract was scheduled for October, but was delayed by a letter from an attorney representing two environmental groups opposed to the project.

No Wetlands Landfill Expansion and Petaluma River Council say that continued hauling of garbage to the Redwood Landfill in Novato, and the potential to start hauling compost to the location, threatens the surrounding wetlands.

The groups had called for an environmental review of the agreement, but the city’s attorneys said no review was required because there was no change to the contract.

The groups also accused the Ratto Group, which handles garbage disposal for eight out of nine Sonoma County cities, of “hundreds of violations” of the federal Clean Water Act. These include alleged discharges of pollutants such as lead, zinc, aluminum, copper, iron, oil and grease into the Petaluma River and the Laguna de Santa Rosa.

A spokesman for PR&R declined to comment when approached by Patch at Monday’s meeting and abruptly left the room. But in a letter to the city, PR&R sought to distance itself from the Ratto Group, saying it was a "completely separate and self-capitalized company."

What do you think of the new garbage contract? Is it a big deal that the city changed its municipal code to get it through? Sound off in the comments.

Sheri Cardo November 20, 2012 at 03:18 PM
Fund road work by increasing our garbage rates? And change the city code in order to do it? Not sure the means justify the ends here. And I'm skeptical of any company calling itself the "Walmart of garbage haulers." That's a good thing?
Bob Marchant November 20, 2012 at 05:49 PM
Walmart of Garbage Haulers..... makes one wonder who had their hand out..... Firstly the contract is in my opinion immoral and iillegal. The payments received from the contractor should pay for road repairs and should part apply to a reduction in rates, and not an increase in garbage costs. When will this council start acting on behalf of us citizens.........
David Keller November 21, 2012 at 12:13 AM
It remains unclear to ratepayers and to Council where the $500,000 per year will actually come from. The Ratto Group and PR&R claim that 'it won't come from ratepayers.' That's the same promise they made to Santa Rosa with a $1.8 Million incentive. Similar claims were made by the Ratto Group to all the other cities to extend no-bid monopoly garbage contracts. Either these collective multimillion dollar incentives come from ratepayers' wallets, or from Ratto's profit margin. Ratto isn't operating a charitable organization, but rather a monopoly utility. If the millions are coming from his profits, then garbage rates are too high. If the millions come from ratepayers, we've been sold an expensive lie that this is "free money". Unfortunately, before signing the contract, the city council majority failed to have an independent, transparent audit of PR&R and Ratto Group's charges and costs for Petaluma (and likewise in Santa Rosa and other cities) to prove that in fact this $500,000/year does not, and will not come from ratepayers as promised. Apparently, the new contract won't do that either. This is why monopoly utility contracts are so often abused at the ratepayers' expense. The Council failed to do their due diligence. Calling this $500,000 "free money" is a fairy tale, unless proven otherwise through regular, independent audits to assure ratepayers that we haven't been hit with a tax or slush fund through our garbage rates.
Brett Sklove November 21, 2012 at 03:13 PM
Anyone calling themselves the "WalMart" of Garbage should not be allowed to do business with this city. I am very skeptical about this $500,000 "gift" to the city. My guess is that rates will go up again in year two to cover this. WalMart does not give gifts, they "sell" them.

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