City Changes Muni Codes to Allow No-Bid Contracts

Petaluma has received two letters from law firms urging the city to “strongly reconsider” its recent change of municipal code that pave the way for a local garbage company to enter into a new contract without first going out to bid, as now required by law.

This Monday, the council approved an ordinance amending four sections of the municipal code dealing with franchise contracts, which would allow the city to enter into a new contract with Petaluma Refuse & Recycling, which has hauled the city’s trash since 2006.

Critics have called the decision “special interest legislation” that puts ratepayers at risk while not giving other companies a chance to bid on the contract.

The city’s current garbage contract expires in 2016 and according to the charter, a franchise agreement cannot be renewed  earlier than one year before it expires. But because PR&R has promised to give the city money in return for renewing the contract—as much as $500,000 a year, according to some estimates— the city believes this is one opportunity it can’t afford to pass up.

“We’re challenged as a city,” Mayor Dave Glass said at a recent council meeting, discussing the proposal. “We’re at a point where we are looking at really bad options and even worse options…and if the potential is there to pursue achieving revenue…we have to look at it.”

According to City Attorney Eric Danley, the changed codes are merely “enabling legislation” that would give the city more options when it comes to selecting a company to provide waste disposal. It doesn’t mean, he said, that the city will automatically award the new contract to the Ratto Group, which owns PR&R along with more than a dozen waste companies in the North Bay and calls itself the Walmart of the garbage industry.

But according to Mark Koorenny, a principal at , based in Brentwood, Calif. the city’s decision is “illegal, unconstitutional” and an unlawful use of public funds. Reached by phone, Koorenny said his firm had been retained by clients in Petaluma who were "concerned about the situation" and whose names he could not yet disclose.

In a Nov. 21 letter to the city, Koorenny wrote that "regardless of the city’s attempt to circumvent the charter by clever wordplay,  (the ordinance) violates the equal protection of the law by creating a special, favored class of trash hauling franchisees who have an unfair inside track on public contracts without the need for competitive bidding."

For example, Industrial Carting, a Santa Rosa-based demolition debris hauling company, has expressed an interest in entering a bid once PR&R’s contract runs out. But given PR&R's deal with the city, Industrial Carting says it won’t be given a fair chance. 

“There are still almost six year left to go on the contract,” said Lee Pierce, the government affairs manager for Global Material Recovery Services, which owns Industrial Carting, at this Monday’s meeting. “We urge you, slow it down, changing the municipal code at the last minute doesn’t feel very good as a ratepayer and a service provider.”

Another letter the city has recently received on the issue is from a community group that is fighting the expansion of the Redwood Landfill where some or most of Petaluma's green waste would be taken as part of the new contract. The group, called No Wetland Landfill Expansion, says increasing the amount of any waste to the landfill is dangerous because it's unlined and located at the edge of the Petaluma River Estuary, meaning it's prone to flooding.

“Sending green waste to the landfill is not what government in the 21st century should be doing,” said Brent Newell, an attorney for group, calling the council’s decision “ignorant and uninformed.”

Newell would not say whether the group planned to file a lawsuit against the city over the decision.

Despite the letters, councilmembers said they were comfortable with the decision to approve the changed codes, something that would give them more flexibility when considering future garbage contracts. 

Tiffany Renee said she didn’t want to face legal action over the decision and that she felt “handcuffed” given the city’s financial situation. But ultimately, she voted in favor of the changed codes, saying it was a way to continue the dialogue about the issue.

Councilman Mike Healy concurred, saying he was committed to transparency in the bidding process and the amended code was a way to continue discussing the issue at a later date.

What do you think about the amended muni codes that would allow a company to enter into a no-bid agreement with the city? Is it fair? Is it illegal?