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City Changes Muni Codes to Allow No-Bid Contracts

Move aimed at enabling local garbage company to enter into new contract with city in exchange for up to $500K

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?

LongTimeLocal November 24, 2011 at 08:55 AM
So, if I make a modest 'incentive' (in context) like NorthBay Corp, who use the local sounding Petaluma Refuse name, to get a no bid or scrutiny income, could I do the same? I am quite prepared to ante up several hundred dollars annually to secure a no-interview city position. Has it come to this? I might make a terrific non-bid proposal writer - that seems like a good one for me... And don't forget folks, the Empire Waste folk have already offered to significantly LOWER our rates. If this travesty happens, I'd rather have this no bid, and let the already financially squeezed actual people get by rather than be squandered by our council on rediculous pet projects. Where did common sense go...
Tranh Nguyen November 24, 2011 at 03:38 PM
Most bid packages are already written to favor a specific supplier. But now with the $500,000, bribery is made official and legal in Petaluma.
Bookworm November 24, 2011 at 07:29 PM
This is a dangerous precedent. There is a reason businesses have to bid for contracts. City of Petaluma is selling out right to receive bids to a company that wants a favored position. Do you think the refuse company is proposing this out of generosity? We must not give up long term rights and principles for temporary gain.
Bruce Baum November 24, 2011 at 08:33 PM
Residents should be outraged at this single bid contract. Locking Petaluma into a long term contract by promising a high revenue stream that --- is actually another form of tax needs to be contested. It also will lock ratepayers into a methodology of collection and disposal and perhaps a limited diversion strategy that is not in the best interest of the city, residents and the planet. It also will lock the residents into a payment structure, while locking out competition. By bringing organic resources, mistakenly called green & food waste to Redwood, rather than composting at Sonoma Compost as is currently being done, will only contribute to green house gases being emitted. Redwood does not have the composting capacity and will use the organics for bank stabilization, which the state calls "recycling" because it is "beneficial use" is a travesty. Single bid, never-ending contracts is a dangerous precedent. Think Haliburton in Iraq. Bruce Baum No Wetlands Landfill Expansion
Max November 24, 2011 at 10:51 PM
Am I missing something here? The quote reads, "according to Mark Koorenny, a principal at Koorenny & Teitelbaum, based in Brentwood, Calif." Where is the connection? Who does this law firm out of Brentwood represent? Also, “We’re challenged as a city” said Glass, "transparency in the bidding process", said Healy... I hope people are reading between the lines on this one. A financially strapped city- worsened by the policies and decisions of these three Harris, Glass and Healy, who have been on again, off again, Petaluma's council for over a decade. It's laughable that Healy is talking about "transparency", after he wasted millions of dollars of the city's funds. It's a shame, Petaluma could be a really great city if we could get good leadership on council and get rid of the people catering to special interests.
Go Occupy! November 25, 2011 at 03:17 AM
Ah yes, when I heard the term "no bid contract"I remembered that fellow that destroyed our country a few years back by taking us into an oil war by claiming "weapons of mass destruction" were going to be found under our bed pillows if we didn't let him "protect us from harms across the water". I also remember being infuriated with the no bid contracts awarded to Haliburton, Blackwater, etc just on principal. I don't know the refuse business, but if the first guy is offering $500,000 out of the gate...why close it? Maybe the next player might up the ante to get the contract if that is how it is really done. Let's go for at least $750,000 or even a cool million. I like the sound of that...a cool million. Sounds like something Steve McQueen would say and then ride off on an Indian motorcycle. Varooom!
janna nikkola November 25, 2011 at 05:59 PM
I wish the City of Novato had the flexibility to award a contract without having to accept the lowest bid. The renovation of Novato's old city hall of Sherman Avenue went to a construction company from Richmond with no ties to our city and without expecting to get additional business as a result of performing well on the project. So the project took longer than this company had contractually agreed to finishing and was over budget. Why did this company care? They certainly didn't expect other businesses in Novato to go to Richmond looking for a contractor. Private businesses feel more comfortable hiring someone local whom they know and who has a good reputation locally. I made a point of driving by while this project was underway and there were many days when there was no one onsite working, so I knew completion would be delayed. It's better to hire local so the company has an incentive to finish on time and within budget, with the expectation of more business from others in the city when they do well. Without the expectation of word-of-mouth advertising there's little incentive to excel.
Linda Rowan November 25, 2011 at 08:48 PM
I do hope the city reconsiders their plan on allowing OPEN bids as a monopoly could occur. For instance,Waste Mgmt is one huge refuse that has bought out all the tiny companies...do you want them in your back yard?We need the small companies and we need competetive pricing. Anti Republican...what does your post have to do with this article?
Dr. Art HenSchen November 25, 2011 at 11:29 PM
There is no excuse for entering into contracts longer then 3-5 years. Technology changes, markets change, the economy changes, demand changes...competitive bidding entices entrepreneurs to the table bearing mighty sharp pencils (particularly in todays economy) and they bring with them a good deal of creativity as well for managing the waste streams. Long term contracts seem to breed complacency and allow for untoward relationships to develop. I am a strong proponent of the "free market." The way this government is going we need to endorse the "laissez faire" approach of conservatism. By the way, I agree with Linda Rowan...'anti republican" What planet are you on?
Go Occupy! November 26, 2011 at 04:10 AM
Art & Linda, The article is about no bid contracts and refuse. My response contained both elements. Some of us find a parallel between the whole Bush lying the country into a war thing that has devestated our economy... and no bid contracts. If you are not familiar with this recent history, the internet is right at your fingertips. So, of you read the article and then my comments again, you'll see what I was saying.
Go Occupy! November 26, 2011 at 04:12 AM
So, IF you read... Sorry-on an iPhone with a tiny keyboard.
Linda Rowan November 26, 2011 at 04:29 AM
??????????????????/ You have proven your anti Republican rants in more than one post and on a multitude of threads...I think we ALL get the point! So do you have any constructive ideas to add????
David Keller November 26, 2011 at 06:30 AM
The city changed its Municipal Code to allow this no-bid process, a dubious work-around the city's Charter - the law governing Petaluma's operations. Our Charter can only be amended by public vote. Rather than put the question to the voters and allow that democratic process to occur, the Ratto Group of companies, including Petaluma Refuse and Recycling, made promises that they would magically give $100,000's to Petaluma as an "incentive" to skip the public vote. No change in the Municipal Code, no money. They proposed this questionable scheme to foster their interests. The city, thinking that there is magical free money out there, took the bait and bit down hard on the hook. Changing course in the future to get competitive bids for this monopoly utility service will become increasingly difficult to do. Ratto companies now have monopoly garbage contracts in 9 of the 10 jurisdictions in Sonoma County. Novato Sanitary District, Santa Rosa and others all fell for the same bait. This is not good public or fiscal policy. The ratepayers - you and me, residential and commercial - will be paying for this "free" money for years to come, with no competition to give a reality check on what we should pay for garbage collection. Please urge the City Council NOT to fall for this scheme. Monopoly utilities are guaranteed money makers for the vendor - but we ratepayers get too high a risk of overpaying.
Dr. Art HenSchen November 26, 2011 at 05:28 PM
The City will now very likely have exposed itself to a number of potential lawsuits being filed by competitors and industry activist organizations that could well exceed any of the "contributions" the Ratto Company makes. Why dance around the 3 ton elephant in the room? Contribution = BRIBE end of story,
Linda Rowan November 26, 2011 at 09:06 PM
AMEN to David Kerrler and Dr. HenShen...
Linda Rowan November 26, 2011 at 09:25 PM
Look at towing contracts for the cities of ALL of Calif. There is a "locked"contract with most. Some cities were accused of behind the door proposals. Then to top it off, the traffic control will cite and tow a quota of vehicles and thus add money to the City coffers.Look at the cable companies...our cities are giving preferential treatment to those who feather their nests:( I could go on and on...hopefully Petaluma and OTHER cities do not end up like Bell,Ca. Google Bell and read all the corruption that took place there. Citizens need to band together,Democratic,Republican,or other...and VOTE for fairness.Start a referendum,get signatures to put your issues on a ballot. There are many ways to get the City Council to sit up and listen...even the threat of a recall can wake them up.
Bruce Baum November 26, 2011 at 10:27 PM
David Keller is right on.Franchise fees paid by the hauler is charged as a cost against the contracts. Most contracts for garbage franchises are cost plus 9.5%. They love high costs. So the more it costs the hauler the more money they will make as the rate payer annually has price increases. When garbage companies compete for franchises they sharpen their pencils and the price goes down. In my district (Marin's Ross Valley North) in 2002 competition drove our rates down by 25%. Also be aware that many contracts have an "Evergreen clause". 1 year is added at the end of the calendar year, and you are stuck with a 15 year never ending contract --- forever! Start asking questions BEFORE it's too late.
Go Occupy! November 27, 2011 at 05:29 AM
Why all the ???????? Pretty clear what I offered in the way of contstructive comments. Why don't you just pass over my comments when you see them? You and that other woman seem to have formed an Angry Birds fan club...with me as your target. Every time i post,you leave me harsh comments, if you don't like my name, do you think my comments will get any better? Just pass them over! Jeeze
Linda Rowan November 27, 2011 at 06:03 AM
Great post Bruce :)
Go Occupy! November 28, 2011 at 03:16 AM
Oh, and for the 22 question marks lady... 22 in one post- is that a record? Anyway, the parallel between the Bushco fiasco that our country is dealing with ( to this day ) that you failed to see any connection with is really obvious unless one has a predisposition toward Faux News with their head in the sand. Also, if I was supporting the party that did what the republicans did to the USA, I guess I would get prickly every time someone like me reminded me of it.
Linda Rowan November 28, 2011 at 04:28 AM
Exerpt from Petaluma Refuse. {{Large Item Collection If you have an item too large or prohibited from your trash cart, such as furniture or an appliance, Petaluma Refuse & Recycling provides curbside pickups of these items for a fee.}}} There was a time when cities had a twice a year large item pick up for free. It kept the cities from tossed items in vacant lots,etc. Either littering the city or piling up in back yards as a lot of folks cannot afford to pay on top of the fees already in place.

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