It's been in the works for nearly two years, but North Bay Corp.'s push to get Santa Rosa to extend its garbage-hauling contract an additional 10 years should come to fruition Tuesday, just in time to provide some financial relief for the cash-strapped city.
Council members Gary Wysocky and Jane Bender, members of the council's Solid Waste Committee, expect the council to approve a proposal to extend the company's contract through the year 2022. It's currently set to expire on Dec. 31, 2012.
“Chances are very good it will move ahead,” said Wysocky, noting that several details holding up the contract have been worked out.
“They have satisfied all our conditions,” Wysocky said. The issues included development of a food waste composting program, a change in residential rates to encourage greater recycling through use of smaller cans and imposition of a stiff penalty should North Bay sell its contract to another company.
Wysocky said the extension's biggest asset is the additional $1.8 million in revenues it will generate for the city annually. The money comes largely through raising the 10 percent franchise fee North Bay pays the city to 11 percent and North Bay's agreement to charge itself a 4.5 percent “franchise extension fee,” money the company also will pay to the city based on gross revenues.
That $1.8 million will be in addition to $3.3 million North Bay pays the city through a variety of fees and surcharges, including the franchise fee which accounts for $2.4 million in revenue to the city annually.
North Bay's current contract with the city, initiated in 2003, generates an estimated $24 million worth of business a year based on approximately 45,000 residential and commercial accounts.
“I see no reason for the citizens not to be happy with this deal,” Bender said, noting that Santa Rosa residents will continue to pay among the lowest monthly residential rates in the county.
“Their service seems to be good, the rates are low and we ready need the revenue,” Bender said, referring to the $10 million budget deficit the city is facing.
City officials have provided deficit estimate of $8 million, based on the council approving the extension.
The extension had become controversial, particularly in recent months, when owners of Industrial Carting, a small recycling company, along with attorneys, consultants and environmental groups, urged the council to open the garbage agreement to competitive bidding.
Some predicted such a move could backfire, jeopardizing the additional revenue the extension promises to generate for the city through the year 2022.
“I would prefer competitive bidding but is the economy going to keep going downward or will it go up,” Wysocky said, noting he was unwilling to take the chance at losing the guaranteed funding.