Brief

Santa Rosa, CA contract negotiations down to 2 companies — and Recology isn't one of them

Dive Brief:

  • Santa Rosa, CA is now reportedly considering two companies for a new refuse, recycling and yard waste collection contract, according to The Press Democrat. The Ratto Group's contract to service the city's estimated 55,000 accounts expires at the end of the year.
  • Waste Management and local company GreenWaste Recovery are said to be the two finalists out of five original bidders. Recology, which is in the process of buying The Ratto Group, was surprised to learn that they might no longer be in contention. Waste Connections and a new partnership called Sonoma County Resource Recovery also submitted bids.
  • The five-member city review panel that is assessing the bids has not made any details public and is expected to present their recommendation to the Santa Rosa City Council in late May. At that point it's possible that elected officials could chose to act differently, which multiple companies are hoping will be the case. 

Dive Insight:

Santa Rosa is currently serviced by Ratto subsidiary North Bay Corp., but the city decided to open up its options after a 2016 audit highlighted a series of issues with the company's operations. Ratto's contract was estimated to be worth an annual $24 million when it was renewed in 2010 though the future value is expected to be higher as operating costs have increased and commodity prices have fluctuated in the years since. 

While Ratto also has a large presence throughout Sonoma County, the Santa Rosa contract was seen as a strong selling point when Recology announced plans to purchase them in January. Since then, Recology has started working with Ratto to repair its local recycling infrastructure and North Bay Corp. also settled with the city for $2 million in alleged contract violations

If the decision is indeed between Waste Management and GreenWaste Recovery, the outcome could be an interesting match-up between two companies of very different sizes. As the biggest in the industry, Waste Management often succeeds in contract fights and gets existing contracts renewed. Yet as seen with the company's recent loss of a recycling contract in Ann Arbor, MI to a local nonprofit and Republic Services' loss of a collection contract in Milpitas, CA to a local hauler last year, it isn't impossible for smaller competitors to prevail on occasion.

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Filed Under: Collections & Transfer Corporate News
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