Dive Brief:

• The Santa Rosa City Council voted unanimously on Aug. 29 to award a new 15-year franchise collection contract to Recology that will cover 55,000 residential and commercial accounts. The contract value is estimated to be $735 million, and the company will pay the city $105 million in franchise fees over that term, as reported by The Press Democrat.
• The majority of residential customers will experience rate increases of at least 58% during the first year compared to the low prices of their current provider, Ratto subsidiary North Bay Corp. This also reflects the cost of new services offered by Recology. The city will expect them to help increase the current diversion rate of 36% to 60% by 2029, as well as provide public education and other services.
• Recology received an extension until May 2018 to deploy 50 new trucks and new carts — about a $20 million investment. The company will use Ratto's trucks when the contract starts in January. Though it was previously reported that Recology's purchase of Ratto is complete, the company has said that won't be the case until approval is received from all of the other communities served by Ratto in Marin and Sonoma counties. 

Dive Insight:

North Bay Corp. held this contract since 2003, but faced multiple legal and regulatory challenges in recent years. Parent company Ratto has since come into compliance through a settlement and ongoing upgrades to its local recycling facilities. Santa Rosa officials had expressed interest in opening up their options ahead of the October 2016 request for proposals, though Recology's pending acquisition has changed the situation. While it initially looked like they might not be in contention — as Santa Rosa was favoring Waste Management or Green Waste Recovery — that has since changed. The uncertain timeline of these negotiations recently led one other local town to pass over Ratto for their own contract renewal.

Recology's reputation for offering a full spectrum of services, and helping drive diversion rates higher, is well-known along the East Coast. Due to the costs of providing such services and rising disposal fees, among other factors, cities such as San Francisco have also seen that come at a higher price. Santa Rosa customers will also see their rates increase, though a report from the deputy city manager recommending council approval emphasized that these rates will still be below the regional average.

Along with newer trucks, Recology will also be providing a "zero waste manager" and aims to bring composting back to Sonoma County. With new California recycling mandates for organics set to kick in soon, and existing state recycling rate targets for local jurisdictions on the horizon, this emphasis is seen as increasingly important. On a state level California doesn't appear likely to achieve a goal of 75% recycling by 2020. Organics and packaging have been highlighted as key areas of focus by the state's recycling agency. Construction and demolition recycling has also been raised as an area that may need additional attention.