Dive Brief:

• An audit of hauler North Bay Corp. found what it deemed potential violations of the company's franchise agreement to collect waste and recycling from approximately 50,000 homes and businesses in Santa Rosa, CA. Issues include an outdated collection fleet, recycling rates, facility permitting and poor customer service.
• The city plans to recommend that the City Council not extend the company's contract — which generated more than $27 million for the company last year — once it's up for renewal in 2017. 
• North Bay has raised questions about the audit process and plans to issue a response before the City Council discusses the issue next month. The company's general manager, Rick Downey, said North Bay isn't interested in a contract renewal unless the city is willing to pay more due to the pressures of lower commodity prices.

Dive Insight:

North Bay Corp. has won every collection contract in Sonoma County — except the city of Sonoma — since 1997. Downey, formerly of Republic Services, has been credited with starting to turn the company around since he joined in October. Yet fines for non-compliance could be steep and meeting government requirements will not be easy.

Recycling has been an issue for the company's bottom line in recent years and is one of the reasons behind the Santa Rosa audit. North Bay was fined by the county for processing higher amounts of refuse than permitted at its recycling facility — which the company says is due to residential contamination — and also stopped collecting plastic bags despite a requirement in its contract to do so.

It seems likely that Santa Rosa's collection costs will go up regardless of which company gets the contract. The current residential rate for a common can is $16.83 per month which is estimated to be much lower than the Bay Area average.