Ratto Group pays $2 million settlement for alleged contract violations

North Bay Corp., a subsidiary of the Santa Rosa, California-based Ratto Group and Santa Rosa’s waste hauler, is paying the city $2 million to settle alleged contract violations, a report by the Press Democrat says. The settlement comes soon after James Ratto, owner of North Bay Corp. and the Ratto Group, sold his operations to San Francisco-based Recology.

The violations North Bay Corp. is accused of includes use of old garbage trucks, failing to register street sweepers and maintaining a record of poor customer service, the report says. The payment is only part of the $18 million the company owes the city in fines.

The violations came forth in a 2016 audit, according to the report, and the company did not admit any faults in its settlement.

The city lowered the figure of the settlement in order to go forward in the process of selecting a new hauler while making sure North Bay Corp. fulfills the responsibilities for the remaining 10 months of its contract, the report says.

The company paid $750,000 to the city Feb. 13 and will pay the rest of the settlement in two installments, including interest, in May and August.

A large amount of the fines come from a violation of North Bay’s contract regarding 27 trucks, which the city claimed were out of compliance and resulted in thousands of dollars per day in fines, the report says. The contract states North Bay is required to rebuilt its trucks after five years as needed and for no trucks to be more than 10 years old.

Another fine came about when the company allegedly violated the contract’s rules on alternative fuels, the report says. The contract requires North Bay to receive approval before using an alternative fuel but city officials say there is no proof of the company seeking approval after the company began using clean diesel. The contract also requires the company to use re-refined motor oil, which it has not complied to, according to the report.

These two alleged violations created a $14 million fine for the company, with an additional $3.4 million after the city discovered North Bay never registered the four street sweepers it acquired in 2010, the report says. The total before the $2 million settlement payment then grew to $18 million.

The settlement waives any future fines related to the fleet and does not require the company to buy new ones, the report says. Any additional fines for the company’s alleged violation over alternative fuels will also be waived with the settlement.