ROHNERT PARK -- A Windsor-based waste and recycling company has filed a lawsuit against the city of Rohnert Park, alleging that its recent requirement of paying a "buy-in" fee to conduct business in the city "is tantamount to a bribe."
Read Pacific Sanitation's legal complaint
Download a PDF version of the filed lawsuit.
Pacific Sanitation, a division of M&M Services, Inc. that specializes in construction and demolition debris, filed the suit in Sonoma County Superior Court on Friday in response to what it calls a "buy-in fee" stemming from Rohnert Park's request for bids on hauling waste from construction sites within city limits. The bid process asked companies to include a non-refundable fee, according to the company.
"As part of of the bid process, the city required the haulers to pay a $300,000 non-refundable fee plus any additional amount a hauler was willing to pay to obtain the contract," the company said in announcing the suit. "This was on top of a percentage of all revenue to pay for the administration of the program."
Rohnert Park's Assistant City Attorney Benjamin Winig on Monday said the city had not yet been served with the lawsuit and therefore could not comment.
Dustin Abbott and Doug Mordeda, owners of Pacific Sanitation, said the city is getting paid a fee to administer the service. As such, the owners allege, the "buy-in" fee only increases the cost of service to citizens and contractors.
Mr. Moreda said city records indicate that the gross revenue of the contract is less than $239,000, while the "buy-in" fee is $300,000. At that rate, the owners said, any company would be forced to pass costs onto customers by way of "outrageous rates."
The suit, which seeks a temporary restraining order, preliminary injunction or a permanent injunction depending on the court's findings, also says the so-called "buy-in" fee has the potential to lead to "misconduct, favoritism and other ethical problems."
Additionally, the city "readily admitted the 'buy-in' fee was not a fee associated with the specific program under consideration. ... Instead, it was made clear that the fee was solely for the privilege of being granted a license or franchise by the defendant city," according to the suit.
The owners acknowledge that the city has a right to impose a "franchise fee to cover the costs of administration and management of the subject program, but disputes the city's right to demand or collect a 'buy-in,' which the city readily admits is not for costs associated with the subject program," according to the suit.
Santa Rosa attorney Hans Herb is representing the plaintiffs. Judge Rene Chouteau has been assigned to the case.
Mr. Herb said, according to his firm's research, the fee imposed by Rohnert Park was rare, and that only one other jurisdiction in the state had a similar fee.
"We asked at the city meeting and we were told it has been done in a few cities in Southern California, but the consultant who specializes in waste and does most of the waste contracts in this area did not know of any jurisdictions who accepted these types of fees in this area," Mr. Herb said. "When we checked, we only found one similar case in the city of Compton."