The Santa Barbara City Council voted unanimously to begin noncompetitive contract talks with MarBorg Industries that, if consummated, would give the South Coast’s family-owned trash hauler a citywide garbage monopoly for the next 10 years, not to mention a virtual monopoly throughout almost the entire South Coast. In the same breath, however, the councilmembers rejected an initial franchise proposal submitted by the company.
City garbage planners and their consultants said City Hall should negotiate for lower trash rates than MarBorg is now offering and push harder for greater recycling. Councilmember-elect Cathy Murillo accused MarBorg of playing “hardball” and urged the council to look out for the interests of renters and low-income residents. Company representative Derek Carlson noted 18,134 of MarBorg’s 20,499 ratepayers would see their trash bills go down — many by as much as 14 percent — if the proposal was accepted as is. MarBorg political consultant Jeremy Lindaman added that most of the low-income renters alluded to by Murillo would see their rates drop by roughly 30 percent.
To the extent there was debate, it was over how much the consultants hired by City Hall should spend on evaluating MarBorg’s proposal and in preparing city negotiators for the bargaining sessions that lie ahead. Currently, $120,000 has been authorized, which the trash hauler will pay for. Should negotiations succeed, MarBorg — which has held a franchise for half the city’s trash pickup for the past 10 years — would have a contract that generates $16 million a year. Should negotiations fail to bear fruit after six months, City Hall has reserved the right to reopen the competitive bidding process.


Print friendly
E-mail story
Tip Us Off
Comments
Share Article
Myspace





Previous Month



Comments
I am not getting all warm and fuzzy with civic pride when a critical utility (trash hauling and recycling) becomes a monopoly with all the leverage over the city government and eventually it becomes too big to fail.
We have seen how that turns out in other critical industries.
And just how do we know that "negotiations fail to bear fruit" when we only have one flowering plant with which to compare the fruit production. Maybe, oh maybe, this cumulative $60 million contract indeed will attract other firms to enter the market.
Maybe editorial writers who pretend to know something about economics in other publications might start looking into and writing about all this? After all, the SB city establishment wants the Marborg Monopoly so that should be reason enough for Lanny and Wendy to be against it. Follow the money, who received it, and how they voted.
John_Adams (anonymous profile)
December 15, 2011 at 4:38 a.m. (Suggest removal)
The good ol U.S.A has been privatizing services at the request of the chambers of commerce for some time now. The long term result to rid us of government provided services, because of the corruption and all.
But now we're satisfied: now that we have a local who has provided what we, through city government, has asked for. The question is how will this apparent monopoly continue to be the good cost effective service provider without all this much bandied about 'competition.' Remember the chambers' mantra that competition is required for service and pricing. Shouldn't the chamber be against this or do they just go along with a good old boy.
DonMcDermott (anonymous profile)
December 15, 2011 at 6:14 a.m. (Suggest removal)
If any of the folks who chose to run off BFI pretend to be surprised by Marborgs new "hardball" stance I'd say they're not being honest. That or they never took "negotiation 101"!
The article I read said multiple unit rates would see a price increase which sounds like lower income folks will be hit. This is counter to what Marborgs political consultant is saying. Its very hard to know how inexpensively a job can be done without competitive bidding. No matter how hard Mario and his political consultant try to reassure us of their commitment to the community, the fact remains that Marborgs is in the drivers seat now. Here we goooooo.
JHL (anonymous profile)
December 15, 2011 at 8:45 a.m. (Suggest removal)
JHL writes truth to power this time.
The presentation/pitch by that political consultant and the Marborg staffer during that city council meeting differed markedly in many ways from the detailed, expensive analysis in the city staff report, which was supposed to be analyzing the same proposal.
One could conclude that the single, complicated proposal provided by Marborg was deliberately convoluted as a tactic to spend out the consultant budget for its analysis. Then, because no money would be left for an outside expert, the consulting budget would be depleted as a way to influence the city staff later to recommend against a true competitive proposal review process with open competition that would require more consultant funds. Even Michael Self saw that and asked the price of a consultant analysis of truly competitive proposals.
Are JHL and I the only ones smelling the stench here that will lead to trash bills for everyone at least $10 higher per month in a few years?
Perhaps so, as this news article by Nick Welsh was very disappointing today.
John_Adams (anonymous profile)
December 15, 2011 at 10:28 a.m. (Suggest removal)
Ken_Volok (anonymous profile)
December 15, 2011 at 2:30 p.m.
Mario Borgatello has been one of the best public citizens in Santa Barbara for at least my 3+ decades here. He gives personal and business funds freely in the community.
In an open bidding process MarBorg beat Allied, the competition, in an initiative that was being driven by a city insider.
What more should MarBorg do?
Not beat the competition in a competitive process after having been a great trash hauler for decades?
Not accept a contract simply because his business is more efficient than the competition?
Hauling garbage is not particularly amenable to multiple companies due to the recurring heavy burden of equipment(new trucks alone are around $300k each) and high personnel cost.
With regards to the Murillo comment about Marborg playing "hardball", duh Cathy, unlike community organizers and government supported programs, private companies have to play hardball to stay in business.
If and when Marborg screws up we can all yell; until that time why are we predicting doom for a company that has been an exceptional model in the community?
And no, despite our shared heritage, I have never met Mario in person.
italiansurg (anonymous profile)
December 16, 2011 at 6:11 a.m. (Suggest removal)
Italiansurge...you're right about private companies and the need to play hardball to survive. However, this all changes when you are given a monopoly. Think of it like a marriage.
You aren't supposed to play hardball with your spouse once they grant a monopoly. That's why I said "here we goo", we are waiting to see if Marborg will honor the trust they've been given and actually DROP our rates now that they have the whole pie. They can certainly operate on a thinner margin now that they KNOW they have a guaranteed income.
JHL (anonymous profile)
December 16, 2011 at 7:53 a.m. (Suggest removal)
It may or may not change, so you and I agree, and we have to watch closely.
italiansurg (anonymous profile)
December 16, 2011 at 10:06 a.m. (Suggest removal)
JHL is citing the ideal that seldom results. How happy is everyone with Cox Communications on their TV monopoly?
Is service improving while prices decline?
And italiansurg, before you take some more cheap shots, you first should read the lengthy staff report that was developed for this city council action last Tuesday. Your comments also are mixing up what happened in Goleta with Santa Barbara.
Good community organizers study the issues first instead of repeat Fox News sound bites.
John_Adams (anonymous profile)
December 16, 2011 at 2:02 p.m. (Suggest removal)
You and KV seem to be the experts on Fox news. I do not watch it. But keep watching and reporting back to those of us that can think for ourselves. We can always use another laugh at the expense of a Progressive mush head.
italiansurg (anonymous profile)
December 16, 2011 at 6:57 p.m. (Suggest removal)
btw JL-if you really believe that monopolies have monolithic business models stop listening to your recordings of the late Air America, turn off NPR, and do some analysis like a good community organizer; use the Tea Party model, for example...
Cable requires perpetual easement over public and private right of way with up front infrastructure that is mega expensive. Cable must purchase their content or make long term agreements with third party content providers. They must provide 24/7 coverage to each subscriber. They must contractually guarantee 24/7 customer service. Who is going to pay for the upfront infrastructure cost?
Garbage, on the other hand, requires no permanent and cost prohibitive infrastructure and easements other than a place to park trucks and processing facilities only IF the municipality want them, i.e. recycling centers/transfer stations. Service is periodic per individual customer and the delivery pipeline is flexible by route and time of day. The average customer interaction is roughly, oh, 15 seconds for garbage, 15 seconds for green waste and 15 seconds for recycling. Hmm, less than a minute per week and nobody cares when they show up as long as the crap is gone.
Cable has oversight from local, state and federal entities. Garbage contracts are controlled locally and should be easy to manage.
But, yea, other than the above they're EXACTLY THE SAME.
italiansurg (anonymous profile)
December 17, 2011 at 7:18 a.m. (Suggest removal)