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By a commitment to recycling and political savvy, Mario Borgatello (second from left) has emerged as the major player in South Coast trash disposal.

Paul Wellman

By a commitment to recycling and political savvy, Mario Borgatello (second from left) has emerged as the major player in South Coast trash disposal.


King of the Hill

New MarBorg Trash Contract All But Approved


Wednesday, November 28, 2012
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About the only thing missing were trumpets and a cape for Mario Borgatello, reigning papa bear of the Borgatello garbage dynasty, which after years of waging guerilla war against his multibillion-dollar conglomerate competitors has emerged simultaneously as both David and Goliath.

At last Tuesday’s City Council meeting, MarBorg Industries — the Borgatello family company — was all but awarded a new 10-year contract worth about $160 million in net revenues. Though the final decision won’t be officially rendered until January 15, it was a done deal. Aside from a few respectfully skeptical questions from Councilmember Cathy Murillo, it was all air kisses and butterflies from the council, whose members took pains to praise MarBorg’s pioneering efforts on behalf of recycling and commitment to customer service.

MarBorg today stands as the undisputed king of South Coast trash. Last June, MarBorg outhustled and outmuscled Allied Waste — which held very longstanding contracts in both Noleta and Goleta — securing new eight-year franchise agreements worth $46 million. Shortly thereafter, MarBorg bought out Allied’s contract for half the City of Santa Barbara. Only the small trash concession enjoyed by E.J. Harrison in Carpinteria stands in MarBorg’s way of a complete monopoly of South Coast trash.

For Borgatello, it must have been a pinch-me moment, the ultimate vindication for the insult he’s nursed since 1973. That’s when he claimed the family business, started in 1936, was denied a fair shot at competing for the city’s contract and BFI — Allied’s predecessor — won the bid via methods not just underhanded, but illegal. A little more than 10 years ago, Borgatello began his relentless — and then audacious — campaign to crowbar one-half of the city’s contract away from BFI, citing his company’s stellar efforts on behalf of recycling. It worked. Without MarBorg’s recycling numbers, the City of Santa Barbara could never have met state requirements that a large chunk of the waste stream be diverted from the Tajiguas Landfill.

Since then, Borgatello has relentlessly bird-dogged BFI — and later Allied — making sure it lived up to the letter of its contract with City Hall. Last summer, Allied concluded it would rather sell out than fight it out with the politically connected Borgatello any further and did so — for an undisclosed amount — with about a year left on its contract. For the past eight months, MarBorg has been negotiating the terms of the first new unified city contract, set to take effect next year, with City Hall. Behind the scenes, there was plenty of friction; MarBorg’s first two proposals were rejected. But by last Tuesday, the contention had been tamed and the terms of a new contract arrived at. The council has scheduled the first public hearing on the new contract for December 11.

For those not utterly transfixed by the operatic melodrama of Santa Barbara’s long-running trash wars, the new contract offers very tangible new services and new rates that will take effect next July. Rates will go down 15-20 percent for about 45 percent of the city’s single family residential customers, while the green waste recycling services will be limitless. Rates are slated to stay the same for the other 55 percent. All residential customers will get two days of free big bulk pickups — not the one day now provided. In addition, the contract calls for free mail-in recycling of needles and other sharp objects. Curbside recycling for batteries and old cell phones will also be offered. Apartment dwellers will see their recycling services expand, but they will have to pay more for it. Likewise, many businesses, though not all, will see their rates go up to better reflect the true cost of recycling.

City Hall will also get an expanded commitment from MarBorg to pick up old mattresses, TV sets, refrigerators, and the like dumped in public areas by private citizens. Built into the contract is a guarantee that MarBorg can make an 8 percent profit; should the cost of business eat into that margin, MarBorg has the right to reopen the contract, providing a third party auditor gets to look at its books. In actual dollars, MarBorg will be taking in roughly $670,000 more a year than what ratepayers shelled out under the now expiring contract. Part of this will pay the cost of converting MarBorg’s fleet of trucks to compressed natural gas; part will be used to defray the company’s loss in revenues as customers begin to recycle more.

Comments

Independent Discussion Guidelines

Photo caption: "Get away from me or I'll hit you over the head with this pipe".

billclausen (anonymous profile)
November 28, 2012 at 1:46 a.m. (Suggest removal)

Trash, check. Toilets, check. Temp fence, check. All events, check. City counsel, check. Still greedy enough to want more, check. Watch out construction industry, mafia-borg has already taken work away from small local fence contractors while they attempt to work into permanent fence and gate sales. They won't be happy until we're eating maf-borg brand cereal in our mob-borg home... Thank you city counsel, now it's cox cable, cottage hospital and monop-borg.

99percenter (anonymous profile)
November 28, 2012 at 7:18 a.m. (Suggest removal)

What will the city do in a few years when Marborg wants more money? Sure, they have a contract but when Marborg stops picking up trash because they want to renegotiate the contract early and are holding the city hostile, what alternative will the city have from this monopoly?

Monopoly is as monopoly does.

John_Adams (anonymous profile)
November 28, 2012 at 8:52 a.m. (Suggest removal)

Yeah, BFI was really great weren't they - NOT - they had their chance to compete and their service was miserable. Marborg has proven themselves to be a good corporate citizen.

JohnLocke (anonymous profile)
November 28, 2012 at 9:44 a.m. (Suggest removal)

Which is the lucky 45% of the city's single family residential customers that will see a rate reduction?

at_large (anonymous profile)
November 28, 2012 at 10:34 a.m. (Suggest removal)

Seems to me there's some nasty comments in this thread. Such trash-talking is disappointing.

billclausen (anonymous profile)
November 28, 2012 at 2 p.m. (Suggest removal)

So 99percenter and John Adams, let me ask you one thing. Would you rather have a national faceless corporation sending it's profits elsewhere or would you like a local family owned business employing dozens upon dozens of employees, most of them earning way more than a "living wage" and spending their hard earned pay here locally? I've known the Borgatello family for 40 of my 55 years and I admire not only their hard work, but the risk they take on a continual basis. Imagine the expense of maintaining over 100 trucks, each of them costing around $250,000. Imagine what happens to the business and employees if they didn't get the contract? Can you say "you're laid off" to probably 250 employees? Oh, and who would pick up the trash afterwards and who would separate recyclable materials and reduce the volume sent to Tajiguas? Do you realize this separation is done manually?! Both of you go ahead and spout off, because you'd both be the same complainers when Republic or Waste Management took the contract and laid off all the employees.

person (anonymous profile)
November 28, 2012 at 9:36 p.m. (Suggest removal)

Oh, and another thing. So 99percenter and John Adams, have you ever been part of a non-profit and gone to Marborg for sponsorship? I have volunteered and worked with several non-profits and every single time I've gone to them to sponsor an event, it's a YES without hesitation. They pour probably hundreds of thousands of dollars back into the community.
It's okay, because you'll find another reason to complain. It shows your jealousy of the success that comes from hard work.
Our city should have more families and businesses like them. Instead we have too many like you.

person (anonymous profile)
November 29, 2012 at 7:12 a.m. (Suggest removal)

It totally sucks when a local family achieves great success after only 70 or 80 years of really hard work. Who do they think they are?

Kingprawn (anonymous profile)
November 29, 2012 at 7:53 a.m. (Suggest removal)

Well, as Obama said, "[they] didn't build that".

JohnLocke (anonymous profile)
November 29, 2012 at 9:20 a.m. (Suggest removal)

These folks give more back to this community than any of you know. They live modestly, drive Chevy's and GMC's and work their ass's off 24/7, and that can be proved. Head down there on Sunday morning and see for yourself. Being a 99%, that may be to much work for you though!! Hopefully someday our community will realize all that these folks have done for them....... from providing scholorships to HS to donating bathrooms to Girsh Park..... list goes on from Hollister to State.
What ever happened to congratulating success!
State of the Nation..........and it's sad.

Cape (anonymous profile)
November 29, 2012 at 9:52 a.m. (Suggest removal)

All you defenders of the monopoly have made your points, such as they are.

You have no defense except to appeal to sentimentality, personal friendships / spinships or mythmaking, and amazingly argue that a particular corporation is a better decider of financial contributions to local nonprofit organizations than direct contributions by individuals would be in the same community. Geez, Cox Cable tries that spin too.

So, again, go ahead and defend why a monopoly of a critical public utility service (trash hauling and recycling) is a good idea in a capitalist economy. And do explain what the city should do or can do in a few years when Marborg wants more money, because they WILL WANT MORE MONEY and fabricate any excuse before the end of the contract.

John_Adams (anonymous profile)
November 29, 2012 at 10:19 a.m. (Suggest removal)

The City would be better off taking over trash collection.

Ken_Volok (anonymous profile)
November 29, 2012 at 10:27 a.m. (Suggest removal)

He's using part of the extra money to convert his trucks to clean burning CNG? How dare he! These big businessmen are supposed to be selfish and greedy without any concern for the environment. Another liberal fantasy destroyed.

Botany (anonymous profile)
November 29, 2012 at 10:39 a.m. (Suggest removal)

haters hate. thats what they do. #talktothehand. #nocomplaintshere.

lawdy (anonymous profile)
November 29, 2012 at 10:56 a.m. (Suggest removal)

How dare they promise to increase recycling percentages!
How dare they reduce landfill volumes!
How dare they convert their trucks to clean burning fuel!
How dare they give mulch away for free! How dare they pick up extra trash for free!
And as far is it being a monopoly, you've conveniently forgotten they must compete for the contract each time it comes up for renewal. Millions of dollars of capital are at risk every time the competition for the contract comes up.
John Adams is happy with nothing and scapegoats success.

person (anonymous profile)
November 29, 2012 at 11:12 a.m. (Suggest removal)

And Marborg is still a Monopoly and no spin or attacks on the messenger will change that stubborn fact.

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. Monopolies are thus characterized by a lack of economic competition to produce the good or service and a lack of viable substitute goods. The verb "monopolize" refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power, to charge high prices.Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry (or market).

A monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods. Monopolies, monopsonies and oligopolies are all situations such that one or a few of the entities have market power and therefore interact with their customers (monopoly), and the other companies (oligopoly) in a game theoretic manner – meaning that expectations about their behavior affects other players' choice of strategy and vice versa. This is to be contrasted with the model of perfect competition in which companies are "price takers" and do not have market power.

When not coerced legally to do otherwise, monopolies typically maximize their profit by producing fewer goods and selling them at higher prices than would be the case for perfect competition. Sometimes governments decide legally that a given company is a monopoly that doesn't serve the best interests of the market and/or consumers. Governments may force such companies to divide into smaller independent corporations as was the case of United States v. AT&T, or alter its behavior as was the case of United States v. Microsoft, to protect consumers.

Monopolies can be established by a government, form naturally, or form by mergers. A monopoly is said to be coercive when the monopoly actively prohibits competitors by using practices (such as underselling) that derive from its market or political influence. There is often debate of whether market restrictions are in the best long-term interest of present and future consumers

John_Adams (anonymous profile)
November 29, 2012 at 11:30 a.m. (Suggest removal)

Isn't the trash co. always a monopoly no matter who it is? BFI, Allied Waste, Marborg?

We have quite a few monopolies in town. So Cal Gas., SCE, Cox Cable. Even SB and Goleta water are all monopolies. They need to go abide by strict rules when they make changes or raise rates. Remember smart meters?

Yeah, and we could have the city take over trash collection. Then we'd have another public employee union gouging the taxpayers of Santa Barbara. I'll take Marborg any day over having the city do it.

Botany (anonymous profile)
November 29, 2012 at 11:43 a.m. (Suggest removal)

Curbside recycling of batteries will be a nice added service. But hopefully it won't be needed long as more & more people switch to rechargeable batteries.

A Sanyo Eneloop AA cell costs $2.50. It can be recharged 1,500 times.

A Duracell AA costs $0.35, has to be thrown away after one use, and loses charge just sitting there unused.

That makes the Eneloop over 200-times more cost effective!

Costco has the Sanyo charger for a measly $6 now.

EastBeach (anonymous profile)
November 29, 2012 at 12:39 p.m. (Suggest removal)

Riiiight. Let's have the City take over trash collection. And even further expand the cadre of overcompensated government employees that we can't afford. And face cuts in service, just like we've seen in libraries, road maintenance, traffic patrol, etc. etc. as the local gov fails to deal with a bloated, overcompensated, overpensioned bureaucracy. Remember the definition of insanity....

And why do some of you so hate success? Are you failures? Lazy? Always assume that the successful must have somehow cheated their way to success? Just envious of anyone who has accomplished much? Why??? And are you the same folks who think that taxing the rich will solve all our problems? Surely you see the inherent contradiction therein. Or is there REALLY no cure for stupid, as one columnist recently opined.

JohnLocke (anonymous profile)
November 29, 2012 at 2:48 p.m. (Suggest removal)

I say divert resources away from tourist oriented projects and focus on local residents, that'd be a huge first step JL.

Ken_Volok (anonymous profile)
November 29, 2012 at 2:55 p.m. (Suggest removal)

Still waiting to read a defense of the monopoly.

John_Adams (anonymous profile)
November 29, 2012 at 3:36 p.m. (Suggest removal)

Wow, here we have a fantastic local company serving the community and many of you want to pass this service off to large corporations run from afar?

These folks are good people and they live here... so they care and they work hard to provide good services.

In addition Marborg leads the industry in so many aspects. We're really, really lucky to have a local provider... most of you are simply clueless as to how much of a benefit this is...

iamsomeguyinsb (anonymous profile)
November 29, 2012 at 4:28 p.m. (Suggest removal)

You, John Adams, see what you want to see.
Try reading the comments of John Locke and Botany.
Your real issue is jealousy and hatred for success and refusal to admit that hard work and sacrifice over generations should be rewarded.
Everyone on this thread knows what a monopoly is. This clearly is a natural monopoly industry (economics 101). The regulators, Marborg and even you know that. We're all past the definition you so demand. The fact is Marborg will be and always has been under regular surveillance and adherence to objective and measurable performance standards. Something I'd bet you've probably never agreed to.
Go back to your subsidized housing, tenure and entitlement mentality.

person (anonymous profile)
November 29, 2012 at 4:37 p.m. (Suggest removal)

Mr. Adams,

Did you just move here from Los Angeles.......you seem really uninformed and out of place? Not to mention Jealous.

Cape (anonymous profile)
November 29, 2012 at 5:43 p.m. (Suggest removal)

JA

Good for you man. Ride that "monopoly" angle into the sunset, buddy. Who cares if anyone else will ride with you? I appreciate the focus.

Kingprawn (anonymous profile)
November 29, 2012 at 7:03 p.m. (Suggest removal)

You all can huff and puff and blow yourselves silly but "John Adams" is indeed correct. Marborg, by the textbook definition indeed has the trash monopoly in SB. Hoping, and posting and pretending the only definition of monopoly is a board game isn't gonna change the fact that Marborg indeed is a monopoly. The level of willful ignorance displayed here rivals Mitt Romney's.

Ken_Volok (anonymous profile)
November 29, 2012 at 10:13 p.m. (Suggest removal)

Willfull Ignorance!! Ha
None of us care that they have a monopoly, that's the point brain surgeon. Better them than someone else.
There is not a better alternative for our community....period!
Now go huff, puff and blow

Cape (anonymous profile)
November 29, 2012 at 11:05 p.m. (Suggest removal)

There is a better alternative Mr. Astro-Turf , and that is having the city operate garbage pickup. Many cities save many dollars by operating their own refuse disposal.
In addition, monopolies never serve the consumer (or the trade). John Adams is quite right on all his counts, perhaps if your opinion wasn't for sale you might agree.

Ken_Volok (anonymous profile)
November 29, 2012 at 11:38 p.m. (Suggest removal)

Attack the messenger all you want, but we all are still waiting to read a defense of the monopoly.

Anyone?

John_Adams (anonymous profile)
November 30, 2012 at 7:44 a.m. (Suggest removal)

Marborg is one of two monopolies that dispose of our trash. Marborg collects it and the County buries it, Both are monopolies but few discuss the County monopoly. The County owned and run Landfill, dump, is run as an "enterprise" funded operation. It charges what it wants and spends what it takes in. It's only oversight is from the County Supervisors, hardly known for their benevolence to folks in the cities or even the county. And any attempt over the years to let the trash haulers pick and choose landfills to haul our trash to has been stymied by the County. Yes, government itself can be and often is the worst of 'monopolies".

dontoasthecoast (anonymous profile)
November 30, 2012 at 7:45 a.m. (Suggest removal)

Public employee unions have been a huge disaster for the state, the country as well as the city. It just boggles my mind that anyone would even consider creating another public employee union burden for the city to shoulder.

Botany (anonymous profile)
November 30, 2012 at 7:56 a.m. (Suggest removal)

Ken, you're a movie guy, so I know you'll understand me if I put it this way, "Yeah, well, you know, that's just like, uh, your opinion, man."

Kingprawn (anonymous profile)
November 30, 2012 at 7:58 a.m. (Suggest removal)

Again, John Adams, we all know what a monopoly is and that there are inherent dangers to allowing one to exist.
So what's your solution? The city to own and run trash collection? That's a monopoly, too. You want 3-4 different trash companies in town? Imagine the pollution, traffic etc from the constant criss crossing garbage trucks.
You can't have it both ways.
Also, if you're saying others' opinions are for sale, well maybe your's is. I'm thinking you're a local union boss who has had no luck penetrating Marborg and their well compensated and appreciated workforce.
Again, read Botany, dontoasthecoast, and John Locke above.

person (anonymous profile)
November 30, 2012 at 8:14 a.m. (Suggest removal)

Anti-monopolists: Marborg is a monopoly. All monopolies are evil. Therefore Marborg is evil.

Marborg supporters: We wish the Borgatello family all the best. They've been really good to this community.

Anti-monopolists: Past behavior doesn't predict future behavior. Marborg is evil now...all of a sudden.

Marborg supporters: We understand how you feel, but disagree.

Anti-monopolists: You're wrong, you don't have a basic understanding of the word "monopoly", you have no integrity (opinions for sale) and you're wrong. Did we mention you're wrong?

Marborg supporters: Nope. You forgot to do that.

Anti-monopolists: Well, then...YOU'RE WRONG!

There. Nut-shelled.

Kingprawn (anonymous profile)
November 30, 2012 at 9:20 a.m. (Suggest removal)

This has got to be one of the most hilarious discussions I've ever seen.

On the one side, you have free market conservatives arguing for government monopoly while on the other side you have a leftist occupier arguing for more market competition =D

Ok, so the city is doing a reasonable job holding them accountable - these firms know if they want to stick around for a long time they will have to provide reasonably good service. And they are providing reasonably good service. I can't say the situation is optimal, but it's working for the moment.

I want to see the federal government get out of the business of corporatizing and monopolizing nearly every industry under the sun with their regulations and federal departments before I am going to worry about what is happening at the local level in small towns where citizens are able to have greater control over their leaders.

loonpt (anonymous profile)
November 30, 2012 at 9:49 a.m. (Suggest removal)

loonpt, you couldn't have said it better!

person (anonymous profile)
November 30, 2012 at 11:19 a.m. (Suggest removal)

Loonpt is one of my best friends all the haters might like to know :P

Ken_Volok (anonymous profile)
November 30, 2012 at noon (Suggest removal)

Stop privatization in it's tracks and beat it back away from public utilities, which trash collection is. There is no reason Marborg and the City's own garbage dept couldn't exist side by side.

Ken_Volok (anonymous profile)
November 30, 2012 at 12:53 p.m. (Suggest removal)

This just in from New Jersey. Cities and towns that run their own utilities had their service fully restored in days; municipalities with privatized utilities didn't have service for weeks and some still don't.

Ken_Volok (anonymous profile)
November 30, 2012 at 4:27 p.m. (Suggest removal)

Cool story, bro.

Kingprawn (anonymous profile)
November 30, 2012 at 4:52 p.m. (Suggest removal)

loonpt FOR THE WIN!!

Someone gets it instead of denying the truth.

Next question: will the "free market conservatives" who support the Marborg Monopoly be willing to bet that the prices to the public bill payers will not be rising at least 15 percent within 5 years? Still trust Saint Mario then?

John_Adams (anonymous profile)
November 30, 2012 at 5:22 p.m. (Suggest removal)

If we had a trash collector's public employee union, they would be demanding wage and benefit increases of 30% over 5 years.

Botany (anonymous profile)
November 30, 2012 at 5:55 p.m. (Suggest removal)

And John Adams would be right there getting paid to picket.

person (anonymous profile)
November 30, 2012 at 6:21 p.m. (Suggest removal)

Ken, how can you possible believe that the City can collect trash at lower cost when city employees receive total compensation far in excess of the private sector? Alchemy?

Of course its a monopoly. As someone else said, Econ 101 - there are certain functions, that, properly regulated, are more efficient as monopolies.

JohnLocke (anonymous profile)
December 2, 2012 at 10:16 a.m. (Suggest removal)

The facts point to themselves, your team just majorly lost an election ignoring the facts. Since the public welfare is at stake, the public should have greater control.
It hasn't nothing to do with whether the people who own Marborg are nice people or not; but everything to do with the common good and wise future planning.

Ken_Volok (anonymous profile)
December 2, 2012 at 12:59 p.m. (Suggest removal)

"As someone else said, Econ 101 - there are certain functions, that, properly regulated, are more efficient as monopolies." @JohnLocke

"____" @Ken_Volok

Exactly.

Kingprawn (anonymous profile)
December 13, 2012 at 7:18 p.m. (Suggest removal)

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