King of the Hill

New MarBorg Trash Contract All But Approved

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

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.


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