Let the Trash Wars Begin

For the past seven years, Mario Borgatello and Stephen MacIntosh worked almost hand-in-glove to expand recycling opportunities throughout the South Coast. Now, they’re preparing to go head-to-head in what promises to be a prolonged and bruising battle over monopoly, competition, and garbage franchises.

Over the past 10 years, Borgatello — trash czar for the privately held and locally owned MarBorg Industries — has been spectacularly successful playing the role of David to Allied Waste’s monolithic Goliath. If MarBorg was infinitely smaller, Borgatello proved faster, shrewder, and bolder than Allied’s local executives, successfully prying away half the City of Santa Barbara’s $18-million garbage-hauling franchise. While preaching the gospel of old-fashioned competition, Borgatello practiced the nitty-gritty of recycling in ways that left Allied honchos — and their predecessors with BFI — choking on his dust. During much of that time, Borgatello worked closely with Stephen MacIntosh, an upstart city bureaucrat with a frisky entrepreneurial spirit who made his City Hall superiors more than a little nervous. A true believer when it came to recycling, MacIntosh pushed and prodded for a successful food-scrap program that not everyone in City Hall wanted to see happen. Likewise, MacIntosh pushed Santa Barbara’s dueling waste haulers to get more aggressive about commercial recycling.

This past spring, corporate executives with Allied’s $8.2-billion parent company — Republic Services — recognized that if they didn’t take immediate action, Borgatello would successfully run them out of town. In what Allied had complacently thought was an information-only Goleta City Council meeting in March to hammer out details of a competitive bidding process, Borgatello walked away with an exclusive franchise agreement worth an estimated $4.2 million. Only after the gavel came down did Allied grasp what had just happened.

With the Noleta franchise — worth $2.1 million — coming due next year, and half the City of Santa Barbara’s — worth $9 million — expiring in 2013, Allied realized it had to fight fire with fire. It hired MacIntosh away from the City of Santa Barbara, where he’d grown increasingly restive over his lack of management status. “They made me an offer I couldn’t refuse,” recounted MacIntosh. “But when I refused it anyway, they made me another offer. That one I couldn’t say no to.”

Today, MacIntosh is doing his best to sound like Borgatello did 10 years ago: If Borgatello made friends in high places by going green, MacIntosh is ready to do the same. It was Allied, he points out, who volunteered $250,000 worth of help that got the food-scrap recycling program up and going. If MarBorg installed giant solar panels on its industrial facility, so too would Allied. If MarBorg fuels its fleet of trucks with clean-burning compressed natural gas, so too does Allied. And if MarBorg donates generously to community groups, MacIntosh vowed to start writing checks. And if Borgatello takes pride in his extended family and corporate family, MacIntosh is here to redefine Allied — as he did before the county supervisors this week — as “a local operation” and “a family.” But mostly, MacIntosh talks about competition. “Monopoly isn’t good for the customer or the community,” he said. “I don’t care if you happen to be Mario Borgatello or Jesus Christ.” In fact, MacIntosh has been showing off a letter Borgatello wrote 10 years ago, extolling the virtues of competition. At that time, Borgatello was engaged in an intense bidding contest with Allied’s predecessor, BFI. “Mario was right then,” MacIntosh said, “and he’s right now.”

For all MacIntosh’s newfound corporate bravado, MarBorg has a huge head start when it comes to action. When other trash haulers embraced recycling with reluctant disdain, MarBorg partnered with the Community Environmental Council (CEC) to lead the charge for curbside recycling. Without Borgatello’s help, it’s unlikely the CEC would still be alive. Likewise, MarBorg built the plant on the Eastside capable of handling vast quantities of commercial and demolition waste. Where MacIntosh insists his corporate bosses have given him carte blanche to change Allied’s MO, Borgatello is his own boss, and has been so for more than 20 years. In recent customer satisfaction surveys, MarBorg scored better than any of its rivals in the local trash business. Intensely engaged and competitive, Borgatello bristles at MacIntosh’s efforts to portray MarBorg as the 800-pound gorilla. “He’s trying to portray us as Goliath and Allied as the poor little David,” Borgatello spat. “Allied’s parent company is the second biggest trash company in the country. It’s worth $8.2 billion! Come on, that doesn’t pass the mustard test.”

Whatever affection and regard Borgatello may have once held for MacIntosh is now irrelevant. Since MacIntosh joined Allied, Borgatello has been pointedly reminding elected officials and their minions in the solid-waste bureaucracies of Allied’s transgressions over the years. Allied’s past practices should count for a lot more, he said, than MacIntosh’s newfound corporate religion. In particular, Borgatello is claiming that Allied took trash it collected during the free spring-cleaning massive dump afforded all customers once a year — known as annuals — and buried much of it at the landfill rather than recycling it. In at least one documented instance, Allied workers took a TV set collected at an annual and deposited it at the dump, a violation of state e-waste laws, not just the company’s franchise agreement. MacIntosh was not working for Allied at the time, but dismissed this as an isolated incident. City solid-waste employees also investigated the matter, and Bob Samario — MacIntosh’s former boss at City Hall — likewise concluded it was an isolated incident.

Borgatello remains far from convinced. “Where are all their records? Where are all their dump tickets?” he asked. “There are none. I rest my case.” The real issue, he said, is not the rhetoric of monopoly and competition, but which company can best deliver the goods. On that point, MacIntosh and Borgatello at least claim to agree. And as far as dump tickets and records, MacIntosh said Allied has them all. “Come on down. Take a look,” he said. “There’s nothing to see.”