The Santa Barbara City Council on Tuesday approved a 10-year franchise agreement with MarBorg Industries for exclusive trash-hauling services that goes into effect July 1 and will bring new rates and services to city customers.
The negotiated agreement gives the family-owned company a monopoly of the South Coast besides the Ventura-based E.J. Harrison & Sons, which serves Carpinteria.
MarBorg purchased its main competitor, Allied Waste Services, in June 2011 after winning contracts over Allied for both the county and City of Goleta. It was already serving half of Santa Barbara.
The 10-year contract will cost about $16.79 million every year, which is $670,000 more than the current cost for services, according to environmental services manager Matt Fore.
Santa Barbara negotiated with MarBorg exclusively for 10 months over the city’s two trash zones and reached an agreement last October.
Some new services offered include: battery and cell phone collection; a sharps mail-in program; extra green waste collection; extra collection for the two weeks after Christmas; and unlimited collection of large appliances such as water heaters, washers and dryers. Appliances are often illegally dumped all over the city, Fore said.
MarBorg will also give the city 2,000 responses to illegal dumping — sending a driver to pick up items or piles before they become nuisances — and additional dumping for items such as pipeline and sidewalks dug up by the Public Works Department.
With the council’s 6-1 support Tuesday, the transition plan starts so the contract can take effect July 1.
MarBorg will purchase 14 new compressed-natural-gas vehicles, distribute new carts and dumpsters to customers, work out a new pickup schedule and do outreach to customers. The city will send out notices of the new rates in March and hold a hearing in June.
Single-family residential customers will have lower rates under the new agreement, but many businesses and multi-unit residential customers will see increases.
According to the Nov. 20 staff report: “In the multi-unit residential sector, 35 percent will see decreases or no increase, 49 percent will see increases of 1 to 15 percent, and 16 percent of customers will see increases greater than 15 percent. In the business sector, 31 percent of customers will see decreases or no increase, 53 percent of customers will see increases of less than 25 percent, 10 percent of customers will receive increases of 25 to 50 percent, and 6 percent of customers will see increases of over 50 percent.”
MarBorg business manager Derek Carlson spoke before the council and said the negotiation process was long but collaborative. The company is still a family business — Mario Borgatello Sr. is nearly 95 years old and still comes to work every day — and remains very dedicated to the community, Carlson said.
“We’ve worked to build upon the reputation of Santa Barbara as an environmental leader,” he said.
Many council members had been skeptical of negotiating solely with MarBorg for the contract.
“A sole-source negotiation is never a good idea, even when it involves an excellent local company like this,” City Councilwoman Cathy Murillo said.
She voiced concern about the lack of competition in the area — and potential impact on future rates — and the city’s decision to forgo a competitive bidding process.
“I hope that my caution and skepticism are proven wrong; I’d happily eat this crow,” said Murillo, who cast the only dissenting vote on approving the contract.
Councilman Dale Francisco said MarBorg was the only realistic choice since it’s the only hauler left in town. No other company would make the investment in labor, land and capital to come in and serve half of a small city, he said.
“This sole-source negotiation was really the result of a very, very long period of open competition in this area,” he said. “And I’m satisfied we could not have done better.”
Other council members agreed.
“MarBorg has a reputation to date as being a proactive citizen of the community,” Councilman Bendy White said. “I know there won’t be any complacency as the next generation manages this wonderful company and works with Santa Barbara.”