COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Shad S. Springer, Director of Utilities
DATE: February 17, 2026
SUBJECT: Adoption of a Resolution Approving Disposal Fees for MarBorg Industries at Santa Maria Regional Landfill
Description:
The City Council will consider approving disposal fees for Marborg Industries at the Santa Maria Regional Landfill.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
Adopt a Resolution approving disposal fee s for Marborg Industries at the Santa Maria Regional Landfill effective January 1, 2026, July 1, 2026, and July 1, 2027.
BACKGROUND:
MarBorg Industries provides solid waste collection services in unincorporated areas of northern Santa Barbara County under a franchise agreement with the County of Santa Barbara (County). The f ranchise term began July 1, 2024, and expires June 30, 2034.
The franchise service areas include:
Zone 4: Unincorporated communities in the Santa Ynez Valley, including Los Olivos, Ballard, Santa Ynez, and surrounding rural areas. Zone 5: The unincorporated Orcutt area, including residential, commercial, and industrial customers located outside the City of Santa Maria boundaries.
Under the franchise agreement, MarBorg Industries has designated the Santa Maria Regional Landfill (SMRL) as its pr eferred disposal facility. The County has approved SMRL as a designated disposal facility for waste collected in Zones 4 and 5.
Disposal fees at SMRL are set by the City of Santa Maria (City) based on landfill operating costs, capital improvement needs, a nd a rolling five -year financial analysis intended to support long-term landfill operations. SMRL increased the disposal fee from $100 per ton to $105 per ton on January 1, 2026, consistent with rates approved by City Council.
2 County staff and MarBorg Industries staff notified the city that the increased rate of $105 per ton was not included in the County’s rate-setting process for the current rates charged to customers in Zone 4 and Zone 5 of the County.
The County requires disposal fee information to be provided annually by March so those costs can be included in franchise rates that take effect on July 1 of that year . When disposal fee changes occur after this deadline, the full cost of disposal cannot be reflected in franchise rates until the follo wing year. This can delay cost recovery and require additional administrative adjustments.
DISCUSSION:
MarBorg Industries has requested a one-time adjustment to the disposal fee schedule so that future City -approved landfill fee cha rges can be implemented on clear and predictable dates. In evaluating this request, City staff considered that MarBorg Industries delivered approximately 43,000 tons of waste to SMRL during calendar year 2025, primarily from Zone 5. That quantity of waste is a significant revenue stream for the SMRL and is considered in financial modeling for future funding. In addition, the long-term nature of the franchise agreement between MarBorg Industries and the County provides an opportunity for the City, County, and MarBorg Industries to partner on solid waste disposal in the Santa Maria Valley.
In order to provide advance d clarity on disposal rates and protect the City’s financial interests, City staff have developed a phased disposal fee schedule. The phased disposal fee schedule allows for the previous rate of $100 per ton to be maintained through the County’s current rate setting period (June 30, 2026) with an increase in the next two County rate-setting periods to address the anticipated revenue needs for the SMRL.
Proposed Disposal Fee Schedule
City staff recommends the following disposal fee schedule be charged for waste delivered by MarBorg Industries for refuse collected from the County’s Zone 4 and Zone 5 franchise service areas:
January 1, 2026 Disposal fee set at $100 per ton, consistent with prior year’s rate July 1, 2026 Disposal fee increases to $115 per ton
July 1, 2027 Disposal fee increases to $120 per ton
Alternative(s)
The City Council may:
1) Direct staff to continue implementing current disposal fees. While this maintains the existing fee structure, it is not recommended as the higher disposal rate increases the risk that MarBorg Industries may pursue alternative disposal options or request future concessions, which could reduce long-term disposal volumes and associated revenue to the City. Additionally, this would introduce uncertainty in disposal volumes at SMRL at a time when the City depends on consistent tonnage to support landfill operating costs and long-term capital planning. 3 2) Direct staff to apply a single disposal fee increase without phasing. While this increases revenue more quickly, it provides less advance notice and increases the likelihood of future adjustments or disputes, creat ing administrative and financial uncertainty for the City. A single, immediate increase may discourage continued use of SMRL by a major regional customer, increasing the risk of reduced disposal volumes and associated loss of landfill revenue.
3) Direct staff to create a separate disposal rate class for County franchise haulers.
This could address franchise timing directly but adds complexity to the City’s rate structure and increases administrative effort without a clear financial benefit to the City. Importantly, establishing a separate rate class may prompt similar requests from other landfill users, limiting the City’s flexibility in future disposal fee setting and increasing the risk of reduced revenues over time.
It is recommended to approve the proposed phased disposal fee structure for Mar Borg Industries to p rovide predictable and clearly defined disposal fee cha rges, i mprove revenue stability, avoid mid-year corrections and administrative rework, and allow the City to maintain control over landfill rat e-setting. This recommendation best supports the financial interests of the City and the long-term operation of the SMRL.
Fiscal Considerations
MarBorg Industries is a major regional user of SMRL. Disposal volumes and revenue associated with MarBorg Industries deliveries have a direct impact on landfill financial performance, supporting landfill operating costs, future capital needs, and long -term financial planning.
Impact on the Community
The proposed disposal fee structure does not change collecti on services or disposal locations for residents or businesses in unincorporated Santa Barbara County. Clear and predictable disposal fee charges reduce the likelihood of unexpected rate adjustments being passed on to customers.
Impact on the City
Approval of the proposed disposal fee structure benefits the City by increasing revenue and supporting long -term financial planning. It will also strengthen the City’s role as a reliable regional disposal facility.
Attachment(s)
A. Resolution