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147 18 The Creation of Envirocal, the Holding Company A new problem arose. We were required by law to include all in­ come from Sunset Scavenger Company in a certified public audit that was used to develop the rates in San Francisco. On the other income statements, revenues from outside of the city were reported as “other income” and added to the net profits of Sunset Scavenger Company. We believed that these income sources had no relationship to the cost of collecting and disposing of waste in San Francisco. Although we could legitimately argue that fact, I concluded that it would be better for each regu­ lated subsidiary to oper­ ate on its own. The point was that even though San Francisco had nothing to do with these other entities, it was conceivable that someone could integrate the revenues from these acquisitions within the rate structure . Our rates might be adjusted downward if that happened, a prospect that was not in our best interest. After due consideration, I concluded that we should create a new holding company with Sunset Scavenger Company. The directors were a little nervous when I first proposed this concept, because they did not understand the need to exchange the traditional Sunset Scavenger stock certificate of thirty-two shares for a certificate in a new corporation. Despite this, I was convinced that if we gave shareholders the proper notice and explanation, they would vote to adopt the plan. According to our attorneys, 100 percent of the shareholders had to agree to turn in their stock certificates for the new company’s certificates. At first, I picked the name Consolidated Environmental Industries Incorporated (CEI Inc.), but I was saddened to learn that someone already had that corporate name on file, so we couldn’t use it. After some discussion with the attorneys and PR people, we considered combining two words, Environment and Califor­ nia, to create a simple word. Envirocal Inc. was not necessarily as glamorous as I wanted the name to be, but it was better than nothing, and it made sense to have a name like that. With the help of attorneys and certified public accountants, we 148 The Creation of Envirocal, the Holding Company filed for permission to start a new corporation in the State of Dela­ ware (because of favorable tax incentives) and to transfer equity from all subsidiaries. As a result, Sunset Scavenger, Los Altos South Valley, Stockton Scavenger, Sanitary Fill Company, Joseph Petigera Company (our independent salvage/recycling entity), and others became subsidiaries of Envirocal Inc. in June 1972. To my pleasure and surprise, all of the shareholders did exchange their Sunset Scavenge Company shares for the new certi­ ficates in Envirocal Inc. Each Sunset Scavenger share certificate was canceled and given back to the original shareholder. For the record, the bylaws of Sunset Scavenger Company were incorporated into the new Envirocal Corporations, so all working shareholders’ compensation, benefits, and voting rights continued to be “treated absolutely equal and alike, regardless of office position or responsibility.” The only change was a general omission of the term Boss Scavenger. Public Companies Entering the Northern California Markets Garbage companies in Northern California operated on their own for many years; no physical connection of any kind existed among the people who managed them. However, Benny Anselmo, Dewey Vittori, Rudy Vacarezza, and other men who ran small one- or two-truck companies (similar to Oakland Scavenger and Golden Gate Disposal) formed an organization called the California Refuse Removal Council. It had its first meeting in June 1962 in Reno, Nevada, headed by Benny Caramela, then president of Reno Disposal Company. As an aside, Rudy Vacarezza, who left Sunset Scavenger to develop a business in Lodi, California and was an up-and-coming leader, suggested to the newly formed association that we use the term refuse collector instead of scavenger as well as change the word garbage to trash. He emphasized that he was not ashamed of the work he did, but wanted to put a better image on the industry as a whole. I, for one, agreed with him. Initially, the concept was solely to set up communication among the refuse companies and have them meet one another to work out common problems. But after several meetings and some research, it was concluded that private industry provided 95 percent of the waste collection services in Northern California, from the Oregon border to Fresno, with the balance provided by municipalities, 149 The Creation of Envirocal, the Holding...


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MARC Record
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