Our new cat thinks garden mulch is a litter box. HELP!

IWe rescued a shelter cat last year. Despite all the methods one can employ to prevent it (shaking cans of coins by any door about to be opened, etc) , he turned out to be very much of an outdoor cat, much against our wishes. We are far from any road, and our yard is fenced (to keep deer out of our extensive organic vegetable/flower gardens, daylily collection, and iris beds) . He hangs close to home, comes in and out all day, gets along great with all our other pets (indoor-only cats and a chihuahua) and is an all around good boy. Now for the bad news. He does his business in the mulch of our gardens. His 'preferred brand' of litter is the cedar mulch of our borders within the fenced in yard. I have seen him do this...he is a fastidious little guy who spreads the mulch outward, then squats in the center, and then covers it all up into a tremendous pile of mulch. You can't miss it. I am aghast, and revolted even though I can understand his thinking. This is a serious crisis for us. Does anyone have any suggestions or ideas? Our last resort is to give him back to the shelter. I don't think I can live with myself for a decision like that. Lottabeds from the Hudson Valley, NY