Auditor Says County Is Overcharging 5 Trash Hauling Firms

Ventura County overcharged companies that haul away trash in the county’s unincorporated areas, according to a report released this week by the auditor-controller’s office.

The county audit of the Solid Waste Department includes recommendations to improve the department’s performance and to eliminate the so-called “evergreen clause,” which allows for the automatic renewal of trash contracts without open bidding.

The audit--released July 24--showed that over a two-year period the five trash haulers that operate in the county’s jurisdiction overpaid fees to the Solid Waste Department by about $142,000. The companies paid a total of about $1.4 million in fees during the period. The fees, which are based on each company’s gross receipts, pay for the administrative costs incurred by the Solid Waste Department.

The audit was prompted, in part, because of an internal memo written by a department accountant that detailed possible overpayments by the trash haulers.

After that memo became public this spring, many top department officials questioned the memo’s accuracy and a few suggested the county was not charging too much but that trash companies were underpaying their fees.

“There was some disagreement . . . about whether they were being charged too much or were not paying enough,” said Thomas Mahon, the county’s auditor-controller. “What we found was that the companies were reporting accurately and that they had been overcharged.”

The five-page audit says the current formula for how trash haulers--G. I. Industries, E. J. Harrison & Sons, Las Virgenes Disposal, Hillside Rubbish and Ojai Rubbish--are assessed fees is too complicated and contributed to the confusion over how much the companies should pay, Mahon said.

Officials of G. I. Industries and E. J. Harrison, the two largest haulers in the county, were unavailable for comment Friday.

The audit made several suggestions on simplifying that formula as well as how to improve the process for tracking administrative costs and developing better procedures for evaluating the performance of the Solid Waste Department.

“The department is already acting on a lot of those suggestions,” Mahon said.

Most importantly the audit recommends the county eliminate the evergreen clause in county trash contracts. If the county wants to terminate its contract with one of the companies, it must give the company seven years’ notice.

That process inflates the price for trash service, Mahon said.

“It’s the old rule that if you open it up to competition the price will drop,” he said.

Although there has been ongoing debate over the automatic renewal clause for more than two years, officials from the Solid Waste Department have not pressed to resolve the matter, department Director Kay Martin said.

“We didn’t press that issue because there didn’t appear to be enough support for the idea,” Martin said.

Eliminating the evergreen clauses is the one recommendation that the Solid Waste Department would not be able to implement by September, Martin said.

“That is a decision that the board [of supervisors] would have to make,” she said.