Trash Hauler’s Underreporting Costs County Businesses Unwittingly Spared Landfill Fees By Garbage Contractor

An area trash hauler helped unwitting businesses dodge as much as $200,000 in landfill fees, Kootenai County officials say.

The shortfall leaves the county with a thorny choice: Try to get the money back from the company or bill each business.

The problem centers on the way the county collects landfill fees from area businesses.

Trash haulers bill businesses for picking up garbage, and are supposed to report those transactions to the county. The county then bills businesses for the cost of dumping that trash in the landfill.

But, in recent years, one garbage hauler - Coeur d’Alene Garbage Service - didn’t report its irregular, unscheduled collections.

As a result, the county didn’t know to bill the garbage company’s customers for landfill fees. In at least one case those fees would have topped $11,000.

Company owner Hal Damiano blames the reporting gap on unclear county laws.

County officials float a darker motive: Damiano, they said, may have sought to lower customers’ costs to gain an unfair competitive edge.

“It’s not a case of Coeur d’Alene Garbage trying to keep money they’re not entitled to,” Taggart said. “But there may be an advantage to deliberately underreporting.”

Damiano flatly denies he underreported to get customers. But he admits North Idaho’s garbage hauling industry has grown increasingly cutthroat.

Damiano contracts to haul all the garbage in Post Falls. His major competitor, Waste Management of Idaho, contracts with Coeur d’Alene. Hayden-area customers are fought over trash bin by trash bin.

“Everything else is open country,” Damiano said.

The county hasn’t decided how to recoup the money and isn’t sure yet how much is at stake. Officials are considering asking for a full-scale financial audit of Coeur d’Alene Garbage - a request Damiano said he would fight.

Stuck in the middle are some garbage customers who could be socked with thousands of dollars in back bills.

The county doesn’t even know who all those customers are, and refuses to release the names of those uncovered in a partial audit. County lawyers cite “attorney-client” privilege because the information was obtained in preparation for a legal battle with Damiano.

A frustrated Randy Rolphe, part owner of Century Publishing, learned recently he was never billed for up to $11,000 in landfill fees over the past two years. He doesn’t know whether to blame the county or Coeur d’Alene Garbage.

“I know I’ve requested detailed accounting from the county in regards to what amounts they think we owe, and they have not been able to produce anything,” he said. “But if due to discrepancies or inattentiveness on the part of the vendor supplying this service … gosh, I don’t need to be surprised with bills like this.”

County officials first noticed Coeur d’Alene Garbage’s reporting irregularities almost two years ago, when the solid waste department beefed up its accounting procedures.

But Damiano said his conflict with the county goes back to 1990, when commissioners passed a new garbage hauling law.

Until then, garbage men estimated the amount of refuse in a business’ trash bin before hauling it away. They reported that volume to the county, which used it for landfill billing.

But acting Solid Waste Director Steve Wulf feared that approach left too much room for error.

One garbage company could promise to regularly underreport a customer’s trash volume in exchange for repeat business.

“They felt there was an opportunity for the garbage men to use the county’s money to compete with other garbage men,” a disgusted Damiano said. “That never happened.”

The county changed its procedure so that businesses were billed based on the size of the trash bin - regardless of whether it was full.

Trash haulers were infuriated by the new law. Some cost-conscious customers, they figured, would abandon trash collection altogether. Others would use small trash bins and let their garbage pile up on the ground around it.

The two possibilities could cost haulers money or cut back on efficiency, Damiano said. And since customers were still throwing the same amount of trash out, haulers felt unable to raise their rates.

“People aren’t going to pay higher rates when they’re not generating any more garbage,” he said. “I lost 15 to 20 accounts from people who said, ‘Just take the container away.”’

In 1991, he and other trash haulers received a letter from the county, outlining the new rules for the type of garbage collection they must report.

The letter told haulers they must report even irregular, unscheduled garbage collection. The county described those irregular pickups using the term “will-calls.”

Damiano said he didn’t know what that term meant, so he tossed the letter aside and ignored it.

“I don’t now, nor have I ever offered a ‘will-call’ service,” Damiano said. “I have an ‘on-call’ service.”

Even though he charged customers to haul away garbage picked up during his “on-call” service, he didn’t report it to the county.

“It would be a violation of the relationship I have with my customers” to report those calls, he said.

But the county’s other major hauler, Waste Management of Idaho, reports all its garbage collection, operations manager Steven Roberge said.

Roberge said he isn’t too concerned about Coeur d’Alene Garbage’s conflict with the county. It’s part of the competitive nature of his business, he said.

Twenty years ago, when a competitor’s garbage truck was hit by a train, Damiano loaned out one of his own.

These days Damiano and Roberge don’t even speak - in part because Waste Management executives fear accusations of price fixing.

“Anymore, it’s a very sophisticated business,” Roberge said. “There’s a lot of reason to be careful.”

, DataTimes