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Published: Sunday, 7/4/2004

Coding error costs Waste Management

BY JENNIFER FEEHAN
BLADE STAFF WRITER
Waste Management blames a coding error for the underpayment of dumping fees at the Evergreen landfill in Northwood and Walbridge. Waste Management blames a coding error for the underpayment of dumping fees at the Evergreen landfill in Northwood and Walbridge.
LONG / BLADE Enlarge

BOWLING GREEN - When Waste Management confessed it had underreported the amount of solid waste deposited at its Evergreen Landfill for 4 1/2 years, state and county officials didn't know whether to be impressed with the company's honesty or suspicious of its story.

By Waste Management's account, the Wales Road landfill had misidentified nearly 200,000 tons of solid waste between January, 1999, and September, 2003, and failed to pay the required taxes on that waste.

The garbage giant subsequently wrote checks totaling more than $1.1 million to cover the back fees to the Ohio Environmental Protection Agency, the Wood and Lucas County solid waste districts, Northwood, and Walbridge.

Kathy Trent, spokesman for Waste Management of Ohio, said the situation was the result of a simple error in coding loads brought to the company-owned landfill.

"It is unusual, but as soon as it was discovered Evergreen voluntarily came forward and disclosed the information on our own because we wanted the communities we work with and the agencies that regulate us to know that we are a compliant company," Ms. Trent said.

Not all the parties consider the matter settled.

"Do we have the full story? I don't know. Are there questions? Yes," said Ken Rieman, director of the Wood County Solid Waste District, which received $430,465 in back fees from the company.

Wood County commissioners, who act as the district's board of directors, said they intend to seek penalties for the late fees - penalties which by law could total in the millions of dollars - but they want to get more information about how the mistake was made before determining what a fair punishment would be.

"When a problem occurs involving so much waste over such a long time, you want to find out: Did this become accepted business practice? Did higher level managers understand it and condone it? How was it allowed to continue for such a long time?" asked Albin Bauer, a Toledo attorney hired to represent Wood County commissioners. "... Clearly it was potentially a financial benefit to the landfill."

Waste Management's attorney Robert Leininger said in a lengthy March 19 letter to the waste district that the error "arose because a concerted program of training, monitoring, and auditing this portion of the facility operations had not been implemented."

He said that during that 4 1/2 year period, all open-top, roll-off loads from Waste Management's Northwest Ohio Hauling Division were automatically coded as construction and demolition debris - regardless of what was inside.

Because it is not considered solid waste, by law construction debris is not subject to the state, county, and local taxes that are charged on every ton of solid waste dumped at landfills.

The error, Mr. Leininger said, was discovered in September, 2003, when a new district manager, Bob Downing, came on board and began reviewing operations at Evergreen, a 158-acre landfill that sits in Northwood and a small portion of Walbridge.

Mr. Downing immediately stopped the practice, and procedures similar to what Waste Management has in place at its other landfills were implemented, the attorney said.

An internal audit - conducted by an outside firm working with Waste Management personnel - revealed fees were not paid on 199,882.44 tons of solid waste.

Mr. Rieman is skeptical. He has numerous questions for Waste Management.

"How do we know it was just your hauling company? Why was it just your hauling company when several others haul in there?" he asked. "The question becomes, if it was just your hauling company, how can that be and be accidental?

"We're trying to resolve it," he added. "To Waste Management's credit, they came clean. On the debit side, they didn't do it right."

In January, the Ohio EPA launched its own investigation into the matter.

Andrew Booker, a supervisor in the EPA's division of solid and infectious waste, said the agency is still examining Waste Management's facts and figures. In April, the EPA received $351,724 in back fees from the company.

Asked if the EPA would conduct its own audit of the company's records, Mr. Booker said, "I hesitate to use the word audit. The exact steps that we will be taking, we're still working through some of that. Certainly there will be some direct follow-up. We won't just be taking it at face value."

Reporting what kind and how much waste gets deposited at a private landfill is the sole responsibility of the landfill operator, in this case Waste Management.

Mr. Rieman said neither he nor anyone in his office noticed a dip in monthly garbage generation and disposal fees paid by Waste Management, which average around $85,000 a month.

Much of the money is used to reduce trash and promote recycling by buying brush chippers and other equipment for communities, operating the Bowling Green Recycling Center, funding the sheriff's litter pickup program, and giving each community in the county $1 per resident for recycling efforts.

Mr. Rieman doubts he ever would have known about Waste Management's error unless the company had come forward.

"Volumes go up and down with the seasons. They go up with a special job. They go up and down with the weather," Mr. Rieman said. "... If we didn't get a check each month, I'd say, 'Whoa. We've got a problem.' But there's a check. It goes up and down. You don't know."

That makes some officials question whether Waste Management's error was intentional, whether company officials feared someone might blow the whistle on them.

"It makes you wonder why they brought it to our attention," said Commissioner Jim Carter. "Were they just being good stewards?"

Ms. Trent said Waste Management came forward "because it's the right thing to do.

"You discover you made a mistake. You correct it, and you move on," she said. "We believe we have a very positive working relationship with our communities and we want to continue that."

The EPA's Mr. Booker said solid waste regulations indeed rely on self-reporting by landfill owners and operators.

"There's a great deal of faith that things will get reported accurately," Mr. Booker said. "There are consequences if they don't - if it's discovered and they don't - so presumably there's enough disincentive to generally keep the system working correctly."

Wood County Prosecutor Ray Fischer said the matter could wind up in court, though attorneys are hoping it can be settled before it reaches that point.

"The penalty provisions are very substantial," Mr. Fischer said. "... Waste Management wants to say, we are very nice to go to confession and tell you our sins, but don't punish us."

Mr. Booker said it would be premature to say whether the state would pursue penalties.

Waste Management, for its part, says it's not liable for penalties because it came forward independently and paid the back fees promptly.

"First, Ohio's law requires that any penalty for paying fees late is related to Ohio EPA fees, not the solid waste district fees," Ms. Trent said. "Second, late fees are assessed only if the actual fee is collected and not remitted."

In this case, Evergreen Landfill did not collect the fees in the first place, she said.

Contact Jennifer Feehan at jfeehan@theblade.com or 419-353-5972.



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