SLO County to rejoin IWMA after embezzlement scandal. Will garbage rates increase?

San Luis Obispo County will rejoin the Integrated Waste Management Authority, a countywide organization that oversees compliance with state regulations for recycling and solid waste disposal.

In 2021, the board voted to leave the IWMA after an an embezzlement scandal and disagreement over a Styrofoam ban.

This meant the county assumed responsibility for making sure garbage collectors in unincorporated areas of the county follow state mandates.

Now that the IWMA has resolved the embezzlement case and hired new employees, the board voted 3-1 on Tuesday to rejoin the agency — with Arnold dissenting.

“I think its dangerous to live in the past,” Supervisor Dawn Ortiz-Legg said, noting that the IWMA restructured to prevent future embezzlement.

Returning to the IWMA will save the county about $700,000 annually and save ratepayers money, Supervisor Jimmy Paulding said.

“It’s about good governance and efficient provision of government services,” Supervisor Bruce Gibson said.

Two county supervisors will now join the IWMA’s board of directors, one as a member and the other as an alternate member.

The nine-member IMWA board will include representatives for the cities of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, San Luis Obispo, Paso Robles and Pismo Beach and as well as special districts, according to San Luis Obispo County Solid Waste Division manager Mladen Bandov.

Arnold said she dissented because the Board of Supervisors will only have one member seat on the IWMA’s nine-member board of directors, and she’s worried that cities’ interests will overshadow interests of unincorporated communities.

“Very often the needs of rural areas are different than the needs of the urban areas,” she said.

Supervisor John Peschong abstained from the vote.

What will happen to garbage collection rates?

Garbage rates would have increased in December in unincorporated areas of the county regardless of whether the county rejoined the IWMA.

However, those rates will increase by a smaller amount when the county returns to the waste management organization, according to the staff report.

In addition to paying trash collection fees, ratepayers are also charged solid waste compliance fees, which fund the county’s efforts to comply with state mandates for recycling and waste collection.

On Dec. 1, the solid waste compliance fee rate will increase from 2% to 4.4% of the garbage collection fee, according to Bandov.

If the county had continued to be its own provider, however, the fee would have jumped to 8.1%, the report said.

Currently, the waste removal fee for a 64-gallon garbage can costs between $30 and $70 per month depending on where the ratepayer lives in SLO County.

The solid waste compliance fee adds between 30 cents and $1.40 to the total haul-away cost, according to the report.

On Dec. 1, that fee will increase to between $1.32 and $3.08 for a 64-gallon garbage can.

The 4.4% rate expires on June 30, 2024, and the IWMA Board of Directors will decide whether to maintain, increase or decrease the rate at that point, according to Bandov.

The county hired three new staff members to replace the IWMA’s services, but one of those positions is now vacant, according to Bandov.

After the transition back to the IWMA, the county will eliminate the vacant position and assign the other two employees different duties within the county Public Works Department, Bandov said.

How did IWMA address embezzlement, lack of transparency?

After a tumultuous few years, the IWMA improved its accounting and oversight practices, according to IWMA executive director Peter Cron.

The San Luis Obispo County District Attorney’s Office started investigating allegations of fraud at the IWMA in 2018, which resulted in charging former IWMA board secretary Carolyn Goodrich with embezzlement and destruction of records in 2021.

The Board of Supervisors voted 3-2 to leave the IWMA shortly after the charges were filed.

Goodrich stole a total of $13,054 from the IWMA from 2014 to 2018.

In 2022, a court sentenced Goodrich to two years of felony probation, 60 days in San Luis Obispo County Jail and 100 hours of community service, according to San Luis Obispo County Assistant District Attorney Eric Dobroth.

Goodrich returned the stolen money to the IWMA, and was ordered not to handle money for work during her probation, Dobroth said.

In September 2021, the District Attorney’s Office released a report on its investigation, which found that former employees of the IWMA keep poor financial records and showed a “lack of transparency.”

However, they didn’t commit fraud, according to the report.

According to Cron, the IWMA improved its financial practices after the embezzlement scandal.

Now, the IWMA discloses every expense to its board of directors each month, he said.

“They see every penny we spend and every penny we bring in,” Cron said.

Additionally, at least two people must approve every expense at the agency.

“I can ask someone to buy me a pencil, but I can’t buy the pencil,” Cron said. “There’s multiple sets of eyes on every transaction.”

None of the IWMA’s current employees worked at the agency when Goodrich stole money, according to Cron.

These new practices increase transparency and are designed to prevent another employee from stealing from the agency, he said.

“To say that it would never happen again is probably wrong because you never want to say never,” Cron said. “But it will be challenging for someone to conduct a transaction that somebody didn’t have peer review over.”