Trash, Recycling Firms Call Report to Orange Misleading

Orange’s trash and recycling companies, which the district attorney’s office is investigating on fraud allegations, are objecting to a consultant’s report that found problems with their operations.

A letter from the Los Angeles-based accounting firm of Alder, Green & Hasson states that parts of a report presented to city officials earlier this month were misleading. Z. Harry Astor, attorney for the companies, gave the letter to City Council members at their meeting Tuesday.

The city’s study, done by Hilton Farnkopf & Hobson of Newport Beach, found that Orange Disposal Service Inc., the city’s trash hauler, and Orange Resource Recovery Systems Inc., the subsidiary recycling plant, had operational and financial problems.

The report said the companies may have overcharged ratepayers for the recycling plant by $1 million and improperly charged some business costs to residents.

Accountants for the companies said that the $1 million in dispute was actually justified. But, because investigators have seized and continue to hold many of the documents, the original consultant did not have all the evidence, they said.

The firm “believes that the comment concerning the overstatement of [recycling plant] costs is unsubstantiated and is highly unfair due to the city’s control over the records,� the letter said in part.

Other ratepayer charges are legitimate contract issues still in dispute and the city’s consultant failed to state the companies’ positions on the issue, the companies’ representative said.