Contract With Waste Management Under Fire

Saying a trash firm has dramatically overestimated the amount of garbage it collects here, city officials are taking steps to cancel the company’s multimillion-dollar contract that would allegedly overcharge residents $1.2 million over five years.

The action--aimed at a subsidiary of Waste Management Inc., the nation’s largest trash company--comes just three weeks after San Diego prosecutors urged “extreme caution” in contracting with the Illinois-based trash giant, saying it has a history of environmental sins and public corruption.

In a letter expected to be delivered today to the Irvine office of Dewey’s Rubbish Services, the city charges the firm with inflating by more than 30% the amount of Mission Viejo refuse brought to Orange County landfills and denying city auditors access to key records.

The notification, required by the city’s contract with Dewey’s, a subsidiary of Waste Management, gives the trash company 30 days to rectify the alleged improprieties. But city officials said full compliance would be near impossible.

“They can’t do it,” City Councilman Robert Breton said. “They’re in breach in so many ways, it would be virtually impossible for them to rectify what they’ve done.”

Officials with the trash hauler, however, said they’ve made a strong effort to address any problems.

“Reasonable people have reasonable differences,” said David Ross, general manager of Dewey’s Rubbish. “We’ve done everything in our power to meet the city’s demands.”

To halt the contract termination, the firm would be required to roll back trash rates, compensate the city for more than $100,000 in expenses and acknowledge a “pattern of deception,” Breton said. The city would then have the option of canceling the agreement or entering binding arbitration.

“Like in poker, it’s time to show our hands and see what we’ve got,” he said.

The city’s action could end 18 months of often acrimonious negotiations that have soured Mission Viejo politics since a new City Council majority was elected in November, 1990, and began closely scrutinizing the trash contract.

In San Diego, Dist. Atty. Edwin Miller said in a report issued April 1 that Waste Management Inc. is so large that it seems impervious to the millions of dollars of fines and penalties it has been assessed over the years for alleged environmental and antitrust violations.

Waste Management, which does business with 1,500 public agencies around the nation, did $6 billion in business nationally in 1990.

Miller’s report was requested by the San Diego County Board of Supervisors in connection with what turned out to be an unsuccessful proposal by Waste Management to own and operate a North County landfill. The report found no evidence of criminal wrongdoing by the company’s San Diego County subsidiaries.

Last August, the city of Mission Viejo hired an accounting firm to review Dewey’s Rubbish records. After weeks of research, city officials say they found proof that the firm hauled 31,564 tons of trash in 1991 instead of the 41,441 tons estimated by the company.

That difference cost Mission Viejo homeowners about $250,000 last year and would overcharge the city $1.2 million by the expiration of the contract in 1995, Breton said.

Times staff writer Alan Abrahamson in San Diego contributed to this report.