Landfill billing problems lead to citywide review

Problems with a delinquent garbage hauler last year are prompting the city to review how it handles money.

City officials will present a report Thursday about money-handling practices at the Sioux Falls Regional Sanitary Landfill. A Sioux Falls garbage hauler dodged payments for years and eventually racked up more than $250,000 in debt before city officials took him to court.

The report to the City Council Audit Committee this week is just part of the response, which will include a closer look at how all departments keep track of money owed, and how they bill for services.

“The questions would be is this happening elsewhere?” said Rich Oksol, internal audit manager for the city. “Was it just a landfill issue? Was it isolated?”

Dan Roach, owner of Dan’s Garbage Service, was in hot water with the city last year with unpaid landfill bills dating back to 2009.

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Sioux Falls officials took him to court in March 2015, and Roach confessed and agreed to pay back what he could. Roach was already in trouble with some of his clients, who complained about slow or nonexistent pickup and billing problems as part of an Argus Leader Media investigation.

City Councilman Dean Karsky, who sits on the audit committee, said landfill staff should have been quicker to bring the problem forward.

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“Instead of trying to manage it on their own, they probably should have taken it to the finance department or the city attorney and said, you know, this guy is into us for a lot of money here,” Karsky said.

The report this week will focus on how the landfill handles smaller cash, check and credit card payments from residents who pay directly for its services. It’s just one of the ways city officials responded in the aftermath of Roach’s massive debt load.

“This is strictly money that comes across the counter,” Oksol said.

The goal of the audit was to make sure these payments – which average about $700,000 a year – are properly and securely handled, and deposited on time.

Auditors recommended some improvements to the landfill’s video surveillance and check handling procedures but otherwise concluded the landfill’s methods were suitable.

Not included in Thursday’s report are the millions of dollars paid to the city by commercial garbage haulers. These are made in monthly payments. It’s the biggest chunk of money paid to the landfill, and it’s where Roach fell into trouble.

These payments make up about 92 percent of the landfill’s yearly collections, totaling $10.5 million in 2014. City auditors are still preparing a report on this kind of billing practice because officials decided to expand the scope of the investigation, Oksol said.

Instead of just focusing on the landfill, the city’s internal audit department is also exploring similar billing practices in other departments.

The next report is slated to be released in June, Oksol said.

“We expanded that to city-wide, so were not just focusing on the landfill,” Oksol said.

Read the audit: