June 5, 2018

To The Citizens Group

Of San Luis Obispo County

Dear Citizens Group:

I am pleased to provide you a copy of my report (with exhibits) on the
investigation of the San Luis Obispo Integrated Waste Management Authority
(IWMA). I have previously provided copies of my reports on the investigation of
Charles K. Tenborg and his related companies. All of the information in this
report was obtained through Public Record Requests (PRAs) or provided by
citizens of the San Luis Obispo area.
Respectfully submitted,

Carl R. Knudson, CFE, PI (#19339)

213-364-4474

Attachments; as stated
June 6, 2018

To The Citizens Group

Of San Luis Obispo County

Report on The Integrated Waste Management Authority

San Luis Obispo, Ca

INTRODUCTION
On February 6, 2018, I issued my first preliminary report in response to your
request to conduct an investigation of Charles K. Tenborg and his related companies;
Eco Solutions, Fond Farewells Inc., CEC Medical Waste Services Inc., CEC
Electronic Waste recycling, The Cleaner Earth Company Inc. and Stericycle, Inc.
On February 14, 2018, I issued an addendum to my original report dated February
6, 2018 in response to your request to summarize potential “perjury” or “false
statements” made by Charles K. Tenborg that were uncovered during our
investigation of Charles K. Tenborg and his related companies. Copies of the
previous reports are available but are not attached to this report.
You subsequently asked me to conduct an investigation of the Integrated
Waste Management Authority (IWMA) that had long-standing ties to Charles K.
Tenborg, Eco Solutions and the Cleaner Earth Company Inc. I was informed that
Mr. Bill Worrell, the manager of the IWMA had long standing ties with Mr. Tenborg
and had actually testified on behalf of Mr. Tenborg in the recent trial (March 2017),
Tenborg v. Karen Velie, et al.
Both investigations of Mr. Tenborg and the IWMA have been limited to
Public Record Requests to local and state government agencies; and to citizens of
the San Luis Obispo area who have provided information as noted. As noted in my
previous reports, I attempted to gain the cooperation of Cold Canyon Landfill, Waste
Connections and Pacific Gas & Electric who had a business relationship with Mr.
Tenborg and his companies, but I was informed that they were not subject to the
Public Records Act and would not cooperate.
REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

I have collected a vast number of records during my investigation of the

Tenborg Companies and the IWMA, but I have only included a sampling of much
of the Warrant Requests and related invoices from The Tenborg Companies.
Unless otherwise stated, the information in this report is based upon
information and belief, this report is based upon my personal knowledge and if called
upon to testify, I could and would competently testify thereto.
INTEGRATED WASTE MANAGEMENT AUTHORITY (IWMA)

1. The IWMA was formed in 1987 under a Joint Powers Agreement (JPA)
entered into by the “cities of; Arroyo Grande, Atascadero, El Paso de Robles,
Grover Beach, Morro Bay, Pismo Beach, and San Luis Obispo, all being municipal
corporations of the State of California and located within the boundaries of the
County of San Luis Obispo California, hereinafter called "CITIES," and the
County of San Luis Obispo..” local and county agencies and has been managed by
Mr. Worrell since that time to the present. A Board of Directors was established
that consisted of representative from the participating cities and districts and
Raymond A. Biering, legal counsel was retained to advise the IWMA on legal
issues. Mr. Biering has been the IWMA’s legal counsel since 1994.

2. The IWMA is located 870 Oso Street, San Luis Obispo, Ca and is managed
by William (Bill) A. Worrell with a small staff consisting of Carolyn Goodrich,
Board Secretary and Pattie Toews, Program Director. Mr. Worrell has been the
manager of the IWMA facility since 1995.

3. I have received a copy of the Joint Powers Act (JPA) regarding the
formation of the IWMA and have extracted and highlighted certain portions of the
Act as follows:

“1 .12 "Manager" means the person hired and appointed by the Board as
the Authority's administrative officer to administer the affairs of the Authority
and to effect the policies of the Board.”

“5.2 To the full extent permitted by applicable law, the Authority is

authorized, in its own name, to do all acts necessary or convenient for the
exercise of such powers that each Member could exercise separately
including, without limitation, any and all of the following:

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(a) to make and enter into contracts, including contracts with any Member;

(b) to apply for and accept grants, advances.and contributions;

(c) to contract for the services of engineers, attorneys, accountants,

planners, consultants, fiscal agents and other persons and entities;

(d) to make plans and conduct studies;

(e) to acquire, improve, hold, lease and dispose of real and personal
property of all types;

(f) to sue and be sued in its own name;

{g) to incur and discharge debts, liabilities and obligations;

(h) to establish rates, tolls, tipping fees, other fees, rentals and other
charges in connection with the Authority's facilities identified in Paragraph
5.1 herein, as well as any and all services provided by the Authority; to hire
agents and employees;..”

“5.3 Such powers shall be exercised subject only to the limitations set
forth in this Agreement, applicable law and such restrictions upon the
manner of exercising such powers as are imposed by law upon the
Members in the exercise of similar powers. In no event shall the
Authority be authorized to exercise any power not expressly
authorized.”

“7.1 The Board. The Authority shall be governed by the Board, which shall
exercise or oversee the exercise of all powers and authority on behalf of the
Authority.”

“7.2(b) Representatives of the County and CITIES shall be appointed to

serve on the Board in accordance with procedures established by each of
the governing bodies of the member agencies. Representatives to the
Authority shall consist of the five members of the Board of Supervisors of
the County of San Luis Obispo and of one additional member from the
governing body of each incorporated city within the boundaries of the
County of San Luis Obispo which is a party to this Agreement, with each
incorporated area being limited to one representative. ((7 cities and 5 from
country = 12)

7.4 Officers.

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(a) The officers of the Board shall consist of a President and Vice-President
elected for a term of one year by a majority vote of member agency
representatives to the Authority.

(b) Both the President and Vice-President of the Board shall be elected at
the last meeting preceding July of said year.

(c) The officers shall serve until their successors are elected.

(d) The duties of the officers shall be as follows:

1) · President

a) Shall preside over all meetings of the Board as Chairman.

b) Shall appoint all ad hoc committees subject to ratification by the Board.

c) Shall exercise general supervision over all activities of said Authority.

d) Shall be an ex-officio member of all committees.

e) Shall execute all contracts and legal documents on behalf of the

Authority.

2) Vice-President

a) Shall serve as Chairman pro-tern in the absence of the President.

b) Shall give whatever aid necessary to the President in administering of

the Authority.

c) Shall be an ex-officio member of all committees.

7.5 Manager.

The Board shall employ or contract for the services of a manager (the
"Manager") who shall be the chief administrative officer of the Authority. The
Authority shall select a qualified manager using professional personnel
standards and an open competitive process. The Manager shall plan,
organize and direct the administration and operations of the Authority, shall
advise the Board on policy matters, shall recommend an administrative
structure to the Board, shall hire and discharge administrative staff, shall
develop and recommend budgets, shall reply to communications on behalf
of the Authority, shall approve payments of amounts duly authorized by the
Board, shall carry out such other duties that may be assigned to the
Manager by the Board from time to time and shall attend meetings of the
Board.

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8.5 Quorum and voting. For purposes of conducting business. there shall
be present a quorum consisting of a majority of representatives, including
one COUNTY representative. Each representative shall have one vote. No
action shall be effective without the affirmative votes of a majority of those
present. However, eight (8) affirmative votes shall be required for taking any
action in the event any Member demands such a vote. The representatives
to the Authority shall adopt such procedures as are consistent with this
Agreement and necessary to conduct the business of the Authority in an
orderly manner.

8.6 Budget. The Cities and the County have entered into a Memorandum of
Agreement among the County of San Luis Obispo and the Cities of Arroyo
Grande, Atascadero, El Paso de Robles, Grover Beach, Morro Bay, Pismo
Beach, and San Luis Obispo for the Establishment and Payment of Landfill
Tipping Fee Surcharges To Support The San Luis Obispo Integrated Waste
Management Authority (the "MOA''). Pursuant to the MOA, those members
of the Authority having jurisdiction over such matters have agreed to
establish tipping fee surcharges (the "Tipping Fee Surcharges") which shall
be paid into a Solid Waste Authority Trust Fund (as defined in the MOA) for
the purposes therein.

(a) A line item and program budget for the Authority's operations shall be
adopted by the Board for the ensuing Fiscal Year prior to June 30 of each
year. All costs incurred by the Authority shall be set forth in the budget and
shall be paid out of the solid waste fund derived from tipping fee surcharges
and other sources as approved by the Authority.

The line item and program budget shall be submitted in draft form to all
member agencies for review and comment prior to adoption.

The line item and program budget shall include sufficient detail to constitute
an operating guideline, the anticipated sources of funds, and the anticipated
expenditures to be made for the operations of the Authority and the
administration, maintenance and operating costs of the facilities identified
in Paragraph 5.1 herein. Any budget for Sole Use Facilities shall be
maintained separately. Approval of the line item and program budget by the
Board shall constitute authority for the Manager to expend funds for the
purposes outlined in the approved budget, but subject to the availability of
funds.

(b) A budget for the acquisition, construction, or operation of facilities, or for

contracting for the acquisition, construction, or operation of facilities,
identified in Paragraph 5.1 herein shall be adopted by the Board before the
Authority commits any acquisition or construction funds or contracts. It may
be amended if and when determined by the Board. Approval of the budgets

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for the facilities identified in Paragraph 5.1 herein shall constitute authority
for the Manager (or any trustee or other fiduciary appointed by the Authority)
to receive state or federal grant funds and proceeds of Revenue Bonds and
to expend funds for the acquisition, construction, or operation of the facilities
identified in Paragraph 5.1 herein.

SECTION 9. Joint Operating Fund and Contributions.

The Authority shall have the power to establish a joint operating fund. The
fund shall be used to pay all administrative, operating and other expenses
incurred by the Authority.

Funding shall be on an enterprise basis or as determined by member

agencies. All monies in the joint operating fund shall be paid out by the
Treasurer for the purposes for which the fund was created upon
authorization by the President of the Board and approval by the Controller
and Manager of demands for payment, or as otherwise authorized by
resolution of the Board filed with the Treasurer. No Member shall be
obligated to make any contributions of funds to the Authority for facilities to
be established in accordance· with Section 5.1 or pay, any other amounts
on behalf of the Authority, other than as required by this Section 9, without
that Member's consent evidenced by a written instrument signed by a duly
authorized representative of that Member.

The Authority shall contract with an independent certified professional

accountant to conduct annual fiscal audits as required by the Public Utilities
Code Section 99245.

9.1 Treasurer. The Treasurer of San Luis Obispo County shall be the
Treasurer of the Authority. The Treasurer shall:

a). Receive and receipt all money of the Authority and place it in the
Treasury of San Luis Obispo County to the credit of the Authority.

b). Be responsible for the safekeeping and disbursement of all Authority

money held by him/her.

c). Pay any sums due from the Authority, from Authority funds held by
him/her or any portion thereof, upon warrants of the Controller designated
herein, Invest funds.

The Authority shall reimburse the Treasurer for the actual cost of services
rendered.

9.2 Controller. The Auditor-Controller of the County of San Luis Obispo shall
be the Controller for the Authority. The Controller shall:

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INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018
a}. Draw warrants to pay demands against the Authority when the demands
have been approved by the Authority Board and/or the Manager. He/She
shall be responsible on his/her official bond for his/her approval of the
disbursement of Authority money.

b). Keep and maintain records and books of accounts including keeping
separate sub accounts of tipping fee surcharges and other revenues
deposited into the Solid Waste Authority Trust Fund and expenditures made
therefrom on the basis of generally accepted accounting principles.

c). Make available all such financial records of the Authority to a certified
public accountant or public accountant contracted by the Authority to make
an annual audit of the accounts and records of the Authority. The minimum
requirements of the audit shall be those prescribed by the State Controller
for special districts under Section 26909 of the Government Code and shall
conform to generally acceptable auditing standards.

d). Verify and report in writing as soon as possible after the first day of July,
October. January, and April of each year to the Authority the amounts of
monies he/she holds for the Authority, the amount of receipts since his/her
last report, and interest accrued to those funds.

The Authority shall reimburse the Auditor/Controller for the cost of services
rendered.

SECTION 10. -·Records and Accounts.

This Section and Section 9 are intended to insure strict accountability of all
funds of the Authority and to provide accurate reporting of receipts and
disbursements of such funds.

The Authority shall maintain accurate and correct books of account showing
in detail the costs and expenses of any service or acquisition and
construction and the maintenance, operation, regulation and administration
of any service or joint use or sole use facility and all financial transactions
of the Members relating to any service or joint use or sole use.... facility.
Books and records shall be established and maintained in accordance with
generally accepted accounting principles promulgated by the California
State Controller's Office and the Governmental Accounting Standards
Board. The books of account shall correctly show any receipts and any
costs, expenses or charges to be paid by all or any of the Members. The
books of account shall be open to inspection at all times by a representative
or agent of any of the Members. In addition, if required by any resolution
authorizing the issuance of Revenue Bonds, the Authority shall maintain
appropriate books·, records, accounts and files relating to each project as
required by such resolution which shall be open to inspection by holders of

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Revenue Bonds if and to the extent, and in the manner, provided in the
resolution.”

4. I have been advised by Mr. Wayne Hall, former San Luis Obispo County
Official that the IWMA Executive Committee was never legally formed because an
amendment to the JPA agreement would be required in order to legally delegate or
usurp any of the “authority” created in the original agreement? There has been no
documentation on the formation of this committee, its’ purpose and its’ powers.

5. I have obtained a copy of a 2006 Contract Agreement with Bill Worrell from
my PRA request to the IWMA. The contract in part states:

“2. Scope of Services. Pursuant to this contract, Manager shall perform all
functions and duties of Chief Administrative Officer as specified in the
IWMA Joint Powers Agreement, and such other legal permissible and
proper duties and functions as may be assigned by the IWMA Board of
Directors.” (Exhibit A, Worrell Contract, May 10, 2006).
I understand that this contract is the most current contract between the IWMA and
Mr. Worrell. I believe Mr. Worrell has been the manager of the IWMA for over
twenty-years and I have seen no indication that the contract awarded to Mr.
Worrell was put out for competitive bidding.

6. I have obtained a copy of a 2006 Contract Agreement between the IWMA

and Raymond Biering (Exhibit B). I understand that this is the most current
contract with Mr. Biering. I believe Mr. Biering has been general counsel for the
IWM since 1994 and I have seen no indication that the contract awarded to Mr.
Biering was put out for competitive bidding.

REVIEW OF IWMA RECORDS

7. In my previous two reports, I detailed the IWMA records I reviewed related

to Mr. Tenborg and his companies.

8. In my very first meeting with Mr. Worrell at the IWMA, I noticed that there
were no billing records for Charles Tenborg or his companies being provided prior
to the year 2013 even though my PRA request was asking for billing records for

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INTEGRATED WASTE MANAGEMENT AUTHORITY
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the period beginning in 2009. Mr. Worrell informed me at that time that he had
destroyed the IWMA billing records that I was requesting related to the billing
statements covering the period 2009 to 2012 for Charles Tenborg and related
companies. In subsequent meetings and emails with Mr. Worrell, he has confirmed
that he destroyed the billing records for Tenborg and his companies but has not
responded to my repeated requests to provide information regarding the destruction
of the IWMA records such as; a listing of the records that were destroyed, when
they were destroyed and by whom. In my last meeting with Mr. Worrell he
believed that the retention period for the invoices and billing records was two
years. I have not found a provision for the destruction of records in the IWMA,
JPA.

9. Based upon my training and experience as a Certified Fraud Examiner and

as a Forensic Accountant, I am aware that the destruction of government records is
not permitted without prior approval. Further, the retention of certain records
according to State and Federal regulations is required depending on their certain
classification. I am aware that the retention period for “accounting records” is for 5
(five years).

10. As an example, I have reviewed the City of San Luis Obispo Records
Retention Policy and Schedule that is posted on their website that reads as follows:

“DISPOSITION OF PUBLIC RECORDS

At least annually, each Department is responsible for reviewing all records in its
custody. Records that have reached the end of their retention period are to be
destroyed pursuant to the Destruction of Public Records section of this manual.
Electronic versions of those records must also be deleted at the same time.
The City Council, by adopting the Records Retention Schedule, authorizes City
Department Heads to destroy duplicate records less than two years old if the
records are no longer required in accordance with adopted retention schedules.
All original records to be destroyed must be listed. Requests for the destruction of
original records must be approved by the responsible Department Head and the
City Attorney prior to destruction. A Request for Records Destruction/Certificate
of Destruction (sample 1) and listing of documents to be destroyed (sample 2),
and copy of the appropriate page(s) from the records retention schedule shall be
filed in the Office of the City Clerk.”

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INTEGRATED WASTE MANAGEMENT AUTHORITY
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11. I have also confirmed the regulation on the 5 (five) year retention of
accounting records with the San Luis Obispo’s County Auditor’s office.

12. Based upon my various public records requests for records and my review of
the IWMA’s agenda items and minutes for the period 2009 to March 2018, I have
not found any evidence that the IWMA Board of Directors approved a public
records destruction request from the management of the IWMA.

13. As part of my investigation, I have reviewed the bidding process for

contracts being awarded by the IWMA. The IWMA, Joint Powers Agreement
stated at para:

“5.2 To the full extent permitted by applicable law, the Authority is

authorized, in its own name, to do all acts necessary or convenient for the
exercise of such powers that each Member could exercise separately
including, without limitation, any and all of the following:

(a) to make and enter into contracts, including contracts with any Member;

(b) to apply for and accept grants, advances and contributions;

(c) to contract for the services of engineers, attorneys, accountants,

planners, consultants, fiscal agents and other persons and entities.

14. Under the premise that the Authority would authorize contracts for vendors
wishing to do business with the IWMA, I focused my PRA requests to the IWMA
for contracts, Requests for Proposals (RFPs), responses to RFPs and IWMA Board
approval of contracts with the IWMA. As detailed in my two previous reports
dated February 6, 2018 and February 24, 2018, I focused primarily on the
relationship between the IWMA and Mr. Tenborg and his companies.

15. My first requests to the IWMA were for the contracts between the IWMA
and Mr. Tenborg and his companies. I was provided a signed and executed copy of
a May 1997 contract between Eco Solutions and the IWMA. The contract was for
the fiscal-year 1997/1998 for an amount of $21,000 and Raymond A. Biering
IWMA Counsel signed as Approved as to form and legal effect. (Exhibit C)

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16. The second contract provided by Mr. Worrell related to Eco Solutions is a
contract for 2001, but there was no detail as to the duration of the contract other
than at para 3. “until terminated in accordance with this contract.” The contract
was signed by George Luna, President and Raymond A. Biering, Counsel
Approved as to form and legal effect.” Attached to the 2001 contract was a
“Proposal” from Eco Solutions for “FY2001/2002 Management of Household
Hazardous Waste and Used Oil Collection Program.” The proposed total for
services was $83,000. (Exhibit D)

17. Based upon my review of the IWMA records, there was no indication that
this 2001 contract was awarded based upon a competitive bidding process where
RFPs were solicited from hazardous waste specialist. The only “Proposal”
provided by Mr. Worrell was the one for Eco Solutions.

18. My review of the IWMA records for FY2002/2003 revealed a “Proposal”

dated April 18, 2002 from Eco Solutions and signed by Charles K. Tenborg. The
proposal was for “FY2002/2003...” The first paragraph states, “Eco Solutions is
pleased to submit this proposal...” The proposed amount is $141,213 an increase of
$58,213 from the previous year. (Exhibit E) I did not find an RFP issued by the
IWMA for the fiscal year 2002/2003.

19. This same pattern continues from 2004 to 2013 with Eco Solutions
providing a “Proposal” for each of the Fiscal Years as follows but there is no RFP
in the IWMA documents provided by Mr. Worrell for any of the proposals listed
below:

Year Amount of Proposal

2004/2004 $205,425
2004/2005 $242,394
2005/2006 $213,846
2008/2009 $353,963
2009/2010 $344,527
2010/2011 $439,517
2011/2012 $401,247
2012/2013 $404,145 (Exhibits F-M)

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20. Based upon my review of the IWMA Board Minutes and Agenda for the
period 2004 to 2013 there is no documented discussion regarding the Eco
Solutions proposals and the rising costs of the proposals. Based upon my review of
the IWMA minutes and agenda’s it appears that there was no competitive bidding
for the above referenced “contracts.” As detailed in my previous reports on Mr.
Tenborg, the bidding process from May 2013 and beyond are covered.

21. In a November 1, 2012 email from Mr. Worrell responding to a question

regarding Eco Solutions to Karen Velie, Mr. Worrell stated that, “The Board hired
him as part of approving the budget…” “Each year as part of the budget process
his proposal is included in the budget item for the Board to act on.” Mr. Worrell
made the same statement on a question regarding a contract with Mike DeMilo.
(Exhibit N).

22. As part of my review of the IWMA records for the period 2009 to 2018, I
reviewed copies of the IWMA proposed budgets that were attached to the IWMA
agenda items for May of each year. The proposed budget consisted of a one-page
summary of amongst other things, “Services and Supplies” that included general
categories without names. However, the names of Eco Solutions and Mike
DeMilo were listed on each of the proposed budgets and seems to confirm Mr.
Worrell’s email to Ms. Velie that the Eco Solution proposal was included as a line-
item in the proposed budget. It is apparent that there was no competitive bidding
by Eco Solutions or by Mike DeMilo at least until May of 2013.

23. Mr. Worrell in a declaration (Exhibit O) (California Superior Court,

October 2, 2013, page 11 stated:

“43. At the time the contract was bid upon, counsel for the IWMA informed
us that the contract did not need to go out for competitive bidding. As
indicated on the finalized contract itself, the IWMA legal counsel, Raymond
Biering, approved the contract “as to form and legal effect,” thus confirming
that the contract was in accordance with applicable legal guidelines.”

24. Mr. Worrell’s trial testimony on March 9, 2017 in California Superior Court
stated (Exhibit P transcript):

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“19 MR. LABAR: LET'S PUT UP EXHIBIT 81, WHICH HAS
20 BEEN ADMITTED INTO EVIDENCE. OKAY.
21 Q. AND DO YOU RECOGNIZE EXHIBIT 81, SIR?
22 A. SURE, THAT'S THE AGREEMENT THAT MY BOARD OF
23 DIRECTORS APPROVED BACK IN MAY 1997.
24 Q. ALL RIGHT. AND WAS THIS AGREEMENT RENEWED
25 ON AN ANNUAL BASIS?
26 A. THERE WAS AN AMENDMENT MADE EVERY YEAR TO
27 RENEW IT, YES.
28 Q.
18 Q. OKAY. HAS MR. RAY BARON EVER MADE ANY {{Raymond A.
Biering}}
19 COMMENTS AT THE PUBLIC MEETINGS INVOLVING THE IWMA ABOUT
20 WHETHER AGREEMENTS LIKE THIS NEED TO BE SENT OUT TO BID?
21 A. SURE. HE ATTENDS EVERY IWMA MEETING AND
22 ANY LEGAL QUESTIONS LIKE THAT THAT COME UP HE WOULD BE
23 THE ONE RESPONSIBLE FOR ANSWERING IT.
24 Q. AND HAS HE EVER ANSWERED THAT QUESTION IN
25 THE AFFIRMATIVE OR THE NEGATIVE?
26 A. HE'S ALWAYS SAID IT WASN'T REQUIRED TO GO
27 OUT TO BID.
28 Q. AND WAS THAT AGREEMENT EVER REQUIRED TO GO
Page 80
1 OUT TO BID?
2 A. NO.
3 Q. OKAY. ANY OTHER AGREEMENTS OF
4 MR. TENBORG'S COMPANY?
5 A. NO.
4 A. SURE. THIS WOULD HAVE BEEN MY STAFF REPORT
5 ON APPROVING OUR BUDGET FOR FISCAL YEAR '97/'98.
6 Q. OKAY. AND IS THERE A REFERENCE HERE ON
7 PAGE 2 TO MR. TENBORG'S COMPANY?
8 A. YES, ACTUALLY, PAGE 9-2.
9 Q. OKAY. AND IS THIS THE DOCUMENT WHICH
10 REFLECTS THAT THE BOARD -- THE BOARD FOR YOUR
11 ORGANIZATION APPROVED MR. TENBORG'S CONTRACT?
12 A. YES. THERE'S A RESOLUTION, IT WOULD BE
13 ADOPTED APPROVING THE BUDGET AND ALL THE ASSOCIATED
Page 82
14 CONTRACTS THAT THE BOARD WOULD ADOPT.
15 Q. SO APPROVING ANY CONTRACT INVOLVING
16 MR. TENBORG WAS DONE BY THE BOARD, NOT BY YOU?
17 A. ABSOLUTELY.
18 Q. AND WHO'S ON YOUR BOARD, SIR?

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19 A. AT THE TIME OF THIS DOCUMENT MY BOARD
20 INCLUDED THE FIVE MEMBERS OF THE BOARD OF SUPERVISORS
21 AND ELECTED OFFICIALS FROM EACH MEMBER CITY.
22 Q. OKAY. SO THAT'S -- EVERYONE ON THE BOARD
23 IS AN ELECTED OFFICIAL?
24 A. ABSOLUTELY.
25 Q. OKAY. AND YOU DON'T TELL THEM WHAT TO DO,

27 HEY TELL YOU WHAT TO DO, RIGHT?

27 A. I WORK AT THE PLEASURE OF THE BOARD.”

25. Based upon my review of the IWMA Agenda’s and Minutes for the period
2009 to 2013, I have not been able to confirm that an amendment was specifically
filed to approve a contract for Eco Solutions or Mike DeMilo or to extend a
contract for Eco Solutions or Mike DeMilo. Further, based upon my review of the
IWMA Agenda’s and Minutes for the period 2009 to 2018, I have not been able to
confirm that IWMA Counsel, Raymond A. Biering advised Bill Worrell or the
IWMA that contracts did not have to go out for competitive bidding. In my most
recent PRA request to the IWMA, I asked specifically for all legal opinions
provided by Mr. Biering to the IWMA and I was not provided any such evidence
of an opinion rendered by Mr. Biering on the subject of competitive bidding.

26. The IWMA, JPA states,

“The line item and program budget shall be submitted in draft form to all member
agencies for review and comment prior to adoption.
The line item and program budget shall include sufficient detail to constitute an
operating guideline, the anticipated sources of funds, and the anticipated
expenditures to be made for the operations of the Authority and the administration,
maintenance and operating costs of the facilities identified in Paragraph 5.1 herein.
Any budget for Sole Use Facilities shall be maintained separately. Approval of the
line item and program budget by the Board shall constitute authority for the
Manager to expend funds for the purposes outlined in the approved budget, but
subject to the availability of funds.
27. In my review of the IWMA Agendas and Minutes of Meetings for the period
2009 to 2018, the yearly budget process followed the same pattern. In May of each
year a “line item budget” was part of the Board packet. The line-item budgets

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were a one-page attachment with virtually no specific detail or a detailed

discussion of how the IWMA funds would be spent. Based upon discussions with
some of the Board members by members of the community it does not appear that
even this one-page budget proposal was circulated to the Board members for
“review and comment” prior to adoption. Further, a review of the Board minutes
for the period 2009 to 2018 revealed that there was virtually no discussion by the
Board members regarding how the funds of the IWMA were to be spent or the
awarding of contracts.

28. The IWMA was audited every year by the accounting firm of Glenn
Burdette and the Audit Report was presented to the Board in September following
the close of the fiscal year in May. Glenn Burdette has audited the IWMA for over
twenty-years and there does not seem to be a bidding process to award the auditing
work to this company. In reviewing the audit reports, I notice that the IWMA had a
bank account for the processing of the payroll for the IWMA employees, but I did
not see a discussion about whether the payroll account was audited. Moreover, as
discussed further in this report, the audit report did not mention the credit card that
was issued to the IWMA in or about May of 2010.2

29. The Audit Report’s that I reviewed for 2009 to 2017 provided no analysis of
line-items on the “proposed” budgets such as payments to Eco Solutions or
whether there were contracts to evaluate or to test/confirm invoices to performance
by the IWMA contractors. I have not spoken with the auditors from Glenn
Burdette and I have not seen any IWMA record that confirms that an engagement
letter was received from Glenn Burdette with a discussion as to the parameters of
their yearly audit. In my review of the IWMA records, I have not seen any
document that shows management reviewed or audited invoices received from
their contractors, including Eco Solutions.

30. In response to my request to the IWMA for invoices and warrants issued to
Charles Tenborg or his companies, the IWMA provided copies of EFS
Authorization to Draw Warrant with listed payee as “Eco Solutions.” I have
attached a few examples of how the document is compiled (Exhibits Q and R).
Exhibit Q is a warrant request dated 7/8/2014 to the Auditor/Controller of the

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INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

County of San Luis Obispo with the payee shown as Eco Solutions. The total
amount of reimbursement claimed is $37,449. There is a handwritten note “Attn:
Lisa Jackson who I know to work in the SLO Auditor’s office.

31. Attached to the 7/8/2014 IWMA warrant request is an “Invoice” from CEC
Eco Solutions, Inc. with an itemized listing of charges. Of particular interest were
the charges on page 4, “Management/Technical Expertise Services” for twenty-two
days and three hours per day but there was no summary for total hours or a
calculation to show number of days charged @ $75 per hour or a grand total. The
calculation would be twenty-two days times 3 hours or 66 hours @ $75 per hour
for a total of $4,950. This amount charged does not appear on the warrant request
summary, but there is a charge of $5,040. There is no other description on the Eco
Solution invoice that describes when the actual service was performed such as
beginning and ending times or a description as to where he was performing these
services or a description as to what these services entailed. There is no evidence
on the Eco Solutions invoices that indicate the itemized charges had been
“checked” to see whether the totals were correct. The warrant request has a
“Authorizing Signatures:” notation at the bottom of the warrant with the stamped
signatures “ORIGINAL SIGNED.”

32. Exhibit R is an IWMA warrant request dated 10/6/2014 to the

Auditor/Controller of the County of San Luis Obispo with the payee shown as Eco
Solutions. The total amount of reimbursement claimed is $77,451. Attached to the
10/6/2014 warrant request is an “Invoice” from CEC Eco Solutions, Inc. with an
itemized listing of charges.

33. Of particular interest were the charges on page 4/5 “Management/Technical

Expertise Services” for twenty-two days and three hours per day but there was no
summary for total hours or a calculation to show number of days charged @ $75
per hour or a grand total. The calculation would be twenty-two days times 3 hours
or 66 hours @ $75 per hour for a total of $4,950. This amount charged does not
appear on the warrant request summary, but there is a charge of $4,340. There is
no other description on the Eco Solution invoice that describes when the actual
service was performed such as beginning and ending times or a description as to

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INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

where he was performing these services or a description as to what these services

entailed. There is no evidence on the Eco Solutions invoices that indicate the
itemized charges had been “checked” to see whether the totals were correct. The
warrant request has a “Authorizing Signatures:” notation at the bottom of the
warrant with the stamped signatures “ORIGINAL SIGNED.”

34. I have reviewed three other Eco Solutions Warrant Requests, dated
2/4/2014, 3/4/2014 and 12/4/2013 and have seen the same pattern whereby Eco
Solutions charges the IWMA for Management/Technical Expertise for 17, 20 and
22 hours @$75 per hour for a combined total of $13,275. There are no subtotals
listed on the pages where these charges are listed and I did not see any indication
that these totals have been checked or audited. I have not included these Warrant
Requests to this report.

35. The IWMA, Joint Powers Agreement states:

“9.2 Controller. The Auditor-Controller of the County of San Luis Obispo shall be the
Controller for the Authority. The Controller shall:
a}. Draw warrants to pay demands against the Authority when the demands have
been approved by the Authority Board and/or the Manager. He/She shall be
responsible on his/her official bond for his/her approval of the disbursement of
Authority money.”
In a recent discussion with Jim Erb, Auditor for the County of San Luis Obispo
regarding the actual persons who “authorized” the warrants submitted to the
Controller’s Office, I learned that Bill Worrell, Carolyn Goodrich, or Patti Toews
were the persons who were signing the warrant requests as the “authorizing” officer.
Mr. Erb informed me that he had a subsequent telephone conversation with IWMA
Counsel Raymond A. Biering who told him in substance that the IWMA “warrant”
requests were not signed or approved by the IWMA Board Of Directors because it
was not practical. I have attempted to interview Mr. Biering and he has declined.
REVIEW OF IWMA ACCOUNTING
36. I received a copy of the IWMA Book Asset Detail schedules for the period
July 2010 to 6-30-2017 and they are attached as Exhibit S to this report. I have
reviewed and noted many purchases of assets such as Forklifts, Computer
Equipment, Pickup Trucks, Storage Containers and a vehicle.

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

a) In my first report dated February 6, 2018 to the SLO Citizens Group, I noted
the following:
“24. Interview of Paul Schmidt, Arroyo Grande Citizen who provided the
following information:

He had been in business with Tenborg in 2009 and had invented a paint can crusher
that Tenborg used to crush paint cans.”
37. In my report on Mr. Tenborg dated February 6, 2018, I was explaining how I
had received documents from the SLO County Auditor for the IWMA 2009
warrant requests because the IWMA had destroyed all invoices prior to August
2013. In my Tenborg report I stated:

“The invoice had an attachment to apparently substantiate expenses claimed

on the invoice to the IWMA. The attachment is an invoice from “Borg
Building Consultants” dated “8/7/2009” to Eco Solutions, 131 Ikeda Way,
Arroyo Grande, CA for a series of hourly charges for:
“Contract Services, PGE Vault Cleaning Lompoc”
“Contract Services, Crusher Repair, Cold Canyon Landfill”
“Contract Services, HHW Supply Distribution to all sites &
Hauling”
“Contract Services, Hauling tubes and propane tanks to Cold
Ca.”
It does not appear that the $300 charge for the PGE Vault Cleaning Lompoc was
charged to the IWMA but it appeared the charge for “Crusher Repair” was paid. In
my Tenborg report, based upon my research of Borg Building Consultants, I
concluded that “Borg” was associated with Maurice Tenborg, the brother of Charles
Tenborg.
38. The IWMA Book Asset Detail for 7/01/11 to 6/30/2012 showed under
“group equipment” “Group 25, Free standing crusher and power pu.. 7/19/2009
with a book value of $7,800. Further, at “Group 80” there was an entry for; “Free
Standing Oil Can Cru-.. dated 7/1/09 with a book value of $20,453. These two
assets were carried on the IWMA books until the Book Asset Detail of 7/1/15 to

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

6/30/16 where both “Group 25” and “Group 80” are lined-out (eliminated from the
balance sheet).

39. Given the timing of Mr. Schmidt’s statement related to the 2009 event and
the information listed on the Book Asset Detail, it is reasonable to believe that the
IWMA paid $28,253 for the benefit of Eco Solutions or Charles K. Tenborg.

40. The IWMA Book Asset Detail Report for 7/1/14 – 6/30/15 showed the
following assets: Isuzu Truck, 11/21/2014, $69,123.66; four (4) 2015 Chevrolet
Truck Silverado, 1/20/15, $35,266.72 for each truck. There was a notation next to
each truck in parenthesis that stated: San Luis Garbage, San Miguel Garbage, Paso
Robles Waste Disposal and Atascadero Waste Alternatives.

41. In my PRA request to the IWMA, I obtained a “lease agreement” between

IWMA and 21st Century Environment Management (Stericyle) that stated, “1.
Equipment Lease…a 2015 Isuzu-NPRHD 18-foot box Compressed Natural Gas
(CNG) vehicle.” And, “This lease will terminate 5 years from the above date or
when the Agreement dated May 8, 2013, between the lessor and lessee for
Management of the San Luis Obispo County Integrate Waste Management
Authority regional hazardous waste program terminates, whichever occurs first.”
Although this appears to be a lease between parties there is no stated lease payment
to be made to the lessor by the lease? The lease was signed by Bill Worrell on
behalf of the IWMA. (Exhibit T)

42. In my report on Charles K. Tenborg dated February 14, 2018 at paragraphs

22 to 28, I discussed in detail a May 8, 2013 contract between the IWMA and Eco
Solutions and the subsequent transfer of the contract to Stericycle in September of
2014. The lease agreement reference to 21st Century (Stericycle) dated May 8,
2013 is confusing since there does not appear to be an executed agreement between
the IWMA and Stericycle dated May 8, 2013 in the records of the IWMA.

a) However, whether Eco Solutions was sold to Stericycle in May of 2013 or

September of 2014, a summary from the SLO Auditor showed that Eco Solutions
continued to bill the IWMA for $942,365 until 2015 as shown on Exhibit 9,
Addendum Report.

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

43. The nature and timing of the purported zero-dollar lease between the IWMA
and Stericycle is suspicious since this was the period of time where Mr. Tenborg
testified in his lawsuit that he was attempting to sell Eco Solutions because of the
November 2012 article written by Karen Velie.

44. The IWMA Book Asset Report for 2015 (Exhibit S) showed a purchase of 4
(four) 2015 Chevrolet Truck Silverado valued at $35,266.72 each (total of
$141,066) on or about 1/20/2015. I have reviewed the IWMA Board Meeting
Agenda’s for 2014 leading up to 2015 and I have not found any discussion about
the purchase of the aforementioned trucks. Further, I have asked for all resolutions
and amendments from the IWMA for this period of time and I have not found any
resolution that authorizes the purchase of the trucks. I reviewed the Proposed
Budgets of the IWMA for the fiscal year 2014/2015 and saw a line-item of
$472,295 for equipment and supplies, but no detail. I compared the 2015 fiscal
year to the 2014 fiscal year and noted the line-item for equipment and supplies in
2014 was $159,000 so there was an anticipated increase from $159,000 to
$472,295, but apparently no documented justification provided to Board for the
$313,295 increase. At this point in my investigation, I have not interviewed the
recipients of the Chevrolet trucks to confirm the purpose of why they amongst
other trash companies were selected to receive the trucks. Further, I have not
received any documentation (including lease agreements) regarding the
arrangement with the IWMA and the recipients of the trucks.

45. In January 2018, I issued a PRA request to the IWMA for the accounting
records of the IWMA, but Mr. Worrell responded:
“As explained with your prior public records request, the IWMA Joint Powers
Agreement designates the San Luis Obispo County Treasurer with the responsibly
for making payments due from the IWMA. The IWMA does not issue warrants or
checks nor have copies of warrants or checks issued by the San Luis Obispo County
Treasurer. In addition, the Joint Powers Agreement designates the San Luis Obispo
County Auditor-Controller with the responsibility of maintaining the financial
records for the IWMA. Thus, requests for copies of warrants or checks and other
financial records should be made to the San Luis Obispo County Auditor-
Controller-Treasurer’s office.”
46. I subsequently issued a PRA request to Jim Erb, SLO County Auditor-
Controller who provided electronic versions of the IWMA accounting records for

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

the period 2009 to 2018. Mr. Erb and his staff have been very helpful in navigating
SAP accounting system and providing summaries of the books and records of the
IWMA. I was informed by the auditor’s staff that Carolyn Goodrich at the IWMA
was the person who initially entered the warrant request data into the SAP
accounting system.
47. I have created a summary spreadsheet that reflects all payments made for
expenses of the IWMA for the period 2009 to March 2018 and have attached the
spreadsheet to this report as Exhibit U. I color-coded in blue those individuals or
entities that were mentioned on the IWMA Budget Proposals for the years 2009 to
2018. I identified $537,607.68 that was paid to U.S. Bank Corp Payment Systems
(US Bank) during the period 2009 to 2018.
48. I subsequently issued a new PRA to the IWMA in March 2018 for all Credit
Card and Payroll Records for the period 2009 to March 2018. After much delay, on
May 14, 2018, I visited the IWMA with Mr. Wayne Hall to inspect the records
requested on the US Bank credit card, the records requested on the IWMA Payroll
and records related to Raymond Biering, Counsel for the IWMA. Mr. Worrell
handed me an envelope with a letter addressed to me with a date of May 10, 2018.
I have attached a copy of this letter as Exhibit V. The May 10th letter explained
that certain records were withheld based upon certain privileges but did not list the
records that they were withholding that held some kind of privilege. In fact, the
payroll records withheld prevented me from determining employee names or
payments made to individual employees whoever they might be. Also, as before on
the other PRA requests to the IWMA, there were no records for the period 2009 to
July 2013 because Mr. Worrell stated again that they had been destroyed.
49. In or about May 25, 2018, I received the documents previously reviewed at
the offices of the IWMA from Mr. Worrell, which included the warrant requests for
the US Bank and associated invoices used to substantiate the amounts claim on the
warrant requests. There were over 1100 pages of documents pertaining to my
request. I have analyzed the US Bank records and created a summary spreadsheet of
the data contained on the warrant requests and supporting invoices, and I have
labeled this spreadsheet as Exhibit W.

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

50. Exhibit W lists the IWMA warrant requests for payments to the US Bank
starting in August 2013 and continuing to March 2018. I listed the date of the warrant
and the amount requested on the warrant request. I then analyzed the invoices and
expense data that was provided by Mr. Worrell and totaled the amounts in order to
reconcile the data to the warrant request. I noted the differences between what was
listed on the warrant request versus the total of the invoices and noted the difference.
51. As summarized on Exhibit W, there were only $270,725.83 total warrant
requests out $537,607.68 as shown on Exhibit U. Of the $270,725.83 warrant
requests provided there were only $92,529.94 in supporting invoices for a difference
of $178,195.89 in unsupported claims. I then created a section on Exhibit W that
compared the US Bank warrant requests provided by Mr. Worrell to the information
contained in the County Auditor’s Accounting Data and noted the differences. There
were seven (7) warrant requests listed on the County Auditor’s database that were
not provided by Mr. Worrell.
52. On May 31, 2018, after my review of the US Bank documents and upon
finding that many of the supporting documents were missing including all of the
monthly bank statements, I sent an email to Mr. Worrell where I informed him:
“I have begun the review of the 1100 documents you recently provided and
have focused on the US Bank Credit Card Warrant Requests. I have gone
through the warrants and the related invoices that support the warrant
request for 2013 to March 2018 and have found that there are a lot of
missing invoices or documents that support the total amounts claimed on
the warrants. Can you tell me what records might have been withheld based
upon an exemption?
Are you withholding the US Bank Statements for the IWMA credit card?”

On June 5, 2018, I received a response from Mr. Worrell who provided me a copy
of the California Public Records Act.
53. In my analysis of the US Bank warrant requests, I noted several large
purchases that appeared to be appliances as follows: 3/2/15 $8,177.25 from Clean
Energy; 12/1/15 $5,800 for windows; 2/5/16 purchase of appliances $4,200; and
3/29/16 $6,700 appliances. I reviewed Exhibit S, which is the IWMA Book Asset
Detail for the period 1/15/2015 to 6/30/2017 and did not see the above identified
purchases listed on the IWMA balance sheet.

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

54. I have reviewed several of the IWMA US Bank warrant requests filed with
the County Auditor’s office and observed that the warrant requests were signed by
Patti Toews and Carolyn Goodrich as authorizing signatures. Further, I received and
reviewed the County Auditor’s copies of the IWMA warrant requests related to the
payments to Eco Solutions and observed that the authorizing signatures were
William Worrell and Carolyn Goodrich.
55. I requested and received the IWMA request to open the US Bank Credit Card
which I have attached as Exhibit X. The US Bank documents indicate that the credit
card was provided to William A. Worrell, SLO County IWMA on or about May 21,
2010. There was an Addendum to State of California Purchase Card Program Master
Services Agreement (DGS MSA 5-06-99-01) that describes the relationship between
the Department of General Services, State of California and the U.S. Bank.
56. The stated participating agency is the IWMA and a “Certificate of Authority”
is provided where William A. Worrell, Manager is listed as the “Authorized Person.”
Page 2 of the agreement has a signature page where William A. Worrell signs on
behalf of the IWMA, there is a signature line for the US Bank official, and at the
bottom of the page is a signature line: “Approved as to form: (Signature of Attorney
for Participating Agency).” However, the attorney name is blank and the signature
line for the attorney is also blank.
57. The “Certification” section of the application listed Carolyn Goodrich as the
“Board Secretary,” “acting in an official capacity as an authorized officer who has
been given the authority by the Government Entity...” There is an additional
“Certification” stating “I certify that I am an officer of the Government Entity…”
and signed by Peter Cron, Staff Analyst. The signatures are dated Nov. 23, 2009
58. In my PRA requests to the IWMA, I asked for all Resolutions and
Amendments for the period 2009 to 2018, I did not receive any amendments or
resolutions that were presented to the IWMA Board of Directors (BOD) regarding
the US Bank credit card.
SUMMARY OF ISSUES
59. As detailed in this report on the IWMA, and the two other reports related to
Charles K. Tenborg and his companies, I have summarized my findings below:

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

• Destruction of IWMA records (all before July 2013) without Board Of

Director (BOD) approval.
• No record of destruction of records provided to the BOD or other competent
authority such as the Controller or County Treasurer.
• No BOD approval or review of warrants issued by IWMA. No item spending
limit where a notice to the BOD is required.
• No review of proposed IWMA budgets by BOD or member cities/counties
prior to vote to approve.
• The One-Page Budget Proposal submitted by Mr. Worrell to the IWMA are
incomplete and show no revenue side for source of revenue, merely
expenditures. Many of the budget items for expenditures have a proposed
amount but no identification of a person or company.
• There is no reliable reporting process in place with BOD to assess the past
years budget to see if goals were met or if there were cost overruns that should
have been approved by the BOD.
• No contracts proposed for substantial projects including those exceeding
$50,000 (see schedule of expenditures 2009-2018 showing numerous people
and companies receiving funds without a contract or approval of the
expenditure of funds by BOD.
• Failure to confirm Workers Comp Ins. For Eco Solutions (confirmed that Eco
Solutions did not provide proof to IWMA).
• No apparent audit of the payroll account at the IWMA
• No approval by BOD for credit card used by Mr. Worrell, no apparent audit
of the credit card(s) being paid by the IWMA.
• There are numerous potential conflicts of interest including; Mr. Worrell or
his staff approving and authorizing the payment of their own salary, Mr.
Worrell or his staff authorizing other reimbursement payments to themselves.
• Mr. Worrell authorizing and approving payments to Tenborg companies
whose daughter has been a long-time employee of Eco Solutions. As noted
in this report, the Eco Solutions invoices submitted to the IWMA were likely
prepared by Emily Worrell, Mr. Tenborg’s administrative assistant.
• No specific approval by BOD for purchase of pickup trucks for identified trash
haulers.
• No specific BOD approval for purchase of forklifts for use by named trash
haulers or other companies.

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

• Unauthorized disclosure by Worrell (March 2018) of private banking

information (CCN defense fund) of a private citizen to Charles Tenborg or his
attorney.
• No change in IWMA auditor for 20 years, no change in IWMA counsel for
20 years, and no change in the IWMA Manager for 20 years.
• No BOD approval or review of warrants issued by IWMA (confirmed by Jim
Erb/Ray Biering).
• No contracts proposed (RFPs) for substantial projects including those
exceeding $10,000 (see schedule of expenditures 2009-2018 showing
numerous people and companies receiving funds without an RFP, contract or
approval of the expenditure of funds by BOD.
• Previous reports on Charles Tenborg, Eco Solutions showed that he had been
cited numerous times by DTSC/Cal Recycle; and in 2015, Tenborg was
discovered by Cal Recycle for over-billing Cal Recycle for 17 consecutive
months for an excess of $30,000. (see Tenborg reports)
• No apparent IWMA audit of Tenborg Companies or other vendors receiving
hundreds of thousands of dollars in IWMA funds.
• Unexplained expenditures on the IWMA US Bank credit card and
unexplained accounting classifications that appear to be personal in nature.
Of the $537,607.68 payments made to U.S. Bank, the IWMA could only
provide backup for $92,529.94, a difference of $445,077.74.
• Potential Hazardous Waste dumped at the Cold Canyon Landfill not fully
investigated to assure that Hazardous Waste or toxic waste is not present at
the Cold Canyon Landfill, the area near the IWMA HHW processing area.
CONCLUSIONS AND RECOMMENDATIONS
60. The preliminary findings in this report on the IWMA investigation, and the
related reports regarding Charles K. Tenborg and his companies were all dependent
upon cooperating citizens and Public Records Requests. There are many issues as
detailed in my reports that can not be resolved through Public Records Requests.
Some of the issues discovered relate to Management Best Practices at the IWMA
with respect to spending, record keeping and reporting controls.
61. However, the more serious issues that I uncovered deal with the relationship
between Charles K. Tenborg and William Worrell at the IWMA. As summarized in
my Exhibit U, which is a summary of the SLO County Auditor’s warrants paid out

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

on behalf of the IWMA, Eco Solutions from 2009 to 2018 received $2, 885,754.07
in IWMA funds; and Cleaner Earth Co Inc. during the same period received
$236,009.89. The IWMA records show that Tenborg continued to receive over $1
million in IWMA funds even after the purported May 8, 2013 sale to Stericycle and
where the Eco Solutions contract with the IWMA had been assumed by Stericycle.
62. Exhibit U also shows that Stericycle (assumed Eco Solutions contract with
IWMA) has received $1,439,529.54 during the same period of time. The
circumstances surrounding the transfer or assumption of the Eco Solutions 5-year
contract needs to be investigated since there has been no evidence provided that
confirms that Eco Solutions in fact was sold to Stericycle.
63. As discussed at paragraph 39 to 41, the convoluted transaction between the
IWMA and Stericycle regarding the zero-dollar lease of a $69,124 Isuzu truck just
before the assignment of the Eco Solutions 5-year contract with the IWMA needs
further investigation by an agency that can compel production of documents and take
sworn statements from potential witnesses.
64. There are other companies that I identified in Exhibit U, who received
substantial IWMA funds without competitive bidding or without IWMA Board
approval that should be audited/investigated.
65. There should be an investigation into the use of IWMA funds used to purchase
equipment, trucks, vehicles, and forklifts for a selected few trash-hauling companies
in the SLO area that have more serious implications that cannot be investigated
through public records requests.
66. I believe that the IWMA credit card with US Bank needs to be investigated.
As detailed in my report at paragraphs 49-54, the application for the IWMA credit
card is not signed as being approved by the IWMA Counsel. Further, I have been
unable to obtain records from the IWMA Manager William A. Worrell who claims
privilege on many of the critical requested documents. My analysis on the payments
made on the credit card shows a $445,077.74 lack of documentation relative to
$537,607.68 of expenditures. I cannot complete my investigation without the records
I requested from the IWMA. However, as stated in my report, there are several
transactions that might be personal in nature since the credit card charge was credited
to the generic payroll account.

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INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

67. I therefore recommend that all three of my reports be provided to the IWMA
Board of Directors who should commission a Forensic Accounting of all of the
IWMA financial records to address the IWMA Credit Card expenditures, the IWMA
purchase of trucks, vehicles, equipment; and the IWMA Payroll accounting.
68. I also recommend that the previous awarding of contracts and the bidding
process be clearly defined by the IWMA Counsel, and the issue as to the viability of
the IWMA “executive committee” be addressed with outside legal counsel.
69. I recommend that a Best Business Practice Review be performed by outside
consultants, and I recommend that the Board of Directors consider a 5-year term for
contracts with Counsel, Management and Auditor which is in line with current Best
Business Practices.
70. I also recommend that all three reports be forwarded to the District Attorney
of San Luis Obispo County, and the Federal Bureau of Investigation who have
requested copies of my reports.

Respectfully submitted,

Carl R. Knudson, CFE, PI (#19339)

213-364-4474
Attachments; List of Exhibits

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REPORT OF INVESTIGATION
INTEGRATED WASTE MANAGEMENT AUTHORITY
JUNE 6, 2018

LIST OF EXHIBITS

Exhibit No. Description

A Copy of 2006 IWMA Contract William A. Worrell
B Copy of 2006 IWMA Contract Raymond A. Biering
C Copy of 1997 IWMA Contract Eco Solutions
D Copy of 2001 IWMA Contract Eco Solutions
E Copy of 2002/2003 Eco Solutions Proposal
F-M Copies of 2004 to 2013 Eco Solutions Proposal
N Copy of November 1, 2012 Email Worrell to Viele
O Copy of Worrell Declaration, October 2013
P Copy of Worrell Testimony Transcript March 2017
Q Copy of IWMA Warrant Request re Eco Solutions, July 2014
R Copy of IWMA Warrant Request re Eco Solutions, Oct. 2014
S Copy of IWMA Book Asset Detail (2010 to 2017)
T Copy of IWMA Lease with Stericycle May 8, 2013
U Summary Spreadsheet of IWMA Expenses (2009 to 2018)
V Copy of May 10, 2018 Letter received from IWMA
W Summary Spreadsheet of IWMA Credit Card Claims (2013 to
2018)
X Copy of IWMA U.S. Bank Authorizing Documents.

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