Caglia Environmental accused of overbilling Fresno garbage ratepayers by $3.35M

A Fresno taxpayer advocacy group is calling on the Fresno County District Attorney to investigate allegations that Caglia Environmental overcharged Fresno garbage ratepayers by $3.35 million from 2018 to 2022.

The Central Valley Tax Protection Group unveiled the accusations Tuesday in a news release that includes emails and letters from City of Fresno officials. Gregory Wallis, chair of the Central Valley Tax Protection Group, is asking DA Lisa Smittcamp to evaluate whether city officials through two mayoral administrations misappropriated public funds through their handling of the matter.

The allegations come as the City of Fresno prepares for a public hearing on proposed rate increases that the Central Valley Tax Protection Group alleges come under the guise of inflation, but also to recoup the $3.35 million loss.

“While the District Attorney examines the full extent of Caglia Environmental’s half-decade of fleecing Fresno residents, it is time for the City Council to do the right thing by us. Our representatives must draw a clear line: ratepayers will not pay for Caglia’s fraud,” according to the news release.

Through its Orange Avenue Disposal Company Subsidiary, Caglia Environmental first contracted with the City of Fresno to process waste in 2004. In 2018, Caglia reached an amendment to its agreement to add on a perpetual fuel surcharge and added an increase in the price per-ton of garbage processed. The amendment would only be valid if the City of Fresno pursued a general rate increase using the Proposition 218 protest process.

The Prop. 218 process — which lays out steps for increasing garbage rates that include action by the Fresno City Council, a public hearing and a process for ratepayers to protest — didn’t begin until December 2023. Yet Caglia Environmental enacted those charges beginning in 2018, according to the allegations. The discrepancies ranged from $407,000 to $861,000 each year through December 2022, according to a February 2023 email from a city analyst to City Manager Georgeanne White.

The Central Valley Tax Protection Group believes that once the overbilling was discovered in February 2023, city officials privately confronted Caglia Environmental President of Corporate Development Richard Caglia threatening litigation behalf of city ratepayers. The city began disputing invoices starting with April 2023.

Wallis said his group began its own investigation, with a California Public Records Act request on Nov. 1, 2023. He noted that responses from Caglia Environmental were referred to in records produced by the city but were not included in the records.

Instead of pursuing litigation against Caglia Environmental, the city instead decided to stick ratepayers with the bill, the group, founded in 2022, alleges.

“This arrangement, I believe, was developed at the behest of City of Fresno officials to avert litigation and provide legal and financial cover for a long-time campaign donor to the Mayor of Fresno and members of the City Council,” according to the letter from Wallis to the DA. “City of Fresno ratepayers have been defrauded by Caglia Environmental, their waste processor.”

Messages left for Caglia, City Manager White, and Sontaya Rose, City of Fresno director of communications director, were not returned Tuesday morning.

Taylor Long, Fresno County DA public information officer, said in an email Tuesday that the Public Integrity Unit does not confirm nor deny if any submissions have been made.

Fresno City Councilmember Garry Bredefeld, who voted in favor of the Prop. 218 rate increase process in December, said the matter should be investigated. He doesn’t plan to ultimately support the rate increases.

Councilmembers Miguel Arias and Luis Chavez were the only members who voted against initiating the Prop. 218 process.

Fresno City Council members are scheduled to hold a public hearing on the Prop. 218 solid waste rate increase on May 2. Ratepayers will have the opportunity to protest the increase via notices mailed by the city. A simple majority is required to return the notices for the protest to be deemed valid. Without a simple majority protest, the city will request the council adopt the proposed rates, to go into effect July 1.

“In the event that 50% + 1 of customers do not protest the rates, Fresno City Council members can decide to adopt rates lower than proposed in the City’s Proposition 218 notice to customers, ensuring that customers are not paying for Caglia’s fraud.”

Frank Lopez contributed to this report.