An audit report on the Fort Dodge agency that runs the landfill and the recycling center could lead to civil or criminal consequences, according to the attorney representing the agency.
The possibility of a deeper investigation into the North Central Iowa Regional Solid Waste Agency comes after the office of Iowa Auditor of State Mary Mosiman released its report Dec. 12.
"This audit is now warranting further investigation," said Fort Dodge attorney Steven Kersten, who is representing the solid waste agency.
He said all remedies are being explored, particularly regarding the sale of landfill land in May 2012 and payments for gravel hauling from September 2012 to February 2013.
The practices in question occurred when Deb Watson was the agency's director of recycling and administration/finance and Mike Grell was landfill director.
Webster County Attorney Cori Kuhn Coleman said she could only provide details about a pending investigation "when and if charges are filed."
Grell resigned from his position in April 2013. He was replaced by Interim Director Cindy Turkle.
Watson, who has since married and is also known as Deb Lentsch, was terminated September 2013, according to the audit. Her position was eliminated.
Kersten was hired to represent the landfill agency in June 2013.
"We've hired a consulting firm, brought them in and hired some new staff, and we're following through on the audit recommendations," said Webster County Supervisor Mark Campbell, who was appointed to the agency's executive board in January 2013.
The audit found that the agency hired Gypsum Hollow Industries to haul gravel, paying it $995,694 for about 65,000 tons from September 2012 to February 2013.
GHI was owned by Grell's son.
Grell told the board he could find the needed gravel at $14 per ton, according to the audit report. It said he had requested quotes from four vendors prior to a board meeting and that the lowest quote was from GHI at $15.40 per ton. The report said there was no indication in the board's minutes that a formal bidding process was completed before hiring GHI, something that is required by the Iowa code, and there was also no formal contract between GHI and the agency.
Also, in an unemployment appeal filed by Watson that was concluded in November, it was revealed that Watson purchased equipment for the landfill from Grell's son.
Kersten said he is looking into civil and criminal options regarding these findings on behalf of the agency.
The solid waste agency sold 27.2 acres of land to an adjacent property owner for $5,695, or $209 per acre, land that was later assessed at a value of $10,810 by the Webster County assessor, according to the report.
The agency did not have an appraisal done prior to selling the land, nor did it seek to identify any other interested parties to bid on the land.
The North Central Iowa Regional Solid Waste Agency executive committee voted in January 2012 to move forward with the sale at $250 per acre, as recommended by Grell, the report said. Although a notice was published that a public hearing would be held on the sale on March 21, 2012, the minutes from that meeting do not indicate that the hearing took place, according to the report.
Also, according to the report, the full 43-member agency board never voted on the land sale. The agency's rules require approval of a two-thirds majority vote of all representatives for a sale.
Kersten said the agency is investigating the land transfer and is trying to determine whether the sale is void or if a court could rule it void.
According to the Webster County assessor, the sale date is listed as May 12, 2012. The land is located south of the landfill.
The assessor's records show the land was purchased by Westside Fort Dodge Properties LLC. According the Iowa Secretary of State, Dennis Frank is the company's registered agent. He owns the property adjacent to the landfill.
The audit report found that some payments to vendors did not include evidence of approval for payment. Although checks require two signatures from members of the executive committee, the signatures on the examined checks were applied by Watson with a stamp, the report said.
Watson was disqualified from earning unemployment benefits due to misconduct. She had been employed by the agency since 1991.
Watson's unemployment appeal documents show she was writing and also signing checks to vendors; the accepted procedure is for one person to write the check and another authorized person to sign it.
Phone and email messages to Watson were not returned as of press time Thursday.
Turkle initiated disciplinary actions against Watson in July 2013 for failing to hold required safety meetings and hiring unqualified people, according to Watson's unemployment appeal documents.
"The claimant appears to have been cutting many corners and making questionable deals with public funds for some time," Administrative Law Judge Bonny G. Hendricksmeyer wrote in the unemployment appeal decision. "Once these were discovered she continued to have difficulties in determining what appropriate conduct was and what was not. When questioned about many of these items, such as failing to forward the (Department of Natural Resources) violation notices, she would merely shrug and say she did not know why she had done them or that she did not have time."
Campbell said, "Our board is fully supporting the interim director and working with the DNR to take any and all corrective measures needed."