Orange Takes First Step to Ending Trash Contract

The city took a first step Monday toward breaking its contract with its trash haulers, who are the targets of a criminal investigation into possible misappropriation of city funds.

Sam Hambarian and his son Mike, owners of Orange Disposal Service Inc., and Orange Resource Recovery Systems Inc., will receive a letter from City Atty. David A. De Berry stating that they are in default of their contracts.

To break its contracts with the companies, the city must find them in default of the terms of those contracts, and the companies must fail to remedy those faults.

The letter lists 10 areas in which the companies are in default. They include information the city has received that recycling revenue due to the city was diverted, and that at least one officer of the company misappropriated recycling revenue “for his own personal use.”

Police are investigating Jeffery Hambarian, Sam’s other son, who was fired as head of the recycling company in March, on suspicion of stealing funds that should have gone to the city. Informants have told police that Jeffery Hambarian may have skimmed as much as $6 million. Hambarian and his attorney, Robert L. Shapiro, have repeatedly refused to return calls for comment.

The letter also states that the contractors may have failed to sell salvaged material for the highest possible prices and to submit proper accounting records.

In the letter, De Berry gives the companies 15 days to comply with the terms of the contracts or face a hearing before the City Council to discuss terminating the contracts.

De Berry said most of the steps to solve the problems, such as allowing the city direct oversight of operations, have been complied with, but that he wanted a written record.

“These are steps we believe need to be taken on an interim basis only in order to continue the contract,” pending the outcome of the criminal investigation, De Berry said.

He noted in the letter that other companies have been contacted about possibly taking over garbage service.