By Rich Pollack
After years of back-and-forth discussions and letters, Delray Beach in June filed a lawsuit against neighboring Highland Beach, claiming the oceanfront town owes the city $3.8 million for past fire rescue services.
As they have for at least the past four years, Highland Beach town officials dispute the contention.
“The amount claimed is not substantiated by the exhibits they provided,” said Highland Beach Town Manager Marshall Labadie.
In April 2025, Highland Beach responded to a request from Delray Beach for mediation by saying the town sees the advantage of settling the dispute without going to court, but it wouldn’t do that until it received detailed records it has been seeking for several years.
Now it appears mediation may be one of the first steps in the effort to resolve Delray Beach’s claims that Highland Beach is in breach of contract.
“Now we have an opportunity to get to a place where we can resolve this issue,” Delray Beach City Manager Terrence Moore said. “This is the next step.”
In the lawsuit, the city said it initially sent the town a breach-of-contract notification in 2023 for $517,654 for moneys owed in 2020-2021 and 2021-2022.
The suit said that in 2025, the city further reviewed “all transactions and amounts for services rendered and determined the town owed the city $3.8 million.”
Highland Beach’s Labadie said that the town has not received a bill from Delray Beach since 2023.
For more than 30 years, Highland Beach and Delray Beach had an agreement in which Delray Beach provided fire and rescue services to the town using a town-owned fire station
In May 2024, Highland Beach started its own fire department, following notification to the city in October 2021 that it would terminate the contract.
During the final years of the contract, Highland Beach disputed the way Delray Beach calculated how much it was owed.
In years prior to the split, Delray Beach began using the actual costs of the 21.5 firefighter paramedics assigned to the station in Highland Beach to determine the town’s cost for service, about $5 million per year.
Highland Beach has argued, however, that the agreement between the two municipalities clearly states that such cost should be calculated based on the average “in-rank” cost of fire rescue personnel throughout the city.
Since that time, the two municipalities have exchanged correspondences, including one in which Highland Beach Town Attorney Len Rubin wrote that the town thinks the city actually owes it money because it overcharged the town almost $238,000 for fiscal years 2021 and 2022.
While the city in the lawsuit says it provided the town with additional materials and data in 2023, Highland Beach leaders have said they have not received all the detailed information that substantiated Delray Beach’s contentions.
“There is nothing to validate their claims,” Labadie said.
In March 2023, State Rep. Peggy Gossett-Seidman, a former Highland Beach town commissioner, took the issue before the state’s Joint Legislative Auditing Committee that she served on. The committee referred the matter to the state auditor general’s office, which reported that November that Delray Beach had mismanaged its billing and had not charged Highland Beach for $2.2 million the city was owed. The anticipated mediation following that report has yet to occur.
The new lawsuit, which was filed in Palm Beach County Circuit Court on June 10, came just a short time after Delray Beach City Commissioner Juli Casale asked for an update on efforts to collect money owed by Highland Beach.
Labadie said that he believes the dispute will eventually be resolved, but he doesn’t think that will happen quickly.
“It will eventually work itself out in time,” he said.
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