By John Pacenti and Rich Pollack
Like many a divorce, the fire-rescue split between Highland Beach and Delray Beach is hardly amicable, but it really isn’t about irreconcilable differences. It’s mostly about the money.
Highland Beach decided it would rather save what its consultants say could be several million dollars a year by having its own fire department, rather than pay Delray Beach Fire Rescue more than $5 million a year to staff the fire station in town and provide the town’s fire-rescue services.
Now Highland Beach officials are balking at paying more than $620,000 in additional charges Delray Beach has demanded without getting more information first. Officials from the two sides met Jan. 24 to try to resolve the dispute.
The current arrangement, which dates back 30 years, is set to expire in May 2024, and Highland Beach is well on its way to establishing its own fire department.
Here’s what Delray Beach says is owed by Highland Beach above the monthly payments the town is making to the city:
• $121,514 for services provided in fiscal year 2021 — due a year ago — for actual expenses that exceeded the city’s original estimates.
• $396,140 billed in November to reconcile actual fiscal year 2022 costs.
• $103,025 in ambulance transport fee reimbursements that the city says it paid in error to the town based on a software error by a third-party billing company.
When Highland Beach asked last year for specific details on how Delray Beach arrived at the fiscal year 2021 charge, Delray Beach told town officials to file a public records request — and then made the town pay for the documents the city provided.
“Is that any way to treat a partner after 30 years by asking for a formal public records request to obtain information the town rightfully deserves?” Highland Beach Commissioner John Shoemaker told The Coastal Star. “It’s absolutely silly.”
Town Manager Marshall Labadie said at his Town Commission’s Jan. 17 meeting that he didn’t know how best to describe the situation between the two municipalities: surprised, disappointed or shocked. “I don’t know if I have the right adjective at this moment,” he said.
During the Delray Beach City Commission meeting on Jan. 10, Deputy Vice Mayor Juli Casale stated, “We don’t have a great relationship with them right now.”
City Manager Terrence Moore declared that Highland Beach was in breach of contract at the meeting, claiming the city had handed over documents but still was being stiffed on the money owed for 2021.
Since then, The Coastal Star has confirmed the two sides reached a detente where Delray Beach would provide the documents sought by its neighbor — such as a daily roster of employees at the station for each shift and payroll data. The Jan. 24 meeting included Moore and Labadie, along with their finance directors, attorneys and an assistant fire chief.
The bills are ‘true-ups’
So, how is it that Highland Beach has negotiated a contract to pay Delray Beach for fire-rescue services but still gets hit with an additional bill at the end of the year? Welcome to the world of “true-ups.”
A true-up bill comes at the end of each fiscal year, reconciling the difference between the original projected costs on which payments were based and the actual costs for the services provided.
The disputed items surfaced after the town in May 2021 gave Delray Beach notice that it would be ending its contract with the city in three years. Highland Beach questioned the true-up bill that came in late 2021, and officials there were even more surprised when the 2022 true-up arrived in December for more than triple the 2021 cost.
“Since we terminated the contract, the true-up amounts have gotten quite large and warrant a more detailed review,” Labadie told The Coastal Star.
Labadie claims Delray Beach had stymied his town’s efforts to analyze the extra costs by first requiring Highland Beach to file public records requests for the information and then not providing all it wanted for the analysis.
Moore, though, said Delray Beach Fire Rescue, the Finance Department and others involved provided Highland Beach with everything it needed in terms of analysis and billing. “Highland Beach just did not honor that obligation,” he said.
Prior to the Jan. 24 meeting, Labadie said what Delray Beach provided are only “just ‘trust us’ numbers.”
“We want details so we can see how they got to the number,” he said. “They just keep giving us totals.”
He hopes his recent meeting with Moore changes that.
“If everything is as we discussed, we could be making a recommendation to our commission regarding the true-ups in a few weeks,” Labadie said.
City wants some cash back
Besides the true-up charges, Moore informed commissioners Jan. 10 that the city had sent Highland Beach a check for ambulance transport fee reimbursements totaling about $114,000, which he said the city was now trying to get the town to pay back.
City Attorney Lynn Gelin told commissioners a software change with billing company Digitech is at the root of the overpayment; she said the payment was around $15,000 in previous years.
Gelin said though Delray Beach shoulders some of the blame, Highland Beach “had a duty to call the city and question why it was so astronomically high when compared to prior years.”
Documents obtained by The Coastal Star show the payments have varied widely. The amounts were $15,877 in fiscal year 2019 and $88,343 in fiscal year 2018.
Of the 2022 amount sent to the town, Moore is seeking $103,025 back from Highland Beach. Delray Beach commissioners appeared to be hearing about the issue for the first time at the Jan. 10 meeting even though it occurred almost a year ago.
Labadie questioned whether the EMS transport dollars were actually an overpayment. He said that if Delray Beach’s request for reimbursement was correct, then Highland Beach had only about $8,000 in transports for the 2022 fiscal year — only between 30 or 40 residents being transferred by ambulance.
But information from Delray Beach Fire Rescue shows that the Highland Beach station conducted 289 medical transports from Highland Beach in 2022.
Town says breakup is final
What really burned Labadie was hearing that some in Delray Beach think Highland Beach won’t be able to establish its own fire department and that it will come back to the city hat in hand. He said that had no basis in reality since town voters overwhelmingly supported spending up to $10 million to build a new station.
Labadie told The Coastal Star he thinks the disputes may boil down to a new interpretation of the contract by new leaders of the Delray Beach city administration. He and Moore are still hopeful there may be some mutually acceptable resolution to the dispute.
Either way, there remains a lack of trust.
“Every time I get information from them, I begin questioning the prior information that was provided,” Labadie said at Highland Beach’s Jan. 17 commission meeting.