By Margie Plunkett
Delray Beach finished sifting through its trash in July, ending an investigation of refuse hauler Waste Management’s billing that turned up about $76,000 due the city and several dysfunctional business practices. No impropriety on the part of either party was discerned.
The nearly six-month inquiry, powered by at least 1,780 man hours, was spurred by an initial investigation by resident Ken MacNamee. Commissioners assigned the Financial Review Board in February to study the questions of whether Delray Beach was receiving all its franchise fees from Waste Management and if the city was overpaying on residential services.
“This has been a very long and painful process,” said Commissioner Fred Fetzer. “I’ve learned a lot from the process and the city staff has. We have to make some safeguards that it doesn’t happen again.”
The review found relatively small sums due for franchise fees and residential collection that Waste Management has now paid, according to Rich Reade, the city liaison with Waste Management who gave the final report to commissioners on July 13. It also helped the staff identify more effective practices.
On the commercial side, three franchise fees and administrative fees were not paid to the city, totaling about $53,000. On the residential side, the review found the city overpaid by about $65,000. The amount was reduced to $26,000 after deducting sidewalk container disposal services that Delray Beach owed. The study also found items including that unit counts were sometimes inaccurate; invoices occasionally required adjusting before the city paid and invoices sometimes had incorrect service dates.
It also turned up an “inadvertently missed” city payment of $177,926 in 2005 that was identified after an employee’s concerns of whether payments were made in advance or arrears. Fetzer called the unpaid bill part of “a quarter-million-dollar question mark hanging over me.”
Waste Management representative Butch Carter explained that the missed payment was a result of nomenclature changes in whether the billings were in arrears or advance after Waste Management bought the assets of the former refuse company. The company did not pursue the payment, he said.
As a result of the review, the city identified a number of processes to improve accuracy of billing, including: coordinating with the trash contractor to ensure all new rates are used; including a monthly rate structure in the annual rate ordinance; taking franchise fees one month in arrears to allow a monthly analysis of revenue earned; spot checking accounts; requiring Waste Management to make written notice of any problems or changes that may affect revenue; and allowing one sector of the city to vote on whether it still wanted to receive a choice of rear-door service.
McNamee brought concerns with Waste Management’s billing to commissioners’ attention after realizing he was billed for rear-door pick up at his house that he didn’t use, according to Commissioner Gary Eliopoulos.
The issue later led to a vote of no confidence against City Manager David Harden, because McNamee’s concerns weren’t resolved as quickly as commissioners deemed appropriate. In February, the mayor formalized the review of the Waste Management billing and turned it over to the FRB.
After Reade presented the final report, Commissioner Angeleta Gray pointed to the $26,000 figure and said, “Is that all we came up with?”
“The analysis found sloppiness on our part and Waste Management’s part,” Harden said, explaining that the city has come up with processes to avoid future inaccuracies. However, he said, “You’re dealing with 25,000 to 30,000 counts; it’s not uncommon to have some errors.”
Mayor Woodie McDuffie thanked all involved — McNamee, Reade, the FRB and staff among them. ”It’s been a long, arduous, tedious process,” he said, noting the biggest gain was gleaning the kinks in the process. “We need to be in constant vigil watching the contracts in the city. Waste Management has acted in good faith. No one here acted improperly. The flaws in procedure need to be corrected and corrected now.”
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