- April 26, 2024
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The city of Ormond Beach and Waste Pro of Florida are working to resolve a dispute over half a million dollars worth of franchise fees.
The City Commission approved a six-year extension of its solid waste, yard waste and recycling contract with Waste Pro in February 2023. The contract extension included an annual consumer price index increase of 8.54% and a rate adjustment of $3.55 per unit for unusual and unanticipated costs, to be applied retroactively to Oct. 1, 2022.
After the commission approved the contract, the city paid Waste Pro $546,515.25 to retroactively apply these adjustments. But, in a letter from Waste Pro's attorney Amy Shay to the city attorney dated Feb. 8, 2024, Waste Pro said the lump sum payment was short by $186,779.33. This was due to a change in the franchise fee calculation, the letter stated, as the city calculated it out to be 20% of the total invoice sent to Waste Pro. The company argued that it should have been calculated using a fixed dollar amount, increased each year by the same CPI percentage received by Waste Pro.
Because the city differed in its franchise fee calculation through the end of September 2023, Waste Pro claims it was shorted $560,647.64. Though the city ultimately agreed on the franchise fee calculation, the letter states, it reported to the company that the increase on the unusual cost of business of $3.55 per unit was not owed, leading to the dispute.
"Waste Pro values its partnership with the city," Shay wrote in the letter. "However, please do not think that Waste Pro's ongoing commitment to a positive relationship lessens its resolve that this money is owed to it."
Waste Pro has been the city's waste collection contractor since 2014.
In a statement to the Observer, the city said that it has been "diligently working with Waste Pro to resolve a dispute concerning the franchise fee calculations."
"This fee is essential for funding city services related to solid waste management, including street maintenance and emergency services," the city stated. "Despite some differences in interpretation of the contract terms, we are in continuous dialogue with Waste Pro to find a common ground that respects both parties' perspectives and maintains our commitment to fiscal responsibility."
The city argues that the unusual cost of business fee is not contained in the contract or any amendment to the contract, and that the provision for "unusual and unanticipated costs" was not to be applied the way Waste Pro seeks; the city argued that it was restricted to costs from storms other natural disasters. Waste Pro argues that the increase in fuel, parts and labor costs sparked by the COVID-19 pandemic and supply chain backlogs "were unusual and unanticipated," according to Shay's letter.
Ormond Beach Mayor Bill Partington said it appears there was a misunderstanding regarding the contract agreement.
"After listening to both sides, it sounded to me like there wasn't a meeting of the minds and that's what created the conflict," Partington said. "I would think the most obvious explanation for that would be a miscommunication or a misunderstanding somewhere along the line."
Partington said he brought the issue up at past commission meetings to encourage both parties to seek a resolution.
"We have a good working relationship with Waste Pro and they provide a service that 99.9% of the time, our residents are very happy with," he said. "And so I'm hopeful that they can hammer out a resolution and everybody can be on the same page going forward, and we won't have this problem in the future."
The Observer reached out to Shay and Waste Pro, but did not receive a response in time for publication.
