Re WM's Franchise Fee Underpayments Revisited-- the plot thickensCome on MacNamee;
You are being completely unfair to the Chief Financial Officer�
HIs number, somewhere around 40,000�ish, give or take a shitload, is
good enough. After all, it�s not coming out of his pocket, his salary
isn�t dependent upon producing data that�s factual, accurate, and
reliable, he�s gonna get �all sorts of attaboys� regardless.
The dude�s will get paid whether or not the number is four, 40,000, or
fuck, who cares.
Question: Has someone suggested to Warner he move his desk closer to the
window? Maybe the problem is something as simple as �his Hello Kitty
solar powered calculator is just running low on juice.� Or maybe
Lynda.com to score a few Excel lessons.
Have a good day.
On Tuesday, December 30, 2014 at 9:06 AM, Kenneth MacNamee wrote:
Commissioners (and Mr. Redman):
The longer the wait is for a make sense, detailed explanation
why Mr. Redman's 54,612 monthly commercial cubic yards of containerized,
non-compacted service raises a serious question about the FF revenue
Delray has been receiving, the more I dig.
In WM's presentation to the Commission at the 8/17/12 Commission
Meeting, Mr. Carter stated at the 47 minute mark, "the City gets about
40,000 cubic yards of commercial service a month". In the 2001 Bid
Takeoffs, the City claimed it had "34,259 C.Y monthly non-compacted
service and 1,032 containers in service (my estimate in an email below
is 1,042 now)".
Here's the topper. I went to the SWA Jan 2013 Bid Sheet with
takeoffs. It lists 209,503 annual commercial container yards (17,458
monthly comparable to Delray's 54,612) for Service Area 4. I submitted a
PRR yesterday to the SWA for the underlying customer by customer service
breakdown. The SWA responded the same day within 3 hours. Lo and behold
there is a 4 page WM customer by customer listing with a 9,608.27
monthly yards that is a part of the 17,458 compilation. So, WM can
obviously produce the listing!
For Mr. Redman to cite "54,612 monthly C.Y. of non-compacted
container service" in his 12/4/14 Report, he most likely had to get that
exacting number from a WM customer by customer listing. If not, it only
seems logical that someone from WM has a customer by customer trial
balance that totals 54,612. Once that is available, it can be compared
with the WM monthly FF remittance. This isn't a 'rocket science'
investigation and it should have been put worth and completed last week.
Instead, the drama/intrigue lingers!
P.S.-- It is section 6 "Waiver of Past Claims" in the Settlement
Agreement which precludes any retroactive FF shortfall claims to after
3/28/14. I have copied Atty. Cole herein. Maybe he can check his files
and determine for you who wanted that paragraph inserted in the
Settlement. I'll bet you the best drink in town it was WM!
----- Forwarded Message -----
From: Kenneth MacNamee <kjmacnamee@yahoo.com>
To: Mayor Commissioners
<commissioners_mayor@ci.delray-beach.fl.us>; Redmen
<bredman@rcgusaonline.com>
Cc: Jack Warner <warner@mydelraybeach.com>; Terrance Stewart
<stewart@mydelraybeach.com>; Noel Pfeffer <pfeffer@mydelraybeach.com>;
"ddbcooper@aol.com" <ddbcooper@aol.com>; "randy@bocamag.com"
<randy@bocamag.com>; Gottesman Marisa <mgottesman@sun-sentinel.com>;
Lantigua John (CMG-WestPalm) <jlantigua@pbpost.com>;
"mbuczyner@cbs12.com" <mbuczyner@cbs12.com>; Chaz Stevens
<chazstevens@gmail.com>; Vince Dole <gelod3@yahoo.com>
Sent: Friday, December 26, 2014 9:39 AM
Subject: Fw: Fwd: WM's Franchise Fee Underpayments Revisited--
It gets WORSE!
Commissioners (and Mr. Redman):
Whenever I ask the City a thoughtful, analyzed question and
receive a defensive, whiny, non-analytical response like in Mr.
Stewart's 12/18/14 email below highlighted in Red, I'm usually on to an
important issue. So, I dig deeper and get more analytical.
I went over the emails below with Mr. Archambo at the SWA. He
confirmed that my question of why the City isn't getting $577K in
Franchise Fee (FF) instead of only $433K has merit.
In fact, the apparent $144K (577-433) FF shortfall could be even
WORSE. The $577K anticipated FF revenue is calculated based on Mr.
Redman's takeoffs on page 16 of his 12/4/14 Bid Evaluation Report. The
FF revenue extrapolation is based solely on commercial collection and
disposal charges. However, FF revenue also includes 10% of monthly
"container maintenance charges". These are $19.40, $22.21, $25.53, and
$27.09 for two, four, six, and eight cubic yard containers,
respectively.
So, if one conservatively estimates the average monthly
container maintenance charge is $22, then the additional "missing(?)" FF
would be calculated at $22 X 1,000 est. containers X 12 mos. X 10%=
$26,400. This would take expected FF revenue up to $603K (577+26) and
the unexplained annual shortfall up to $177K (603-433).
Let's go back to page 16 of Mr. Redman's Report. The primary
takeoff quantity is the top number in the 3rd column, "54,612" cubic
yards of containers serviced monthly. For an amount that specific, one
would think there have to be detailed customer by customer back up and
that Mr. Redman obtained it from WM.
Let's further analyze 54,612 to see if it is a make sense. I
heard there were 1,042 containers being serviced (please adjust that
number if it is wrong) so that means there is on average 12 C.Y. per
week serviced per commercial container customer ( 54,612 / 1,042
customers / 4.33 weeks per month). This would mean the weighted average
customer has a four yard container picked up 3 times per week. It sounds
reasonable to me since the smallest container customer is two yards,
once a week. The largest is eight yards serviced 7 days a week (56 total
yards).
Here is another analysis to demonstrate how "short" $433K in
actual and budgeted FF revenue appears to be. From $433K, subtract the
$26K for the container maintenance portion of FF revenue, leaving $407K
for collection and disposal based FF Revenue. That would reduce the
54,612 C.Y. takeoff to approximately 44,000 C.Y.
I can't fathom that Mr. Redman (and WM) would be over 10,000
C.Ys (19.4%) off! It would be irresponsible/unprofessional. Furthermore,
it would mean the average customer only has 9.8 yards of service weekly.
That doesn't make sense either.
Mr. Redman's silence on this important FF shortfall question is
deafening. I can understand his apparent shortcomings in drafting an RFP
so that the City had to engage Atty. Dee but I would think takeoffs
would be his strength. Apparently, the acquiring and analyzing critical
commercial bid component takeoffs is not within City staff's purview
because they apparently haven't provided you with any detailed
statistical explanation justifying the $177K shortfall question. Nor did
staff catch and correct the $9.38 (should be $9.98) recurring error in
WM's bid compliation in Mr. Redman's Report.
Commissioners, there has to be a verifiable explanation. Right
now I am haunted with the WM litigation Settlement Agreement you
approved. Why was the contentious, litigious WM so cooperative to sign
off on no appeal and paying the City's $135K in legal expenses? I was
told WM wanted the City's goodwill for the current bid process. But, in
the Settlement Agreement, I recall WM getting closure for no other
retroactive claims. Maybe WM knew about this FF "shortfall" exposure and
feared a new hauler would expose how under remitted FF have been!
Remember, WM has a proven record of under remitting FF to the
City. It totaled $52,989 in 2007 and 2008 and was so egregious that it
resulted in a unanimous Commission "Vote of No Confidence" for Messrs.
Harden and Safford on 1/19/2010. The SWA also caught WM shorting the
County $715K on tipping in 2012. See the attached SS article below "WM
Caught Cheating..."
Finally, one should expect and understand staff's "lack of
urgency" to investigate the unexplained $177K FF shortfall. 4 staff
members just recommended WM to remain as the City's hauler which will
cost Delray trash customers $1,171,473 more annually ($8.7M over the 7
year life of the contract) above the lowest bid. Also, I detailed on a
10/15/14 email how Mr. Stewart's flawed and lacking 2015 Sanitation
Budget review left $934K "on the table". Considering those two matters,
I guess a $177K annual shortfall does not seem that pressing or
significant after all!
----- Forwarded Message -----
From: "Petrolia, Shelly" <petrolia@mydelraybeach.com>
To: "Stewart, Terrance" <stewart@mydelraybeach.com>
Cc: "Warner, Jack" <warner@mydelraybeach.com>;
"ddbcooper@aol.com" <ddbcooper@aol.com>; Kenneth MacNamee
<kjmacnamee@yahoo.com>
Sent: Friday, December 19, 2014 3:25 PM
Subject: Fwd: WM's Franchise Fee Underpayments Revisited
Good Afternoon Mr. Stewart,
Considering Mr. MacNamee's email was reviewed and responded to
within several hours of receipt, I am disappointed my question has gone
unanswered since late yesterday. I merely requested an explanation of
the failure in Mr. MacNamee's calculations, something already reviewed
by you and Mr. Warner. This should have received a quick response and
not required a second inquiry on my part.
Please send me an explanation as to why Mr. MacNamee's
calculations fail. I expect to hear something today since the email in
question was reviewed yesterday.
Respectfully,
Shelly Petrolia
Vice Mayor
City of Delray Beach
100 N.W. 1st Avenue
Delray Beach, FL 33444
Petrolia@mydelraybeach.com <mailto:Petrolia@mydelraybeach.com>
Phone: (561) 243-7010
Note to Mayor & Commissioners. This message is for your
information only. To comply with the Sunshine Law, please do not reply
to this message.
PUBLIC RECORDS NOTE: Florida has a very broad public records
law. Most written communications to or from local officials, employees,
or the general public regarding city business are public records
available to the public and media upon request. Your e-mail
communications may therefore be subject to public disclosure.
PLEASE NOTE: Pursuant to Florida�s Government in the Sunshine
Act (a.k.a. �Sunshine Law�), e-mails containing city business should be
directed to either: all City Commissioners or only 1 City Commissioner
at a time and should not include prior responses from the other
Commissioners in order to avoid the perception that a third party is
acting as a liaison between Commissioners.
Begin forwarded message:
From: "Petrolia, Shelly" <petrolia@mydelraybeach.com>
Date: December 18, 2014 at 6:04:27 PM EST
To: "Stewart, Terrance" <stewart@mydelraybeach.com>
Cc: "Commissioners, Mayor"
<Commissioners_Mayor@ci.delray-beach.fl.us>, "Warner, Jack"
<warner@mydelraybeach.com>, "ddbcooper@aol.com" <ddbcooper@aol.com>,
Kenneth MacNamee <kjmacnamee@yahoo.com>
Subject: Re: WM's Franchise Fee Underpayments Revisited
Thank you for your response however there were numbers
calculated in Mr. MacNamee's assertions. Can you please tell me where
Mr. MacNamee's numbers fail?
Here is the possible "FF Underpayment"
issue facing the City NOW! Mr. Redman's takeoffs for the City's
Commercial service totals $5,773,892.22. A 10% FF on that amount should
total $577,389. But, according to its Sanitation Fund 2015 Budget, FF
revenue is only $433,000 (based on $413,611 actual for 2013 and $433,000
for projected 2014). So, based on Mr. Redman's commercial takeoffs, WM
could be "shorting" the City again on FFs in excess of $100K annually
Shelly Petrolia
Vice Mayor
City of Delray Beach
100 N.W. 1st Avenue
Delray Beach, FL 33444
Petrolia@mydelraybeach.com
<mailto:Petrolia@mydelraybeach.com>
Phone: (561) 243-7010
Note to Mayor & Commissioners. This message is for your
information only. To comply with the Sunshine Law, please do not reply
to this message.
PUBLIC RECORDS NOTE: Florida has a very broad public
records law. Most written communications to or from local officials,
employees, or the general public regarding city business are public
records available to the public and media upon request. Your e-mail
communications may therefore be subject to public disclosure.
PLEASE NOTE: Pursuant to Florida�s Government in the
Sunshine Act (a.k.a. �Sunshine Law�), e-mails containing city business
should be directed to either: all City Commissioners or only 1 City
Commissioner at a time and should not include prior responses from the
other Commissioners in order to avoid the perception that a third party
is acting as a liaison between Commissioners.
On Dec 18, 2014, at 5:29 PM, "Stewart, Terrance"
<stewart@mydelraybeach.com> wrote:
Mayor and Commissioners,
Below, you will find a response from City CFO Jack Warner in
response the latest set of assertions from Ken MacNamee. As you will
note, Mr. Warner defines those assertions as having no support.
As soon as I receive the information regarding our controls
processes, I will forward that to your attention.
Best regards,
Terry Stewart, Interim City Manager
(561) 243-7010
From: Warner, Jack
Sent: Thursday, December 18, 2014 12:06 PM
To: Stewart, Terrance
Cc: Butler, Lula; Berg, Al
Subject: RE: WM's Franchise Fee Underpayments Revisited
Manager �
Unlike previous analyses conducted by Mr. MacNamee, this is an
assertion with no support and therefore there is nothing to �look into�
other than to describe our existing controls procedures, which I will
request that CI commence.
Lula and Al � Pls see notes below and send the Manager a
response with copy to me.
Thanks
Jack Warner, Chief Financial Officer
City of Delray Beach
100 NW First Avenue
Delray Beach, FL 33444
(561) 243 � 7117
warner@mydelraybeach.com
From: Stewart, Terrance
Sent: Thursday, December 18, 2014 8:50 AM
To: Warner, Jack
Subject: FW: WM's Franchise Fee Underpayments Revisited
FYI
Best regards,
Terry Stewart, Interim City Manager
(561) 243-7010
avoid the perception that a third party is acting as a liaison
between Commissioners.
Begin forwarded message:
From: Kenneth MacNamee <kjmacnamee@yahoo.com>
Date: December 18, 2014 at 7:53:53 AM EST
To: Mayor Commissioners
<commissioners_mayor@ci.delray-beach.fl.us>
Cc: Jack Warner <warner@mydelraybeach.com>, Redmen
<bredman@rcgusaonline.com>
Subject: WM's Franchise Fee Underpayments Revisited
Reply-To: Kenneth MacNamee <kjmacnamee@yahoo.com>
Commissioners:
I reviewed WM's Power Point presentation for the
12/18/14 Meeting. On page 29 of 51, WM bodaciously states, "WM's current
an prior performance is exceptional;". The italics is WM's emphasis--
not mine.
Below is my 1/3/2010 email culminating my 10 month
ordeal uncovering WM failing to timely and accurately remit
Administrative and Franchise Fees (FF) due the City. It happened 13
times during an 18 month period (July 2007 through December 2008) and
totaled $52,989,12. It was Commissioner Fetzer's sounding board for
getting the Commission "Vote of No Confidence" on Messrs. Harden and
Safford unanimously passed at the 1/19/2010 meeting.
Note how then Finance Director Safford tried to politely
blow me off before I uncovered the final $10,841.51 unpaid for 15 months
in Red below. Look how sheepishly and unrepentantly WM's Butch Carter
admits it in his 12/31/09 email. WM omitted paying on 120 customers and
the City never caught it!
Here is the possible "FF Underpayment" issue facing the
City NOW! Mr. Redman's takeoffs for the City's Commercial service totals
$5,773,892.22. A 10% FF on that amount should total $577,389. But,
according to its Sanitation Fund 2015 Budget, FF revenue is only
$433,000 (based on $413,611 actual for 2013 and $433,000 for projected
2014). So, based on Mr. Redman's commercial takeoffs, WM could be
"shorting" the City again on FFs in excess of $100K annually!
I have cced Mr. Warner so that he can inform you what
verification steps if any the City does with WM's FF. If it is like
2009, all the City does is deposit the check and nothing to check the
accuracy/completeness of WM's remittance like I spent countless hours
doing to uncover the $52,989.12 in 2009.
One way to get to the bottom of the "FF Mystery" is to
engage a new hauler!
I'll wait for the Committee's recommendation to you
before I further elaborate on and document "WM's exceptional prior
performance".
________________________________
From: Kenneth MacNamee [mailto:kjmacnamee@yahoo.com]
Sent: Sunday, January 03, 2010 9:26 PM
To: Safford, Joseph; harden; Commissioner Fetzer
Cc: kevin Warner; shelly petrolia; chuck halberg; gordon
wright; bob Wiebelt
Subject: Re: WM Underpayments Report Card--Update
Messrs. Harden, Fetzer, and Safford:
In the 12/31/09 email below with neither an apology nor
an explanation, WM admits that they paid -$0- in C&D for Sept. 2008 and
owes the City $10,841.51 in Franchise Fees (from approximately 120
customers). So, their "Underpayments Report Card" now stands at:
"During the 18 month service period of Jul. 2007
through Dec. 2008, WM under remitted to the City 13 times for a total of
$52,989.12!"
Good thing I persisted with this investigation after Mr.
Safford wanted to prematurely close it out on his Dec. 9th email and I
quote:
"We (the City) are comfortable that we have
analyzed sufficient detail to confirm that we are receiving the correct
amount of franchise fees and administrative fees from WM.
We are recommending closing this issue...I wish to thank you for your
diligence in questioning these franchise fee issues."
There is still a lot of work to do to get to the bottom
of WM's transgressions in its trash dealings with the City. There are
numerous other issues. In the meantime, the City should write WM stating
its performance has been shameful and deplorable. Furthermore, the City
should put WM on notice that it expects WM's full cooperation to
coordinate with the City in the development of timely, informative
reports, in detail and summary, to enable City personnel to ensure the
accuracy and completeness of commercial franchise fee revenues. Anything
less could result in this embarassing situation happening again.
Mr. Harden, I still await the meeting Commissioner
Fetzer requested in emails to you on 12/17 and again on 12/19.
________________________________
From: "Safford, Joseph" <Safford@mydelraybeach.com>
To: Kenneth MacNamee <kjmacnamee@yahoo.com>
Cc: "Harden, David" <Harden@mydelraybeach.com>; "Fetzer,
Fred" <fetzer@mydelraybeach.com>
Sent: Thu, December 31, 2009 12:33:09 PM
Subject: FW:
Ken,
Success. WM is going to be sending us $10,841.51 for
the September, 2008 C&D accounts that they missed.
From: Carter, Harold [mailto:HCarter@wm.com]
Sent: Thursday, December 31, 2009 11:55 AM
To: Safford, Joseph
Subject: RE:
Yes, we did not pay the City the Franchise Fee for Temp
Roll-off for the month of September 2008.
The outstanding balance is $10,841.51
I have included the file for your information.
The check request will be processed and the payment
should be made to the City in January.
Thanks Joe,
Harold "Butch" Carter,
Government Affairs Manager
Waste Management Inc. of Florida
2700 N.W. 48th Street
Pompano Beach, FL 33073
561-322-5528 cell phone
hcarter@wm.com
From: Safford, Joseph [mailto:Safford@mydelraybeach.com]
Sent: Thursday, December 31, 2009 10:32 AM
To: Carter, Harold
Subject:
Butch,
Have you any kind of status report on the September,
2008 C&D containers that were apparently missing from our franchise fees
for that month?
________________________________
Waste Management recycles enough paper every year to
save 41 million trees. By not printing this email, you can help save
even more.
Attachments:
- ARTICLE WM CAUGHT CHEATING SWA BY DIVERTING TRASH TO BROWARD
AND MUST PAY $719,340.27 APRIL 2012.doc