Republic-All Service WasteMIAMI BEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
DATE:
AUDIT:
PERIOD:
Jorge M. Gonzalez, City Manager Q
Kathie G. Brooks, Budget and~· erf~manc Improvement Director~
James J. Sutter, Internal Auditor
,'f/1
August 26, 2009
Republic Services of Florida, d/b/a All Service Miami-Dade Division (Non-Exclusive
Franchise Contractor)
October 2005 to January 2009
This report is the result of a regularly scheduled audit of the Franchise Service Agreement with
Republic Services of Florida, d/b/a, All Service Miami-Dade Division. (All Service Miami-Dade
Division)
INTRODUCTION
Chapter 90, Article IV Solid Waste of the City Code provides for the City to have Non-Exclusive
Franchise Waste Contractor Agreements and Service Agreements with five waste contractors.
These contractors provide waste collection and recycling services for Commercial and Residential
for multi-family residences with eight (8) or more units in the City of Miami Beach. According to the
Non-Exclusive Franchisee Waste Contractor Agreement, the waste contractor is granted the
franchise and is required to undertake and perform each and every obligation set forth in this
Agreement. The "Service Agreement" covers the provision of additional solid waste collection and
disposal and recycling services at certain City owned facilities and properties. The Service
Agreement is intended to have a term that will run concurrent with the terms of the Non-Exclusive
Franchise Waste Contractor Agreement.
The City Commission under resolution 2003-25385 renewed All Service Miami-Dade Division and
the other waste contractor's franchise service agreement on October 15, 2003 for an additional five-
year term expiring September 30, 2008. Subsequently the City Commission adopted Resolution
(#2008-26923) authorizing the further renewal of the City's existing four franchise waste contractors
including All Service Miami-Dade Division for the collection and disposal of solid waste, to also
included recycling services. The waste contractors' renewal was for three years, commencing
retroactively on October 1, 2008 and ending on September 30, 2011.
For the past several years, the City had franchise waste contractor and service agreements with four
waste contractors to provide commercial service within its boundaries. On May 25, 2009 the City
Commision by resolution 2009-27020 approved another company to be the fifth hauler.
Section 90-221 City Code 1964,14A-16 (a) requires each franchise waste contractor to pay the City
a franchise fee consisting of a percentage of the licensee's total monthly gross receipts established
by resolution of the City Commission. On October 1, 2007 as required pursuant to section 90-278 of
the City Code, the franchise fee paid to the city by its franchise waste contractors was raised from
16% of the franchisee's total monthly gross receipts for waste removal in the city, to 18% of said
gross receipts. However, the Public Right-of-way franchise fees remained the same (2%).
All Service Miami-Dade Division reported to the City of Miami Beach $4,060,227.01 in gross receipts
for Waste, Roll-offs & Public Right-of-Way. All Service Sanitation Miami-Dade Division remitted
amounted to $752,145.67 for the services performed within the city limits in compliance with the City
vVe ore commilled to providing excellent public service one/ safet7• to oil who live, work, one/ ploy in our vibront, tropicol, historic ,~ommunity.
Internal Audit Report
Republic Services of Florida, d/b/a All Service Miami-Dade Division (Non-Exclusive Franchise
Contractor)
August26,2009
Code. The following table summarizes the total amount of gross receipts reported and related fees
paid:
2005 2006 2007 2008 2009 TOTAL
(Oct-Dec) (Jan)
Audited Gross $250,661.38 $1,077,827.14 $1,253,198.75 $1 ,361,010.52 $117,529.22 $4,060,227.01 Receipts
16%Franchise 31,686.88 143,441.37 175,778.66 210,773.19 17,550.83 579,230.53 fee paid
2%Public 3,960.86 17,930.16 21,474.88 23,419.25 1,950.05 68,735.20 Rioht-of-Wav
Roll-off $8,418.95 $29,010.98 $28,936.49 $34,208.69 $3,604.83 $104,179.94
Footnote: On October, 2007 as requ1red pursuant to sect1on 90-278 of the C1ty Code, the franchise fee paid to the c1ty
by its franchise waste contractors was raised from 16% of the franchisee's total monthly gross receipts for
waste removal in the city, to 18% of said gross receipts. However, the Public Right-of-way franchise fees
remained the same (2%).
OVERALL OPINION
All Service Miami-Dade Division remitted the correct amount of franchise fees for Waste, Roll-offs
and Public Right-of-Way; based on the records provided in adherence to the City Code and Service
Agreement. The waste contractor properly and timely obtained an annual business tax receipt,
submitted the required certificate of liability insurance and provided the In-Kind Services to the City.
In addition, the contractor's franchise returns were timely filed and correctly recorded in the City's
Financial System. However, the following items were noted during our audit and are in need of
improvement:
• All Service Miami-Dade Division did not comply with City Code sections requiring monthly
report of recyclable materials.
• All Service Miami-Dade Division did not submit a statement of annual gross receipts
generated from accounts within the City certified by an independent certified public
accountant reflecting gross receipts within the City for the preceding fiscal year.
PURPOSE
The purpose of this audit is to determine whether the franchise waste contractor reported all gross
receipts to the City, were correctly calculated, received timely and accurately recorded by the City,
and the contractor was in compliance with designated sections of the City Code and related
Ordinances.
SCOPE
1. Review the private waste contractor's books and records to confirm that their billings were
correct; their gross receipts were correctly calculated and support the monthly franchise fee
and public right-of-way payments submitted to the City.
Page 2 of 4
Internal Audit Report
Republic Services of Florida, d/b/a All Service Miami-Dade Division (Non-Exclusive Franchise
Contractor)
August 26, 2009
2. Confirm that the private waste contractor timely sent the City the required reports in
adherence with the terms listed in the Service Agreement.
3. Confirm that the private waste contractor is timely sending the required Monthly Report of
Gross Receipts along with their remittance to the City.
4. Confirm that the private waste contractor timely obtained their required annual City Business
Tax Receipt.
5. Confirm that the private waste contractor timely submitted their annual Certified Public
Accountant (CPA) Statements of Gross Receipts to the City, and that amounts reported
therein agree with corresponding totals reported on the waste contractor's Monthly Reports
of Gross Receipts.
6. Confirm that the private waste contractor has obtained the required insurance in adherence
with Section 90-223 of the City Code and the signed service agreement.
7. Confirm that all monthly franchise and public right-of-way fee payments were timely and
correctly recorded in the City's Financial System.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSE
1. Finding -Required Reporting
All Service Miami-Dade Division did not submit the following documents in accordance with
the listed City Code sections during the audit period:
a. The City Code Section 90-308 Monthly Report, "Each recycling contractor shall deliver
monthly to the city manager an accurate report regarding the nature and disposition and
volume of Recyclable Materials collected by it from each account within the limits of the
city. Upon request by the City Manager, each contractor shall also furnish the city with
verifiable information regarding the method and place of final disposal or distribution of
said materials." All Service Miami-Dade Division did not deliver to the City Manager the
required monthly report of recyclable materials as required by the City Code. Going
forward, a list that states address, size, number of containers or totters and frequency
serviced must be delivered monthly.
b. Section 90-223 states" The licensee shall on or before 30 days following the close of its
fiscal year deliver to the Finance Director and the City Manager a statement of its annual
gross receipts generated from accounts within the City certified by an independent
certified public accountant reflecting gross receipts within the City for the preceding fiscal
year". All Service Miami-Dade Division did not provide statements of its annual gross
receipts generated from accounts within the City certified by an independent public
certified public accountant reflecting gross receipts within the city for the preceding fiscal
year. However, upon requested during the audit All Service Miami-Dade Division
provided a CPA annual statement for fiscal year 07/08.
Recommendation(s)
All Service Miami-Dade Division must comply with the designated sections of the City Codes
as follows:
Page 3 of 4
Internal Audit Report
Republic Services of Florida, d/b/a All Service Miami-Dade Division (Non-Exclusive Franchise
Contractor)
August26,2009
a. The contractor shall deliver to the City Manager monthly report regarding the nature and
disposition, volume of recyclable materials collected from each account within the City
limits.
b. All Service Miami-Dade Division must submit a statement of annual gross receipts
generated from accounts within the City certified by an independent certified public
accountant reflecting gross receipts within the City for the preceding fiscal year.
EXIT CONFERENCE
On June 30, 2009 we forwarded an audit draft to All Service Miami-Dade Division. Their attorney
responded on July 13, 2009 by providing further clarification to our audit findings. On August 24,
2009, we visited their offices to verify additional information and made changes accordingly to our
report. Going forward, the waste contractor agreed to take the necessary action to address our
audit findings.
JJS: CD
Audit performed by Carmin Dufour
F:\obpi\$AUD\INTERNAL AUDIT FILES\DOC08-09\REPORTS-FINAL\Republic Service of Florida Audit Final Report.doc/
cc: Fred Beckmann., Public Works Director
Alberto Zamora, Sanitation Director
Patricia Walker, Chief Financial Officer
AI Blease (General Manager for All Service Miami-Dade Division)
Cindy Thompson (Office Manager for All Service Miami-Dade Division)
Page 4 of 4