OIG No. 25-05 Eastern Waste Systems, Inc. Roll-Off Fees RevenuesJoseph M. Centorino, Inspector General
TO:
FROM:
DATE:
AUDIT:
PERIOD:
Honorable Mayor and Members of the City Commission
Joseph Centorino, Inspector General
April 4, 2025
Eastern Waste Systems, Inc. Roll-Off Fee Revenues
Audit OIG No.: 25-05
March 1, 2019, through July 31, 2021
This report stems from an audit performed of the permit fees that Eastern Waste Systems, Inc. (EWS) charged, collected, and remitted to the City Finance Department during the audit period
of March 1, 2019, through July 31, 2021. The City of Miami Beach Office of the Inspector General
(OIG) Sanitation Tax Auditor examined the contractor's compliance with selected provisions in the City Code, including obtaining annual Business Tax Receipts (BTRs), filing required reports, and maintaining sufficient insurance coverage. Additionally, the audit assessed the performance
of City staff responsible for monitoring EWS and processing the payments received from the
contractor during the audit period.
Eastern Waste Systems, Inc. specializes in Roll-Off/portable waste disposal services. On August
18, 2021, OIG staff notified the contractor of the audit's commencement. Subsequent to the
inquiry, the OIG auditor received and reviewed an undated letter from EWS stating that, effective July 16, 2021, the company was no longer a vendor in Miami Beach and requested the
cancellation of its BTR. Additionally, EWS customers were informed via a letter dated August 15,
2021, that EWS had become part of the Coastal Waste & Recycling group of companies.
INTRODUCTION
City Code Requirements for Roll-Off Contractors
Definitions of Roll-Off and Bulky Waste & Permit Fees
As defined in City Code Section 90-2, a Roll-Off is a container with a minimum capacity of ten cubic
yards designed to be transported by a motorized vehicle. Contractors primarily use these
containers to collect and dispose of construction and demolition debris and large quantities of trash or bulky waste, but not garbage or commercial refuse. Bulky waste includes large household
articles such as appliances, furniture, accumulations from major tree cutbacks, large crates, and
similar items, while commercial refuse consists of all solid waste produced by commercial
establishments.
Roll-Off contractors operating in Miami Beach must comply with the terms outlined in City Code
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Section 90-221. These requirements include the monthly remittance of permit fees based on the
City Commission-approved rate: 18% of total gross receipts from the start of the audit period
through October 5, 2019, and 20% thereafter. The fee is calculated by applying the applicable rate to the contractor's total gross receipts from operations within the City.
Definition of Gross Receipts
City Code Section 90-221 defines gross receipts as all contractors' fees collected, whether wholly
or partially, for solid waste collection and disposal services provided within the city, excluding any taxes and gross receipts from servicing Roll-Off and portable containers.
Account Reporting Requirements City Code Section 90-278(3) requires that each roll-off contractor provide the City Manager with a current list of account names and addresses when submitting an initial application. For permit
renewal applications, contractors must also provide the frequency of service, the permit number,
the capacity of each roll-off container or dumpster for each account, and the address serviced by each roll-off container or dumpster. This list of accounts is typically furnished concurrently with
the monthly report to the Finance Department and serves as an essential document for verifying
the accuracy of the contractor's filings during audits.
Monthly Reporting and Fee Payment Requirements
City Code Section 90-278(4) requires contractors to submit monthly reports to the City's Finance Department, along with payment of any owed permit fees. These reports are due by the end of the month following the month in which the gross receipts were generated. For example, the report
and fees for February 2024 must be submitted by March 31, 2024. Under City Code Section 90-
225(2), unpaid fees that are not timely submitted are subject to penalties of 10% per month, up to a maximum of 50%. Additionally, the highest legal interest rate permitted by law will apply to
all unpaid fee amounts (excluding penalties) from the date the fee first became delinquent until it
is fully paid.
Annual Reporting for Gross Receipts Exceeding $200,000
Per City Code Section 90-278( 4 ),_ contractors with reported annual gross receipts exceeding
$200,000, must submit a statement of annual gross receipts for the preceding fiscal year to the City Finance Department. This statement must be prepared by an independent Certified Public
Accountant and furnished within sixty days following the fiscal year's close.
Insurance and Permit Requirements Finally, City Code Section 90-196 requires adequate insurance coverage to be maintained by
qualified licensed Roll-Off contractors, and Section 90-193 requires all Roll-Off contractors to
obtain permits for all solid waste accounts serviced within the city.
PURPOSE
This audit assessed whether the contractor's filings were complete and accurate and whether the
corresponding payments were calculated correctly according to the permit fee rates approved by
the City Commission. Additionally, the audit aimed to ensure that the City Finance Department received and accurately recorded the filings and payments in a timely manner, and to assess the contractor's compliance with other relevant sections of the City Code.
OBJECTIVES 1. Assess whether the contractor maintained sufficient records to verify the accuracy of permit
fee billings and correctly calculated the corresponding Miami Beach gross receipts based
on the monthly fees submitted to the City for the audit period March 1, 2019, through July
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31, 2021.
2.Evaluate whether the contractor submitted its monthly gross receipts reports on time andremitted full payment of the associated fees to the City. If not, determine the penalties andinterest charges under City Code Section 90-278(6)(a-d).
3.Verify whether the contractor obtained the required annual Business Tax Receipts duringthe audit period.
4.Determine if the contractor complied with the reporting requirements specified in City Code
Section 90-278.5.Determine whether the contractor maintained the required insurance coverage pursuant
to City Code Section 90-196.
6.Determine whether monthly permit fee payments remitted by the contractor were
accurately recorded in the City Financial System.
METHODOLOGY
The Sanitation Tax Auditor performed internet searches, examined and analyzed the contractorfurnished sales reports, searched the City's EnerGov1 system database for all other building
permits issued during the audit period, and reviewed insurance requirements for compliance.
RESULTS/CONCLUSION
The review of the contractor's information in EnerGov showed EWS appropriately obtained
business tax receipts through the 2018/2019 fiscal years. The business ceased operations in Miami Beach as of July 16, 2021. Records provided to the OIG indicate that they requested permits to conduct performance Roll-Off services at 28 Miami Beach locations during the audit
period; the permits were obtained in accordance with the City Code.
During the audit period, the contractor submitted copies of their "Monthly Sales Reports" and
"Franchise Reports" to the City; both reports provide monthly sales information. In addition, the
Franchise Reports include the tax due and remitted to the City. A reconciliation spreadsheet was
created to compare the monthly sales reports to the franchise reports. The amounts in the reports,
which were supposed to agree, did not. The contractor's gross receipts per their monthly sales
reports ($2.3 million) were underreported compared to the franchise reports ($2.7 million). The
discrepancies appear to be primarily due to differing accounting methods, specifically the use of
cash-based versus accrual-based reporting.
As the amounts shown in franchise reports exceeded their monthly sales reports, no additional
tax is due or assessed.
The auditor also verified that the contractor had adhered to insurance requirements per City Code Section 90-196.
RECOMMENDATION
The OIG recommends that the contractor report sales as incurred rather than when payments are
received, per Sec. 90-278(1 )(2). Additionally, the contractor should ensure consistency and
accuracy in future monthly roll-off permit fee returns and promptly remit all associated payments
as required by City Code Section 90-278(4).
1 EnerGov is a comprehensive, enterprise-level software platform designed to streamline and manage various
municipal processes related to permitting, licensing, inspections, and code enforcement.
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cc: Eric Carpenter, City Manager
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Bradford Kaine, Public Works Department Director Jason Greene, Chief Financial Officer
Ricardo J. Dopico, City Attorney
Hernan D. Cardena, Esq., Code Compliance Department Director Michale Marzano, Treasurer Eastern Waste Systems, Inc.
OFFICE OF THE INSPECTOR GENERAL, City of Miami Beach
1130 Washington Avenue, ffh Floor, Miami Beach, FL 33139 Tel: 305.673. 7020 • Hotline: 786.897 .1111
Email: CityofMiamiBeachOIG@miamibeachfl.gov Website: www.mbinspectorgeneral.com
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