Tom On Location: Waste Pro Settlement
On Wednesday August 30th, the Council agreed to settle its dispute with Waste Pro by returning $1.7 Million of the $2.6 Million withheld for their lack of performance. The Council further decided to keep $500,000 of settlement funds instead of giving residents a bigger refund on our upcoming tax bill. The council also gave Waste Pro a 5.16% increase in next year’s contract payout. Little was explained as to why the city settled on giving back $1.7 Million to Waste Pro. My biggest issue is that the city did not return all the money back to the residents who were actually harmed by all the waste not collected.
I suggested each resident get a $10 reduction in our Solid Waste bill in November, but the council only gave you $5.80, keeping the rest in the city’s pocketbook and replenishing the reserves. They missed another opportunity to give back more money to the residents in this time of need for everyone.
Settlement from Waste Pro
- City held back $2.6 Million in monies otherwise owed Waste Pro due to not fulfilling their contract of trash pick-up.
- City agreed to pay Waste Pro $1.7 M from monies withheld
- City is keeping $900K of monies withheld plus getting a future $240,000 benefit in Bulk Waste Pick-up and disposal.
- $183,728 is monies they would owe us anyway for Franchise Fees. (Should not be included is savings)
- $308,070 is cost the City spent doing Waste Pro’s job.
- $416,394 is cost recovery for residents damage.
- $240,334 is future work that Waste Prop will do for Bulk Waste Pickup.
- So the real recovery is $964,798 from the lack of performance from Waste Pro.
- After taking out City cost, the cost reduction to residents is $656,728.
At the Aug 31 Council meeting, the council voted to hold back $208,197 from residents until next year. Therefore only giving back residents $474,908 of the cost reduction to residents. According to Finance’s math, this equaled a $5.80 yearly reduction to residents versus $8.34. The council chose to hold back $2.54 per resident until next year to smooth the price change.
Realize that the annual price is increasing by $28.23 with what the council approved. (12.8% Increase). Had the council given the residents the entire amount of damages due them, the rate would have increased by $25.69 (11.64% Increase). The council’s logic of holding $2.54 back for smoothing the change next year is faulty. We needed the maximum deduction this year due to the large increase from last year. The logic is further faulty because the money the council is holding back is already in our bank account. That money would be better served in our residents bank account, especially in a recession.
We are not talking a lot of money per resident. This debate is one of principle. The council thinks that Cape Coral residents shouldn’t get their money back this year because they will complain about the increase next year is absurd and frankly, demeaning.