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Tampa overpaid Waste Management nearly $1 million

TAMPA — The city of Tampa has overpaid Waste Management at least $972,000 for commercial solid waste pickup from 2008 to 2012 as a result of overbilling by the company, city officials said Friday.

The company agrees the city paid too much, but said the problem began when the city gave it inaccurate information at the start of the billing process.

Tampa officials said negotiations are under way with the hauler for a refund. City Hall believes believe Waste Management overbilled it by a total of nearly $1.4 million, but officials said $972,712 is the amount the company has acknowledged so far.

Discussions are continuing to try to close that gap, city spokeswoman Ali Glisson said.

Waste Management has a $1.76 million-per-year contract with the city to pick up waste at businesses in the central and northwest parts of the city. City trucks pick up 60 percent of Tampa's commercial solid waste, and Waste Management picks up 40 percent.

Tampa officials say the problems apparently began when, for example, one company would close at a location served by Waste Management and a new company would open in the same spot.

When that happened, city officials say they would submit a work order to Waste Management reflecting the change in business operations. But Waste Management would continue to bill the city for service to both the old and new businesses at the same location, according to Tampa public works and utility services administrator Mike Herr.

Over time, the charges for businesses not receiving service were repeated each month, driving up the total, Glisson said.

Herr said the problem came to light after a management analyst in the solid waste department spotted examples of potential overbilling. The problems were serious enough that in December 2011, officials asked City Hall's internal auditors to launch a formal review of solid waste contractural services. That audit is under way now.

In a written statement, Waste Management said "the overpayment was based on inaccurate base billing information provided by the city."

"Based on the city of Tampa audit and a subsequent audit by Waste Management, we agree that the city has overpaid us for services, and we have been working closely and cooperatively with city staff to correct the matter," Waste Management Florida community affairs manager Dawn McCormick said.

What happens in the billing process, she said, is that the city provides Waste Management with base billing information each month based on cubic yardage picked up. Waste Management then adds and subtracts city-generated work orders from that base amount and sends the city an invoice for its charges. City officials review the invoice, make further changes and pay Waste Management. McCormick provided an example of a Waste Management invoice from last September showing hand-written adjustments to its charges.

"We do not want to be paid for anything we didn't earn, and we look forward to a mutually agreeable resolution and refund provisions," McCormick said.

City officials said they believe the errors that resulted in the overpayments have been identified and eliminated.

"We feel like we are now being invoiced by them for the proper amounts," Herr said.

In the meantime, Waste Management's five-year contract with the city was scheduled to expire on Dec. 31. Rather than renew it for a year, city officials extended it for 90 days at a cost of $424,115. Asked whether Tampa could change haulers at the end of the extension, Herr said it's a possibility.

"We don't know yet," he said. "We've got to work through these details."

Richard Danielson can be reached at danielson@tampabay.com or (813) 226-3403.

Tampa overpaid Waste Management nearly $1 million 01/25/13 [Last modified: Friday, January 25, 2013 11:53pm]
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