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Home My WebLink About2023 Audited Statement of Franchise Fees Paid - Waste Management Waste Management, Inc. of Florida STATEMENT OF REVENUES COLLECTED AND FRANCHISE FEES PAID – MODIFIED CASH BASIS FOR THE FRANCHISE AGREEMENT WITH THE CITY OF SEBASTIAN, FLORIDA For The Year Ended December 31, 2023 - 1 - Carr, Riggs & Ingram, LLC 215 Baytree Drive Melbourne, Florida 32940 321.255.0088 386.336.4189 (fax) CRIcpa.com INDEPENDENT AUDITOR’S REPORT To the Management of Waste Management, Inc. of Florida Opinion We have audited the accompanying special purpose statement of revenues collected and franchise fees paid – modified cash basis (“special purpose statement”) for the Solid Waste and Recyclables Collection Franchise Agreement with the City of Sebastian, Florida for the year ended December 31, 2023, and the related notes to the financial statement. In our opinion, the special purpose statement referred to above presents fairly, in all material respects, the revenues collected and franchise fees paid for the Solid Waste and Recyclables Collection Franchise Agreement between the City of Sebastian, Florida and Waste Management, Inc. of Florida for the year ended December 31, 2023 in accordance with the modified cash basis of accounting described in Note 2. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Special Purpose Statement section of our report. We are required to be independent of the City of Sebastian, Florida and Waste Management, Inc. of Florida and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis of Accounting We draw attention to Note 2 of the special purpose statement, which describes the basis of accounting. The special purpose statement is prepared on the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter. Emphasis of Matter As described in Note 1 to the special purpose statement, the accompanying special purpose statement was prepared for complying with the Solid Waste and Recyclables Collection Franchise Agreement with the City of Sebastian, Florida and is not intended to be a complete presentation of the Company’s revenues and expenses on the modified cash basis of accounting. Our opinion is not modified with respect to that matter. - 2 - Responsibilities of Management for the Special Purpose Statement Management is responsible for the preparation and fair presentation of the special purpose statement in accordance with the modified cash basis of accounting described in Note 2, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a special purpose statement that is free from material misstatement, whether due to fraud or error. In preparing the special purpose statement, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Waste Management, Inc. of Florida’s ability to continue as a going concern within one year after the date that the financial statement is available to be issued. Auditor’s Responsibilities for the Special Purpose Statement Our objectives are to obtain reasonable assurance about whether the special purpose statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the special purpose statement. In performing an audit in accordance with generally accepted auditing standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the special purpose statement, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the special purpose statement. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Waste Management, Inc. of Florida’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the special purpose statement. - 3 - • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Waste Management, Inc. of Florida’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. Melbourne, Florida April 19, 2024 Waste Management, Inc. of Florida Statement of Revenues Collected and Franchise Fees Paid – Modified Cash Basis The accompanying notes are an integral part of this statement. - 4 - For the Year Ended December 31, 2023 Gross Revenues Collected Franchise Fee Amount Paid January 2023 259,173$ 15,550$ 15,550$ February 2023 75,599 4,536 4,536 March 2023 360,589 21,635 21,635 April 2023 117,269 7,036 7,036 May 2023 123,226 7,394 7,394 June 2023 89,982 5,399 5,399 July 2023 88,827 5,330 5,330 August 2023 91,976 5,519 5,519 September 2023 98,371 5,902 5,902 October 2023 94,476 5,669 5,669 November 2023 96,572 5,794 5,794 December 2023 105,473 6,328 6,328 Total 1,601,533$ 96,092$ 96,092$ Waste Management, Inc. of Florida Notes to the Statement of Revenues Collected and Franchise Fees Paid – Modified Cash Basis - 5 - Note 1: NATURE OF OPERATIONS Waste Management, Inc. of Florida (the “Company”) is a wholly owned subsidiary of Waste Management Holdings, Inc. (a Delaware corporation, which in turn is a wholly owned subsidiary of Waste Management, Inc. (“WMI”). The Company is operated by the local district office located in Vero Beach, Florida, which oversees the contract. In June 2013, Waste Management, Inc. of Florida entered into a Franchise Agreement (the “Agreement”) with the City of Sebastian, Florida, to provide residential solid waste collection service, residential recycling collection service, commercial collection service and certain construction and demolition debris service, for a term of five years. This agreement began July 1, 2013, and had an automatic renewal clause for an additional five year term ending June 30, 2023. On May 10, 2017 the automatic renewal was agreed upon and the agreement expired on June 30, 2023. Effective, July 1, 2023, the City entered into an agreement which expires on August 31, 2030 with an option to renew for one additional fiver year term. The accompanying statement includes only those revenues and expenses applicable to the Agreement (see Note 3). Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The accompanying financial statement was prepared for the purpose of complying with Article 13.2 of the Agreement. The accompanying statement has been prepared in accordance with the modified cash basis of accounting. Financial Statement Presentation Revenues under the Agreement are recognized upon collection of payment for services rendered (i.e., modified cash basis of accounting). Note 3: BASIS OF REVENUES AND FRANCHISE FEES APPLICABLE TO THE AGREEMENT The Company's results of operations include the operations accounted for under the Agreement as well as the operations accounted for under other non-exclusive solid waste collection contracts. The accompanying statement of revenues collected and franchise fees paid – modified cash basis includes only those revenues and franchise fees applicable to the Agreement. Franchise fees are calculated in accordance with the Agreement as 6% of revenues collected for services provided Waste Management, Inc. of Florida Notes to the Statement of Revenues Collected and Franchise Fees Paid – Modified Cash Basis - 6 - Note 4: SUBSEQUENT EVENTS Management has evaluated subsequent events through the date that the financial statements were available to be issued, April 19, 2024 and determined there were no events that occurred that required disclosure. No subsequent events occurring after this date have been evaluated for inclusion in this financial statement.