OIG No. 23-25: Inspector General G.O. Bond Quarterly ReportJoseph M. Centorino, Inspector General
TO:
FROM:
DATE:
RE:
Honorable Mayor and Members of the City Commission
Joseph Centorino, Inspector General
December 18, 2023
Inspector General G.O. Bond Quarterly Report
OIG No. 23-25
Revised Report
INTRODUCTION
This report is written in compliance with Section 2-256(j) of the City of Miami Beach Code, which
requires the Office of the Inspector General (OIG), on a quarterly basis, to prepare and submit to
the City Commission a written report concerning the planning and execution of the General
Obligation Bond Program, including, but not limited to, progress reports, financial analysis and
potential risks. The review is based on official city records, OIG attendance at implementation and
oversight committee meetings, interviews with staff and other department personnel as well as
regular discussions with the Program Director. This report is intended to provide the Mayor, City
Commission and the public with useful information and periodic evaluations regarding the
implementation of the G.O. Bond projects to date.
The current financial status of the G.O. Bond program is:
PARKS INFRASTRUCTURE PUBLIC TOTAL
SAFETY
SPENT $29,094,042 $19,414,504 $18,974,693 $67,483,239
ENCUMBERED $35,577,666 $5,384,487 $4,690,312 $45,652,465
AVAILABLE $26,527,344 $3,200,986 $14,487,022 $44,215,352
FUTURE $81,167,054 $168,000,024 $34,809,031 $283,976,108
TOTAL $172,366,106 $196,000,000 $72,961,058 $441,327, 164
IMPLEMENTATION
The OIG has previously reported that one of the performance measures driving the progress of
the program is the rate of spending. Twice a year, the Program Director presents an analysis of
the rate of spending in each bond category to the G.O. Bond Oversight Committee. The analysis
identifies critical targets, assumptions that are made regarding these targets and specific
milestones that must be met for the program to achieve the required 85% minimum spending
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threshold. Meeting this threshold facilitates the City's ability to return to the bond market for
additional funds to begin Tranche 2 projects. In OIG Report No 21-35, it was documented that the
cumulative expenditures had begun to slow. For this quarter, the OIG requested the current cash
flow projections from the Program Director which show continued slowing of expenditures.
Parks Category
The OIG previously reported that $73. 7 million was the spending threshold needed to issue
Tranche 2 bonds for the parks category. In this category to date, $29 million, 35% of the 85%
target, has been spent. The Program Director anticipated that spending would rapidly increase as
Maurice Gibb Park, Bayshore Park and the Pedestrian Bridge construction began. However,
revisions in the critical targets within these projects have caused at least a four-month delay.
Originally, it was anticipated that Tranche 2 bonds would be issued in December 2024; the latest
data suggests April 2025 is the more likely date.
With respect to Maurice Gibb Park, construction has started, however, unforeseen concrete
structures and fuel tanks discovered below the ground surface now must be removed. Permits
have been sought from DERM, the County's environmental regulatory agency, for the removal of
the fuel tanks. The additional scope of work and permitting process has slowed the construction
schedule as well as expenditures during this quarter. However, at the time of this writing, the OIG
notes that spending has started to increase for a total of $1.1 million to date. Similarly, the
Pedestrian Bridge, which was slated to begin during the last quarter of 2023, has been moved to
the first quarter in 2024. The delay in this project has been attributed to design changes that were
needed due to conflicts with utilities.
The other drivers in this category include the Flamingo Park Master Plan and the Scott Rakow
Ice Rink Floors. The delays in Flamingo Park include the following: the Lodge construction,
revised from May 2023 to January 2024; the softball field construction, revised from July 2023 to
September 2024 and the baseball field construction, which has been delayed for a year, and is
now expected to begin in April 2025.
Infrastructure Category
The money in this category is being spent faster than the other categories. At the time of this
report, 82% of the 85% target amount of $23.8 million, or $19.4 million, has been expended.
However, G.O. Bond project #37 Sidewalks and #38 Streets have not seen expenditures since
May 2023. The combined projected expenditures amounted to $700,000. The delay in executing
these projects is related to the creation of a new work plan by the Public Works Department. At
the November 29" internal implementation meeting with staff, the Public Works Department
reported that the workplan is now complete and both sidewalk and street paving is re-commencing
in January 2024. Public Works presented its 5-year plan and is updating the progress maps which
will be presented to the Oversight Committee in December. The other delays in this category
affecting the issuance of Tranche 2 bonds include G.O. Bond project #42 Traffic Calming and #43
23"° Streetscape Improvements. Both projects have delayed construction commencement dates
and are expected to begin in the spring of 2024. The issuance of Tranche 2 bonds is expected to
be delayed only four months.
Public Safety Category
To date, 58%, or $19 million, of the 85% target amount of $32.5 million has been expended. The
main drivers of progress in this category are Fire Station #1 and Police Headquarters. Two other
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projects of significance are the Ocean Rescue Nobe Facility ( commencement of design has been
delayed from October 2023 to January 2025) and Street Lighting for which construction is now
expected to begin in July 2024. Fire Station #1 construction cannot begin construction until the
daycare center currently located in the South Shore Community Center is relocated to the
modulars in Flamingo Park. Staff anticipates that these will be completed by spring of 2024.
Interest Earned to Date
The G.O Bond has accrued interest in these amounts:
Infrastructure
Parks
Public Safety
TOTAL
$1,298,673
$4,466,106
$1,746,058
$7,510,837
As will be discussed below, $6,212,164 of the accrued interest has been allocated to projects
facing funding gaps during the 2023 budget cycle in the Parks and Public Safety categories.
Those transfers have depleted the earned interest in these categories. There is currently
$1,298,673 in accrued interest available for an infrastructure project.
An additional $3,739,342 of project savings has been realized since the inception of the G.O.
Bond program out of which $1,339,070 remains to be transferred to future projects.
Funding Swaps
The Soundscape Park project is comprised of 2 subprojects: Soundscape 4K Technology,
completed in 2019 with $51,503 in savings, and Soundscape Storage. The original scope of work
of this subproject was a restroom facility with a storage component for the housing of large
portable screen video walls purchased by New World Symphony. Over the course of the project,
it was determined that the construction of a restroom facility within the park was not feasible. The
administration moved forward with a design of the storage facility large enough to house the
portable screens. Permitting is currently being finalized. The City has received a proposal from a
JOC Contractor which exceeded the available budget. The total budget shortfall is $127,000.
GO #24, the Middle Beach Beachwalk, was completed in 2021, with $285,821 remains in savings.
The Administration recommended the transfer of savings to Soundscape Storage as follows:
$51,503 from Soundscape 4K Technology and $75,497 from Middle Beach Beachwalk for a total
of $127,000. The transfer from Soundscape 4K Technology will be done administratively, which
is compliant with the established protocols, since it is within the same G.O. Bond Project. The
transfer from the Middle Beach Beachwalk requires a Capital Budget Amendment to be approved
by the City Commission. This request has been approved by the Oversight Committee.
Project Updates:
41st Street Corridor Improvements
In September the City's Transportation Department and Capital Improvements Program met with
the Florida Department of Transportation to review the project's design. As a result of the meeting,
there were required changes to the 60% construction documents to meet FOOT requirements,
and, consequently, additional money was needed. The total G.O. Bond budget for this project is
$15,000,000, with $2,080,318 allocated in Tranche 1 and the remainder in Tranche 2. Because
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the rate of spending has slowed and the City cannot yet go to the bond market for additional
money, a funding swap between projects in this category was executed.
Acting in compliance with the established protocols that are in place, when funding swaps occur
between projects in a bond category, the Program Director notified the G.O. Bond Chair, Karen
Rivo, that this project needed advanced funding (Tranche 2) in the amount of $451,000 for
additional design services. The additional money was necessary to cover constructability reviews,
a public information officer, permitting fees and CIP management fees. The additional money was
moved from G.O. Bond Project #31, the Ocean Drive Corridor, which now has a balance of
$408,000 in unencumbered funds. The City Commission adopted the eighth amendment to the
capital budget which included the re-alignment of the $451,000.
The 90% construction documents are due in the spring of 2024.
34" Street Shared Use Path
This project, a priority in the Miami Beach Transportation Master Plan, continues to be delayed
due to a request by the Public Safety and Neighborhood Quality of Life Committee in May 2023
to reconsider the project. This Project is a part of a network of paths which will provide connectivity
around the Miami Beach Golf Club, connecting to existing bicycle lanes and sidewalks already
located on Prairie Avenue, and a proposed shared-use path along the east side of Alton Road
(abutting the Miami Beach Golf Course). The City Administration is working with the Florida
Department of Transportation ("FDOT") to include North Michigan Avenue to 43° Street in the
Alton Road reconstruction project, anticipated to begin construction in 2025 ("Alton Road Shared-
Use Path").
The OIG has been monitoring this project (as well as Fire station #1 and the 72° Street
Community Complex) due to concerns regarding schedule delays and expenditures. It should be
noted that this project began in 2018 with a feasibility study that included public meetings with
residents and City staff between October 2018 and December 2018. The public meetings allowed
staff to present the initial designs and take community feedback into consideration as the design
process progressed. In October 2019, the City Commission adopted Resolution 2019-31036,
approving the proposed conceptual design. In 2021, the City hired a consultant to prepare the
design and construction documents which were presented to the public and approved by
Bayshore residents.
In 2022, the design review board approved the design, and the City applied for and was awarded
an FOOT grant in the amount of $495,075. The grant was for the implementation of a shared-use
path to provide a safe link for pedestrians and bicyclists. The project, which is subject to all FOOT
rules and requirements, must gain its approval. The consultant has completed 90% of the
construction documents, which are currently under review by the City of Miami Beach Building
Department, DERM, and the Miami-Dade County Transportation and Public Works Department.
Although the design of the project was nearly complete, with FOOT approval, community input
and support, and the receipt of the grant based on the proposed design, on July 12, 2023, the
Public Safety and Neighborhood Quality of Life Committee, asked staff to consider redesigning
the project to accommodate a single-family home in the neighborhood. CIP staff explained that
the Committee's request to alter the proposed design of the shared-use path would require that
the design be revised to remove bicyclists from the shared-use path in front of the private
residence. CIP staff also explained that FOOT will require that revised plans detailing the changes
in the design be submitted for review. Upon review of the revised permit documents, FOOT would
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determine if/how the design changes would potentially affect the grant funds (which expire on
June 30, 2024) and the project schedule.
CIP and the Transportation and Mobility Department staff recently met with the consultant and
requested a review of the current design. Committee action required staff to consider additional
design options for the project which are still awaiting approval by the Commission. Several options
were presented to the City Commission on 09/13/2023. The item was deferred to the 10/18/2023
City Commission Meeting at which time it was deferred again. The expected date for the
completed design was September 2023. It is likely that design will not be completed until the
beginning of 2024, at which point the City will have to obtain FOOT approval. CIP Director David
Martinez advised the Oversight Committee that if the Commission hears the item at the December
13"meeting, the project will stay on schedule. The cost associated with the review of other design
options is estimated at $10,500.
The G.O. Bond Oversight Committee members in their September meeting expressed concern
that a project which was funded and permitted was being unnecessarily delayed. The G.O. Bond
Oversight Committee has expressed its opinion that their work is being discounted, the cost of
the project has increased, the working relationship with FOOT has been undermined and staff
time wasted.
In the case of the 34 Street Shared Use Path, $411,620.00 has been spent or committed. The
balance remaining in Tranche 1 is $418,379.00.
Fire station #1
This quarter, staff performed a funding swap without the prior consent of the G.O. Bond Oversight
Committee to close a $5,000,000 funding gap. The Program Director advised that because the
G.O. Bond Oversight Committee did not meet during the summer, and the budget had to be
finalized before the end of the fiscal year, staff made the decision to fill the funding gap utilizing
earned interest on the bonds and money from the City's PAYGO funds. CFO Jason Greene
attended the first G.O. Bond Oversight Committee meeting in September to explain the movement
of money and how the City closed the $5 million funding gap for this project.
Mr. Greene stated that the accrued interest in the public safety bond was $1,746,058 and this
money was used to partially fill the gap, leaving approximately $3.3 million unfunded. Because of
higher interest rates, the accrued interest in the parks bond was $4,466,106. Staff took this money
and put it into the Bayshore Park project. This project is also partially funded by PAYGO dollars.
The next step was to take $4.46 million from Bayshore Park and return it to the PAYGO funds.
Once this was done, the remaining $3.3 million gap for the Fire station was filled by utilizing
PAYGO FUNDS. Mr. Greene explained to the Oversight Committee that PAYGO funds can be
used for any purpose on a capital project.
The OIG is monitoring efforts to stop the demolition of the South Shore Community Center, the
location for the new Fire Station #1. As with the 34 Street Shared Use Path, this project is being
reconsidered by the Commission, following years of planning, community meetings and
successful grant applications. Both projects are facing potential schedule delays and the
possibility that they will lose the grant money due to the redesign.
The City first identified the need to replace the existing Fire Station 1 in 2015, after concluding
that the repairs and upgrades would only provide a temporary solution without addressing any of
the major structural, electrical, and mechanical deficiencies. The existing site was evaluated in
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2015 by Borreli and Partners and a report issued which found that the current site conditions and
minimum code requirements required a full site reconstruction and demolition. Intensive
maintenance has been required to continue the operations of the Fire Station as it exists today.
The current costs of maintenance include costs that over time will exceed the cost of full
demolition and reconstruction of all facilities on the site.
At the time of the referendum on the G.O. Bond, the public was told that Fire station #1 needed
to be replaced to current standards identified by the National Fire Protection Association. Those
standards include a new building able to withstand a Category 5 hurricane and other natural
disasters, and challenges such as security threats and/or risks. Additionally, the public was asked
to consider the anticipated increase in demand based on growth in the area.
After voter approval for this project, the City began its search for a new location for the Fire station.
After 8 years of building assessments, feasibility studies, Commission and committee actions and
deliberations, community meetings and public presentations, the currently approved location
provides the optimal solution for the placement and construction of the new Fire station #1. The
OIG notes that there have been 79 public meetings during which the Fire station has been
discussed since 2015
The voters approved $10,000,000 for this project and $5,746,058 has been appropriated in
Tranche 1. The City has executed a contract with the construction manager at risk. The project is
currently in the design process and the City has already spent or encumbered $2,740,859.07.
While there are other funding sources, the OIG notes that the City received an $11 million dollar
grant from the Resilient Florida Grant program for the current project as designed on this specific
site. The cumulative effect of efforts to prevent the demolition of the South Shore Community
Center could potentially cause the City to lose the $13,000,000 grant.
72° Street Complex
The Design Services Agreement with Wannemacher Jensen has been executed and the Design
Phase has begun. The negotiations with the Construction Manager at Risk have been completed
and the contract has been executed.
Like the Fire station#1 project, this project has been the topic of much public discussion by the
Commission, including suggestions to "scratch" the project and begin it again within the budget
originally approved by the voters. While this project is different from the Fire station in that it is at
the beginning of the design phase, it is similar in that contracts have been executed and schedules
have been implemented. To date, $2,266,841 has been spent or is committed with a remaining
balance in Tranche 1 of $8,533,158.
In OIG Report No.22-07, (a review of the West Avenue Phase 2 Construction Project), this office
wrote in detail about the costs associated with changes to project designs after those designs
have been fully vetted by the community, City boards, committees and the Commission, and the
resulting delays in the construction schedules adding to cost escalation. It was noted that the
original budget of $56,108,748.47 ballooned to $105,140,819.32. This sum did not include the
litigation costs associated with a lawsuit filed by the design builder who alleged that, due to project
changes, he was unable to begin the project on time in compliance with contractual terms.
The OIG has calculated that, should the Commission take action to redesign and/or terminate the
above projects, it will amount to a loss of $4,841,436.00 of already expended funds as well as
$11.4 million in grants.
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Security Cameras in Business and Entertainment Districts
The City has embarked on the installation of 800-850 security cameras in strategic locations. This
quarter, the G.O Bond Committee considered several issues related to the Police Department's
Camera Project following public comments that the cameras had not actually been purchased
and, for those that had been purchased, they had not been installed or were not being monitored.
The voters approved $700,000 for the cameras on the beachwalk and all have been installed.
G.O. Bond project #57 includes the installation of 72 cameras in the entertainment district.
At the time of the referendum, the voters were told that the funding would be used to complete
the comprehensive laying of fiber optic lines and the installation of cameras. The referendum
language asserted that there would be two cameras at every intersection of both Collins and
Washington Avenues from 5" Street to 17 Street and that the cameras would retain footage for
30-days. There is $1,489,999 appropriated in Tranche 1. To date, $1,113,845 has been expended.
Of that amount, $824,845 (the total amount appropriated from the G.O. Bond) has been spent for
the Ocean Drive/Lummus Park cameras and $665, 154 has been spent for Collins
Avenue/Washington Avenue cameras. There remains $376,154 in this category for additional
cameras.
G.O. Bond project #50 is the installation of cameras in 80 locations within the business districts
in the City. The Tranche 1 appropriation was $825,000 and the City has spent $346,946. The
breakdown is as follows:
a. $112,220 for Alton Road corridor cameras
b. $17,999 for 41 Street corridor cameras
c. $85,307 for 71 st Street corridor cameras
The OIG met with Police Captains Eric Garcia and Steve Feldman and Officer Roland Aragunde
to discuss the camera projects, particularly the 41 st Street and 71 st Street projects. Those projects
have seen the least amount of spending to date. The bulk of the expense on these projects comes
from the required infrastructure work which the City has not been able to construct because both
streets are state-owned. The Florida Department of Transportation objects to the installation of
cameras for surveillance purposes and will not issue permits for the required infrastructure.
However, the utilization of fiber optic cables gives the City the security of a resilient network.
Therefore, this issue is being navigated on all state roads in the City where cameras are to be
installed.
The Police have determined that it is 3 to 3.5 times more expensive to build the infrastructure
after a project has been completed and, therefore, they are working the fiber optic cables into the
design of the larger projects. For example, the Police and CIP have been working in collaboration
to determine how to install the needed fiber optic cable infrastructure during the construction of
the larger 4 pt Street Corridor project. Currently, the $17,999 that has been spent to date is for
storage of equipment that cannot be installed until the larger project is completed. The plan is to
install city owned poles within the design of that project and place cameras on them. The same
plan will be utilized in the design of Ocean Terrace project. This was already successfully done in
the Rue Vendome Plaza where five cameras were installed at minimal cost on City owned poles
utilizing existing microwaves.
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Conclusion
The OIG continues to identify and report on the issues within the G.O. Bond projects that may
cause delays, waste resources and result in cost overruns. From the beginning of its oversight
role, the OIG has identified that material changes to scope during design contribute to cost
escalation and project delays. That dynamic is particularly apparent in this quarterly report where
projects that have been in design for years, and fully vetted by the community, are now facing
potential changes that could result in the waste of taxpayer money as well as the loss of a
significant amount of grant money.
The OIG recognizes that the Tranche 1 projects have faced many obstacles over the last few
years. The impact of Covid-19 on supply chains, construction costs and worker availability has
been documented in prior reports. The funding gaps in G.O. Bond projects due to unforeseeable
obstacles related to Covid-19 were identified in 2022. However, the project deficits have been
filled during the 2023 budget process. Looking forward to 2024, program cash flows are expected
to increase as 16 major projects begin construction, resulting in $49.2 million being spent. Some
of these projects include: Police Headquarters Real Time Crime Center, the Pedestrian Bridge,
Fire station 1, Chase Avenue Shared Use Path, North Shore Playground, Flamingo Park Softball
Field and the Marine Patrol Facility. Any disruptions to this schedule will delay the City's ability to
obtain Tranche 2 funding and bring the projects promised to the residents.
Finally, the OIG commends staff on its project tracking and continued transparency as well as the
ac mulated savings of $3,739,342.00.
General
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cc: Alina T. Hudak, City Manager
Maria Hernandez, G.O. Bond Program Director
Karen Riva, Chair Person of G.O. Bond Oversight Committee
David Martinez, CIP Director
OFFICE OF THE INSPECTOR GENERAL, City of Miami Beach
1130 Washington Avenue, 6" 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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