OIG No. 20-11: First Quarterly Report re- G.O. Bond
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April 20, 2020
TO: Honorable Mayor and Members of the City Commission
FROM: Joseph Centorino, Inspector General
RE: Inspector General G.O. Bond Quarterly Report
OIG No. 20-11
BACKGROUND
In November, 2018, Miami Beach residents voted to approve a $439 million General Ob-
ligation Bond Program. Planning for the ballot measure began in February and March of
2018. An initial project list was produced to reflect information collected from various com-
munity stakeholders, research studies, master plans and neighborhood assessments.
The cost estimate for the project list produced totaled $1.1 billion. In April 2018, the City
Commission held a workshop during which the Mayor and Commissione rs reviewed and
prioritized the list of projects. The program cost estimate was reduced from $1.1 billion to
$700 million.
In May, 2018, the Mayor created a G.O. Bond Advisory Panel. The panel comprised 11
Miami Beach residents who were appointed to serve through the November 30, 2018
referendum election. The advisory panel recommended a further reduction of projects
and costs. A series of community meetings was held across various areas of the city.
Residents discussed opportunities and challenges asso ciated with the proposed munici-
pal bond program. City staff and elected officials were present to answer questions, offer
input and review ideas.
In July, 2018, the City Commission held a public workshop to refine projects and cost
details, taking recommendations from the Mayor's G.O. Bond Advisory Panel into ac-
count. A final list of 57 projects was approved and the final cost estimate totaled $439
million. The costs were broken into three distinct categories. The ballot measure sought
$169 million for parks, recreational and cultural facilities, $198 million for neighborhoods
and infrastructure and $72 million for public safety. Voters approved all three G.O. BOND
referendum ballot items with an overwhelming support rate of 70%.
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Concomitantly, the city’s voters also approved an amendment to the City Charter, creating
Article IX, which established the City of Miami Beach Office of the Inspector General. The
Inspector General functions as an independent body to perform investigations, audits,
reviews, and oversight of municipal matters, including city contracts, programs, projects
and expenditures, in order to identify inefficiencies and to detect and prevent waste, fraud,
mismanagement, misconduct and abuse of power. The Inspector General has the powe r
to report and/or recommend to the City Commission and/or City Manager whether a
particular project or program is necessary and whether the method used for
implementation is efficient both financially and operationally. Monitoring of an existing
project or program may include reporting whether the project is on time, within budget,
and in conformity with plans, specifications and applicable law.
Miami Beach Code Section 2-256, which establishes the Office of the Inspector General,
mandates that the Inspector General shall review, audit, inspect, and investigate City
contracts, programs, projects, procurements and expenditures associated with the City’s
General Obligation Bond Program, and issue periodic reports to the City Commission.
The Inspector General for Miami Beach began his service in November, 2019.
Between January and March, 2019, a G.O. BOND working group convened to evaluate
and prioritize the 57 projects and create an implementation plan. The priorities were
based on five criteria:
1. Quick wins
2. Shovel ready projects
3. Big impact projects
4. Asset preservation
5. Interdependency with other non- G.O. BOND projects
All 57 projects were organized in alignment with the stated criteria and on March 13, 2019
the Commission approved them. The projects were then organized into tranches.
Tranche 1, the subject of this report, has 38 projects, costing approximately
$151,000,000. Most of the projects have different components which are considered
distinct subprojects and are tracked separately. They have separate budgets,
procurement and implementation schedules. All projects are evaluated on a bi -monthly
basis by an implementation team made up of representatives from each department. A
program manager drives the implementation team.
On a monthly basis, the implementation team reports to the G .O. BOND Oversight
Committee regarding the status of each of the projects in Tranche 1 and advises on the
likelihood of finishing the projects on time and within budget. If impediments arise, they
are discussed and vetted for solutions.
The Inspector General has attended the implementation meetings and has been present
in person, or through a designee from his office, at every oversight committee meeting.
All oversight committee meetings are open to the community. A report is generated after
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each meeting and posted to the G.O. BOND dashboard. Each project and all of the sub-
projects are updated every day and similarly posted to the G.O. BOND dashboard for the
public to scrutinize.
PROGRESS REPORT
As of this writing, four of the Tranche 1 projects have been completed, 32 are in the active
stage and two are being planned. All quick win projects (21) remain on budget and on
schedule to be completed by June 2020. Of the sub -projects, 20 of 70 have been
completed, 14 are under construction, 11 are in the design phase, 17 are in a planning
phase and eight are pending.
The city is currently facing challenges as a result of the COVID-19 pandemic; however,
an Inspector General Investigator attended both the implementation committee meeting
on 04/01/2020 and the oversight committee meeting on 04/16/2020 and in both instances,
the project managers and/or department heads stated that the projects in Tranche 1 were
moving forward in spite of small interruptions in the supply chain and workforce as a
consequence of “shelter at home” orders. Some projects may be negatively affected and
not achieve on- time delivery, but none of the projects have been seriously interrupted at
this point. The expectation is that the Tranche 1 projects will all be completed. For
example, both the Scott Rakow and North Shore Youth Centers have ongoing sub-
projects which include the installation of generators. The generators are currently
unavailable, and it is anticipated that this will cause a 30-day delay. There are a few
challenges with street paving projects because citizens are shelter ed at home and their
cars are parked. Nevertheless, the projects continue in the areas that are accessible. On
the positive side, a number of projects that had been facing challenges are now complete.
For example, the roofs on cultural arts facilities, which had been delayed because of
events that had been scheduled, are now done. Similarly, Collins Park which had faced
delays for the same reason will be completed within two weeks.
Another noteworthy positive outcome is the Scott Rakow Youth Center. The r oof work
was completed on time with a $1.1 million in savings. The project manager has asked the
oversight committee for permission to use that savings and begin working on the gym
floors, which is a Tranche 2 item. This request is unusual in that it is seeking to use money
from one Tranche and move it into a subsequent Tranche. Typically, staff makes the
decision, when there is a savings, to use that money within the same Tranche. For
example, the money saved on the Scott Rakow roof could be used for the r oofs on the
cultural arts centers without authorization from the City. Since those roofs have been
completed, this money is available for another purpose. If the savings is used now for a
Tranche 2 project, there will be additional money available later on when Tranche 2
projects begin. It is clear that a change in scope of a project requires Commission
approval, but less clear how this scenario should be handled. The Committee approved
the request and the program manager will seek the City Manager’s approval. The
Oversight Committee will evaluate a report by the program manager on best practices
moving forward at the next meeting.
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Positive progress has also been made on public safety issues. The Police have received
700 radios which will allow first responders to communicate throughout the city. License
plate readers for the Julia Tuttle Causeway are ready and the final permit from FDOT is
expected by the end of April. The staging area in Lummus Park has been created and the
electrical permit for installation of security cameras is expected soon.
As the projects continue, the City is doing its best to communicate with residents and
accommodate them when possible. To that end, the City Manager has created the
Neighborhood Affairs Division with the stated goal of increasing the consistency of
departments. The City has designated a staff member for each area and that staff
member is tasked with continuing relationships with Neighborhood Associations,
Homeowner Associations and community groups and reporting to City departments. The
Inspector General representative has reached out to the Citywide Neighborhood Affairs
Manager to receive notices of meetings and will attend when possible.
INSPECTOR GENERAL REVIEW
Within Tranche 1, the Inspector General has more closely scrutinized G.O. BOND #1, the
72nd Street Community Complex. This project actually began in fiscal year 2013-2014
when the City began a feasibility study for the creation of a multi-use parking facility on
the property. It was estimated that the original feasibility study would cost $211,344.00.
However, the scope of the project changed numerous times. The first scope change
expanded the project to include a parking garage, a City park, and an all -wheels park,
and space for civic purposes. Subsequently, the project scope was expanded to include
the ability to convert the parking garage to a non-parking use in the future, a rooftop
community pool with all support facilities, bulkheads and movable floor, a
civic/commercial space inclusive of an active liner, a roof-top meeting room and fitness
center with running track. In its final iteration, the scope was expanded again to include
a maximum 500 parking spaces, civic and commercial space at ground level, a
recreational park, a roof-top 50-meter competition pool, 25-meter warm-up pool and
supporting facilities, a 5,000-10,000 sq. ft. library/media center and 7,500 sq. ft. upscale
fitness gym with a running track, resilient storm water retention and reuse system, solar
electric power, energy efficient lighting and green roofing system. The cost of the
feasibility study was increased by $272,924.00. The final service order for the design
criteria added $843,250.00 to the cost for a total of $1,327,518.00.
City residents voted to approve $53.8 million for this project. The total cost is now
estimated between $60 and $64 million. The $10.6 million shortfall was expected to come,
in part, from the Parking budget. In light of COVID-19, it is unclear how the shortfall will
be managed. It is possible that the scope will once again have to be changed. At the G .O.
BOND Oversight Committee meeting on April 16, 2020, Assistant City Manager Eric
Carpenter advised that the Finance Committee would be reviewing a plan to get the City
through the fiscal year and, if approved, the shortfall would not be an issue. The Inspector
General will continue to monitor this aspect of the project.
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An Inspector General auditor conducted a review of this project an d reconciled the
invoices with the service orders. With every scope change, costs increased and the
percentage of project completion decreased, thereby delaying the timeline. The Inspector
General auditor met with the senior project manager, who stated tha t the design criteria
package is now 98% complete. The next step is to go back to the community and the City
Commission for final approval. The staff assigned to the North Beach neighborhood,
through the City’s Neighborhood Affairs Division, will work with Capital Improvements to
put together a presentation to educate the public so they can be heard when the
Commission meets for final approval. However, the design criteria package reflects what
the voters approved and should not be changed unless the scope must be reduced as a
result of the $10.6 million shortfall previously mentioned.
The review further revealed a number of errors in the budget documents found on E -
builder. For example, the cost summary showed a forecasted overage in the amount of
$164,160.00. The auditor spoke with Mrs. Aida Rodriguez, Capital Projects Administrator,
who stated that this was a clerical error and it has since been fixed. Additionally, there
was an error in E-builder regarding the total amount of money spent to date. The
discrepancy was in the amount of $4,492.00. Ms. Rodriguez explained that this was an
allocation for program management that had not been updated on E -builder. Based on
the available records, the auditor confirmed the current commitments totaling
$1,648,263.03, actuals approved totaling $1,054,350.40 and actual cost to complete
totaling $593,912.63. In this project, the City of Miami Beach has expended $604,220.03
from City funds and $521,484.00 from G.O. Bond funds, totaling $1,125,704.00 to create
the design criteria package. The design criteria package is not complete. The updated
budget in E-builder accurately reflects the status of the project. Their current
commitments show the amount of $997,430.00 and an unallocated reserve of
$8,936,410.00. At this time, all the payments related to this project are consistent with the
contracts, service orders and budget commitments.
An Inspector General Investigator met with the Director of Capital Improvement Pr ojects,
David Martinez, to explore this further. Material changes or additions to scope during
design development, and especially during construction, are the main reasons for delays
and cost overruns in his opinion. Mr. Martinez stated that utilizing the design build
methodology of procurement allows for lower costs. He noted that revisions to the design
criteria package at the front end, even if it delays the project, ensures that there will not
be unexpected costs as the project proceeds. In light of oth er projects in the City which
are using the design build model, the Inspector General will continue looking at the
advisability of this procurement process.
At the G.O. BOND Oversight Committee meeting in February, program manager Maria
Hernandez advised department heads that design criteria for their projects needed to be
accurate and final to avoid changes to the plans as the projects moved forward. To
encourage this outcome, she is creating a tutorial for her team on the definition and impact
of “waste” on the projects and subprojects in the G.O. BOND. Moreover, she has
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instructed her team to meet with all of the project heads to continuously update details
regarding timeliness and costs and to include this information on the G .O. BOND
dashboard for the public to see. The IG commends this initiative but also sees it as a
confirmation that the design build methodology may be the cause of cost overruns.
The Inspector General is closely monitoring G .O. BOND #15, the Par 3/Bayshore Park
project. The project has been delayed because of contamination in the ground. The
designer, Savino Miller Studio, P.A. has hired environmental consultants who are working
with DERM to address the issue of arsenic in the ground water. The consultants have
different interpretations of the data and are using different models which has led to
different solutions. At the G.O. BOND Oversight Committee meeting on April 16, 2020,
David Martinez advised that DERM had provided direction for the competing consultants
that will likely cause additional services to be needed. The Committee is concerned that
this project is not moving forward and is considering whether to bring it to the Commission
for guidance as it had been expected that Savino and DERM would reach an agreement
by the end of March 2020.
In discussing the G.O. BOND projects with a number of employees across departments,
it has become clear that there is no standardized training for project managers and much
of the work is being done as “on the job” training. Turnover is high due to the number of
projects being simultaneously advanced and the number of projects an individual
manager is expected to oversee. Knowing how to anticipate issues that can delay
projects, learning how to prioritize, mentoring newer or less experienced project
managers, understanding internal processes of the City and facilitating communication
through dialog rather than email are all suggestions that have been made.
Moreover, it appears that employees working on the projects are not being measured by
performance metrics that are tied to efficient, transparent and orderly practices. While
the teams do seem to communicate on a regular basis, the lack of standardized practices
can lead to unintended results that will, invariably, increase costs. Employees’
performances should be aligned with the department’s objectives and goals. A simple
decision tree may allow employees to be consistent on the status of every project. This
may help reduce delays and improve schedule adherence on the projects by promoting
actions in every phase of the project. Finally, E-Builder, the City’s project management
program, is not kept current. As a tool that can be used for tracking the work being done
on City projects, the IG believes it should be regularly updated. Senior managers can
utilize this tool to measure how their direct reports are performing and whether there are
issues that need to be addressed which have not been raised.
An Inspector General Investigator discussed th ese issues with the Director of Capital
Improvement Projects who agreed that training new employees on internal processes
would be beneficial. This is a project he started years ago, but has not had the time to
complete. Mr. Martinez noted that it is difficult to fill vacant positions and, as a
consequence, project managers are carrying heavy loads. He indicated his main problem
is having to compete for talent with the private sector. In addition to the heavy work load
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they carry, many project managers are frustrated with the continuous changes they are
required to implement through the life of a project. Mr. Martinez noted that they spend
much of their time defending the City’s actions when a constituent is unhappy with a
decision.
CONCLUSION
The G.O. BOND oversight committee has been thorough in their assessment of the work
being done on the Tranche 1 projects to date. Their meetings are open to the public and
the meeting records are on the G.O. BOND dashboard for public scrutiny. Additionally,
the level of transparency, community engagement, cooperation between program
manager and staff, and maintenance of the G.O. BOND dashboard should be highlighted
and commended. The Inspector General staff will continue to meet with department
heads and project managers, and attend community meetings, in order to address and
report on any problems or disruptions in the program.
________________________________ 04/20/2020
Joseph M. Centorino, Inspector General Date
________________________________ 04/20/2020
Jani Kline Singer, Special Agent Date
cc: Jimmy L. Morales, City Manager