OIG No. 24-31 Inspector General G.O. Bond Quarterly ReportTO:
FROM:
DATE:
RE:
Introduction
Joseph M.Centorino,Inspector General
Honorable Mayor and Members of the City Commission
Joseph Centorino,Inspector General
December 23,2024
Inspector General G.O.Bond Quarterly Report
OIG No.24-31
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)to prepare and submit to the City
Commission on a quarterly basis a written report concerning the planning and execution
of the General Obligation Bond Program,including progress reports,financial analysis,
and potential risks.The review is based on official city records,OIG attendance at internal
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.
Program Expenditures
The current financial status of the 2018 G.O.Bond program as of this report is:
PARKS INFRASTRUCTURE PUBLIC TOTAL
SAFETY
SPENT $51,183,450 $24,153,441 $22,002,105 $97,338,996
ENCUMBERED $18,955,751 $1,981,027 $3,763,971 $24,700,749
AVAILABLE $21,059,846 $3,147,665 $12,385,947 $36,593,458
FUTURE $81,167,061 $148,887,871 $34,815,900 $262,870,830
TOTAL $172,366,106 $196,000,000 $72,967,923 $441,334,029
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Program Update
To date,77%of all Tranche 1 funds have been spent or are encumbered:$122 million
out of $158.6 million.In January 2024,the City Administration advised the Oversight
Committee that 14 projects totaling $47.2 million dollars would start construction during
the year.As of this quarterly report,nine of the projects (see below)have not started and
only $2.5 million has been spent on construction,thereby delaying access to Tranche 2
funds.The continuing pre-construction challenges that the OIG has identified since the
inception of the 2018 bond include,but are not limited to,project modifications,funding
gaps due to scope increases,permitting delays,unforeseen site conditions,and a lengthy
community outreach process.
PROJECT REASON FOR DELAY
PEDESTRIAN BRIDGE UTILITY RELOCATION DID NOT START AS PLANNED;
PERMITTING DELAYS;PRIVATE PARTY DEVELOPER
MARJORIE STONEMAN INSUFFICIENT FUNDING TO MEET ORIGINAL INTENDED
DOUGLAS PARK LIGHTING SCOPE/REVISED SCOPE TO WORK WITHIN BUDGET
FIRE STATION #1 COMMISSION ACTION/REDESIGN/
BAYSHORE TRAFFIC DESIGN REVISIONS AFTER COUNTY REVIEW
CALMING
34 STREET SHARED USE COMMISSION ACTION/REDESIGN
PATH
POLICE HEADQUARTERS PRE-CONSTRUCTION SERVICES HAVE BEEN STOPPED
AS A RESULT OF DESIGN CHANGES REQUESTED BY
POLICE CHIEF AND HIS COMMAND STAFF.THE
REDESIGN PROCESS,EXPECTED TO TAKE THREE
MONTHS,IS STILL ONGOING.A FINAL GUARENTEED
MAXIMUM PRICE HAS NOT BEEN DETERMINED
STREET LIGHTING CONTRACTOR SELECTION PROCESS TOOK LONGER
THAN EXPECTED
FLAMINGO PARK ADDITIONAL SCOPE ADDED,HIGH DESIGN COST
SOFTBALL FIELD NEEDED INDEPENDENT COST ANALYSIS
230 STREETSCAPE BIDS WERE HIGHER THAN ENGINEER'S ESTIMATE-
CAPITAL BUDGET AMENDMENT REQUIRED
The Flamingo Park Softball Field,23°Streetscape and Street Lighting now have
construction contracts that have been approved by Commission and are expected to
break ground in early 2025.Additionally,the Commission authorized a capital budget
amendment to allocate $1,282,154 from the interest that has accrued in the infrastructure
category.To date,$7,494,318 in interest has been transferred to projects in need of
additional money (Bayshore Park and Fire Station 1).
Marine Patrol
In September,the City received a probable construction cost estimate from Program
Controls Inc.for the Marine Patrol Facility.The project is currently at the 90%design
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stage.The consultant's estimated total construction cost is $10,749,894.This did not
include additional costs related to LEED upgrades,permitting,inspectors,construction
management,general fees,art in public places and associated contingencies.At the time
of the estimate,no construction schedule was available so it was assumed that the permit
set would be completed by the end of 2024,and that the project award would be issued
six months after that date with a total project duration of 18 months after the notice to
proceed.The City engaged in a value engineering process that has lowered the
construction cost estimate at 90%design to $9,314,212.The 90%construction
documents are under review for permits by Miami-Dade County DERM,the City Building
Department,FDEP and Army Corps.
720 Street Community Complex
The other notable program update this quarter relates to the 72°Street Complex,a
project originally scheduled to begin construction in 2022,but which is at only the 30%
design stage.The delays on this project include cost proposals which far exceeded the
budget,unsuccessful negotiations during the original RFP 2020-180-ND,a termination of
RFP 2020-180-ND,and a new competitive solicitation which resulted in an agreement
with Wannemacher Jensen Architects as the consultant and Kaufman Lynn Construction,
Inc.as the Construction Manager at Risk in 2023.
The Consultant submitted a design concept which exceeded the $70M construction
budget target.In accordance with the design agreement,the consultant re-designed the
concept to meet the construction budget.Certain value engineering (VE)strategies,rep-
resenting cost savings,were identified for implementation.City staff authorized the Con-
sultant to proceed to the 30%schematic design in June 2024.The Consultant submitted
the 30%schematic design including renderings,and the Construction Manager at Risk
has submitted the corresponding construction cost estimate.Preliminary review shows
that the estimate is approximately 14%over the $70,000,000 construction budget.
City staff commenced the public outreach and stakeholder engagement process.The
schematic design was presented,and received favorable support at the November 14,
2024,meeting of the General Obligation Oversight Committee,the November 19,2024,
meetings of the Parks and Recreation Board and the Committee for Quality Education in
Miami Beach.On December 10,the North Beach Community Redevelopment Agency
Advisory Committee voted unanimously in support of the 72"Street project as originally
designed and against the value-engineered version of the project.The Committee rec-
ommended that the City Commission secure the funding to build the more expansive
project.
This project has been the topic of much public discussion by the Commission,including
suggestions to "scratch"the project and begin again within the budget originally approved
by the voters.To date,$3,832,908 has been spent and $5,231,864 is encumbered.On
December 11,the Commission discussed the project and agreed to move it forward with
the recommendation to include an additional level of parking.
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Bond Accrued Interest Transfers
There were two additional appropriations of G.O.Bond dollars to supplement existing
projects with budget gaps:23°Street Improvements and Collins Park Rotunda.From
accrued interest,the 23""Street Project received $1.3 million,and Collins Park Rotunda
received $2.64 million.At the G.O.Bond Oversight Committee meeting in December,the
City's CFO,Jason Greene,reported the transfers and advised the Committee that a policy
related to accrued interest was never discussed,in large part,because interest rates had
remained low and the accrued interest was minimal.However,as rates increased,the
amount of interest earned has become significant and the City has allocated those dollars
to facilitate projects.In total,$7,494,318 dollars in accrued interest within the 2018 G.O.
Bond has gone towards overcoming budget gaps in the Par 3/Bayshore Park,Fire Station
1and 23"St Streetscape projects.The Collins Park Rotunda project received its dollars
from the 2023 G.O.Bond for Arts and Culture.
Update On Implementation Of Specific Inspector General Recommendations
For the last four years,the OIG has been conducting oversight and making
recommendations to the City in an effort to minimize unnecessary spending,identify
inefficient resource allocation,and improve cost effectiveness.Below are the
recommendations that have been made and an update on their implementation:
1.The OIG recommended that staff receive training on "waste"in government
projects to enable them to understand the impact of waste on project outcomes
(including budget overruns,delays and quality issues)and to identify ineffective
project management practices,red flags that indicate potential waste in projects
and strategies to promote cost-effectiveness.The sources of waste that have been
identified by the OIG have included,but are not limited to,project scope changes,
inefficient communication and coordination and unrealistic project budgets.No
formal training has been done on this topic to date,but the G.O.BOND Program
Director has committed to researching some options to propose to the City
Manager for implementation as part of the broader staff development program.
2.The OIG recommended training for the development of a clear and concise scope
of work at the beginning of procurement to ensure that the product or services
meets the desired outcome.The Procurement Director committed to researching
training opportunities through the Institute for Public Procurement.At the time of
the OIG recommendation,the procurement department reviewed available options
but did not find any course that provided significant value.However,since it has
been some time since that review,the current Director has committed to revisiting
this to determine if the Institute for Public procurement has introduced any
advancements in specification training.
3.The OIG identified that there is no standardized training for project managers and
much of the work is being done as "on the job"training.Additionally,it was found
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that City employees working on projects are not being measured by performance
metrics that are tied to efficient and orderly practices.The OIG suggested that a
simple decision tree may allow employees to be consistent on the status of every
project,thereby reducing delays and improving schedule adherence by promoting
actions in every phase of the project.In CIP,for example,a master project
schedule is developed for every active capital project,and it becomes a roadmap
for how the project will be carried out.The milestones identified in the schedule
become performance metrics for each of the project managers assigned to the
project and they are used during their midterm and annual performance evaluation.
The G.O.BOND program director has advised the OIG that staff continues to
identify ways of improving the efficiency in managing projects,but that it is not
uniform across all departments.
4.The OIG identified the inconsistent use by CIP of E-Builder,the department's
project management software,and recommended a performance metric tied to its
regular use.It is still not being utilized consistently and uniformly by CIP staff.CIP
has advised the OIG that it is finalizing a standard operating procedure on the use
of E-builder.
5.The OIG recommended that the Administration assess opportunities to improve
internal coordination and prioritization of G.O.BOND projects.The OIG under-
stands that prioritization tends to occur through a combinationof direction provided
by the City Commission or relevant committees,as well as ongoing internal meet-
ings and Oversight Committee meetings.However,the OIG sees an opportunity
for the City to analyze the drivers of delays on G.O.BOND projects(e.g.the time
it takes to obtain permits)and to formalize a policy or procedure that recommends
the prioritization of GOB projects."
6.The OIG recommended that the City conduct an inventory of all cost estimators
currently being used in order to assess how well they predict construction market
changes.This can be done by comparing cost estimates provided by each estima-
tor with actual project costs to gauge the reliability of the various estimators and
determine their relative accuracy for use in future projects.To date,this has not
been done.However,the G.O.BOND Program director has advised the OIG that
the City can conduct a comparative analysis between the independent estimates
and the actual bids received for all projects that have gone to bid over a specified
period time.To further improve the evaluation process,Procurement can update
the Consultant Evaluation Form,which is provided prior to contract renewals,to
include a section specifically addressing the accuracy of cost estimates.By sys-
tematically tracking and evaluating estimator performance,the City can ensure it
continues to use the most reliable and effective cost estimating practices.The OIG
encourages the City to update the evaluation form and,additionally,identify and
maintain a database of those contractors prone to cost increases.
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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 the various reasons for cost escalations and
project delays.This information is obtained,in part,by the OIG's participation in the staff's
internal meetings for the G.O.BOND projects.The OIG recommends that during these
meetings staff should submit progress reports that include the fiscal status,degree of
completion and challenges,so that management remains aware of impediments to
deliverables.While some of this information is provided orally during the internal staff
meetings,the OIG thinks a more formalized process would benefit the City.
The OIG wants to highlight and commend City staff this quarter for its accumulated
savings of $3,798,659 to date.
The OIG would like to express appreciation for the new G.O.BOND Program Director
and her seamless transition.She has been generous with her time and thoughtful in her
re onses to requests for data and information from this office.
go
Dat2elsate
cc:Karen Rivo,Chairperson of the G.O.Bond Oversight Committee
Eric Carpenter,City Manager
Maria Hernandez,Interim Assistant City Manager
Thais Vieira,Director G.O.Bond Program
Ricardo Dopico,City Attorney
OFFICE OF THE INSPECTOR GENERAL,City of Miami Beach
1130 Washington Avenue,6th 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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