HomeMy WebLinkAboutOIG No. 26-06 Rock & Dirt Construction Equipment Rental AuditDocusign Envelope ID: 3709BDFF-FA30-833D-83AE-B6E62EB2288E
Joseph M. Centorino, Inspector General
TO: Honorable Mayor and Members of the City Commission
FROM: Joseph M. Centorino, Inspector General DATE: June 1, 2026
PROJECT: Rock & Dirt Construction Equipment Rental, LLC. Roll-off Fee Revenues Audit REPORT No.: OIG No.: 26-06
This report presents the findings of a Construction and Demolition (C&D) audit conducted by the City of Miami Beach Office of the Inspector General (OIG) regarding the compliance of Rock and Dirt Construction Equipment Rental, LLC, with City Code Chapter 90 Solid Waste provisions governing C&D contractors during the audit period of August 1, 2022, to July 31, 2025.
BACKGROUND
Chapter 90, Article IV, Private Waste Contractors, Subdivision II. Rolloff/Portable Waste Container Contractors of the City Code allows C&D haulers or other persons to engage in the business of removing or disposing of construction and demolition debris or large quantities of
trash from any premises within the City limits to operate, after obtaining all required permits for such activities.
PERMITS REQUIREMENTS
City Code Section 90-276 requires C&D haulers to obtain a Business Tax Receipt (BTR). Failure to obtain a BTR will result in a penalty of $1,000 to $5,000 for repeat violations. An annual C&D Collection permit is required. Failure to obtain the annual C&D Collection permit will result in a $5,000 penalty. A site-specific C&D Collection permit is required for each project involving the construction or demolition of an existing structure. Failure to obtain a site-specific permit will result in a $1,000.00 penalty.
ACCOUNT REPORTING REQUIREMENTS
City Code Section 90-278(4) requires that each C&D contractor provide the City Manager with a current list of account names and addresses when submitting an initial application. For permit renewal applications, contractors must also provide the service frequency, the permit number, the
capacity of each container or dumpster for each account, and the address serviced by each container or dumpster. This list of accounts is typically furnished concurrently with the monthly report to the Finance Department. It serves as an essential document for verifying the accuracy
of the contractor's filings during audits.
MONTHLY REPORTING AND FEE PAYMENT REQUIREMENTS
City Code Section 90-278(5) requires contractors to submit monthly reports to the City’s Finance Department, along with payment of any permit fees owed at the 20% City Commission-approved rate. These reports are due by the end of the month following the month in which the gross receipts were generated. Section 90-221 defines gross receipts as all contractors' fees collected, whether wholly or partially, for solid waste collection and disposal services provided within the City, excluding any taxes and gross receipts from servicing roll-off and portable containers. Under City Code Section 90-225, those who fail to remit the fees timely are subject to a 10% original
delinquency penalty of the delinquent fee and an additional 10% per month, up to a maximum of 50%. Additionally, the highest legal interest rate permitted by law will apply to all unpaid fee amounts (excluding penalties) from the date the fee first became delinquent until paid.
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ANNUAL REPORTING FOR GROSS RECEIPTS EXCEEDING $200,000
Per City Code Section 90-278(5), contractors with reported annual gross receipts exceeding $200,000 must submit a statement of annual gross receipts for the preceding fiscal year to the City Finance Department. This statement must be certified by an independent Certified Public
Accountant and furnished within sixty days following the close of their fiscal year.
INSURANCE REQUIREMENTS
Finally, City Code Section 90-196 requires waste contractors to maintain adequate insurance coverage throughout the entire effective period of their Business tax receipts.
PURPOSE
This audit assessed whether the contractor's filings were complete and accurate, and whether the corresponding payments were calculated correctly in accordance with the permit fee rates approved by the City Commission. Additionally, the audit aimed to ensure that the City Finance
Department received and accurately recorded the filings and payments in a timely manner, and to assess the contractor's compliance with other relevant sections of the City Code.
OBJECTIVES
1. To determine whether the contractor has all the necessary permits to conduct the collection of C&D within the City pursuant to Section 90-276.
2. To determine whether the Contractor maintains the minimum insurance required by the City throughout the entire audit period, pursuant to Section 90-196.
3. To determine whether the contractor has collected and submitted 20% of its monthly gross receipts and has submitted the required monthly and annual reports, if applicable. If not, determine the penalties and interest charges, Section 90-278(7).
METHODOLOGY
1. Review Energov records to confirm that the contractor obtained the required Business Tax
Receipt (BTR), Annual C&D Collection Permit, and Site-Specific C&D Collection Permits
before performing any collection or disposal activities during the audit period.
2. Review all Certificate of Insurance (COIs) to ensure that coverage meets the requirements
outlined in the City Code and that Risk Management reviews the policy prior to the renewal of the Business Tax Receipt.
3. Compare the monthly reports submitted to the City with the contractor’s records to confirm that the 20% Sanitation Fee was accurately calculated and remitted and that the payments were submitted timely.
4. Determine whether the annual report was submitted timely and certified by a CPA (if
applicable)
FINDINGS AND RESULTS/RECOMMENDATIONS
FINDING #1: Under-reported gross receipts resulted in an underpayment of $237.83 in
Sanitation Fees (including penalties of $60.00 and interest of $57.83).
Condition:
The auditor reviewed all sales documents for the 36-month period and found that the contractor
had underreported gross receipts by $600 compared with the gross receipts reported to the city.
Criteria:
Section 90-278 -C&D haulers and other persons engaged in the collection or disposal of
construction and demolition debris with or without a grapple service, with or without the use of C&D containers, using dump trucks, trailers of any kind, or any other heavy equipment shall
submit 20 percent of their gross monthly receipts to the city.
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Section 90-278(5) -Monthly report. Each C&D collection contractor shall deliver to the city's
Finance department a true and correct monthly report of gross receipts generated during the
previous month (from accounts within the city) on or before the last day of each month, regardless
of whether any work was performed within the city during that period.
Cause:
The contractor failed to include all applicable revenue in its monthly filings and did not properly reconcile internal records with the reports submitted to the City.
Effect:
Underreporting of gross receipts resulted in a $237.83 shortfall in revenue collected by the City,
affecting funds available for sanitation services and potentially undermining public trust in the contractor’s compliance.
Recommendations to the Contractor:
• The contractor should review and strengthen its internal revenue tracking and reporting procedures to ensure that all gross receipts subject to the 20% Sanitation Fee are accurately captured and reported monthly.
• The contractor should submit future monthly reports and payments by the statutory deadline to avoid accruing penalties and interest.
Contractor Responses:
Yes, we agree to the audit findings.
Recommendations to the Finance Department:
The Finance Department should issue an invoice to the contractor for the $237.83 underpayment identified during the audit. This invoice should include the outstanding Sanitation Fees, along with any applicable penalties and interest. By promptly billing the contractor for the difference, the city will recover lost revenue and reinforce the importance of compliance with reporting and payment
requirements.
Finance Department Responses:
Finance will generate the required invoice and submit it to the vendor for payment.
FINDING #2: BTR was renewed without risk management reviewing the insurance policy.
Condition:
The auditor reviewed the contractor’s Certificate of Insurance (COIs) for the entire audit period
and confirmed that the insurance coverage met the requirements outlined in Section 90-196. Although the policy complied with the requirements, there was no evidence that Risk Management reviewed the COIs prior to renewing the BTR. In a previous report (OIG No. 25-01), the Sanitation auditor found that COIs were neither reviewed nor approved by Risk Management. As a result, OIG worked with the Risk Management and Finance Customer Service to establish a verification procedure before BTR renewals. Risk Management, Finance, and Information Technology planned to implement an automated review process in July 2025. However, as of April 8, 2026, Risk Management confirmed that the process had not started. Therefore, there is no evidence
that COIs were reviewed by Risk Management before BTR renewals during the audit period from August 1, 2022, to July 31, 2025. Refer to OIG No. 25-01 and the Risk Management email in the attachments for additional details.
Criteria:
Section 90-196 of the City Code, Insurance required.
(a) Each private waste contractor must maintain throughout the entire effective period and/or
term of its business tax receipt and/or franchise agreement, whichever term is longer, the following required insurance coverage:
(1) Commercial general liability, in the amount of $1,000,000.00 per occurrence for
bodily injury and property damage. This policy must include coverage for contractual liability and specifically re-state the indemnity agreement set forth in section 90-195. The
city must be named as an additional insured on this policy.
(2) Automobile liability, in the amount of $1,000,000,00 per occurrence for bodily injury and property damage, covering all vehicles owned, leased or used by the contractor within
the limits of the city. The city must be named as an additional insured on this policy.
(3) Workers' compensation and employer's liability, as required by state law. (b) All companies providing insurance shall be authorized to do business in the state and
rated B+:VI or better by Best's Key Rating Guide, latest edition.
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(c) No change or cancellation of any insurance coverage shall be made without 30 days'
written notice to the city's risk manager.
(d) All required policies of insurance are intended to be primary coverage to any insurance or
self-insurance of the city possesses that may be applied to a loss resulting from the work performed by the contractors pursuant to this chapter.
(e) All policies shall provide full coverage from the first dollar of exposure. No deductibles will
be allowed in any policies. (f) As evidence of the above required coverage, the contractor must provide original
certificates of insurance to the city's risk manager, which must be approved by the risk manager
prior to the issuance of a business tax receipt, or the commencement date of a franchise agreement, as the case may be. The contractor must submit a new certificate evidencing
continuing or replacement coverage prior to the expiration date of the insurance policies and must
submit annually certified copies of the liability policies required in subsections (a)(1), (2). (g) The city manager reserves the right to increase the kinds and amounts of insurance
coverage required in this section, including the right to make periodic adjustments to the amounts
of required coverage for inflation. (h) Operation of activities by the contractor without the required insurance shall be grounds
for revocation or suspension of the contractor's business tax receipt and/or franchise agreement.
Cause:
The Finance Department renewed business tax receipts (BTRs) each year without verifying that Risk Management had reviewed and approved the contractor’s Certificate of Insurance (COI)
beforehand. This lapse occurred because the renewal process lacked a compliance checkpoint for insurance.
Effect:
Because the City Code requirements were not followed during the business tax receipt renewal process, the contractor’s insurance status was not verified for compliance. This oversight exposed
the City to possible liability risks if a contractor’s coverage was inadequate or invalid and could lead to increased financial burdens and operational disruptions in the event of an incident involving an uninsured contractor.
Recommendations to the Contractor:
Contractors should be reminded of their responsibility to submit updated COIs well ahead of expiration and renewal deadlines to avoid processing delays and ensure continuous compliance with City Code requirements.
Recommendations to the Finance Department:
• The City should implement a formal checkpoint within the BTR renewal process that requires documented approval of contractors’ Certificates of Insurance (COIs) by Risk Management before any renewal is finalized.
• The Finance Department and Risk Management should collaborate to establish clear communication protocols, ensuring that COIs are routed, reviewed, and approved in
advance of renewal deadlines.
• Additionally, system-based controls—such as those available in Energov—should be
configured to prevent BTR renewal until Risk Management approval is recorded. Refer to the report Insurance Compliance Controls in BTR Renewals OIG 25-01
Finance Department Responses:
The City is implementing a formal checkpoint within the BTR renewal process that requires documented approval of contractors’ Certificates of Insurance (COIs) by Risk Management before
any renewal is finalized. The City has established a procedure to place a hold on all BTR renewals requiring insurance verification. The Customer Service Team will mail and email BTR renewals to BTR holders requiring insurance verification. These BTR holders will be notified to upload their current COI. Reviews (BLPLs) will be created annually in EnerGov for the BTR renewals requiring insurance review by Risk Management. The EnerGov Licensing Module will hold any BTRs not approved by Risk Management.
This process will ensure that COIs are routed, reviewed, and approved in advance of renewal
deadlines, preventing a renewal of a BTR requiring insurance verification until Risk Management approval is recorded.
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FINDING #3: Site-specific permits were not requested for all the projects conducted
during the audit period.
Condition:
During the audit period, a review of all jobs conducted within the City was performed to verify that
site-specific permits were requested before any work began. A total of 22 job sites were reviewed, revealing that 6 projects proceeded without the necessary permits.
Criteria:
According to Section 90-276(b) of the City Code, states All C&D haulers or persons providing
C&D removal services shall obtain a separate, site-specific C&D collection permit for each project
involving new construction or the demolition of an existing structure. Such permit shall be
prominently posted at the job site at the same location that other permits are maintained for
inspection for the duration of the project. The cost for such site-specific permit for new construction
and/or demolition projects shall be $100.00 to cover the city's annual administrative and
processing costs. The rate in appendix A pertaining to this subsection will be administratively
adjusted annually by the city manager, effective October 1 of each year, to reflect increases in
the Consumer Price Index for the Miami-Fort Lauderdale-West Palm Beach, Florida area,
pursuant to subsection 1-15(b) of the City Code. Each C&D hauler shall also pay the applicable
fees set forth in section 90-278 based on monthly gross receipts in respect of the project
concerned. Failure to obtain a site-specific permit for a project involving new construction or the
demolition of an existing structure will result in a penalty of $1,000.00.
Cause:
The contractor's failure to comply with the City Code requirement to request and obtain site-
specific permits prior to commencing work.
Effect:
The absence of site-specific permits increases the risk of improper waste disposal and limits the
City’s oversight of safety and environmental regulations. This lack of permitting also results in
financial losses, totaling $600.
Recommendation to the Contractor:
The contractor should not engage in C&D collection without the appropriate site-specific permits.
Recommendations to Code Compliance:
Code Enforcement should maintain ongoing monitoring of C&D activities to ensure proper permitting compliance across the City. Additionally, Code Enforcement should conduct C&D collection inspections citywide, with recurring violations triggering escalated enforcement actions
and immediate penalties for noncompliance.
Code Compliance Response:
The Code Compliance Department appreciates the opportunity to respond to the recommendations regarding enforcement of site-specific C&D collection permits. Under Chapter 162 of the Florida Statutes, any case that may proceed to the Special Magistrate must be
supported by competent, substantial evidence based on a personal investigation or independently verified documentation. As such, Code Compliance can only issue a violation for failure to obtain a site-specific C&D permit when an officer directly observes the unpermitted activity or confirms
it through evidence that satisfies Chapter 162 standards. The City Attorney's Office has also advised that project-related invoices may be used as supporting evidence, provided they are not associated with an ongoing OIG audit.
The audit identified six instances where work was performed without the required site-specific permit. While the Department acknowledges these findings, violations cannot be issued retroactively when no officer witnessed the activity at the time it occurred. It is also important to note that in several prior cases involving this same violation type, the Special Magistrate has exercised discretion to waive or reduce fines, particularly when the contractor later complied or when the evidentiary burden was not fully met. Although this authority is respected, such outcomes can reduce the deterrent effect of the penalty structure. For this reason, Code
Compliance emphasizes thorough documentation and first-hand observation to strengthen future cases.
The Department agrees with the recommendation to increase monitoring and can expand proactive inspections, enhance interdepartmental data sharing with the Building Department and Sanitation Division, and conduct periodic sweeps to verify permit compliance.
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6/2/2026 | 4:38 PM EDT
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Consistent with Chapter 162, Notices of Violation will continue to be issued immediately when officers personally observe unpermitted C&D operations.
All written responses received by the OIG from affected persons or entities related to the
disbursed draft report have been included in this final report, in accordance with Section 2-256(h)
of The City of Miami Beach Code.
Respectfully submitted,
______________ Joseph M. Centorino, Inspector General Date
Norman Blaiotta, Chief Auditor Date
cc: Eric Carpenter, City Manager
David Martinez, Assistant City Manager John Norris, Public Works Department Director Marla Alpizar, Human Resources Director
Alvaro Rueda, Interim Sanitation Division Director Jason Greene, Chief Financial Officer Hernan D. Cardeno, Esq., Code Compliance Department Director
Ricardo Lopez, Rock and Dirt Construction Equipment, Manager
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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