Inspector General Report Strongly Criticizes City of Miami Beach’s First Neighborhood Project to Address Impacts of Sea Level Rise

Susan Askew
Susan Askew

Inspector General Report Strongly Criticizes City of Miami Beach’s First Neighborhood Project to Address Impacts of Sea Level Rise:

Says poor judgment and professional misconduct but no evidence of criminal intent

An Inspector General’s report on the City’s first residential project to address the impacts of sea level rise has found “evidence of poor judgment, professional misconduct and disregard for applicable… laws, regulations and professional standards,” but states there is no evidence that City staff and political leaders acted “with corrupt or wrongful intent.”

The investigation was launched over a year ago after City Commissioners Mark Samuelian and Michael Góngora sought answers about prolonged delays and increased costs of the Palm and Hibiscus Islands Neighborhood Improvement Project. At a Commission Committee meeting in October 2019, they were surprised to learn the County had stopped the project over a lack of permits for side-yard drains on private properties. The revelation prompted them to seek an investigation by Joseph Centorino, the City’s new Inspector General. It was the second City resiliency project stopped over permitting issues. In January 2018, it was disclosed the City did not have the proper permits for the new Indian Creek seawall, causing the City’s Engineer to lose his job. That project remains in limbo pending approvals of the City’s proposed resolution.

The investigation centered around the installation of drains into side yards of more than 100 homes after the City decided it would need to raise the neighborhood’s streets to address higher sea level projections. Plans “evolved” according to the City to address the potential that homeowners’ yards could flood as the result of the elevated roads. 

The City says pipes for those drains were contemplated initially for future use and installed to prevent further disruption when the City came up with a policy for allowing private properties to drain water into the public stormwater system. They were subsequently used as temporary drains to mitigate potential flooding during construction but were “immaterial” and not a “significant” change to the representations in its permit applications – thus not requiring additional permits – because they were for temporary use and did not disperse any more water than was proposed or allowed under the permit applications, the City said. Eventually, following City Commission approval of a new policy to allow the private connections, the City began the process of working with homeowners who wished to install permanent drains to get them permitted by the regulatory agencies.

The OIG contends the side-yard drains were always intended to be permanent which made them “significant” and required the City to notify regulatory agencies during the initial permitting process in 2016. It was only through a “whistleblower” that the permitting agencies were aware the side-yard drains had been installed. Once they learned the extent of the drain installation, a cease-and-desist order was issued for all work until the individual properties could be permitted.

While the Palm and Hibiscus report concludes there was no criminal wrongdoing, it states that organizational pressures and the urgency created by the impact of sea level rise “led to the misleading” of regulatory agencies that issued permits for the project on Palm and Hibiscus Islands. The Office of Inspector General (OIG) report said there were “two causes” for the actions by City staff: 

“The first was the well-intentioned efforts by former Mayor Philip Levine to accelerate the City’s efforts to reduce flooding. The investigation developed no evidence that Mayor Levine ever directed or intended that [City agencies] not comply with state and [County] permitting requirements. Levine’s initial efforts achieved significant results. They included the construction of pumping stations and drainage projects that materially reduced flooding in low-lying parts and earned the City national recognition for taking innovative step[s] to counter the threat of sea level rise,” the report states. “In the case of the Palm and Hibiscus project, the sustained emphasis resulted in City officials cutting corners and neglecting critical tasks [in] the project’s planning, design, and construction.”

 


“The second cause was the concurrent and equally well-intentioned efforts of the Mayor’s Blue Ribbon Committee on Sea Level Rise to incorporate changes in the design criteria of stormwater drainage and neighborhood infrastructure improvement projects to counter the existential threat of climate change. The Mayor’s Committee and its consulting engineer developed changes in design criteria, revisions to the City’s Building Code, and justification for stormwater bond issues that, collectively, ensured a comprehensive and essential overhaul of the City’s defenses against climate change,” the report notes.

“In the case of the Palm and Hibiscus project, however, the pressure and imperative to incorporate new road elevation design criteria into the project’s construction led City officials to make decisions [that] created the circumstances and incentives [that] contributed to the permitting violations,” the OIG concluded.

“The combined pressure to accelerate the project’s planning and execution, and to also incorporate aggressive road elevation criteria resulted in serious override of the City’s internal controls. Ultimately, these pressures reached a tipping point in October 2015, when the City made an eleventh-hour decision at the end of the project’s design that dramatically increased the project’s cost and technical difficulty. This resulted in ill-considered decisions by the responsible City staff to proceed with construction of the Palm and Hibiscus project before they had developed engineering solutions to the technical challenges, finished preparing construction plans and obtained proper permits.”

Evidence gathered during the investigation “supports a conclusion that, in the matters described in this report, the responsible City officials believed they were acting with the knowledge and approval of the City’s political and administrative leadership and in the best interests of the City. There is no evidence that they acted unilaterally or with corrupt or wrongful intent,” the report states.

The evidence also “supports a conclusion” that contractor Lanzo Construction and engineering firms Wade Trim and Craig A. Smith & Associates (CAS), “believed they were acting at the direction of” the City’s Capital Improvement Projects Division and Department of Public Works “and with the approval of the responsible City officials. The evidence established that the incentives and pressures for their actions originated with the City, and were largely the result of frequent changes in the project’s design and the pressure to expedite work and hold down costs,” according to the report.

The City Administration says the report contains “conjecture, unsupported allegations, and innuendo.” In an email to Centorino, Mayor Dan Gelber, and City Commissioners, Interim City Manager Raul Aguila said, “[t]here are portions of the report that attempt (whether intentionally or not) to sensationalize and manipulate the information provided by a few individuals, based upon their opinion of the situation.”

He called the OIG’s investigation a “flawed and misdirected process” in which City staff “endured over a year of frankly, hostile and aggressive interviews that gave the investigation an awkward, hostile feel, rather than a thoughtful fact finding inquiry as to what may have been some issues, so that they may be done better in future projects.”

Planning for the Palm and Hibiscus project was initiated in 2011 through a design-build process in which the contractor is responsible for developing the plans used to construct a project. It would ultimately include replacement of the underground water and sanitary sewer system; replacement of streetlights, road and sidewalk reconstruction, new landscaping; and undergrounding of utilities.

In 2016, after five years of planning, the City awarded a $38.5 million build contract to Lanzo Construction Co. Florida, and the two regulatory agencies – South Florida Water Management District (SFWMD) and Miami-Dade Division of Environmental Resources Management (DERM) – issued permits for the project, and construction began.

Despite the permitting delays, the City Administration indicates the project is three to four months away from completion. The Administration sought a delay in the issuance of the final OIG report until then to provide “a more comprehensive evaluation of the completed Project” which Aguila noted “functions as it was intended.”

 

The 141-page report and 177 pages of appendices paint a picture of a complex project in which the City and its contractors dealt with changing sea level rise projections and continually evolving policy direction from elected officials. The City Administration says the groundbreaking nature of the project meant the project necessarily evolved over time including laying pipes for drains that could be installed in the future without disrupting the newly installed infrastructure, temporary drains used during construction that were originally intended to be removed but which were eligible to become permanent after the City Commission changed its policy during construction to allow private properties to drain water into the City’s stormwater system, and that there was never an attempt to conceal changes to the drainage project. The OIG said that narrative is “a legal fiction.”

“This [temporary] designation was intended to protect the City and Lanzo from legal liability until the City adopted a policy for connecting private-side yard drains to the public drainage system, and to postpone the legal requirement to obtain the approval of permitting agencies for their installation,” the OIG alleges.

The intent, the report states, “was to build the permanent infrastructure required to connect private-side yard drains to the public drainage system” after the City Administration decided in October 2015 to increase the elevation of North and South Coconut Lanes. “This decision significantly increased the risk that building up the pavement to that height would create a dam-like barrier that would trap floodwaters on adjacent private lots at lower elevations. To counter this risk, the responsible City officials made a second decision. They decided to build a public right-of-way drainage system with a different design and intended purpose that included permanent connections for privately owned yard drains in every residential lot on west Palm Island (‘private-side yard drains’).”

At that point, the OIG contends, the City dual-tracked plans, utilizing the original engineering designs by Orlando Rubio of Craig A. Smith & Associates for permit submissions while developing another “non-standard and unprecedented conceptual design for a municipal drainage system in Miami-Dade County” by Holly Kremers of Wade Trim. A plan “that Wade Trim’s engineers were not sure DERM would permit,” according to the OIG report.

“The plans by Rubio were used to obtain permits. After the permits were issued, the plans by Kremers would replace and supersede the permitted plans and thereafter be used to build the essential infrastructure for a non-standard drainage system that could [be] connected in the future to yard drains in residential lots,” the report states.

“During the permitting review process, this legally significant change in responsibility for the plans was not disclosed to the regulatory agencies,” the OIG said, noting “[T]he permit applications, and the supporting documentation submitted to the agencies did not truthfully describe the stormwater drainage system that the City and Lanzo intended to construct.”

“The City staff in charge knew the revision of the Rubio plans would require months of engineering work that could delay permitting of the project. Under pressure to proceed, the City staff decided not to wait for a new set of construction plans,” the report alleges.

In May 2016, the OIG says that both the South Florida Water Management District and DERM “unwittingly” issued permits for the project based on “permit applications, construction plans, and technical documents” showing the proposed system met water quality standards “that omitted material facts and contained information that was untrue and misleading.”

“For the next two years, the City and Lanzo used the Kremers plans to build a stormwater drainage system which included pipes that extended laterally from the mainline drainage system at the edge of the right-of-way in front of each house on west Palm Island,” the report says.

In April 2017, a resolution was approved by City Commissioners to allow private property owners to connect to the City’s system.  “Subsequent events and records examined during the investigation, support a conclusion that the primary purpose of the resolution was to provide after-the-fact authorization and legal justification for the private-side drains the City had already allowed, and any new connections of such drains to the system,” the report states.

“On or before February 2018, the City and Lanzo began the initial efforts for extending the drainage system onto private property” based on the new City policy, the OIG said. “During this period, Wade Trim recommended that the City and Lanzo notify DERM and SFWMD of this new phase of construction and obtain a modification of the existing Class II permit from DERM and the Environmental Resources Permit from SFWMD. The agencies received no such notification.” The OIG report contends the City “disregarded” the recommendations.

“In May 2018, the project’s two-year Class II permit expired. When the City and Lanzo applied to DERM for a new permit, they did not disclose the Kremers plans. Instead, they misled DERM a second time by claiming that the new application for a permit was based on the long-since superseded and unused Rubio plans,” the report states. 

This is where another major point of contention arose. According to a joint response from Assistant City Manager (and former Public Works Director) Eric Carpenter, Public Works Director Roy Coley, and Capital Improvement Projects Director David Martinez, “Irresponsibly, the author of the Report decided to omit additional communication between the engineer of record [Wade Trim’s Daniel Garcia] and DERM, related to the issuance of this permit, and in fact uses the term ‘misconduct,’ to describe the application for this permit as an act of ‘commission and omission.’ The reality, omitted by this report for unknown reasons, is that the permit application to DERM included a letter dated May 10, 2018, from the engineer of record, providing a narrative whose purpose was to assist DERM in their review of the permit. The EOR’s third paragraph reads:

City provided a change in directive requiring installation of private-side yard drains for properties that have finished floor elevations below the adjacent crown of road. The original stormwater design criteria required that the drainage area be sized to account for and reflect the actual contributory area at a minimum of all road rights-of-way, 100% of interior (landlocked) lots and 50% of waterfront lots. Thusly there is enough capacity in the system to account for this additional stormwater load, particularly in light of the fact that few of the properties fall within this new City criteria.

Additional City-directed changes will be submitted via revised plans for Palm Island and Hibiscus Islands during permit certification submittals; these mainly related to change of pipe alignments to reduce impact to existing vegetation, addition of a secondary drainage system to reduce potential flooding in isolated areas, and lowering of proposed elevation of roads to reduce harmonization impacts to private properties.

“Changes to the plans were disclosed, documented to be immaterial to the parameters of the permit, and proposed to be fully captured during permit certification submittals,” Carpenter, Coley, and Martinez said.

In a June 23, 2020 email to Centorino, former City Manager Jimmy Morales focused on the May 10th letter written from Garcia which he noted “does appear to make some significant disclosures about the changes to the project, including private-side yard drains, addition of a secondary drainage system to reduce potential flooding, change of pipe alignments to reduce impact to existing vegetation, etc. I am truly a lay person when it comes to engineering, but when you combine this May 10th letter together with the 2nd paragraph of the May 17th letter which indicates that the City has recently revised the project’s stormwater criteria, which could result in changes, I think Wade Trim certainly put DERM on notice that this project was evolving and would be including some of the enumerated items which were not part of the original permit application. Furthermore, Mr. Garcia, by stating that these changes would be submitted at the end of the project, prior to putting the system into operation, would reflect these changes. DERM issued the permit extension having received both letters.”

“My purpose in sending this email is not to suggest that mistakes were not made during the course of this project,” Morales wrote, “But I find it hard to see a conspiracy to defraud DERM. The May 10th letter is fairly explicit about the changes being made. In fact, the term ‘private-side yard drains’ appears twice.”

The OIG report contends that “correspondence from a Wade Trim engineer… omitted material facts and contained information that [was] false or misleading about the drainage system under construction. The misrepresentations included a statement that significant changes had not been made to the original Rubio plans, and other statements that reinforced the fiction that the City and Lanzo were still using the Rubio plans.”

Records and statements made by Garcia and others during sworn interviews, “support a conclusion that the responsible City officials discouraged the Lanzo team from disclosing the new phase of construction to the permitting agencies,” the report alleges. “During an interview with OIG staff, Wade Trim engineer Garcia said that by 2017 he had grown frustrated with the number of significant changes that Cip [Capital Improvement Projects] had directed Lanzo and Wade Trim to make to the construction plans, most of them at the request of the Homeowners Association. Garcia stated that he was concerned about the failure to notify DERM of the significant changes and the agency’s reaction if all the changes were only disclosed at the end of the project.” 

“On a number of occasions,” he said he recommended reaching out to DERM “to begin discussions regarding some of these changes… but he told investigators, “I was essentially muzzled.”

Carpenter, Coley, and Martinez wrote in their response to the initial draft report, “It appears that individuals from the Design/Build firm, after being intimidated by the approach and actions of the OIG, (which were extremely aggressive and led to an overall feeling of persecution and degradation of morale for all involved) may have made statements that they thought would insulate them from any responsibility but they are not based in fact, merely opinion.”

The OIG said “On May 29, 2018, DERM again unwittingly issued a new Class II permit based on the outdated constructed plans prepared by Rubio.”

“The deception of the SFWMD and DERM continued for 31 months. It ended after a whistleblower sent the agency an email with photographs of the installation of a private-side yard drain on a residential lot on Palm Island that was connected to an unpermitted drainpipe in the right-of-way. The permanent right-of-way drainage pipe was connected to the City’s new stormwater drainage system that emptied into Biscayne Bay,” the OIG asserts.

 

The recommendations of the inspector general's report

The OIG noted that its scope was focused on “managerial decisions leading to the permitting issues and their consequences. It is not intended to be a critique on the City’s policy choices or the engineering decisions or methods used... It also does not purport to pass judgement on success of the project as a whole. We have been informed by some City staff members that the Palm/Hibiscus project is nearing completion, and that the serious problems identified in this report have been addressed and may at last be getting resolved. The Engineering Division of the Public Works Department has assumed responsibility for permitting and the DERM has advised that the working relationship has dramatically improved. We hope these improvements are sustained. If they are, then the hard work of the City Administration that has been done to move past these issues will deserve credit. It is well understood that the City’s efforts at stormwater control have been recognized as innovative and groundbreaking. Despite the emergency conditions under which these projects have been undertaken, and the novel problems they have presented, City staff members overall have performed well in confronting these challenges.”

The OIG offered seven recommendations. They are here in their entirety:

Recommendation #1: Establish by ordinance that the Director of the Environmental and Sustainability Department shall have the final authority and responsibility to approve the submission of all applications for permits by the City from the South Florida Water Management District (SFWMD), the Miami-Dade Department of Regulatory and Economic Resources (RER) and its Division of Environmental Resource Management (DERM), or any other federal, state or county agency with environmental enforcement authority over issuance of a permit for any City project; and, further, that the Director of the Environmental and Sustainability Department shall immediately, and in writing, report to the City Manager and the Inspector General any concerns expressed by those agencies, or by any other parties, about alleged lack of compliance with federal, state or county laws and regulations related to the permitting of any such projects. 

Recommendation #2: Establish by ordinance that, notwithstanding any provision in a City contract, that the City official who signs an application for a permit included under Recommendation #1 be responsible to personally verify in writing to the City Manager the accuracy and completeness of all such permit applications and associated documentation submitted to any such regulatory agency. 

Recommendation #3: The City Administration should develop policies and procedures for the management of design-build contracts that provide a framework of guidelines, practices, and internal controls to guide management of design-build projects. The City Manager should develop the policy in consultation with CIP, Public Works and the Procurement Director. 

Recommendation #4: Establish by ordinance that, prior to approving significant changes in the design criteria of a design-build project after on the award of the construction phase of the project, require that the City Manager notify the Commission, provide justification for the change and its impact on project cost schedule.  [Aguila, in his response for the City Administration agreed with this recommendation.]

Recommendation #5: Direct the City Manager to provide an evaluation of the costs and benefits of the City[‘s] present [use] of multiple architecture and engineering consultants versus those of retaining a single project management contractor to provide the City with an integrated, coordinated, and disciplined end-to-end process for planning, designing, and managing the City’s portfolio of design build projects to counter the effects of sea level rise. 

Recommendation #6: Require that CIP, Public Works, and the Procurement Department working together, in consultation with the Finance Department, [to] develop a list of key indicators and provide an annual report to the Commission that [lists] projects that are at a high risk of cost overruns, schedule delays or performance failures. [Aguila, in his response for the City Administration agreed with this recommendation.]

Recommendation #7: Amend the City’s Debarment Ordinance to authorize the Inspector General to conduct fact investigations in support of the Debarment Panel and submit to the City Manager and Director of Procurement reports of investigations on the performance of City contractors for possible debarment. [Aguila, in his response for the City Administration agreed with this recommendation.]

   

Response from Interim City Manager Raul Aguila

In his memo to Centorino, Mayor Dan Gelber, and City Commissioners, Interim City Manager Raul Aguila wrote, “Please let me begin by stating that, in my personal opinion, the report prepared by the Office of the Inspector General to look back at the Palm and Hibiscus Neighborhood Improvement Project is clearly written from the perspective of an individual or group of individuals that have only a cursory understanding of the contractual mechanism utilized; the permitting process as required by the South Florida Water Management District and Miami-Dade County Department of Regulatory and Environmental Resources (DERM); and the challenges associated with developing a program that was expected to deliver results outside of the status quo. Further, and with all due respect to the OIG, there are portions of the report that attempt (whether intentionally or not) to sensationalize and manipulate the information provided by a few individuals, based upon their opinion of the situation.”

“Despite the significant amount of conjecture, unsupported allegations, and innuendo in the OIG report, there are no facts to dispute any of these pillars of this Project,” Aguila wrote. Among those “pillars” is that “The nearly completed Project functions as it was intended,” he said.

“That is not to say that the Project, if it was to be done over, could not have been improved,” he acknowledged, citing the need to agree to harmonization plans with private property owners in advance, a strategy that is now being employed on the West Avenue Neighborhood Improvement Project.

Aguila reinforced the City’s position that “the contractual relationship between the City and the Design/Builder is clear that the permitting of the project falls completely within the responsibility of the Design/Build firm. Furthermore, documentation was provided to DERM in writing, clearly identifying the modifications of the Project over time. This letter was provided prior to the application for reauthorization of the Class II permit from DERM, not a request for extension of the existing permit, but a reapplication for a new permit. The subsequent response from DERM stated that it needed a certification from the Engineer of Record that there were no changes to the drainage system. The re issuance of the Class II permit for the Project on May 27, 2018, appears to signify that either DERM was confident that the ‘private side yard drains’ were not a significant modification, or they were comfortable with the information provided that these changes would be addressed as part of the permit close-out documentation,” which the City says is standard for immaterial changes to projects.

“If the City was truly trying to conceal information or keep these potential future private connections quiet, as the OIG alleges, why were these matters repeatedly discussed in public meetings; submitted in writing to DERM; and directed by the City Commission to the Administration (as well as approved in the backup documentation for the initial construction scope ratified by City Commission on December 9, 2015),” Aguila asked. “Which is more likely: that there was some elaborate deception, or that there was a reasonable evolution of an emerging solution to sea level rise that was new and uncharted territory for all three entities (the City, the Design/Builder, and the regulatory agencies)?”

Aguila reinforced points made in the joint response from Carpenter, Coley, Martinez that “The incorporation of the secondary drainage system on west Palm Island evolved over time in response to the needs of the residents and the public response to the partially completed Project. The initial modification was only the inclusion of stub out pipes from the existing primary drainage system that remained unchanged. Since these stub outs were only to provide for a future connection, with no additional water entering the system, they created no change to the resulting operation of the system.”

“Subsequently the Design/Build team used some of these stub outs as temporary construction drains within the right of way during the construction activities,” Aguila explained. “Each and every one of these temporary inlets will be either removed or converted to a permanent inlet under a separate permit, by the completion of the Project. At this point, with only three or four months until the completion of the Project, almost all the temporary drains have been removed. Only 10 of the 70+ private connections remain to be permitted and, to date, there has been no need to modify the water treatment system originally approved in 2016.”

“We repeatedly requested that the OIG wait until the Project was completed to finalize its report. Unfortunately, the OIG was unwilling to give the appropriate time to conduct what we believe would have been a more comprehensive evaluation of the completed Project.”

“There were many decisions made that resulted in an evolution of the Palm and Hibiscus Project,” Aguila said. “All of those decisions were made with the best interest of the residents, and with the clear direction and approval of the appropriate authorities within the City. There was no ill intent, nor any intentional omissions (as can be demonstrated by the lack of clear evidence to the contrary, despite a year of investigation).”

“Although the OIG has expended considerable effort and significant resources to investigate this Project, they are still left with only conjecture and the specter of malfeasance to justify their expenditures,” he wrote. “What is troublesome to me is that conjecture and speculation, while they may make for a more tantalizing report, are contrary to the OIG's core mission; namely to objectively identify areas within the project that will result in staff being able to learn from and apply these corrective measures and efficiencies toward future projects.”

“Instead, City staff endured over a year of frankly, hostile and aggressive interviews that gave the investigation an awkward, hostile feel, rather than a thoughtful fact finding inquiry as to what may have been some issues, so that they may be done better in future projects,” Aguila asserted.

“Notwithstanding what I believe to have been a flawed and misdirected process, the OIG's Report is what it is. In reviewing the report, the City Administration recognizes that there are lessons learned from this report, that could improve the process of handling many large-scale construction projects simultaneously. In addition to the improvements the Administration has already implemented, like the harmonization design and agreements being in place prior to commencement of construction, and the City taking the lead on the permitting of the private connections, we accept the OIG recommendations # 4, 6 and 7 in the report and will take the actions necessary to implement those measures moving forward.”

Responses from former Mayor Philip Levine, City Staff, Contractors


As noted in the OIG report: 
“As required by the OIG’s enabling ordinance, before finalizing this report and its findings and recommendations, a draft was sent to the persons and entities named in the report to provide a written response or rebuttal within 30 working days. The draft was released on December 4, 2020. In recognition that weekdays and holidays during that period could not be counted, the due date for responses was set at January 22, 2021. An additional seven working days, through February 2, 2021, was provided to City staff members Eric Carpenter and David Martinez in which to make further responses on their own, as well as to respond to questions from the OIG concerning issues in contention. 

“Where the written responses from any person or entity provided identified errors or omissions, proffered new evidence or information, provided alternative views, or suggested clarifications that had merit, some revisions were made to the final report to enhance its accuracy and fairness and the potential value of its recommendations to the City Commission and residents of Miami Beach. 

“In instances where a respondent strongly objected to a finding or characterization of their actions, the office re-examined the underlying evidence and, where appropriate, conducted additional interviews. In such cases, pertinent statements from the written responses or prior sworn interviews, were added to the final report to provide context and to reflect alternative explanations consistent with the evidence.”


Among the responses noted:

The Inspector General met with former Mayor Philip Levine and his attorney “at their request.” 

“During the meeting, Levine and his counsel strongly objected to the use of the word ‘pressure’ to describe the impact on City staff of Levine’s public efforts to accelerate work on construction projects to reduce flooding, and the imperative to incorporate new design criteria to counter the future effects of sea level rise,” the report says. “Subsequently, Levine’s counsel submitted emails from former City Manager Morales stating that Levine never ‘exercised any improper pressure or influence’ and from Acting City Attorney Aguila stating that, while serving as City Attorney, he never received complaints of Levine having ‘used any undue influence or pressuring City staff with regard to various projects.’

“The report does not state that the actions of Levine and [former Chair of the Blue Ribbon Panel on Sea Level Rise Scott] Robins, as to the Palm and Hibiscus project, were wrongful or improperly motivated. It sets forth facts that show the unintended consequences that occurred in one construction project. It bears noting that during sworn interviews, Morales and Martinez used the word ‘pressure’ in describing their perceptions of factors that influenced decision-making during the project,” the report notes.

In the end, the findings of the report twice emphasized “no evidence that Mayor Levine or Blue Ribbon Committee Chairman Robins directed City staff to mislead permitting agencies.”

“During his campaign for Mayor, Levine contended that the routine flooding of city streets was a public emergency, which it was,” the OIG acknowledged. “He was elected with a strong mandate from voters to accelerate and expand the City’s efforts to reduce flooding and modernize the stormwater drainage system. During his two terms as Mayor, the record shows that he and the responsible City officials made significant progress on those objectives.”

“Nevertheless, the evidence compiled in this report established that the cumulative effect of Levine’s, ‘Get it Done’ management approach set a tone at the top of City government that was translated by some City staff to justify or rationalize ill-considered decisions and actions in the case of the Palm and Hibiscus project, that made the Mayor’s primary objective of accelerating completion of the project impossible to achieve.”

In text messages with this reporter, Levine said, “I am extremely proud of the work that we accomplished under the leadership of [former City Manager] Jimmy Morales and his amazing team in fighting sea level rise. We lead the nation in these pioneering achievements. From Sunset Harbor and Lower N Bay Road to Alton Road and the various islands, residents who once experienced massive flooding before are now high and dry! I only wish that the current elected leaders would exercise more positive pressure to move the city forward to fight against this existential threat to Miami Beach as tides continue to rise. ‘Mother Nature’ does not respond well to ‘Analysis Paralysis.’”

“One can always find fault with Henry Ford’s first car, the Model T or the Navy ships that were built quickly after the Japanese invasion of Pearl Harbor. Bottom line is that whether it be rising crime on Miami Beach or rising sea levels, it is the job of elected officials to push the Government to respond in a timely manner and listen to the will of the people and JUST GET IT DONE!!! As they say, don’t let perfect be the enemy of good!”

“If you are flying on a commercial jet and you let the pilots know you are in a rush to get to your destinations, should that be interpreted into let’s do the wrong thing, evade safety measures and potentially endanger the lives of the passengers? Of course not. Translating the people’s desire for action to stop flooding would never be interpreted as making mistakes during the process. Both the former city manager and city attorney specifically stated that I never had any complaints or allegations of any undue pressure. I believe the city needs more than ever the public pressure to confront the multiple front problems of crime and sea level rise,” Levine wrote.

Current City Staff Named in the Report: While the OIG was not persuaded by the written responses from Carpenter, Martinez, and Coley, saying they “did not provide evidence that alters [the] facts” as detailed in the report, it did “in the interest of fairness and completeness” revise the report “to include additional statements from the respondents and from DERM staff on this subject, as well as a response from the Bureau Chief at the Environmental Resource Bureau/Regulation Division at SFWMD. The language used to describe the actions of Carpenter, Martinez and Coley in the draft report was reviewed for fairness and clarity and, where appropriate, was revised.”

In their joint memo to Centorino Carpenter, Coley, and Martinez described the circumstances impacting the project from the beginning. “This was not a matter of nuisance ponding, but a matter of life safety and protection of property. The City needed to take action and the Commission, rightly so, tasked the Administration with developing a solution. This direction put the City on the front line of the battle against the climate change and sea-level rise, and garnered world-wide acclaim.”

“Unfortunately, there is no simple solution to this challenge, and in the early stages of the project there were no precedents to follow or case studies to review,” they said. “The approach to mitigating sea level rise was an evolving process and resulted in the Palm and Hibiscus project’s evolution. Every decision and strategy required innovative, ‘outside the box,’ thinking, including changes to policies and ordinances. Everything was on the table. Arguably the single most important and impactful strategy to adapt to sea level rise was raising the roads, and eventually private properties, above the level where tidal changes cause flooding. Raising private properties is a long-term strategy and is being addressed through City legislation requiring new developments to build at higher elevations.”

“Potentially the greatest challenge of breaking out of the status quo was demonstrating to the regulatory agencies that the same approach that had continued to become less and less effective due to changing conditions was not sufficient to overcome the evolving threat of sea level rise,” they noted. “This was further exacerbated by a prior employee of the City that significantly undervalued the role of the regulatory community and ultimately was removed from his position due to his cavalier approach to the need of following the requirements of those agencies,” they said referring to former City Engineer Bruce Mowry. “This difficult evolution created situations that allowed for individuals with political motivations to plant seeds of distrust in the minds of the regulatory agencies toward the City. Despite efforts at all levels of the City Administration (including monthly meetings beginning in October of 2016, to open the lines of communication with the regulatory agencies), the City was still unable to overcome the distrust that had been growing as a result of the efforts of those that intended to undermine the program.”

“The evolution of the stormwater program included the gradual increase in understanding of the impacts to those properties that had historically relied on the flow of water from private to public property. The building code of Florida is clear that private properties are responsible for managing all water that falls upon their property. That perspective did not address the moral obligation to leave all properties in a better position after completion of the work than before” which was the impetus behind “the inclusion of private property drainage connections to facilitate the transition period” from elevation of the roadway to elevation of private properties, according to the joint memo.

“The impacts of this real time development of solutions created modifications to the Palm and Hibiscus Island Neighborhood Improvement project that could have been handled better, had there been unlimited time to evaluate.” Carpenter, Coley, and Martinez’ response indicated “the City Administration acknowledged these shortcomings” during the City Commission Workshop on Resiliency in January 2020.  

“Interestingly, although the City acknowledged many of the findings of this report in a Commission workshop on January 27, 2020, it took nearly another 12 months for the Office of the Inspector General (OIG) to prepare a draft report which echoes the same thoughts,” they wrote. “Notwithstanding, the OIG’s report includes, in our opinion, a significant amount of innuendo and editorializing which, in our opinion, serves no purpose other than insinuate wrongdoing where none has occurred.”

“Furthermore, after over a year spent on generating this report, despite several requests from the Administration for extensions beyond the 30 business day response time, which happened to fall during the holidays and a global pandemic, those requests were rejected by the OIG. Why are the facts from staff that were involved from the beginning less important than the conjecture of those who are trying to decipher a very complex issue after the fact?” they asked.

“Finally, the real truth is that there were many decisions made that created an evolution of the Palm and Hibiscus Neighborhood Improvement project. All of those decisions were made with the best interest of the City, and with the clear direction and approval of the appropriate authorities within the City. There were decisions made by the contracted Design/Build firm that are now being questioned by the regulatory authorities, that are open to debate,” they said. “However, there was no ill intent, nor any intentional omissions, as can be demonstrated by the lack of clear evidence to the contrary, despite a year of investigation.”

Referencing the May 10, 2018 letter from Wade Trim, the three said its contents were “buried” in the draft report “and glossed over preferring to continue to use words like deception and misrepresentation. This letter, along with the signed application submitted by the City via email on May 15, 2018 was before the response from DERM, stating that it needed a certification from the Engineer of Record stating there were no changes, and well before the September 19, 2018 email from the alleged whistleblower.”

“There was no information hidden from the regulators, it was provided to them in writing prior to permit renewal being applied for in May 2018 including the reference to the secondary drainage system connections. Furthermore, it has recently been confirmed by the South Florida Water Management District that the introduction of the secondary drainage system will not require any additional documentation or a permit modification.”

To this point, the OIG report noted, “During a subsequent interview of SFWMD officials by OIG staff, which included a review of differences between the Rubio and Kremers plans, SFWMD senior officials, including Executive Director Jill Creech and Bureau Chief Jesse Markle, indicated that they were not aware of the Kremers plans.” Upon learning of the differences from investigators, Markle wrote in a follow up response, “As such, our position that ‘[t]he installation of yard drains within the permitted surface water management system… will not require a permit modification’ is no longer the case.’”

Carpenter, Coley, and Martinez said, “The entire exercise felt from the start that it was determined to find some issue where none exists, other than what was acknowledged already a year ago. This begs the question of what is the real motivation and intent here? In the end, the OIG’s draft report has clearly omitted or manipulated facts to substantiate some objective that we are not privy to, but which, in our opinion, is intended to be punitive and not instructive.”

They note the report “attempts to equate normal and common project evolution to the nefarious presentation of false or misleading permit plans.”

Coley, in an individual response wrote, “The findings within the report are demonstrably prejudice, stretching, or even creating, facts to affirm the apparent desired narrative.”

Martinez, in his individual response to Centorino said, “[I]t is clear to me that these allegations are based on misinformation, opinions, hearsay, and conjecture. Evidence has been ignored or avoided to establish their findings. All exhibits attached hereto, and referenced above, were available to the OIG for review. The OIG was clearly focused on finding a ‘smoking gun’ that did not exist. Even after spending more than a year conducting ‘deposition’ style, ‘hostile’ interrogations, there is nothing material or of substance represented in their document.”

“All decisions by City officials were made with full transparency and with the support of the City Commission,” Martinez said. “There was no serious override of internal controls. The OIG simply does not understand the complexity and processes involved in managing large capital improvement projects.”

“Since 2014, the City embarked on an unprecedented and aggressive path to protect itself from the effects of climate change, specifically, rising sea levels and king tides,” he said. “For nearly four years, the [Mayor’s Blue Ribbon] panel deliberated on many elements associated with protecting the City from sea level rise. The topic of raising elevations on public and private properties was a recurring theme. The challenges and opportunities of raising city streets was often discussed. There was no play book on how to address the challenges. There were no instructions, or codes, or standards specifying how to address elevation changes or harmonization of private properties. Ideas, solutions, policies and ultimately directives from the City Commission, evolved during this period. During this evolution, CIP was responsible for moving this project, and all other projects forward. Yes, there was abundant pressure from all stakeholders, but doing nothing was not an option. This is what makes this city so great.”

 


In an interview with RE:MiamiBeach, Assistant City Manager and former Public Works Director Eric Carpenter agreed that the final report included “some modifications to the draft report language which I think are more reasonable,” but he said there are still some things the OIG is “just not grasping… I think they still don’t really understand the concept of stub out pipes. It’s similar to if you build a house but you know that you’re going to put an addition on it later. It makes sense to leave stub out pipes so your plumbing can connect in the future without tearing up the slab of the existing house.”

“I think that they made an honest attempt to tone down some of the language based on our responses, but I think that a lot of this is misguided,” Carpenter said. “This is a post-mortem on a project that’s still not compete. I think if they were to give us another three or four months to final out all of the permits with regulatory agencies then we would be looking at this in a whole different light.”

As the first project, Carpenter said it provided a lot of learning opportunities. “We’ve definitely learned that you have to come up with the plan and agree on harmonization with the adjacent property owners before you begin construction because it’s too cumbersome a process to handle that in the midst of all the construction activity. I also think that what we’ve learned is that the private property owners really don’t have the tools to be able to deal with the regulatory agencies individually and so it’s much better for the City to take the lead on the permitting efforts for any of these private property connections that are necessary.”

“We acknowledge that some of the recommendations that the IG made are good recommendations,” Carpenter said. “We agree that the IG should be involved in the debarment evaluation process. We agree that we shouldn’t change drastically the scope of projects in the middle of construction.”

While he said, “there’s some good information” in the OIG report to learn from, he emphasized, “One of the things that they’ve really missed on this is the letter of May 10 that was sent by Wade Trim to the regulatory agencies,” noting the side-yard drains. “I understand that the regulatory agencies may have not understood or they may have had a different interpretation, but I think the claim that there was anything other than the best of intent by providing them all of that information is just not accurate.”

When asked about the OIG’s consulting with an engineer to provide the necessary expertise to help review the project, Carpenter said, “I would share with you that there are a lot of engineers out there that are not up to speed on sea level rise and the adaptation measures. Miami Beach is really out in front of everybody on this and so they may have had the best of intentions, but I think they’re just not up to speed on everything that has transpired over the last ten years in this field and some of the challenges that we’ve faced and, thankfully, overcome in some of the success stories which Palm and Hibiscus, I think, is one of them.”

“Could we have done it better in hindsight? Absolutely,” he said. “If we had all of the information now that we have in 2021[when we] started in 2013, we would have done things differently.” Learning what they did on Palm and Hibiscus, resulted in a different strategy for the restart of the West Avenue project with agreements on harmonization between elevated roadways and private properties upfront. But, he added, “Large scale construction projects like this, it’s never going to be completely smooth.”

With regard to the “pressure” cited in the report, Carpenter said, “In my head, I see this as we were watching these streets flood and hearing the residents cry out just like you’re hearing the residents in the Keys now crying out because they’re having a hard time getting to and from their homes because their streets are flooded and, yes, there is an urgency in bringing solutions to people who are in distress and I think that there was an attempt from the Commission at the time to think outside the box and advance the technology and the approach as much as we could because we hadn’t done enough in the past. And, so, we were challenged to come up with new solutions and better mousetraps… it wasn’t things that had really been on the table or contemplated before and so everybody” from the contactors, designers, regulatory agencies, and the City itself, “were figuring it out as we went,” he said.

“My hope is that the approach of the IG doesn’t negatively impact our relationship with the regulatory agencies because I think that that’s a possibility,” Carpenter said. “Having gone through a year of the type of interviews that they conducted, I can totally understand why the regulators said some of the things that they said. I’m sure they were provided some of the information in a less than neutral manner but that’s my biggest hope, that it doesn’t set us back with the regulators and we can finish out the work that needs to be done to get out of the people’s hair on Palm and Hibiscus.”

Carpenter said he has not heard from any City Commissioners, “but I am hopeful that they read not only the report but also the responses because I think that it adds a lot of clarity to what could otherwise be a very confusing subject.”

Michael Góngora, one of the Commissioners who sought the investigation, said, “I’m concerned that it took so long for the Inspector General to investigate and issue the report. It seems like an important item like this would take priority over a lot of the things that would be investigated so I’m concerned it took so long.”

As to the report, he said, it is “over 100 pages long and contains serious allegations that will need to be reviewed and considered by the Commission.” He said he’s most interested in learning “What are the takeaway points and how do we make projects better. That was the initial intent, not only Palm and Hibiscus, but what can we learn for the future.”

“The city, surprisingly, issued a very lengthy response,” he said, noting, “They managed to get their response out very quickly – also voluminous – and it takes great offense so there’s a disconnect here between our City Administration and the Inspector General, and the Commission needs to take a deeper dive and figure out why.”

While a discussion item to get an update on the project was initially planned for today’s City Commission meeting, it is now being scheduled for March to give everyone a chance to digest it. 

“Clearly the Inspector General’s report was very critical of the City Administration’s handling of the project and, if that’s his finding, then I don’t have a problem putting the truth out there for the Commission to consider,” Góngora said. “He did seem critical of the prior administration and mayor, in particular.”

His reading, he added, is the criticism was aimed at the “Administration allowing the Office of the Mayor and Commission to override good governance decisions” with cautionary notes that no matter who is making a request, “they still need to do their due diligence, permit projects properly and it’s better to be slow and steady than to be too fast in a manner that actually causes more delay and expense.”

“I’m looking to see what the positive takeaway points are,” he said. “I can’t go back in time to 2013, but we can learn from mistakes of the past. Yes, this was the first of the neighborhood projects but, clearly, I’m sure even those involved would not have made the same decisions.”

He said he’d “like to understand the City’s response.” Noting the tone of the OIG report was “very critical,” he said, “The tone of the City is very defensive. We have to understand why.”

The process has also led Góngora to question the role of the Inspector General which, he said, “doesn’t seem to be clearly defined.” When residents voted to set up the office, he said, they voted for it “as a good governance item” but then it was “made into more of an audit type position” which now reviews “a range of things.” 

“Maybe we need to further define what his role is intended to be, he said. In his mind, the IG should be “looking for fraud, waste, misspending or outright theft so the Inspector General is there to follow the money for us and see where mistakes have been made.” While noting, the Palm and Hibiscus project falls into that criteria, he said he’s concerned the focus is too wide ranging and maybe should be narrowed down so the IG “can focus on the big-ticket items.”

The Palm and Hibiscus project is “important,” he said. “We shouldn’t be waiting for over a year” for the report.

He’s looking forward to the full discussion in March adding, “I think that we’ll learn something about how to move forward correctly on future projects.”

A final note on formatting: Góngora said, “The Inspector General’s report is very difficult to absorb because it’s not prepared like an audit. It’s kind of free form information with blurbs and paragraphs on various interviews. I don’t think the format of the report is the most helpful… I’d appreciate something that looks more like an audit with specific findings and recommendations… In free form paragraphs it becomes very difficult to respond to… and it becomes more difficult for folks to figure out what are the takeaway points to move forward.”

Commissioner Samuelian who also sought the initial review said via text that he “just received it last night [Monday] so I have some reading ahead of me.”

Mayor Dan Gelber said he needed to “really review it first” before commenting.

Contractors Lanzo and Wade Trim: The OIG noted “Wade Trim and Lanzo provided responses that contained general denials of wrongdoing or any intention to mislead DERM and the SFWMD during the permitting process. Neither contractor disputed specific facts related to the actions of their personnel during the permitting process. Wade Trim’s response from President/CEO Andrew McCune said, ‘Relative to Wade Trim, we find the report to contain numerous misrepresentations and faulty conclusions; so many that responding to each would be overly burdensome’ and, further, said ‘The design-build team worked with and at the direction of the City of Miami Beach. We were transparent in our dealings with the City and other stakeholders. Wade Trim never intentionally misled or deceived any party and the implication of such is simply false.’” 

“Similarly, the response from Lanzo’s [Robert] Beaty stated, ‘A picture of deception by the City of Miami Beach, Wade Trim and Lanzo is seemingly presented which is not factual and far from the truth,’” the report noted.

“Additionally, both contractors suggested the OIG staff lacked the technical expertise to evaluate their actions. ‘The report should clearly indicate that the conclusions are being drawn, not by a “member of the same profession” as required by the contract, but by a party limited in familiarity with design engineering, construction, and design-build delivery, making it [OIG] unqualified to assess the performance or standard of care,’” the report said.

“Lanzo’s response said, ‘Lanzo does not cast blame upon the OIG for its erroneous presentation, understanding that the engineering and construction aspects of the Palm and Hibiscus Neighborhood Infrastructure Project are quite complex and beyond the normal report and recommendation background of your office,” according to the report.

“It bears noting the Inspector General retained a consulting engineer, Louse Aurigemma, PE to provide technical assistance during the investigation. His signed and sealed report, which supports the OIG position, is included in the Appendix,” the report stated.


The IG Postscript

In a Postscript, titled “THE PROBLEM OF MANY HANDS,” the OIG report quotes Harvard political scientist and ethicist Dennis Thompson … “We should surely still hold the officials morally responsible for failing to take precautions to avoid the harmful consequences of the actions of other people when those actions are predictable responses to the officials’ own actions.”

“The mismanagement and misconduct in the Palm/Hibiscus project outlined in this report includes acts of commission and omission, lapses both intentional and unintentional. Harvard political scientist and ethicist Dennis Thompson has tackled the ‘problem of many hands’ in connection with the difficulty of affixing legal or moral responsibility to individuals when wrong decisions in government are made through the actions of layers of personnel, some of whose actions or inactions may affect but not determine the decisions.”

“There are not enough facts produced in this report to accurately assess the responsibility of all of the players involved in the Palm and Hibiscus Stormwater Drainage project. When there are multiple government departments, as well as consultants and subconsultants to them and to multiple private contractors involved in making complicated, technical decisions on a project gone awry, it becomes too easy for many of them to point elsewhere when the blame is assessed for the missteps taken. When the roles of those players are overlapping and ill-defined, the problem of assessing responsibility deepens.”

“In the end, some consideration needs to be given to whether the numerous public and private consultants interwoven into the Palm and Hibiscus Stormwater Drainage, without clear lines of authority, have added to or subtracted from the transparency of the decision-making process, as well as to the overall efficiency of the project. One gets the impression that the motivation behind the retention of so many consultants could have more to do with insulating the decision-makers from responsibility, than it does with marshalling the professional expertise with the necessary brainpower to ensure the project’s success,” the report notes.

“There are other projects of a similar nature to be completed in the City of Miami Beach. It is hoped that the unraveling of the issues raised in the Palm and Hibiscus Project will help the City better evaluate these concerns in the road ahead,” the report concluded.

 

Miami Beach to Resume Limited Trolley Service


Susan Askew
Susan Askew
Service had been suspended due to pandemic

Tougher Penalties Approved for Sidewalk Café Violations


Susan Askew
Susan Askew
Clock to be reset on violations