At a Special Meeting held on August 4, 2020, the North Miami Beach City Commission voted 5-2 to compromise the safety and quality of the water utility and to flush at least $9 million down the drain.

But first, a little background.

History of the NMB Water Plant

The City of North Miami Beach purchased the Norwood-Oeffler Water Treatment Plant in 1957, and has run the facility for 63 years.

The plant encompasses 374,802 square feet and is located at 19150 NW 8th Avenue in the City of Miami Gardens, Florida.

After several expansions, today the city’s utility provides water for residential, commercial and industrial use for approximately 200,000 customers over a 25 square mile area.

In addition to the 50,000 residents and businesses within North Miami Beach, the water plant also services 150,000 customers in the municipalities of Miami Gardens, Aventura, Sunny Isles Beach, Golden Beach, and sections of unincorporated Miami-Dade County.

Over the years the expansions, upgrades and technological advances made to the water plant have only enhanced the quality of the water and uninterrupted service.  This was despite the multitude of problems created by certain public officials who made serious mistakes, either intentionally or because of sheer incompetence.

The Scandal

From 1994 to 2004, the infamous Kelvin Baker ran the utility as Director of Public Works/Public Services.  In June of 2004, he was promoted to Assistant City Manager and eventually to Interim City Manager in 2008.  Two months later Baker promoted Martin King to take his place as Director of Public Services.  King then went on to embezzle over $2.2 million from the city in what has become the biggest heist of public funds in the history of North Miami Beach.

On May 14, 2010, Martin King resigned after suspicions arose that he approved purchase orders for materials that were never delivered.

According to a September 13, 2010 article, the Sun Sentinel reported:

“Over a four-year period, the city contracted with a construction company to build 254 manholes — access tunnels to utility pipes 8 to 10 feet below street level. No one — not the city public services department, the City Council or residents — appears to know when, where, or if the manholes, part of a $2.2 million project, were ever built.

The city does not know if over 22,500 feet — more than four miles — of water pipes and sewer pipes it paid for were ever laid. Or if 142 valves used to shut off flow to water pipes were ever installed.  The money for the project was paid to construction firm Jackson Land Development, based in Pompano Beach.  Company officials did not return calls seeking comment.  The mystery of the missing work arose after the city hired an engineering firm to examine the spending of Martin King, the city’s public services director who oversaw the water and sewer work now being questioned.

King’s case casts a spotlight on lax oversight in North Miami Beach and the ability of city employees to sign off on projects without a supervisor’s approval.”

Martin King is currently serving a 12-year prison sentence.

Also in 2008, Kelvin Baker authorized the water utility to purchase a massive generator for the sum of $1,000,000.00.

Unfortunately, this generator was illegal to use in the United States.

Fortunately, Kelvin Baker was fired in September of 2010.

He went on to financially ruin the Cities of Opa-locka and Lauderdale Lakes, and is currently wreaking havoc in the City of Miramar, as the Assistant Manager over Community and Development Services.

Disaster in the Making

Seven years and three City Managers later, on April 3, 2017 the Mayor and Commission voted to outsource the management of the water department by passing Resolution R2017-38.

Two weeks ago, five of the seven Commissioners voted to terminate the city’s contract with Jacobs Engineering Group (formerly CH2M Hill), the company that’s been running the utility for the past three years.  The Commission had three Options to choose from.

Furthermore:

• Option 1:  The City would retain the existing contract with Jacobs, which would allow the company to keep 100% of the Operations and Maintenance (O&M) of the plant.  This option limits the City’s opportunities for additional savings and revenue.  On the other hand, Jacobs would maintain the liability for major risks.
• Option 2:  The City would accept a renegotiated contract reducing Jacobs’ operation to 40%.  This plan would transfer customer service and building maintenance back to the City, allowing Jacobs to focus in their expertise and keep the major risks.  The new contract would take less than three months to implement.  This Option represents a true public/private partnership, which is the route most municipalities are now taking.
• Option 3:  The City would terminate the Jacobs’ contract altogether and take back 100% of the O&M of the water plant.  This Option would take between six and twelve months to implement, and cost the City a minimum of $9 million.  The City will also assume 100% of the risk.

Keep in mind that when the government estimates the cost of anything, you’re likely to pay at least twice as much.  The $9 million price tag allegedly includes the salaries of all the newly hired employees to manage and operate the water plant, but it does not include the cost of their pensions, which was one of the main reasons the city decided to privatize in the first place.

Despite the fact that they had three different Options, they had already made up their minds way in advance of the meeting.

Unfortunately, instead of putting the best interests of the city and its residents first, their motives were purely political.

The Politician with the “Hidden” Agenda

This was especially true in the case of Michael Joseph, a shifty political chameleon, who will do and say anything to get elected.

In fact, Michael couldn’t care less about the residents of North Miami Beach.  His only goal is to move up the political food chain and hang his hat in Tallahassee.

Let’s not forget that Michael ran on the phony “progressive” budget-busting agenda to “take back the water department,” knowing full well there was absolutely no benefit to North Miami Beach residents.  After all, he needs to prove he’s a “Union Man.”

The minute he got into office, he immediately began pandering to the employees – at the expense of the NMB taxpayers for whom he has little regard.

Not that he cares about the city employees, either.  But he needs their Union’s endorsement for his future run for state office.

By voting to take back the management of the city’s utility, Michael is once again showing his true colors.

There are thirteen full-time Jacobs employees who retired from their positions in North Miami Beach.  As City Attorney Dan Espino explained, they cannot resume the same position in NMB on a full-time basis.  According to the general employees’ collective bargaining agreement, those employees would be restricted to working less than 20 hours a week and not more than five months without losing their retirement income.  On top of that, they would lose all benefits that they may be receiving now from Jacobs, including health insurance, 401K contributions, etc.

You’d think that Michael Joseph would be oh-so-concerned about those thirteen employees.  After all, he desperately pushed for a “living wage” ordinance, guaranteeing an unsustainable minimum of $14.50 an hour for all part-time and seasonal (high school summer camp counselors) city employees.  (Note: Full-time city employees already earn at least that amount.)

But, Michael Joseph doesn’t give a damn about city employees – part-time or otherwise.

Just the ones who might happen to live in District 107 of the Florida House of Representatives, and who will vote for him when he attempts to run again for that seat in the future.

Ironically, the Norwood-Oeffler Water Treatment Plant is also located in District 107.  How convenient for him.

The True Cost of This Bad Decision

As for the estimated minimum $9 million price tag to “take back the water department,” City Manager Esmond Scott said that the actual cost would be between $9 and $18 million depending on how quickly the transition could be made.  Until the City could fully staff the water plant, it would still be responsible for paying Jacobs according to the current contract until the transition is complete.

Just where do the five Commissioners think the $9 to $18 million will come from?  Well, let’s take a look at the budget.

As you can see, the FY 2020 Adopted Budget for the General Fund is $66,463,699.  Since revenues and expenses are accounted for, if the City cuts $9 to $18 million from any one or more of its departments, employees will be fired.

On top of the thirteen former employees who will lose their full-time jobs and benefits the minute Jacobs’ contract is terminated.

But, Michael Joseph doesn’t care about those employees at all.  He’s only concerned about getting the endorsement from their Union!

Yes, he’s that duplicitous.

True Believers or Blind Followers?

We could go on and on about the duplicity of Michael Joseph, but four other Commissioners also voted to terminate the utility contract.  But make no mistake, he’s the ringleader.

We fully expected McKenzie Fleurimond and Paule Villard to go along with their comrade.  They almost always vote in lockstep with Michael Joseph.

McKenzie is not an idiot, nor is he a conniving, manipulative, unethical piece of work like Michael.  If McKenzie had really thought this one through, we’re convinced he would have voted for Option 2, which is the most favorable one for the benefit of both the city and its residents.

Paule, on the other hand, seems to be absolutely clueless about the entire matter.  At one point in the meeting she mentioned that the city has had the water plant for “twenty years,” when it’s actually 63 years.  Apparently, whenever she’s in doubt about an issue, she simply follows Michael’s lead.

We’re not sure why McKenzie and Paule are so beholden to Michael Joseph, but they are obviously hitching their wagons to the wrong horse.

Just saying.

VotersOpinion reached out to McKenzie Fleurimond and Paule Villard for their comments, but neither responded.

We have no idea why Phyllis Smith also didn’t choose Option 2.  Phyllis usually makes sound decisions.  And let’s not forget that Michael Joseph is her political nemesis.  He unsuccessfully tried to unseat her in 2015, and then filed a lawsuit against her alleging voter fraud, which was dismissed two years later.  By now, Phyllis should instinctively know that anything Michael wants is bad news for NMB.

If Phyllis had done her homework she would have realzed that Option 3 would be fiscally irresponsible.  But she seems not to care.

At the meeting, Phyllis even suggested that if “it didn’t work out” the city could always put the contract out for bid again.  In essence, she’s perfectly okay with spending upwards of $18 million on an experiment that may or may not work out.

Yeah, we’re still shaking our heads on that one.

Phyllis Smith will be termed out in two and half months.  After thirteen years of service to the City of North Miami Beach, we can’t understand why she’d willingly leave a legacy of massive debt behind.

The biggest mystery of all is why Fortuna Smukler would choose Option 3, considering the cost of terminating Jacobs’ contract.  She knows full well what the financial burden this will have on the city’s taxpayers, residents, and municipal customers.

Ironically, Fortuna is known to be fiscally responsible (i.e., cheap AF).  She has consistently voted against the spending of a few thousand dollars on some proposals, yet she had no problem wasting millions upon millions of dollars on a completely unnecessary move.  We are shocked that she voted to terminate the Jacobs contract and without even considering the more viable and fiscally responsible Option 2.

Commissioner Smukler declined to give VotersOpinion a comment.

Unintended Consequences

Despite the fact that City Manager Esmond Scott, Chief Financial Officer Janette Smith, City Attorney Dan Espino and the city’s hired consultants, have all recommended not to terminate the Jacobs contract at this time, and despite valid arguments by Mayor Anthony DeFillipo and Vice Mayor Barbara Kramer, Michael Joseph & Co. decided to drive the city off the fiscal cliff.

In her August 10, 2020 Miami Herald Op-Ed, Commissioner Kramer wrote, “In my 11 years as a North Miami Beach commissioner, I have seen a lot.  But, until recently, I have never seen our commission make a decision that puts the health and safety of the public at risk.”

She went on to explain that all the hired experts, as well as staff and public officials from other municipalities, advised that North Miami Beach is “unlikely to be able to fill the critical jobs required by the state of Florida just to meet the minimum safety standards.”

Finally, Commissioner Kramer warned, “My colleagues also brushed off our consultants’ estimated $9 million minimum cost for in-sourcing.  The city’s chief financial officer told us in no uncertain terms that we would have to pass that cost on to our residents and customers in the form of a possible rate increase.  So many people are struggling just to pay for the necessities right now.  How can we look them in the eye and tell them we are hitting them with massive, unnecessary rate increases?”

Simple, Barbara.  Just tell them exactly which Commissioners voted stupidly.

Rate increases passed on to the city’s current customer base are likely to be much worse than Michael Joseph & Co. even considered.

For one thing, in order to pay for the transition cost of $9 to $18 million, the water rates will increase considerably for all the utility customers.

The Mayors and Commissioners of Miami Gardens, Aventura, and Sunny Isles Beach have written and called the elected officials in North Miami Beach to let them know they will seek other sources, such as Miami-Dade County, for their water service unless the Commissioners reconsider their decision.

If that happens, North Miami Beach will lose 75% of its customer base, and the residents’ water rates will skyrocket even further.

Keep in mind that the County’s water rates are much higher than those of North Miami Beach.  If NMB raises its rates, the city will no longer be competitive.  There would be no reason for these municipalities to continue buying water from North Miami Beach.

Mayor Enid Weisman of Aventura, Florida, sent a scathing letter dated August 10, 2020 to the Mayor and Commission, advising them, “If North Miami Beach does not reconsider this decision before the end of August, I plan to ask our City Manager and Commission to explore alternative water sources for Aventura.  I have already informed our city’s administration of my concerns and asked them to begin gathering information.”

Sunny Isles Beach Commissioner Dana Goldman also weighed in today in a letter to the North Miami Beach Mayor and Commissioners.  She wrote, “I urge you to reconsider.  The recent vote terminating the Jacobs contract flies in the face of universal recommendations by your consultant, City Manager, City Attorney and CFO to retain it.  In addition to the contract break-up fees, this termination is estimated to be at least $9 million in tangible transition expenses, possibly higher, and at best unclear whether you can find the requisite number of personnel during this pandemic.  You have been advised that it can take much longer than that, even absent a pandemic.”

Sunny Isles Beach Mayor George “Bud” Scholl and Miami Gardens Mayor Oliver Gilbert have also called NMB Mayor Anthony DeFillipo to express their dismay with the Commission’s decision and apprehension of its consequences.

All four elected officials will be attending tomorrow night’s Special Meeting to address the Mayor and Commission on behalf of their respective cities’ residents.

Mayor Anthony DeFillipo told VotersOpinion, “I am seriously troubled about the poor decision made by my colleagues and the fallout that will occur.  It is my hope that they reconsider and vote to overturn their decision so that the unintended consequences will not affect the 200,000 customers of the North Miami Beach water utility.”

We can only hope that Michael & Co. come to their senses before all the unintended consequences materialize.

Stephanie