Council probes no‑bid text‑messaging contract and finance risks after ARPA warning

At Tuesday’s North Miami Beach commission meeting, elected officials demanded documentation and remedies after staff revealed problems with a manager‑authorized contract for a municipal text‑messaging pilot with Figures Communications and a commission briefing raised several serious finance‑control and ARPA exposure risks.

Procurement and IT told the commission that the text‑messaging arrangement began as a pilot and was executed as a software exemption. The vendor’s monthly, all‑inclusive fee was roughly $4,000; because the arrangement straddled two fiscal years it exceeded $50,000 in total payments to date (about $32,000 was reported paid so far). City staff reported weak vendor responsiveness and little evidence of a fully functioning product in city systems.

Procurement said it had issued a termination letter but the city manager briefly delayed termination to give the vendor a chance to meet with staff. That meeting request went unanswered, and commissioners directed the city attorney and procurement director to review the contract and pursue recovery if the vendor is in default. The city attorney said legal remedies — including civil litigation to recover amounts paid — are possible if the city was not provided contracted services.

Separately, the city manager briefed commissioners on a finance review that flagged several risks: a February communication from the former chief financial officer to the U.S. Treasury that some ARPA funds were not timely appropriated; a subsequent Treasury demand for return of $3.2 million; incomplete monthly bank reconciliations; gaps in accounts receivable/payable processes; and recurring payroll errors tied to weekly payroll processing.

“On ARPA, the Treasury demanded the return of $3.2 million,” the manager said, adding staff are preparing a response and engaging outside specialists to help negotiate or demonstrate valid spending. The manager said staff are also examining revenue options and reported preliminary discussions that could, if completed, bring multi‑million‑dollar water agreements or other revenue options to reduce the budget gap.

Commissioners pressed for quick action. Vice Mayor Fortuna Smuckler asked whether staff had attempted to recover payments from the text‑messaging vendor and requested a copy of the contract; procurement said legal review and correspondence collection will be prioritized and that staff have already begun termination steps. The city attorney said he will review all correspondence and the contract to identify enforceable breaches and next steps.

Finance managers told the commission the city is facing a structural challenge: current operations show a projected deficit in the coming fiscal year, and the combined effect of a Treasury demand, potential state statute changes, and unresolved structural problems could leave the city with a multi‑million‑dollar shortfall without corrective action. Staff said they will bring recommendations — including spending controls, procedural fixes (monthly bank reconciliations and dedicated AR/AP staff), and potential revenue opportunities — to the commission during the budget process.

What’s next: the commission directed the city attorney and procurement director to review the Figures Communications contract and pursue recovery if warranted; the manager will return with a timetable for remediation, a plan to fix finance process gaps and documentation sent to Treasury; and staff will update the commission on ARPA negotiations and any prospective revenue agreements.

The council did not vote on any of these matters during the session but asked for an accelerated staff briefing and written documentation within weeks.