Audit Report on the Department of Design and Construction’s Oversight of Maintenance of Rain Gardens During the Guarantee Periods

Executive Summary

The New York City (the City) Department of Design and Construction (DDC) contracts for the construction of rain gardens as part of the City’s Green Infrastructure (GI) Plan. Under the GI Plan, the New York City Department of Environmental Protection (DEP) is charged with leading a citywide effort to reduce combined sewer overflows (CSOs) into New York Harbor and other waterbodies.

Rain gardens reduce the amount of stormwater going to the City’s wastewater treatment plants during heavy rains by absorbing rainwater into their plant beds and the ground below. They thereby help reduce the CSOs that enter the local waterbodies. Rain gardens need regular maintenance to ensure that they function properly and retain their appearance. Since the GI Plan’s inception up to early 2020, the City has spent $800 million in connection with it, and an additional $850 million is budgeted for the program through Fiscal Year 2030. Rain gardens are one component of the GI Plan.

DDC is responsible for administering its construction contracts, including for rain gardens, to ensure that the City receives full value for its contract spending. After each rain garden’s installation, the construction contractor is responsible for maintaining its trees, landscaping, and hardscape^[1] during contractually stipulated guarantee periods of 18 and 24 months to ensure the trees and landscaping become established and that the rain garden functions as intended and retains its appearance.^[2] This audit focused on DDC’s oversight of its construction contractors’ maintenance of 545 rain gardens during the applicable guarantee periods.

During our audit scope, DDC used two different processes for overseeing the rain gardens’ contractually required maintenance. For 233 of the 545 rain gardens this audit covered (43 percent) DDC relied on its contracted Resident Engineer Inspection (REI) consultants who oversaw the rain gardens’ construction to oversee the construction contractors’ performance of their maintenance obligations. The REI consultants reported to DDC’s in-house Engineers in Charge (EICs). DDC’s EICs in turn were responsible for managing follow-up activities, including coordinating with construction contractors and with other City agencies to address maintenance issues the REI consultants identified. In addition, starting in October 2019, DDC instituted a pilot program to improve oversight of rain garden maintenance by issuing Green Infrastructure Monitor (GIM) tasks to GIM consultants that was utilized with the remaining 312 rain gardens in our audit. DDC oversaw the GIM consultants’ work by having them report to DDC’s Design Project Managers, who in turn reported deficiencies to the EICs.

DEP assists DDC with oversight and management of various milestones in the construction of rain gardens. According to DDC, DEP frequently takes ownership and control of rain gardens prior to the end of their contract guarantee periods, effectively releasing the construction contractors from their contractual maintenance responsibilities and, in practice, ending DDC’s oversight of those rain gardens’ contractual maintenance.

This audit reviewed DDC’s oversight of the maintenance of 545 rain gardens that were under contract guarantee—and therefore subject to contractual maintenance provisions—during Fiscal Years (FYs) 2020 and 2021 as of July 24, 2020. The average cost to DDC for construction of a rain garden was approximately $44,600, totaling $24.3 million for the 545 rain gardens. According to DDC, the landscape portion of a rain garden’s construction, which includes engineered soil, plantings, and trees, can cost between $10,000 to $15,000 per site—about ¼ to ⅓ of their cost—totaling between $5.5 and $8.2 million for the 545 rain gardens this audit covered. We determined the value of contractual maintenance for those rain gardens to be between $800,000 and $1.1 million. DDC also spent $114,000 for its GIM consultants to inspect some of the rain gardens.

Audit Findings and Conclusion

Our audit found deficiencies in DDC’s oversight of rain garden maintenance during the contractual guarantee periods. Specifically, we found that DDC needs to improve its performance in three respects: (1) enforcement of contract requirements for the full duration of the guarantee periods; (2) oversight of contractors’ performance of the required maintenance work; and (3) management of, and follow-up on, the inspections by the consultants DDC retains to oversee the rain gardens’ maintenance. Those improvements by DDC could help the City better attain the goals set forth in the GI Plan, specifically, reducing CSOs in the City’s waterbodies in a cost-effective way, while also benefiting the City’s neighborhoods and residents through the construction of rain gardens. We determined that although DDC took certain steps to improve its oversight of the rain gardens’ maintenance while the audit was in process, its efforts were inconsistent, which diminished their effectiveness.

In particular, our audit found that:

• The contractual guarantee periods for DDC’s rain gardens were shortened, eliminated, or otherwise not enforced, which resulted in the waiver of maintenance work that had already been paid for valued between $608,000 to $821,000;
• DDC’s records were inconsistent in reflecting the start dates of the contractual guarantee periods, which potentially shortened those periods and made the start dates for DDC’s responsibility to oversee the rain gardens’ maintenance unclear, including during critical periods when their most recent plantings particularly required such maintenance;
• DDC did not ensure that its consultants performed the required number of inspections during the shortened timeframes in which DDC remained responsible for overseeing the rain gardens’ maintenance;
• DDC did not require its REI consultants to maintain appropriate records of their oversight of the maintenance of the 233 rain gardens assigned to them during the audit period (43 percent of the 545 rain gardens this audit covered);
• DDC did not ensure that its GIM consultants who were responsible for 312 of the rain gardens covered by our audit consistently provided complete and accurate inspection reports based on the checklists DDC directed them to use; and
• DDC did not sufficiently follow up on the inspection reports its GIM consultants provided to ensure that deficiencies in the rain gardens were addressed during the periods in which DDC remained responsible for their oversight.

Audit Recommendations

This report recommends 19 measures to DDC to address the findings of this audit, including that DDC:

• Ensure that construction contractors perform their contractual tree planting and landscaping guarantees and maintenance responsibilities for rain gardens throughout the contractual guarantee periods.
• Coordinate with DEP to ensure that DDC transfers the rain gardens it develops to DEP only after the construction contractors satisfactorily complete their maintenance responsibilities throughout the contractual guarantee periods.
• Itemize guarantee period maintenance as a separate bid item and a performance pay item in DDC’s contracts and revise the contact terms to provide that the City can obtain a credit in any instance in which the contractor does not perform its maintenance obligations during that period, including but not limited to cases where another City agency assumes that responsibility.
• Accurately track planting dates for all rain gardens to ensure proper maintenance of the rain gardens and the plants they contain.
• Establish and enforce record-keeping requirements for the proper oversight of rain garden maintenance throughout the relevant guarantee periods.
• Designate and require Design Project Managers/EICs or other qualified DDC staff to review GIM consultants’ inspection reports, including photographs, regularly to determine whether they (a) are complete and internally consistent, and (b) properly document all unsatisfactory conditions requiring correction by the construction contractors.
• Ensure that all GIM consultants prepare the inspection reports in accordance with the format specified in the task orders and that they contain all information necessary to facilitate proper oversight and timely follow-up.
• Ensure that DDC’s designated EICs or other qualified staff regularly follow up with construction contractors to remedy deficient conditions promptly and maintain documentation in the relevant project files reflecting all pertinent communications and any follow-up and corrective action taken.
• Develop and distribute policies and procedures for oversight of rain gardens during the guarantee periods that detail Design Project Managers’, EICs’, and consultants’ oversight responsibilities, including for maintaining documentation of all actions taken that bear on DDC’s enforcement of the pertinent construction and oversight contracts.

Agency Response

In its response, DDC did not explicitly state whether it agreed with or disagreed with any of the 19 audit recommendations. However, DDC stated that 12 of the 19 recommendations were “already in place.” Based on our review of DDC’s written responses, it appears that out of the remaining seven recommendations, DDC agreed with five (#s 10, 14, 17, 18, and 19), disagreed with one (#3), and is taking one under consideration (#4).

DDC’s comments on the recommendations are further discussed in the Discussion of Audit Results section of this report.

[1] “Hardscape” items include sidewalks, curbs and tree guards surrounding a rain garden.

[2] The guarantee periods are 24 months for planted trees and 18 months for landscape and hardscape.