014-2008 Request for Information - Capital Improvement ProgramR~C;~i`;~~=
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OFFICE OF THE CITY MANAGER MEMORANDUM
no.014-2008
TO: Jerry Libbin, Commissioner
FROM: Jorge M. Gonzalez, City Manager
DATE: March 17, 2008
SUBJECT: Request for Information -Capital Improvement Program
The purpose of this memorandum is to respond to your request to provide additional information
regarding action taken by the City Commission since 2005 to expedite Capital Improvement
projects.
Since the commencement of the CIP program, the costs of construction have increased
dramatically due to several factors, including salary demands for qualified personnel,
construction demands, program changes, and global market costs. The scope of work in storm
water and water /sewer projects has also expanded substantially due to newly discovered
needs, requests from residents, and unforeseen conditions during the construction phase of
projects, all of which have resulted in higher project costs as changes in scope of work require
time for negotiations on additional services. Additionally, costs have been impacted as original
estimates, in many cases, escalated over time with inflation driving the program's overall
construction costs up by nearly 25%.
In order to expedite these projects, several adjustments have been made, including improving
and modifying contracts and revising procurement processes, to cope with changing market
conditions and ensure that projects continue into the construction phase at a healthy pace.
Specific adjustments relating to program processes include:
(1) Limiting internal staff reviews;
(2) Staging only one Community Design Review Meeting at 60% submittal;
(3) Performing regulatory agency reviews only at 100% submittal
(4) Converting existing Community Design Review Meetings at 90% submittal to the project
construction kick-off meeting with residents;
(5) Implementing best value procurement procedures;
(6) Exploring waiver of bids where appropriate
All of these changes have resulted in projects entering into the construction phase and towards
completion at a much faster rate. Moreover, the program manager agreement was extended for
another six years at an additional value of $13,000,000, including a credit for the RPR service
which has been transferred to the individual project consultants.
Additional changes have been made to staffing, including the creation of new positions,
increasing compensation and aggressiveness in recruiting candidates, and the use of
outsourcing. At the time when additional positions were approved for the Office of Capital
Improvement Projects and Public Works Department, employment in the construction industry
was nearfull capacity and qualified candidates were in short supply, making recruitment difficult
We are committed to providing excellent public service and safely to o!! who five, work, and play in our vibrant, tropical, historic community.
and resulting in skyrocketing salary demands for both City and consultant staff. During this
period, three new Capital Project Coordinator positions were c pF;ned, and departmental salaries
for project management positions were adjusted to become rr err: competitive. The recruitment
for two open positions is currently in progress.
Funds from additional sources have also been added during the capital budget cycles over the
past two years to ensure that construction remains on sche~ ii.le, with new funding to the
program totaling approximately $18,000,000. Since 2005, funding for projects phased in the last
half of the program has been reallocated to projects designate i for construction in the first half
of the program in order to fully fund the first half of the prograrr . D~:e to shortfalls in funding, the
City Commission also made the decision to add funds to stalled projects, as opposed to
redesigning projects to bring them within the allocated bud~,et. The remainder of the first half
projects is expected to be under construction by the midd ~ of 2008, as the Office of Capital
Improvement Projects will not be able to proceed beyonc these projects until the new bond
issues are approved.
The current program costs are estimated at $800,000,: 00, up from an original cost of
$400,000,000. To date, stormwater and water /sewer bonds in the amount of approximately
$86,000,000 have been reallocated to various projects in order to keep the program moving,
while stormwater and water /sewer costs have increased by roughly $70,000,000 and
$60,000,000, respectively, which will require the issuance of new bonds. Changes in costs and
scope are currently being evaluated and reviewed to minimize the need for new bonds.
At present, there are six neighborhoods in the active construction phase, and two
neighborhoods out to bid and/or pricing. By the close of 2008, three additional neighborhoods
are expected to begin construction subject to funding and staffing availability.
I hope this information is helpful, but should you have any questions or need any additional
information, please feel free to contact me.
C: Mayor and City Commission
Tim Hemstreet, Assistant City Manager
Jorge Chartrand, Director of Capital Improvement Projects
We ore committed to providing excellent public service and safety to 011 who live, work, and play in our vibrant, tropical, historic community.