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2011-27703 Reso RESOLUTION NO. 2011 -27703 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AN INCREASE TO THE PROJECT CONTINGENCY FOR THE WATER MAIN IMPROVEMENTS PROJECT, ALONG INDIAN CREEK DRIVE BETWEEN 25TH AND 41ST STREETS, IN THE AMOUNT OF $1,197,966, FOR ADDITIONAL WORK, INCLUDING THE TRANSFERRING OF WATER SERVICE CONNECTIONS TO THE NEWLY INSTALLED 12 INCH WATER MAIN, PROVIDING ADDITIONAL TESTING AND FLUSHING OF THE WATER MAIN NECESSARY FOR THE NEW SERVICE TRANSFERS, AND RE- WORKING THE EXTENSION TO THE NEW SEWER MAIN NECESSITATED BY A PREVIOUSLY IDENTIFIED FLORIDA POWER AND LIGHT (FPL) DUCT BANK CONFLICT; WITH FUNDS FROM PREVIOUSLY APPROPRIATED FUNDS IN THE FY 2008 -2009 CAPITAL BUDGET; FURTHER APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A SETTLEMENT AGREEMENT AND MUTUAL RELEASE BETWEEN THE CITY AND THE PROJECT'S CONTRACTOR, HORIZON CONTRACTORS, INC. WHEREAS, the State of Florida Department of Transportation (FDOT) identified the need to perform roadway milling and resurfacing along Indian Creek Drive, from 26 to 41 Street, as part of its five (5) year transportation plan; and WHEREAS, the City had two (2) capital project elements which consisted of the installation of a new 12 -inch diameter water transmission main along Indian Creek Drive, from 26 to 41 Street, as well as the replacement of an existing 15 -inch diameter wastewater interceptor along Indian Creek Drive, between 28 and 41 Streets; and WHEREAS, on October 31, 2007, the City entered into a Joint Partnership Agreement (JPA) with the Florida Department of Transportation (FDOT) for the construction of roadway improvements along Indian Creek Drive, between 26 and 41 Streets; and WHEREAS, on May 28, 2011, the City Commission, entered into a contract with Horizon Construction, Inc. (Contractor), in the amount of $4,418,696, for construction services for water mains, milling and resurfacing improvements along Indian Creek Drive, between 26 and 41 Streets; and WHEREAS, on September 15, 2010, the City Commission, through Resolution No. 2010 - 27466, authorized additional funding, in the amount of $335,000, for construction contingency for sanitary sewer main improvements; and WHEREAS, the City and Contractor have had ongoing discussions with regard to the alleged damage caused by the Contractor to an existing six (6) inch water distribution main during the improvements made to the water main installation along Indian Creek Drive, between 28 and 41 Streets (the City portion of the JPA Agreement); and WHEREAS, City staff has reviewed and recommended the approval of eighteen (18) change orders, totaling approximately $1,998,580.07, resulting in a revised contract sum to date of $6,078,724.93; and WHEREAS, the City and Contractor have agreed to enter into a Settlement - _ r 1 Agreement and Mutual Release (Agreement) in order to define the terms and conditions of payment. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby approve and authorize an increase to the project contingency, for additional work, including the transferring of water service connections to the newly installed 12 inch water main; providing additional testing and flushing of the water main necessary for the new service transfers; and re- working the extension to the new sewer main necessitated by a previously identified Florida Power And Light (FPL) duct bank conflict; with funding from previously appropriated funds in the FY 2008 -2009 Capital Budget; and further authorize the Mayor and City Clerk to execute the Settlement Agreement and Mutual Release between the City and the Project's contractor, Horizon Contractors, Inc. PASSED and ADOPTED this 131AI day of Jk 1 / 2011. ATTEST: ii ( 4".(A--- vetka,i,,,_ #:„,„ :) ROBERT ��..,�•,_1 : CITY CLERK Edward L. Tobin 1 bd 4 4., Vice -Mayor J M ., f � . ~ , .NOM... C 4 , ICS— ) % ..0 `‘ • „„,,,--,,,.. • / i � .• P ORATE-a; ' ` ow • • , 9 "...7 . ....' N 4.ff APPROVED AS TO FORM & LANGUAGE e k FOR EXECUTION .., it itIlit i f ' ' t, ^ ,. Da � rl 1 i COMMISSION ITEM SUMMARY Condensed Title: Request for approval to authorize additional funding in the amount of $1,197,966 for construction contingency on the Indian Creek Improvements Project and further authorizing execution of a Settlement Agreement and Mutual Release between the City and the project's contractor, Horizon Contractors, Inc. Key Intended Outcome Supported: Ensure well maintained infrastructure and well designed quality capital projects. Supporting Data (Surveys, Environmental Scan, etc.): According to the City's 2007 Community Satisfaction Survey, 48% and 37% of City residents and businesses, respectively, believe that the City's road conditions are either "good" or "excellent." Issue: Shall the Mayor and City Commission approve the two resolutions? Item Summary /Recommendation: Due to the numerous breaks encountered during the installation of the new water main and the apparent compromised bedding foundation of the pipe in the Indian Creek Improvements Project, the City felt that the integrity of the existing six inch main was in question. Leaving the original main in service would potentially jeopardize the integrity of the new roadway. Collectively it was decided to completely abandon the existing main and transfer all services, including the side street connections, to the new 12 inch main. The City and Contractor have had ongoing discussions with regard to the alleged damages caused by the contractor. As outlined in a previous mediated settlement agreement between the Contractor and the City, the Contractor has completed, as directed by the City, the transfer of water services from the existing water distribution main to the newly installed water transmission main. Durin q the installation of the sanitary sewer main, the Contractor encountered an FPL concrete duct bank at 41 Street and Indian Creek Drive where the bottom of the duct bank is in conflict with the installation of the new sewer main. FPL is currently working to modify the two duct banks to accommodate the new sewer main. The City and Contractor have agreed to enter into a Settlement Agreement and Mutual Release in order to define the terms and conditions of payment. This settlement agreement requires the City to compensate the contractor in the amount of $1,197,966 for the additional water main installation and funding for the conflict with the FPL utility. The source of funds are identified below and the additional cost is within the original project budget. APPROVE THE RESOLUTIONS. Advisory Board Recommendation: N/A Source of Amount Account Approved Funds: $994,050 423 - 2949 - 069357 2 $113,221 423 - 2949 - 000356 3 $25,780 423 - 2580 - 000356 4 $64,915 424 - 2045 - 069357 OBPI Total $1,197,966 Financial Impact Summary:. Financial Information: City Clerk's Office Legislative Tracking: Fernando Vazquez x6135 Sign -Offs: D =' • . ent Director Ass' tant City Manager Manager FAV' DRB JMG T:WGEN' 42011 \7 -13 -11 \Indian Creek Drive Improvements - SUMMARY.doc CA IV TAI v i AENDADATA D 7 /3 .�D �I MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower and Members of the City Commission FROM: Jorge M. Gonzalez, City Manager DATE: July 13, 2011 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AN INCREASE TO THE PROJECT CONTINGENCY, FOR ADDITIONAL WORK INCLUDING THE TRANSFERRING OF WATER SERVICE CONNECTIONS TO THE NEWLY INSTALLED 12 INCH WATER MAIN, PROVIDING ADDITIONAL TESTING AND FLUSHING OF THE WATER MAIN NECESSARY FOR THE NEW SERVICE TRANSFERS, AND REWORKING THE EXTENSION TO THE NEW SEWER MAIN NECESSITATED BY A PREVIOUSLY IDENTIFIED FLORIDA POWER AND LIGHT (FPL) DUCT BANK CONFLICT, IN THE WATER MAIN IMPROVEMENTS PROJECT, ALONG INDIAN CREEK DRIVE BETWEEN 25TH AND 41ST STREETS; IN THE AMOUNT OF $1,197,966, FROM PREVIOUSLY APPROPRIATED FUNDS IN THE FY 2008 -2009 CAPITAL BUDGET. FURTHER APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A SETTLEMENT AGREEMENT AND MUTUAL RELEASE BETWEEN THE CITY AND THE PROJECT'S CONTRACTOR, HORIZON CONTRACTORS, INC. ADMINISTRATION RECOMMENDATION Approve the Resolution. FUNDING Funding for this additional contingency is available and has been previously appropriated in the Capital Budget Work Order No. 2949 - Upsizing Water Main Lines for the Indian Creek Project. Additional funding (fund 424) is being provided by Public Works. The accounts are as follows: $994,050 423 - 2949 - 069357 Water & Sewer (Gulf Breeze) Series 2006 $113,221 423 - 2949 - 000356 Water & Sewer (Gulf Breeze) Series 2006 $25,780 423 - 2580 - 000356 Water & Sewer (Gulf Breeze) Series 2006 $64,915 424 - 2045 - 069357 Water & Sewer Bonds 2000S $1,197,966 Total BACKGROUND The State of Florida Department of Transportation (FDOT) identified the need to perform roadway milling and resurfacing along Indian Creek Drive from 26 to 41 Streets as part of its five (5) year transportation plan. The proposed FDOT work consists of roadway milling and resurfacing, guardrail replacements, sidewalk replacement and bump -out construction at certain intersections. The City had two (2) capital project elements which consisted of the installation of a new 12 -inch diameter water transmission main from 26 to 41 Street, along Indian Creek Drive, as well as the replacement of an existing 15 -inch diameter wastewater interceptor along Indian Creek Drive, between 28 and 41s Streets. Commission Memorandum — Indian Creek Drive Improvements July 13, 2011 Page 2 of 5 The original budget developed by the Public Works Department for the aforementioned improvement was broken down as follows: TABLE 1 — Indian Creek Water/Wastewater Capital Project Capital Project No, Title Total Construction Funding WO# 2949 Upsizing Water Lines Indian Creek $2,435,193 WO# 2580 Upsizing Wastewater Lines Indian Creek $2,250,418 P 9 WO# 2521 Indian Creek 28 -41 $1,864,411 Total Construction Funding $6,550,022 These projects were originally introduced into the Capital Improvement Plan during FY08 /09. On October 31, 2007, the City entered into a Joint Partnership Agreement (JPA) with the Florida Department of Transportation (FDOT) for the construction of roadway improvements along Indian Creek Drive between 26 and 41 Street. FDOT provided construction plans prepared by the Corradino Group to the City and agreed to contribute project funding in the amount of $1,501,000. The agreed upon funding for the FDOT portion of the work under the Joint Participation Agreement (JPA) between the City and FDOT was as follows: • Project Construction $1,365,000 • Project Construction Engineering and Inspection (CEI) Services $136,000 • Total Project Estimate $1,501,000 The City of Miami Beach Public Works Department prepared the construction documents for the water transmission main installation and the wastewater interceptor replacement, while FDOT's Consultant Corradino Group prepared the plans and specifications for the roadway reconstruction and sidewalk / hardscape work. This approach allowed the City to incorporate all of the capital project elements into one capital construction project to be managed by the City's CIP Office. On September 15, 2010, the City Commission, through Resolution No. 2010- 27466, authorized additional funding in the amount of $335,000 for construction contingency for sanitary sewer main improvements. ANALYSIS FDOT Change Orders The FDOT has approached the City with additional scope requests such as additional sidewalk removal and replacement at 39 Street, relocation of a pedestrian signal pole, additional curb and gutter replacement throughout the project, additional de- silting of the outfalls, additional striping and signage for an added bike lane and the addition of a leveling course of structural asphalt to correct deficiencies in the road surface. Additional change order requests in the amount of $79,896.59 for this additional work have been provided by the Contractor and presented by the City to the FDOT for review / approval and funding contribution. FDOT change orders will be paid t Horizon, upon approval by FDOT and subsequent payment by FDOT to the City. FPL Conflict During the installation of the sanitary sewer main, the Contractor encountered a 36 inch wide concrete duct bank at 41 Street and Indian Creek Drive on May 12, 2010, where the bottom of T Commission Memorandum — Indian Creek Drive Improvements July 13, 2011 Page 3 of 5 the duct bank was lower than indicated on the FPL as-builts, thereby causing causin a conflict with the installation of the new sewer main. FPL is currently working with the contractor to expose the two duct banks in conflict with the installation of new sewer main so they can modify them to accommodate the new sewer main. The cost of the additional work is reflected on the contractors PCO 290 -26, in the amount of $19,210.04, and PCO 290 -34 for a negotiated value of $80,542.55. Water Service Replacement The City and Contractor have had ongoing discussions with regard to the alleged damages caused by the contractor to an existing six inch water distribution main. As outlined in the mediated settlement agreement between Horizon Contractors, Inc and the City dated August 19, 2010 (Attachment A), the Contractor has completed, as directed by the City, the transfer of water services from the existing water distribution main to the newly installed water transmission main. During the original design phase for this project, the City retained the services of CDM Consulting Engineers to provide a condition analysis of the existing six inch (6 ") diameter water distribution main within the project boundaries. The CDM analysis indicated that the main still had an estimated useful life of approximately fifteen (15) years, equal to the routine resurfacing cycle for high volume roadways, such as Indian Creek Drive. As a result of this analysis, the City decided to address only water transmission issues (water pressure concerns) along the high density areas adjacent to Ocean Drive by adding a twelve inch (12 ") diameter transmission main. As a cost saving measure, the original main would remain in service for another resurfacing cycle to provide water service to properties within the project boundaries. As construction progressed a problem developed as a result of the dewatering required for the installation of the new utilities. It is stipulated during the dewatering draw down process fines (soil) migrated from beneath the existing six inch distribution main which in turn compromised the bedding materials supporting the main. This, coupled with the re- construction and compaction of the road bed, introduced point loads on the main resulting in approximately 37 breaks along the length of the existing six inch line. The City maintains its position, that per their contract with the City, the contractor had the requirement to properly protect the existing utilities and that the heavier compaction equipment used by the contractor, in opposition to the recommendations of the City, contributed to most of the failures. Per the previous settlement agreement (Attachment A) this issue was left to be negotiated at the end of the project. Because of the numerous breaks in the main and the apparent compromised bedding foundation of the pipe the City felt that the integrity of the existing six inch main was in question and by leaving the original main in service the integrity of the new roadway would potentially be jeopardized. The decision was made to completely abandon the existing main and transfer all services, including the side street connections, to the new 12 inch main. In consideration of the unforeseen destabilization of the foundation bedding of the water main as a result of the dewatering, collectively with the breaks in the water main caused during the rebuilding of the road; and facing the time and monies that would be required to litigate a potentially complicated and lengthy lawsuit; the City proceeded to negotiate with the contractor to reach a full and final settlement in which both parties agreed to a fair and reasonable amount of compensation for the work. These negotiations have been completed and the agreed to amounts are reflected in PCO 290 -16, in the amount of $572,369.12, for the transfer of the water services and in PCO 290 -24, in the amount of $314,652.79, for the connection of the side streets to the new 12 inch main, for a total of $887,021.91. Commission Memorandum — Indian Creek Drive Improvements July 13, 2011 Page 4 of 5 Transforming the new twelve inch (12 ") diameter main from strictly a transmission main to a combined transmission /local branch distribution main required several other modifications to the design. Three new isolation valves were requested by Public Works, to aid in long term maintenance of the new line, and the interconnections with side streets were increased in size to allow enhanced water flow volume and pressure to those properties. The negotiated prices for these enhancements are reflected in PCO 290 -17, in the amount of $7,398.11, and PCO 290 -37, in the amount of $3,699.89, respectively. Based on a review of six recent bids for ductile iron water main installation, the present market average cost for installed water main is approximately $195 per lineal foot. Using that figure, the value of installing a replacement 6 (six) inch service main to replace the damaged water main reflected in these change orders would exceed $1,300,000. Through our negotiations and price concessions made by the contractor to settle this in lieu of litigation, the City saved over $400,000 or approximately 31% over the price of installing separate mains for transmission and local water service. Both parties feel this $400,000 in savings is a reasonable settlement amount for the City's premature loss of its asset. As an added consequence, the net effect of these changes provides our residents with the added benefit of a new service connection to a new main as well as an augmented level of service in terms of improved water pressure for the area and new water lines to local services connected to a new pipeline that will have a useful life estimated in excess of seventy (70) years. Timing: The original project final completion date was scheduled for August 23, 2010. As a result of the water service transfers, side street service connections and the FPL sewer main conflict, the contract final completion is now scheduled for August 31, 2011. To date, the City has reviewed and recommended the approval of 18 change orders totaling approximately $1,998,580.07, resulting in a revised contract sum to date of $6,078,724.19 (This contract value to date includes FDOT CO's). Below is a summary of the current ent PCO s requested by the contractor as a part of this Memo. PCO 290 -16 Transferring of services from 6 inch main to new main 572 369.12 PCO 290 -17 Installation of additional ate valves at new main 7 398.11 9 , PCO- 290 -24 Additional service tie ins at side streets $ 314,652.79 PCO 290 -26 Temporary sewer tie in at 40 St. (Due to FPL conflict) $ 19,210.04 PCO 290 -32 Cannon flushing of mains at 27 and 29 St. $ 26,065.64 PCO 290 -33 Re- mobilization and asphalt leveling $ 129,707.51 PCO 290 -34 Completion of sewer extension (Part of FPL conflict) $ 80,542.55 PCO 290 -35 Lowering of existing manholes on Indian Creek $ 37,744.32 PCO 290 -36 Addition of No. 2 valve boxes at meters $ 6,576.03 PCO 290 -37 Installation of additional isolation valve on main at 27 St. $ 3,699.89 TOTAL $1,197,966.00 PCO 290 -16 for $572,369.12 and PCO 290 -24 for $314,652.79 were previously negotiated by the former CIP Director and Special Assistant to the City Manager during the prior Settlement Agreement and Limited Release. (See Attachment A) Funding is being requested on PCO 290 -33 to level out the driving surface on Indian Creek and provide relief for our residents who travel this roadway. The City has submitted to FDOT for review and reimbursement of $98,000.00 of this request which relates to the roadway Commission Memorandum — Indian Creek Drive Improvements July 13, 2011 Page 5 of 5 improvement. To expedite the completion of the project the City has fronted these funds to the contractor pending acceptance by FDOT. As a comparison of the received bids for this project note Horizon Contractors bid was awarded at $1,368,834.30 below the average of the four additional responsive bidders. Below is a table with the bid tabulations for this project. To date the total value of the Horizon Contract, including all change orders, is valued at $6,078,724.93 of which $168,217.42 is work request by FDOT. Compared to the second lowest bidder, Ric -Man International's bid totaling $5,983,318.60, which includes a 10% project contingency, the City realized a net savings of $72,811.10 after deducting FDOT funded work. In order to provide a consensus between the City and the Contractor, the City and Contractor have agreed to enter into a Settlement Agreement and Mutual Release (Agreement) in order to define the terms and conditions of payment for the aforestated work. A draft of the Agreement is included as Attachment B. CONCLUSION It is important to note that the City contemplated an expenditure of approximately $6.1 million in its Capital Improvement Plan for this project. The Administration recommends approval of the Resolution, authorizing the Mayor and City Clerk to appropriate additional funding in the amount of $1,197,966 for the project contingency and further authorizing the Mayor and City Clerk to execute the Settlement Agreement and Mutual Release between the City and the project's contractor, Horizon Contractors, Inc., for the aforestated work. Exhibit: Attachment A - Settlement Agreement and Limited Release Dated August 19, 2010 Exhibit: Attachment B - Draft Settlement Agreement and Mutual Release between Horizon Contractors Inc. and The City of Miami Beach JMG/ B/ DM /CF T:\AGENDA\2011 \7 -13 -11 \Indian Creek Drive Improvements - MEMO.doc RESOLUTION NO. A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING AN INCREASE TO THE PROJECT CONTINGENCY, FOR ADDITIONAL WORK INCLUDING THE TRANSFERRING OF WATER SERVICE CONNECTIONS TO THE NEWLY INSTALLED 12 INCH WATER MAIN, PROVIDING ADDITIONAL TESTING AND FLUSHING OF THE WATER MAIN NECESSARY FOR THE NEW SERVICE TRANSFERS, AND REWORKING THE EXTENSION TO THE NEW SEWER MAIN NECESSITATED BY A PREVIOUSLY IDENTIFIED FLORIDA POWER AND LIGHT (FPL) DUCT BANK CONFLICT, IN THE WATER MAIN IMPROVEMENTS PROJECT, ALONG INDIAN CREEK DRIVE BETWEEN 25TH AND 41ST STREETS; IN THE AMOUNT OF $1,197,966, FROM PREVIOUSLY APPROPRIATED FUNDS IN THE FY 2008- 2009 CAPITAL BUDGET. FURTHER APPROVING AND AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A SETTLEMENT AGREEMENT AND MUTUAL RELEASE BETWEEN THE CITY AND THE PROJECT'S CONTRACTOR, HORIZON CONTRACTORS, INC. WHEREAS, the State of Florida Department of Transportation (FDOT) identified the need to perform roadway milling and resurfacing along Indian Creek Drive from 26 to 41 Streets as part of its five (5) year transportation plan; and WHEREAS, the City had two (2) capital project elements which consisted of the installation of a new 12 -inch diameter water transmission main from 26 to 41 Street, along Indian Creek Drive, as well as the replacement of an existing 15 -inch diameter wastewater interceptor along Indian Creek Drive, between 28 and 41 Streets; and WHEREAS, on October 31, 2007, the City entered into a Joint Partnership Agreement (JPA) with the Florida Department of Transportation (FDOT) for the construction of roadway improvements along Indian Creek Drive between 26 and 41 Street; and WHEREAS, on September 15, 2010, the City Commission, through Resolution No. 2010 - 27466, authorized additional funding in the amount of $335,000 for construction contingency for sanitary sewer main improvements; and WHEREAS, the City and Contractor have had ongoing discussions with regard to the alleged damages caused by the contractor to an existing six inch water distribution main; and WHEREAS, the City staff has reviewed and recommended the approval of 18 change orders totaling approximately $1,998,580.07, resulting in a revised contract sum to date of $6,078,724.93; and WHEREAS, in order to provide a consensus between the City and the Contractor, the City and Contractor have agreed to enter into a Settlement Agreement and Mutual Release (Agreement) in order to define the terms and conditions of payment. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Clerk hereby approve and authorize an increase to the project contingency, for additional work including the transferring of water service connections to the newly installed 12 inch water main, providing additional testing and flushing of the water main necessary for the new service transfers, and reworking the extension to the new sewer main necessitated by a previously identified Florida Power And Light (FPL) duct bank conflict, in the water main improvements project, along Indian Creek Drive between 25th and 41st Streets; in the amount of $1,197,966, from previously appropriated funds in the FY 2008 -2009 capital budget and further authorizing the Mayor and City Clerk to execute the Settlement Agreement and Mutual Release between the City and the project's contractor, Horizon Contractors, Inc. PASSED and ADOPTED this day of 2011. ATTEST: ROBERT H. PARCHER, CITY CLERK MATTI HERRERA BOWER, MAYOR JMG /DRB /FV /DM :`:AG<_.N€ iA`,201 1 l -'_ 3....< 1\iildlr_?I'? Creek Drive improvements Construction ° RE."iad:3C;