2009-27168 Reso RESOLUTION NO. 2009-27168
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY MANAGER, OR HIS
DESIGNEE, TO ISSUE PURCHASE ORDERS TO SUB-CONTRACTORS, AND
EQUIPMENT AND MATERIAL SUPPLIERS SELECTED BY KVC
CONSTRUCTORS, INC., THE DESIGN/BUILD CONTRACTOR SELECTED BY
NEW WORLD SYMPHONY, INC. FOR THE CONSTRUCTION OF THE
PENNSYLVANIA AVENUE GARAGE (ALSO REFERRED TO AS THE NWS
GARAGE), AS REQUIRED TO IMPLEMENT COST SAVINGS FROM THE
CITY'S TAX SAVINGS PROGRAM FOR CONSTRUCTION PROJECTS
THROUGH DIRECT PURCHASE OF EQUIPMENT, MATERIALS AND
SUPPLIES.
WHEREAS, at the City Commission meeting of April 22, 2009, the City Commission
approved the Second Addendum to the Development Agreement between the City and New
World Symphony, Inc. (NWS), which approved the "Final Garage Budget" (as said term is
defined in the CMB/NWS Development Agreement) for the NWS Garage, now referred to as the
Pennsylvania Avenue Garage (hereinafter, the Garage); and
WHEREAS, KVC, as the Design-Build Contractor for the Garage, will select sub-
contractors, and acquire all needed equipment, materials and supplies to construct the
Garage; and
WHEREAS, all equipment, materials and supplies ordered directly by KVC and its sub-
contractors, equipment, and material suppliers are subject to sales tax at a rate of 6%. The
sales tax paid by KVC (its sub-contractors, equipment, and material suppliers) will be a "pass
through" cost that would be paid by the City; and
WHEREAS, in an effort to realize a cost savings estimated at $280,000, he
Administration is recommending to further implement the City's Sales Tax Cost Savings
Program by authorizing the City Manager, or his designee, to issue purchase orders directly to
sub-contractors and equipment and materials suppliers, as selected by KVC; and
WHEREAS, the total of KVC's Guaranteed Maximum Price for the Garage, of
$12,900,000 will be reduced by the amount of tax savings achieved.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby adopt the attached Resolution, which authorizes the City Manager, or his
designee, to issue purchase orders to sub-contractors, and equipment and material suppliers
selected by KVC Constructors, Inc. (the design/build contractor for the Pennsylvania Avenue
Garage), as required to implement cost savings from the City's Sales Tax Cost Savings
Program for construction projects through direct purchase of equipment, materials and supplies
for the design-build of the Pennsylvania Avenue Garage.
PASSED and PNb th6 day of SP�'7�-Prnbtr, 2009.
ATTEST.
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City Attorney Date
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Of The Mayor And City Commission Of The City Of Miami Beach, Florida, Authorizing The City
Manager,Or His Designee,To Issue Purchase Orders To Sub-Contractors,And Equipment and Material Suppliers
Selected By KVC Constructors, Inc.,The Design/Build Contractor Selected By New World Symphony, Inc.for The
Construction of the Pennsylvania Avenue Garage (Also Referred To As The NWS Garage), As Required To
Implement Cost Savings from The City's Tax Savings Program For Construction Projects Through Direct Purchase
Of Equipment, Materials and Supplies.
Key Intended Outcome Supported:
Improve parking availability
Supporting Data(Surveys, Environmental Scan,etc.):
The 2007 Miami Beach Customer Service Survey indicates 19% of residents rated the availability of parking on
Miami Beach as about the right amount.
Issue:
Shall the City Commission adopt the Resolution?
Item Summa /Recommendation:
At the City Commission meeting of April 22, 2009, the City Commission approved the Second Addendum to the
Development Agreement between the City and New World Symphony, Inc. (NWS), which approved the "Final
Garage Budget" (as said term is defined in the CMB/NWS Development Agreement) for the NWS Garage, now
referred to as the Pennsylvania Avenue Garage(hereinafter,the Garage).
KVC,as the Design-Build Contractor for the Garage,will select sub-contractors,and acquire all needed equipment,
materials and supplies to construct the Garage. All equipment,materials and supplies ordered directly by KVC and
its sub-contractors,equipment,and material suppliers are subject to sales tax at a rate of 6%. The sales tax paid by
KVC(its sub-contractors,equipment,and material suppliers)will be a"pass through"cost that would be paid by the
City.
In an effort to realize a cost savings estimated at$280,000,the Administration is recommending to further implement
the City's Sales Tax Cost Savings Program by authorizing the City Manager, or his designee, to issue purchase
orders directly to sub-contractors and equipment and materials suppliers, as selected by KVC.The total of KVC's
Guaranteed Maximum Price for the Garage,of$12,900,000 will be reduced by the amount of tax savings achieved.
The City's Sales Tax Cost Savings Program allows contractors to utilize City Purchasing Cards,with the City's Tax
Exempt Certificate Number, in order to reduce/eliminate the"pass through"costs associated with sales tax paid by
general contractors,sub-contractors,equipment,and materials suppliers.The City is exempt from Florida Sales Tax
for certain direct purchase which, in this case, would include construction materials, supplies and/or equipment
incorporated into the Garage. The City would be acting in its best interest by exercising its right to direct purchase all
equipment,materials and supplies needed for the Garage and such direct purchase shall be without any additional
cost to the City.
Issuance of purchase orders by the City will not relieve KVC of contract responsibilities for any equipment,material
and supplies purchased and incorporated into a construction project, directly purchased by the City or not.
The Administration recommends,that it is in the City's best interest that the Mayor and City Commission adopt the
attached Resolution, which authorizes the City Manager, or his designee, to issue purchase orders to sub-
contractors,and equipment and material suppliers selected by KVC Constructors,Inc.(the design/build contractor for
the Pennsylvania Avenue Garage), as required to implement cost savings from the City's Sales Tax Cost Savings
Program for construction projects through direct purchase of equipment,materials and supplies for the design-build
of the Pennsylvania Avenue Garage
Advisory Board Recommendation:
Financial Information:
Source of Amount Account Approved
Funds: 1
OBPI Total
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Gus Lopez: Ext. 6641
Sign-Offs:
Department irector A i§%inj City Man City Mapegkr
GL A TH PDW JMG
T:\AGENDA\2009\S t 9\Consent\Tax Savings Garage UMMARY.doc
AGENDA ITEM 671V
� DATE
9-9-0
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: September 9, 2009
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY MANAGER, OR
HIS DESIGNEE, TO ISSUE PURCHASE ORDERS TO SUB-
CONTRACTORS, AND EQUIPMENT AND MATERIAL SUPPLIERS
SELECTED BY KVC CONSTRUCTORS, INC., THE DESIGN/BUILD
CONTRACTOR SELECTED BY NEW WORLD SYMPHONY, INC. FOR THE
CONSTRUCTION OF THE PENNSYLVANIA AVENUE GARAGE (ALSO
REFERRED TO AS THE NWS GARAGE), AS REQUIRED TO IMPLEMENT
COST SAVINGS FROM THE CITY'S TAX SAVINGS PROGRAM FOR
CONSTRUCTION PROJECTS THROUGH DIRECT PURCHASE OF
EQUIPMENT, MATERIALS AND SUPPLIES.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND
At the City Commission meeting of April 22, 2009, the City Commission approved the
Second Addendum to the Development Agreement between the City and New World
Symphony, Inc. (NWS), which approved the "Final Garage Budget" (as said term is
defined in the CMB/NWS Development Agreement) for the NWS Garage, now referred
to as the Pennsylvania Avenue Garage (hereinafter, the Garage).
The proposed Garage costs are as follows:
Total Architectural/Engineering $2,155,612
Cost
Total Construction Cost $13,419,906
Total Site Cost Included in Construction Cost
Total Tax/Insurance Cost $181,500
Total Owner Expenses $0
Total General/Admin Costs $578,000
Total Contingency Cost $750,000
Total Project Cost $179085,0'18
Commission Memorandum-Cost Savings Initiative
September 9, 2009
Page 2 of 3
COST SAVINGS
KVC, as the Design-Build Contractor for the Garage, will select sub-contractors, and
acquire all needed equipment, materials and supplies to construct the Garage. All
equipment, materials and supplies ordered directly by KVC and its sub-contractors,
equipment, and material suppliers are subject to sales tax at a rate of 6%. The sales
tax paid by KVC (its sub-contractors, equipment, and material suppliers) will be a "pass
through" cost that would be paid by the City.
In an effort to realize a cost savings estimated at 280 000 the Administration is
g $ ,
recommending to further implement the City's Sales Tax Cost Savings Program by
authorizing the City Manager, or his designee, to issue purchase orders directly to sub-
contractors and equipment and materials suppliers, as selected by KVC. The total of
KVC's Guaranteed Maximum Price for the Garage, of $12,900,000 will be reduced by
the amount o7 tax savings achieved.
COST SAVINGS PROGRAM/PROCESS
The City's Sales Tax Cost Savings Program allows contractors to utilize City Purchasing
Cards, with the City's Tax Exempt Certificate Number, in order to reduce/eliminate the
"pass through" costs associated with sales tax paid by general contractors, sub-
contractors, equipment, and materials suppliers. This initiative has resulted in a total
savings, to date, of$176,852.
The City is exempt from Florida Sales Tax for certain direct purchase which, in this case,
would include construction materials, supplies and/or equipment incorporated into the
Garage. The City would be acting in its best interest by exercising its right to direct
purchase all equipment, materials and supplies needed for the Garage and such direct
purchase shall be without any additional cost to the City.
KVC will assume all risk and remain fully responsible for all material incorporated into
any project, directly; purchased by the City or not. This will include, but not be limited to,
insurance, theft, storage, damage during installation, coordination, quantities ordered,
submittals, protection, scheduling, shipping, security, expediting, receiving, installation,
cleaning and all applicable warranties.
The City will issue purchase orders for the purchase of equipment, materials, and
supplies selected by KVC at the price negotiated by KVC. KVC will assist the City in the
preparation of the purchase orders.
KVC's contract amount shall be reduced by the amount of the purchase order plus the
sales tax savings. This reduction in the KVC's contract amount will occur through a
deductive change order.
Issuance of purchase orders by the City will not relieve KVC of contract responsibilities
for any equipment, material and supplies purchased and incorporated into a construction
project, directly purchased by the City or not.
GNOa sHx 01 &1I q I9I SNOB SHU UnO,& HS =M II IVHS 2110N�T�3 TO_s0 W��i i►
Commission Memorandum-Cost Savings Initiative
September 9, 2009
Page 3 of 3
KVC will remain fully responsible for, insurance, theft, storage, damage during
installation, coordination, quantities ordered, submittals, protection, scheduling, shipping,
security, expediting, receiving, installation, cleaning and all applicable and warranties.
Upon receipt of the vendors' invoices by the City, KVC will for verify and approve said
invoices for payment. The Contractor will have (five) 5 working days to process the
invoice for payment. Once approved by KVC and the City, the vendors' invoices will be
paid. The City will process all payments pursuant to the Florida Prompt Payment Act.
The amounts paid to the vendors will not exceed the amount of the purchase orders. In
order to maintain timely payments, it will be the responsibility of the KVC to review and
approve invoices in accordance with each payment schedule.
CONCLUSION
The Administration recommends, that it is in the City's best interest that the Mayor and
City Commission adopt the attached Resolution, which authorizes the City Manager, or
his designee, to issue purchase orders to sub-contractors, and equipment and material
suppliers selected by KVC Constructors, Inc. (the design/build contractor for the
Pennsylvania Avenue Garage), as required to implement cost savings from the City's
Sales Tax Cost Savings Program for construction projects through direct purchase of
equipment, materials and supplies for the design-build of the Pennsylvania Avenue
Garage.
JMG:PDW:TH:GL
T:\AGENDA\2009\September 9\Consent\TaxSavingsGarage.doc