Resolution 2021-31738 RESOLUTION NO. 2021-31738
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE
RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY
COMMITTEE, AT ITS MAY 21, 2021 MEETING, DIRECTING THE
ADMINISTRATION TO OBTAIN AN INDEPENDENT COST ESTIMATE
ON ALL PROJECTS WITH AN ESTIMATED CONSTRUCTION COST
GREATER THAN $5 MILLION,AND REQUIRING THAT ANY ESTIMATE
EXPECTED TO COST IN EXCESS OF $100,000 BE SUBMITTED TO
THE CITY COMMISSION FOR PRIOR APPROVAL.
WHEREAS, at its April 21, 2021 meeting, the City Commission referred an item to
the Finance and Economic Resiliency Committee (the "Committee") for a discussion on
requiring independent cost estimates on capital projects prior to the issuance of a
competitive solicitation; and
WHEREAS, typically, construction cost estimating is performed at specific
milestones along a project's design cycle; and
WHEREAS, pursuant to the requirements of professional service agreements,
design consultants retained by the City are required to provide cost estimates at intervals
as deemed necessary by the Administration to assure that projects are being designed
to the budget determined by the City for construction costs; and
WHEREAS, additionally, it has been the Administration's practice to retain the
services of independent (third-party) estimators on select projects as warranted; and
WHEREAS, at its May 21, 2021 meeting, the Committee discussed the item; and
WHEREAS, to minimize budgetary risks and the potential for bids received to be
in excess of available project budgets, the Committee recommends that, on projects with
an estimated construction cost greater than $5 million dollars, the City Commission
require that an independent cost estimate be obtained prior to the issuance of a
solicitation; and
WHEREAS, the Committee further recommended that City Commission approval
be obtained prior to engaging a consultant to complete a cost estimate on a project when
the consultant's fee is expected to be greater than $100,000.
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 accept the recommendation of the Finance and Economic Resiliency
Committee, at its May 21, 2021 meeting, directing the Administration to obtain an
independent cost estimate on all projects with an estimated construction cost greater than
$5 million, and requiring that any estimate expected to cost in excess of $100,000 be
submitted to the City Commission for prior approval.
PASSED and ADOPTED this 02-5 day of 3.14he 2021.
ATTEST:
7x42-11252'L_
RAFAEL E. GRANADO, CITY CLERK_ DAN GELBER, MAYOR
IINCORP ORMED
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
CktOglaI
1,-7, City AttorneyAr Date
Resolutions -C7 M
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Alina T. Hudak, City Manager
DATE: June 23, 2021
SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF
THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE, AT ITS MAY
21, 2021 MEETING, DIRECTING THE ADMINISTRATION TO OBTAIN AN
INDEPENDENT COST ESTIMATE ON ALL PROJECTS WITH AN
ESTIMATED CONSTRUCTION COST GREATER THAN $5 MILLION, AND
REQUIRING THAT ANY ESTIMATE EXPECTED TO COST IN EXCESS OF
$100,000 BE SUBMITTED TO THE CITY COMMISSION FOR PRIOR
APPROVAL.
RECOMMENDATION
The Administration recommends that the Mayor and City Commission approve the Resolution
accepting the recommendation of the Finance and Economic Resiliency Committee requiring
that, prior to the issuance of a solicitation, the Administration obtain an independent cost
estimate on projects with an estimated construction cost greater than $5 million. The Committee
further recommends that City Commission approval be obtained prior to engaging a consultant
to complete a cost estimate on a project when said cost estimate is expected to cost$100,000
or more.
BACKGROUND/HISTORY
At its April 21, 2021 meeting, the City Commission referred an item to the Finance and
Economic Resiliency Committee (the "Committee") for a discussion on requiring independent
cost estimates on capital projects prior to the issuance of a competitive solicitation. At its May
21, 2021 meeting, the Committee discussed the item. The Committee recommends that, in
order to ensure that all stakeholders are aware of the accurate cost estimate and probable cost
of projects for which the City issues a solicitation and, further, to assure that funding is available
for the project prior to the issuance of the solicitation, the Administration seek an independent
cost estimate. To mitigate excessive expenditures relating to independent cost estimates, the
Committee recommends that these only be required on projects expected to be greater than$5
million. Further, the Committee recommends that prior to engaging a consultant for a
construction cost estimate expected to cost more than $100,000, the Administration seek prior
City Commission approval.
ANALYSIS
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Obtaining cost estimates on construction projects is a routine practice currently utilized by the
Administration on nearly all construction projects. Typically, construction cost estimating is
performed at specific milestones along a project's design cycle. As part of the City's
professional service agreements, design consultants are required to provide cost estimates at
intervals as deemed necessary by the Administration to assure that projects are being designed
to the budget determined by the City for construction costs. Additionally, it has been the
Administration's practice to retain the services of independent(third-party) estimators on select,
but not all, projects as warranted.
I n considering the impact of this recommendation, it is important to note that independent
construction cost estimates tend to have a relatively small impact on the overall project cost. For
example, based on prior experience, the cost of obtaining independent estimates tends to be
approximately $3,000 per each $1 million of project construction costs. In other words, an
independent cost estimate for a$5 million project could cost around $15,000.
Finally, based on the current capital program, there are 10-15 projects planned over the next 5-
10 years that have a construction cost in excess of $5 million and for which, based on the
Committee's recommendation, an independent cost estimate would be required.
SUPPORTING SURVEY DATA
N/A
FINANCIAL INFORMATION
The fiscal impact is expected to be approximately $3,000 per each $1 million of project
construction costs and will be funded from existing project budget. Additionally, the benefit of
accurately anticipating project costs for the desired scope before issuing a solicitation
outweighs any relatively small cost impact.
CONCLUSION
The Administration recommends that the Mayor and City Commission accept the
recommendation of the Finance and Economic Resiliency Committee to require an
independent cost estimate on projects with an estimated construction cost greater than $5
million prior to the issuance of a solicitation, and requiring City Commission approval to be
obtained prior to engaging a consultant to complete a cost estimate expected to cost$100,000
or more.
Applicable Area
Not Applicable
Is this a"Residents Right Does this item utilize G.O.
to Know" item, pursuant to Bond Funds?
City Code Section 2-14?
No No
Legislative Tracking
Procurement/Cl P
Sponsor
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Commissioner Micky Steinberg
ATTACHMENTS:
Description
❑ Resolution
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