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2007-26578 ResoRESOLUTION NO. 2007-26578 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING FINAL CLOSEOUT OF THE AGREEMENT WITH REG ARCHITECTS, INC., FOR THE DESIGN OF THE MIAMI BEACH GOLF COURSE CLUBHOUSE AND FACILITIES, AND APPROPRIATING FUNDS, IN THE AMOUNT OF $121,684, FOR FINAL PAYMENT AFTER COMPLETION OF THE WORK, FUNDS TO BE APPROPRIATED FROM THE 2% RESORT TAX FUND 160. WHEREAS, on May 7, 1998, the City issued Request for Qualifications No. 58- 97/98 for architectural and engineering services for the design and renovation of the Miami Beach Golf Course (formerly known as Bayshore) Clubhouse and facilities, and for the Normandy Golf Course Clubhouse and facilities (the Project); and WHEREAS, on October 7, 1998, the Mayor and City Commission authorized negotiations with the firm of REG Architects, Inc. (REG) and, on January 6, 1999, the Mayor and City Commission authorized execution of an Agreement with REG for planning services for the Project; and WHEREAS, through the mid months of 2001, REG presented the structural documents for the Miami Beach Golf Course Clubhouse to the Building Department and was unable to obtain a permit for the Project due to inconsistencies and errors on the design and, at the insistence of the City, they dismissed the initial structural engineer and retained the services of another at their own cost; and WHEREAS, on January 9, 2002, in view of the failure by REG to complete the permit process in the stipulated time, the City presented a Resolution to the Mayor and City Commission requesting authorization to terminate the Agreement with REG for cause; and WHEREAS, REG continued discussions with the Administration up to the day of the January 9, 2002 City Commission meeting in an attempt to find a resolution to the default; and WHEREAS, REG proposed an amendment to the Agreement that would set a date for the completion of the permit process of January 25, 2002; and WHEREAS, the City imposed several conditions to REG that, if not complied with, would trigger automatically the termination for cause and the default; and WHEREAS, if REG completed the permit set of documents, then they would agree to provide a $100,000 bond, that would protect the City if they failed to obtain the permit; and WHEREAS, the Mayor and City Commission, approved the proposed settlement / amendment and directed the Administration to implement the conditions promptly and to get the Project permitted and construction started; and COMMISSION ITEM SUMMARY rnnrlpncPd TiflP' A Resolution approving final closeout of the Agreement with REG Architects, Inc., for the design of the Miami Beach Golf Course Clubhouse, and appropriating funds, in the amount of $121,684, for final payment after completion of the work funds to be appropriated from the 2% Resort Tax Fund 160. Ke Intended Vutcome su ortea: To ensure well designed quality Capital Projects. Supporting Data (Surveys, Environmental Scan, etc.): More recreation opportunities is ranked by residents as one of the changes that will make Miami Beach a better place; 79% of residents rated recreation programs and facilities as excellent or good; and 84% of residents rated recently completed ca ital im rovement ro'ects as excellent or ood. Issue: Should the Cit Commission ado t the Resolution? Item Summary/Kecommenaat~on: On January 6, 1999, City Commission authorized execution of an Agreement for design services for the Bayshore and Normandy golf courses facilities. On January 9, 2002, in view of the failure by REG to complete the permit process for Bayshore in the stipulated time, the City presented a Resolution to the ', Mayor and City Commission requesting authorization to terminate the Agreement with REG for cause in accordance to the applicable Articles in the contract. REG continued discussions with the Administration up to the day of the City Commission meeting in an attempt to find a resolution to the default issue and to seek a compromise. They presented an amendment to the Agreement that would set a date for the completion of the permit process as January 25, 2002. In addition, the City imposed several conditions to REG that if not complied with would trigger automatically the termination for cause and the default. The City Commission approved the Amendment. The most important condition is that REG would place a bond of $100,000 to protect the City in the event other conditions were not met and the Project was further delayed. REG was successful in completing the permit process and provided the bond in the form of cash and fees which was deemed acceptable by the City Attorney's Office. The Project was then placed out to competitive bidding, awarded to Tran Construction, Inc. on September 11, 2002, and construction began on January 11, 2003 for the Clubhouse and the Restrooms. Construction on the Maintenance Building began on April 3, 2003. Completion of both projects at the time was expected to be in June 2004. REG submitted a claim for several reasons such as time extensions and additional fees. C!P has carefully evaluated the claim, in the amount of $207,801, and has determined that several areas of the request are valid and must be considered for additional compensation. The first item the City cannot recommend for payment is the amount of $22,994 established for errors and omissions. The second item is related to the responsibility of REG in some of the delays that the Project experienced. Therefore, the City recommends that out of the remaining time extension requests, in the amount of $161,656, a total of $76,000 be approved. The City recommends compensation, in the amount of $19,500, for closeout services that were expended by REG. The City recommends that REG be compensated, in the amount of $4,099, for punch list efforts. The total amount of compensation for REG would then be $122,208 which includes $22,609 of pending invoices. The amount in the claim for which REG would be responsible and the City would not approve is $108,202. The Administration is now recommending that the claim from REG for the closeout of the Miami Beach Golf Course Clubhouse project be approved, in the amount of $122,208 total. This will result in a required current appropriation, in the amount of $121,684 and the balance of the Purchase Order in the amount of $524.00. Adviso Board Recommendation: N/A Financial Information: Source of Amount Account Funds: ~ $121,684 2% Resort Tax fund 160 2 O P Total $121,684 Financial Impact Summary: City Clerk's Office Legislative Tracking: Si n a ment Director As istant ity Manager City Manager J TH ` T:\AGE D 0 7\j 1 07\Regular\MiamiBeachClubhousiE~ifiSeoutSumm.doc U ~J AC3Ef~©A ITEM G7G DATE '~l ~ m MIAMIBEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Mayor David Dermer and Members of the City mmission FROM: Jorge M. Gonzalez, City Manager ~ DATE: July 11, 2007 SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING FINAL CLOSEOUT OF THE AGREEMENT WITH REG ARCHITECTS, INC., FOR THE DESIGN OF THE MIAMI BEACH GOLF COURSE CLUBHOUSE AND FACILITIES, AND APPROPRIATING FUNDS, IN THE AMOUNT OF $121,684, FOR FINAL PAYMENT AFTER COMPLETION OF THE WORK, FUNDS TO BE APPROPRIATED FROM THE 2% RESORT TAX FUND 160. ADMINISTRATION RECOMMENDATION Adopt the Resolution. FUNDING Funds, in the amount of $524, remain in the REG purchase order. This results in a required current appropriation, in the amount of $121,684. ANALYSIS On May 7, 1998, the City issued a Request for Qualifications No. 58-97/98 for architectural and engineering services for the design and renovation of the Miami Beach Golf Course (formerly known as Bayshore) Clubhouse and facilities, and for the Normandy Golf Course Clubhouse and facilities. On October 7, 1998, the Mayor and City Commission authorized negotiations with the firm of REG Architects, Inc. (REG) selected first by an evaluation committee. On January 6, 1999, the Mayor and City Commission authorized execution of an Agreement for planning services for the projects. On October 20, 1999, the Mayor and City Commission adopted a Resolution approving the plan and authorizing identification of the funding for the prosecution of the Project. On February 9, 2000, the Mayor and City Commission approved the financing of the projects with Gulf Breeze funds and on March 15, 2000, approved the completion of the design for the projects. The construction cost for the Miami Beach Golf Course Clubhouse (MBGC) was estimated at $2.2 million. The service fees for REG for the design of both projects was established at $294,000. On October 17, 2001, the Mayor and City Commission adopted a Resolution awarding construction of the MBGC to the firm of TDI, International with construction expected to be completed by October 2002. Through the mid months of 2001, REG presented the structural documents for the clubhouse to the Building Department and was unable to obtain a permit for the project due to inconsistencies and errors on the design. At the insistence of the City, they dismissed the initial structural engineer and retained the services of another at their own cost. The City further directed REG to complete the process by December 2001 or the City would consider Commission Memorandum July 11, 2007 Miami Beach Golf Course Clubhouse Closeout Page 2 of 5 REG in default of the Agreement. In January 9, 2002, in view of the failure by REG to complete the process in the stipulated time, the City presented a Resolution to the Mayor and City Commission requesting authorization to terminate the Agreement with REG for cause in accordance to the applicable Articles in the contract. At the time it was expected that the project completion would be delayed to early 2003 at best given the need for some re-design, the procurement of a new consultant and the completion of the permit process. REG continued discussions with the Administration up to the day of the January 9, 2002 City Commission meeting in an attempt to find a resolution to the default issue and to seek a compromise with the City. REG presented to the Administration a suggested amendmentto the Agreement that would set a date for the completion of the permit process and the City established that date as January 25, 2002. In addition, the City imposed several conditions to REG that if not complied with would trigger automatically the termination for cause and the default. These conditions were as follows: failure to provide the permittable setwould lead to default; if REG completed the permit set of documents, then they would agree to provide a $100,000 bond, form to be determined later, that would protect the City if they failed to obtain the permit; the bond would be returned to REG at the completion of the Project; REG would have to commit to responding to issues on the project within seventy two (72) hours of presentation by the contractor, the City or URS, the City's Program Manager; REG would address and resolve any errors and omissions that could arise promptly; address any unforeseen situations that could arise; and provide responses to any reasonable request by the City in a timely manner. In these conditions, the City would be sole arbiter of timeliness and responsiveness. In addition, REG agreed to eliminate the scope of the Normandy Golf Course Clubhouse from their Agreement while keeping any fees already paid, while giving up the rest of the fees agreed to in the contract. The City agreed that if this settlement was accepted and the conditions met, the City would not seek any other damages from REG for the delays encountered. The Mayor and City Commission, by a vote of six to zero with one Commissioner absent, approved the Agreement as presented and directed the Administration to implement the conditions promptly and to get the project permitted and construction started. REG was successful in completing the permit process and provided the bond in the form of cash and fees which was deemed acceptable by the City Administration and the City Attorney's Office. The Project was then placed out to competitive bidding, awarded to Tran Construction, Inc. on September 11, 2002, and construction began on January 11, 2003 for the Clubhouse and the Restrooms. Construction on the Maintenance Building began on April 3, 2003. Completion of both projects at the time was expected to be in June 2004. During the process of construction, REG maintained a presence on the Project and generally complied with the terms of the Agreement. They assigned specific staff to oversee the project implementation, attend meetings, respond to the issues, visit the site, etc. When several issues arose on the Project that needed the attention and response by the consultant they participated actively and assisted the CIP Office and URS in resolving the problems and moving the Project forward. Commission Memorandum July 11, 2007 Miami Beach Golf Course Clubhouse Closeout Page 3 of 5 A major delay occurred when deficient soils were found at the site which was not represented inthe geo-technical studies performed by the City priorto the award of contract. The resolution of this matter was very difficult, resulted in extensive mediation and was finally resolved in negotiations between the City and the contractor with the assistance of a mediator. This matter took a long time to resolve and resulted in various delays and in necessary information exchanges between the contractor and REG in order to resolve the construction issues while the mediation was occurring. During this time, REG continued to respond to the needs of the Project and assisted the City in resolving construction matters. Several unforeseen conditions encountered during construction included the removal of an abandoned kerosene underground tank, removal of wood piles that supported the old clubhouse, unexpected utility locations, and a change in the location of FP&L's electrical connection point. Design enhancements included the addition of fiber optic conduits to link all buildings across the golf course; additional data, power and cable outlets; addition of a fence to screen the maintenance building from the golf course; and an upgraded electrical system to supply power to portable A/C units for the new patio enclosure that expanded the under-roof dining occupancy. Regulatory requirements included the relocation of the wash station building outside a contaminated area; additional drainage pipe and manholes to relocate a drainage well outside the contaminated area of the maintenance site; additional fire sprinklers and strobes; and water quality sampling required during installation of the drainage well at the clubhouse. The Florida Department of Environmental Protection (DEP) required additional remediation action prior to the installation of a new storm water drainage well that was part of the Project at the maintenance building area. Construction of the maintenance building was delayed pending resolution of the issue. In addition to the construction issues described above, there were extensive environmental remediation activities at the sites of both facilities which resulted from requirements and directives issued by the Department of Environmental Regulation & Management (DERM). These activities involved identification and removal of several areas within the property that were contaminated by the continuous disposal of agricultural materials onto the soils by the former golf course management firm. The environmental remediation effort also included further removal of soils necessary to perform the underground installations and excavations for structural foundations for the maintenance building which was part of the scope of the REG Project. These required further action from the consultant and the contractor and also caused further delays to the Project. REG's fees for construction administration services were based upon twenty five (25%) percent of the lump sum consulting services contract with the City. While the Project was originally estimated as a thirteen (13) month duration project, the actual duration exceeded thirty six (36) months. On December 13, 2004 REG requested compensation, in the amount of $197,940, of which $148,575 were for additional services rendered during the extended period of time. City staff found that a portion of REG's request could have been legitimate, however, other factors which had to be considered included design errors and omissions, excessive unforeseen conditions, and others. Therefore, City staff informed REG that their request for additional services was premature, and would not be considered until after the completion of the Project The Certificate of Occupancy (CO) for the Clubhouse and the Restrooms was issued on Commission Memorandum July 11, 2007 Miami Beach Golf Course Clubhouse Closeout Page 4 of 5 October 24, 2006. Items on the punch list for the Project, especially in some electrical installations, required additional involvement from REG and their sub-consultants as well as the contractor. This time extension and additional services is considered in the current request for compensation from REG. The Certificate of Occupancy (CO) for the Maintenance Building was issued on June 16, 2006. There were delays on completing the punch list in this facility also and REG continued to assist the City in responding to issues raised by the operating department and by the regulatory agencies. This time extension and additional services are also considered in the current request for compensation from REG. First, though, REG has already received the reimbursement of a portion of $100,000 bond, in the amount of $77,391, which is required by the potential default Agreement. A portion of the fees were distributed at the substantial completion of the Project and a portion retained until final CO. The cash portion of the bond provided by REG, in the amount of $20,000, which was to be returned at the completion of the Project, has recently been disbursed. Since both portions of the Project now have occupancy, the amount was disbursed to REG on March 28, 2007. The remaining Construction Administration fees, in the amount of $29,395, were also part of the potential default and were to be disbursed at the end of the Project. A portion, in the amount of $15,000, has also been recently disbursed on March 30, 2007 and the difference, in the amount of $14,395, is due with the resolution of the items in this memorandum. Additional reimbursables, which were also held in abeyance, in the amount of $8,214, are also due at the completion of the Project. These pending amounts total $22,609 and are not in question. REG has also submitted a claim to the City for several reasons such as time extensions and additional fees. CIP staff has carefully evaluated the claim from REG, in the amount of $207,801, and has determined that several areas of the request are valid and must be considered for additional compensation. Most of this amount is being claimed by REG in relation to time extensions which they believe their firm is entitled to due to the extended schedule on the Project. The first item, though, which the City questions and cannot recommend for payment is the amount established for errors and omissions on the part of REG. These have been established by the City, in the amount of $22,994. The second amount in question is related to the responsibility of REG in some of the delays that the Project experienced. Since the contractorwas granted compensation by the City for time extensions related to delays it stands to reason that REG should receive similar compensation forthese delays and fortheircontinued participation. However, certain delays that were experienced by the contractor were due to less than prompt responses by REG or due to deficiencies in the documents and should be the responsibility of REG. Given that the Project lasted almost three years and over two years longer than expected, it is reasonable that REG should receive some compensation for the extended time but not the full amount. The amount stated in the claim for time extensions is $161,656 which must be reduced by the Errors and Omissions (E&O's) amount to an initial total of $138,662 remaining for evaluation. The City recommends that the time extension amount in the claim, should be further reduced to approximately fifty five percent (55%) of the total after the reduction for E&O's, to the amount of $76,000, to account for REG's responsibilities for Project delays. Commission Memorandum July 11, 2007 Miami Beach Golf Course Clubhouse Closeout Page 5 of 5 In addition, REG has requested project closeout fees, in the amount of $37,352. Some issues arose at the time of closeout that were not within the control of REG, such as the addition of fire sprinklers to the canvas awning at the outdoor seating area or the enclosure of the building's trash container in an air conditioned room, which generated additional work and further delays in obtaining the final CO. In spite of questions as to the interpretation on the need for the enclosure, REG was directed, and they agreed, to re-design the facility at their cost. Some issues and delays were the responsibility of REG because of deficiencies in their performance during final inspections or defects or inconsistencies on the contractor's installations that REG should have detected prior to reaching substantial completion. The City, therefore recommends that compensation to REG, in the amount of $19,500, for this portion of the work be limited to the City's estimated time and services that were expended by REG, which were not their responsibility, in closing out the Project. Finally, REG has requested compensation, in the amount of $8,793, for final punch list and other investigations that became necessary at the time of CO. Some of these items were due to what the City deems deficiencies in the documents or inconsistencies in the Construction Administration of the Project by REG. Because of this, the City only recommends that this effort be compensated in the amount of $4,099. The total compensation for REG that the 'City can recommend from the initial claim of $207,801 is $99,599. The total compensation to REG still remaining will be in the amount of $122,208 which includes the still pending amount of $22,609 for services and reimbursables. The amount from the claim forwhich REG would be responsible and the City would not approve is $108,202. REG Claim Re uest Ci A roved Claim Difference Time Extensions $161,656 $76,000 $85,656 Project Closeout $ 37,352 $19,500 $17,852 Punch List $ 8,793 $ 4,099 $ 4,694 Totals $207,801 $99,599 $108,202 CONCLUSION The Administration is now recommending that the claim from REG for the closeout of the Miami Beach Golf Course Clubhouse project be approved, in the amount of $122,208. Funds, in the amount of $524, remain in the REG purchase order. This results in a required current appropriation, in the amount of $121,684. It should be noted that REG has submitted the Project for competition to two architectural organizations and has won awards for the design which has resulted in excellent publicity for the City. Attachment T:\AGEN DA\2007\ju11107\Regular\MiamiBeachClubhouseCloseoutMemo.doc ATTACHMENT A MIAMI BEACH GOLF COURSE CLOSEO UT CLAIM Item Amount Total for Time Extensions $ 161,656 Total for Pro'ect Closeout $ 37,352 Total for Punch List and Investi ations $ 8,793 Total REG Claim $ 207,801 Total Pa ment to REG for Claim $ 99,599 REG Responsibility for Claim $ 108,202 CLOSEOUT RECOMMENDED COMPEN SATION Item Amount Recommended Com ensation for Time Extensions $ 76,000 Recommended Com ensation for Closeout $ 19,500 Recommended Com ensation for Punch List $ 4,099 Total $ 99,599 Amount of Fees & Reimbursables not Paid $ 22,609 Total Final Payment to REG $ 122,208 Amount remainin in Purchase Order $ 524 Amount to Appropriate $ 121,684 REG ARCHITECTS. INC. ARCHITECTURE r< INTBRIOR DESIGN * PLANNING January 12, 2007 Mr. Jorge Chaitrand, Director Capita! Improvement Division 777.17m Sh~aet, Suite 201 Miami Beach, FL 33139 RE: Bag06orc Gott Clubhouse Final Basic and A,dditionat Services RBG Job No. #98Q42 Dear Ivit Chartrand, REG Architecla, Inc. is in the process of reconciling this account Please find enclosed a spread sheet from our accounts department explaining how we arrive at the final close out amounts. (See Exhlbit "A'~. As mentioned at the close of 2006, we would first like do reconcile our basic service Construction Administration fees of X49,395.63 (which Mt Tim Hemstreet mentioned was a non- negotiable issue and would be released, once the project was (CO) completed) before we reconci3e the contract time extension, additional services as documented and discussed with yourselves an several occasions. Revised Summary tom (O~p'ginat Contractl Bond/Escrow Release Or~nal Construction Administration Balance 20,000.00 ~ 29,395.63 Total Fees Due ~ 49,395.63 We have enclosed the Settlement Agreement (See Exhibit `B'~ for ease of reference, wherein on Page 2, RlS.G further agrees bo a deductive change order to remove the Normandy Shores Golf Course Clubhouse, it makes reference do fees already paid and received for work done, will not be returned ro the City. Please make reference to this when reviewing payment on our Construction Administration basic service spread sheet 120 80UTH DIXiB HIGH~iAY, STS. 201 ~VBST PAL![ •BACH, FL 33401 PHONE: (66i) 66l-2683 FAX: (661) 669-6646 ~pi.RBGASCH.C08[ AA-0002447 V. ES.T. 1988 Bayshore Golf Clubhouse REG Project Na 98042 Jan. 11, 2007 Rgyised Summary to Date: Time Extension)! Contract Time Extension (November 2003-October 2006) $ 161,656.00 Project Close C)IIt $ 37,352.00 Punch List /Investigations $ 8 793.00 Total Fees Due $ 207,80100 We chose a select amount of back up correspondence which is enclosed for your review, please contact us if you require more specific information and or backup. We felt the information and correspondence given at the finance and city wide projects committee meeting on January 27, 2005 (See Section #3) is a good overview history of the project and could be used as a reference, indicating errors and omissions and a composite overview of all the construction team's input, and reasons for delaying the construction schedule We look forward in closing this project out and will make ourselves available to assist when/where possible. We are also very pleased to hear the positive comments passed on to us from the end use of the clubhouse facility. We as the Architects, are also confident of the project's success for the future-and would like to thank you for this work opportunity. Sincerely, REG Arc ,Inc. e o Price Vice President Attachments: 1. Reference Invoices for Review Section # 1 2. Delays/Payment, Record Summary Section #2 3. Project History Summary Cvverview Section #3 4. Construction Drawing Set Section #4 cc: Rick Gonzalez, AIA President Acct BSG ARCHITBCTS, INC. 120 SOUTH DIXIB HIGHWAY, STB. 201 WBST PALM BEACH, FL 33401 rHONBs (S61) 659-2303 FAX: (S61) 6S9-SS46 WWW.RBGAACH.COM AA-0002447 WHEREAS, REG has requested compensation, in the amount of $8,793, for final punch list and other investigations that became necessary at the time of CO some of which were due to what the City deems deficiencies in the documents or inconsistencies in the Construction Administration of the Project, and therefore only recommends that this effort be compensated in the amount of $4,099; and WHEREAS, the total compensation for REG that the City can recommend from the initial claim of $207,801, is $99,599. 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 of the City of Miami Beach, Florida, approve final closeout of the Agreement with REG Architects, Inc., for the design of the Miami Beach Golf Course Clubhouse and facilities, and appropriate funds, in the amount of $121,684, for final payment after completion of the work, funds to be appropriated from the 2% Resort Tax Fund 160. PASSED and ADOPTED this 11th day o~ ''Ju ~" , 2007. ATTEST: ~' ~e~ CITY CLERK MAYOR Robert Parcher David Dermer T: WGE NDA\2007\ju11107\Regular\Miam i BeachClu bhouseCloseoutReso.doc APPROVED AS TO FORM & LANGUAGE