C7A - Addendum for West Ave Phase Iii

Resolutions - C7 A

COMMISSION MEMORANDUM

RECOMMENDATION

The Administration recommends that the Mayor and City Commission (City Commission) adopt the Resolution.

BACKGROUND/HISTORY

The West Avenue project is designed to enhance quality of life with aesthetics and infrastructure, and to reduce flood risk to this vulnerable neighborhood both now and in the future. This neighborhood is one of the lowest lying areas in the City with elevations as low as 1.7’ NAVD.

The Project represents a comprehensively defined neighborhood improvement program, focused on resolving challenges associated with climate impacts and aged infrastructure. The scope of this neighborhood improvement project includes replacement of the existing water distribution/transmission systems and gravity sanitary sewers, installation of a new robust storm water drainage collection system including new bi-fuel auxiliary generators, raising of the paved roadway with harmonization to the adjacent properties, installation of new street lighting, pedestrian lighting, replacement of existing and installation of new traffic and pedestrian signals at intersections, new landscaping, and irrigation. The limits of the improvements are West Avenue between 8th Street and Lincoln Road, including side streets, and Bay Road between 14th Street and Collins Canal, and includes upgrading the project to city standards of resilience of the neighborhood, as well as harmonizing between the two phases.

Due to the size of the neighborhood, the project was divided into two contracts, with 14th Street being the dividing line. On March 22, 2017, the City Commission adopted Resolutions No. 2017- 29800 and 2017-29799, awarding two contracts for West Avenue Improvements Phase II design- build services to Ric- Man Construction Florida, Inc. (Ric-Man): one contract for the project areas north of 14th Street (the “West Avenue North Agreement”), the other, for project areas south of 14th Street (the “West Avenue South Agreement,” and together with the West Avenue North Agreement, the “Agreements”).

On April 27, 2022, the Administration received a letter from Ric-Man indicating that it had instructed its legal counsel to prepare a declaratory relief action seeking termination of the Agreements. After several unsuccessful meetings to discuss the claim a mediation session was scheduled. Prior to the mediation session, Ric-Man delivered a re-start proposal which would allow them to continue with the West Avenue Ph II Neighborhood Improvement project, North of 14 Street, now known as West Avenue Ph II.

On October 26, 2022, the City Commission adopted Resolution No. 2022-32384, approving Amendment No. 1 and deductive Change Order No. 7, pausing the West Avenue Improvements South of 14 Street project and modifying the terms and conditions of the West Avenue South Agreement between the City and Ric-Man. In anticipation of potential grant funding, Amendment No. 1 established the terms for a future termination for convenience of the West Avenue South Agreement. As this portion of the project would be constructed at a later date, the improvements south of 14 Street were renamed West Avenue Phase III Project (Project).

Subsequently, the City submitted a grant application to the Resilient Florida Grant program and the Project was awarded a $10 million grant. The grant requires a new procurement process for the selection of a contractor. As such, the City moved to terminate the Agreement with Ric-Man, and, in order to expedite the design and permitting of the Project, the City is (1) reinstating the Design Consultant Agreement, with CES Consultants, Inc. (CES), and (2) providing for the City’s assumption of Ric-Man's rights and obligations under the Design Consultant Agreement pursuant to Section 3.24(c) of the Design-Build Agreement between the City and Ric-Man dated June 14, 2017. Additionally, the City is expanding the design scope and services to include construction management and inspection services for the Project.

The West Avenue Phase III Project was in the design phase when the project was paused. While design completion approached 90%, owner directed design and applicable code changes have resulted in the need to modify, update and re-do previously completed design documents, reducing the level of completion to approximately 70%.

Under the design-build agreement with Ric-Man, the City utilized a third-party consultant for the Construction Engineering and Inspection Services. For the Project, since the consultant is contracted directly by the City, eliminating any potential conflict of interest, the Administration has elected to combine the responsibilities of the design and engineering consultant with that of the construction engineering and inspection services consultant, making CES the single source for engineering, design and inspections, thereby streamlining communications, issue resolution and certification processes. By utilizing CES for construction management and inspection, the City ensures continuity, preserves design intent, and enables faster issue resolution. A single source centralizes accountability, improves quality assurance, and streamlines communication, ultimately reducing risk, delays, and overall project costs.

The West Avenue Phase II Project is currently under construction and was subdivided into 9 separate Segments. On December 11, 2023, the City issued Notice to Proceed 2 with Segment 1, for commencement of construction activities associated with the pump station, and on June 2,

2025, the City issued Notice to Proceed 2, commencing construction activities within Segments 2 and 3. These two segments are anticipated to be completed within the next twelve months, allowing the contractor to proceed to the next Segment.

ANALYSIS

On March 14, 2025, the City terminated the West Avenue South Agreement. Pursuant to its terms, upon termination of the West Avenue South Agreement, the Design Consultant Agreement and all work product produced thereunder was automatically assigned to the City. CES has acknowledged the City’s right to reinstate and assume the Design Consultant Agreement and has provided a proposal to complete additional work related to the West Avenue Phase III Project (the “New Scope Proposal”).

The reinstated Design Consultant Agreement, along with the New Scope Proposal, will enable CES to complete the design, construction documents, permitting, bidding and construction phase services, advanced under the Agreement with Ric-Man, while addressing changes implemented in Phase II.

For example, the Roadway Plans will need to be updated to incorporate the redesigned split pedestrian ramps at the intersections; the stormwater drainage plans need to incorporate new regulatory water quality requirements; sanitary sewer plans need to be revised as a result of the changes to the roadway layout; the water main plans will be revised as needed to accommodate changes in utilities discovered during the utility coordination phase; the street lighting plans will need to incorporate the redesigned split pedestrian ramps at the intersections and address modifications to the crosswalks, intersections and signals required by Miami-Dade County Department of Transportation Public Works (DTPW); the pavement marking and signage plans will need to incorporate the latest requirements from DTPW and the City of Miami Beach Transportation Department (CMBTD); and Landscaping and Irrigation plans will incorporate modifications to cross walks, intersections, and signals per latest DTPW requirements.

CES’s proposal also includes services not originally included in the Design Consultant Agreement with Ric-man, such as the preparation of Maintenance of Traffic plans (MOT), inspection services during construction, expanded responsibility for the completion of the private property harmonization plans, and updated sidewalk conditions. Under this proposal, CES will be responsible for meeting with residents to coordinate and negotiate Harmonization Agreements prior to completing the construction and bid documents.

On July 10, 2025, the City received the standard Design Agreement (Exhibit A) from CES Consultants for the Project.

On August 28, 2025, the City received CES’s revised negotiated proposal (Exhibit B) for the design, permitting, construction administration services and inspection services for the Project in the not-to-exceed amount of $3,396,680.55, consisting of approximately $930,000 for design revisions and permitting, $640,000 for resolution of harmonization agreements, public engagement and private property surveys, $400,000 for bid, award and post design services, $110,000 for design contingency and reimbursables and $1,320,000 for construction management and inspection services. Given the level of effort associated with drawing revisions, and more significantly associated with the added responsibilities of private property surveys, permitting and completion of the harmonization agreements, the negotiated proposal is deemed fair, reasonable and in the best interest of the City.

The Project’s total budget is $49.8 million. The City was awarded a $10 million Resilient Florida Grant in FY2022-2023. In August of 2025, the City was informed of the award of an additional Resilient Florida grant in the amount of $8.2 million in FY2025-2026. The $8.2 million grant will fund a portion of the currently projected $15.8 million water and sewer funding gap.

Assumption and reinstatement of the Design Consultant Agreement requires the City to negotiate and execute an Addendum to such Agreement for the provision of the design, engineering and construction management and inspection services, in the not to exceed amount of $3,396,680.55 (Exhibit C).

The Project schedule anticipates completion of design by the end of 2025, followed by permitting and execution of harmonization agreements. Dependent on the time required to complete the harmonization agreements, an Invitation to Bid (ITB) could be issued in the spring/summer with the award of a construction contract and commencement of construction activities in the Fall of 2026.

FISCAL IMPACT STATEMENT

The Design Consultant Agreement with CES in the amount of $3,396,680.55 will be funded with previously appropriated funding.

Does this Ordinance require a Business Impact Estimate? (FOR ORDINANCES ONLY)

If applicable, the Business Impact Estimate (BIE) was published on: See BIE at: https://www.miamibeachfl.gov/city-hall/city-clerk/meeting-notices/

FINANCIAL INFORMATION

112-0820-061357-26-410-530-00-00-00-20525 = $ 366,637.29 429-0820-061357-26-418-000-00-00-00-20525 = $ 3,030,043.26

Total= $ 3,396,680.55

CONCLUSION

The Administration recommends that the City Commission adopt the Resolution.

Applicable Area

South Beach

Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481, includes a principal engaged in lobbying? No

If so, specify the name of lobbyist(s) and principal(s):

Department

Capital Improvement Projects

Sponsor(s)

Co-sponsor(s)

Condensed Title

Finalize Addendum Agreement w/ Ric-Man & CES, West Avenue Ph III Project. CIP

Previous Action (For City Clerk Use Only)