HomeMy WebLinkAboutMemo FRCITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO: Hono ., - yor and DATE: November 6, 2008 FILE:
City C. ► is . loners
SUBJECT: Economic Stimulus Program
FROM: Pedro '"-[ : ez, P.E. REFERENCES:
City Manager
ENCLOSURES:
SUMMARY
Based on the impacts of the current economic crisis and as requested by Mayor Diaz, it is
necessary to take immediate action to help stimulate the local economy by soliciting and
awarding contracts in an expedited manner. This will help reduce the unemployment rate in the
local construction industry labor force. This will also place more work in the hands of design
and construction firms which will further increase opportunities for businesses associated with
the construction industry. I am requesting approval of a resolution establishing an Economic
Stimulus Program as well as an ordinance that will create a process to expedite the award of
certain capital improvements projects.
I will be presenting an ordinance on the November 13, 2008 City Commission agenda for first
reading, and will present an accompanying resolution formally establishing the Economic
Stimulus Program with the 2nd reading of the Ordinance.
BACKGROUND
The country is in the midst of an economic crisis that commenced in the downturn in the real
estate market. The Miami Herald on October 21, 2008 reported that Florida was ranked 2nd in
the nation in foreclosures, and Condo Vultures LLC reported that bank owned properties have
increased in South Florida by 134% in the 3`d quarter of 2008 and 190% year-to-date Miami -
Dade County's foreclosure rate increased by approximately 46% between January and
September of this year. Housing values within the City of Miami continue to depreciate in value
of 28.1% since the start of 2008.
This has triggered a snowball effect through the financial markets resulting in investment
banking and bank failures, and an increasing foreclosure rate on residences to the point that
Congress passed a $700 billion economic rescue package in October.
FINDING
As a result of the cascading effects of the economic crisis the residents and businesses in the
City of Miami are being seriously impacted to the point that businesses are failing at an alarming
rate. These failures are the result of numerous factors that include: lack of new business, an
inability to obtain lines of credits from banks or suppliers, and an inability to obtain bonding or
loss of bonding capacity. As these businesses fail they are forced to lay off their employees,
further exacerbating an already critical situation.
One of the hardest hit industries has been construction. Private sector construction has slowed
to a point where many of our City's businesses have no work or no prospect of new work as
they finish projects under construction. Employment in the construction industry in Miami -Dade
County was down approximately 15 percent in April 2008 and the situation has only gotten
worse as a result of the increases in the economic crisis that has occurred since April.
In May 2008 Miami -Dade County held a meeting attended by more than 500 construction
industry representative to discuss ways the County could accelerate the award of contracts for
design and construction services. Such a large attendance highlights the urgency of the current
economic situation.
As I mentioned above the time has come where the City needs to take immediate action to
lessen the impact to our residents and businesses in this time of crisis. My office, in conjunction
with the Capital Improvements Program staff, and the CRA have carefully reviewed the options
that are available to us and identified projects within the City's Capital Improvements Program
that fit the Economic Stimulus Program. Such projects will be known as the "Economic Stimulus
Projects" and are included in the attached list of projects.
The proposed Economic Stimulus Program will expedite the award of contract for the design,
construction, and construction related services, thereby reducing the time in placing work in the
hands of the City's businesses and increasing employment opportunities. We estimate that we
will reduce the timeframe for soliciting and awarding contracts by two to four months.
There is also the potential for significant cost saving to the City associated with the Economic
Stimulus Program. With the slowdown in the private sector construction projects increasingly
more businesses are looking to public entities for work opportunities. We are experiencing a
higher number of businesses participating in the City's capital construction solicitation process
through their outreach or by submitting bids or proposals. This increased competition has led in
some instances to lower costs to perform the work to complete projects.
RECOMMENDATION
The Economic Stimulus Program we are proposing will establish administrative actions and
legislative policies to expedite the award of the capital improvement projects listed in
Attachment A, which may be modified from time to time by the City Commission. These actions
and policies include;
• Authorizes the City Manager to appoint evaluation committee members
without being mandated to meet the requirements of Section 18-542 (12) of
the City Code which stipulates that the majority of such committees shall be
comprised of individuals from the public or from the private sector.
• Award contracts, including professional services agreements and
construction contracts, subject to the following limitations:
o Award value does not exceed ten (10) percent of the estimated cost of
construction. (Where the award value exceeds the 10% threshold the
award recommendation will be brought to the City Commission for
authorization to award.)
o Bids are received from a minimum of three responsive and responsible
bidders.
o The award value has been reviewed and approved by the Office of
Strategic Planning, Budgeting, and Performance.
o The contractor or consultant is in good standing with the City and has a
good past performance record.
• Utilize contract contingency allowances of ten (10) percent to minimize
disruption in the flow of work. Change Orders will be submitted for City
Commission approval to increase the contract contingency previously
approved by the City Commission. Such change orders will include a report
on the draws against the initial contingency.
Exclusive of the recommendation for the award of contracts contained stated above; the
recommendations relative to selection of individuals to serve on evaluation committees;,
replenishment of contract contingencies represent best business practices and is my intent to
bring legislation before the City Commission within the next six (6) months to make these
changes permanent. Should the City Commission not make the changes permanent when the
ordinance(s) are brought before the City Commission, these changes will no longer be
prospectively utilized under this Ordinance.
Our existing Job Order Contraction Program (JOC) contracts will not be utilized as part of this
program.
I am proposing that the City Commission approve the Economic Stimulus Program for the
projects listed in Attachment A, which may be amended from time to time by the City
Commission until such time as the projects are completed or the City Commission rescinds the
Ordinance.
C: Bill Anido, Assistant City Manager
Ola O. Aluko, Director, Capital Improvements Program
Julie O. Bru, City Attorney
Rafael O. Diaz, Assistant City Attorney
Gary Fabrikant, Assistant Director, Capital Improvements Program