The West Avenue Phase II Improvements North of 14 Street project (The 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. Since 2017, low-lying areas of West Avenue have experienced flooding from high tides 59 times (NOAA Virginia Key tidal gauges). Flooding is expected to worsen, as the City faces 14-30 inches of sea level rise over the next thirty years (Southeast Florida Regional Climate Change Compact, 2019). A high groundwater table and intense rain events result in additional compound flooding concerns. Without the deployment of temporary pumps, segments of the neighborhood flood regularly during intense rain events and king tides. Miami- Dade County is planning for 2 ft of sea level rise by 2060, and the United States Army Corps of Engineers is planning for 3 ft of sea level rise by 2070.

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 and pumping system including new bi-fuel axillary generators, raising of the paved roadway and 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, irrigation and construction of a new segment of the Bay Walk. The limits of the improvements are West Avenue and Bay Road between 14th Street and Collins Canal, including side streets.

On March 22, 2017, the Mayor and City Commission adopted Resolution No. 2017-29800, awarding design/build services (the “Design/Build Agreements” or “Agreements”) to Ric- Man Construction Florida, Inc (“Ric-Man” or “Design-Builder”), for The Project with the guaranteed maximum price of $29,669,344, including a 10% contingency.

On January 11, 2018, Change Order No. 1 was executed for a 30-day non-compensatory time extension due to the impact of Hurricane Irma.

On March 16, 2018, Change Order No. 2 was executed in the amount of $3,270,932 for funding of the above-ground improvements to the project, with no additional time extension, increasing the cost of the Agreements to $32,940,276.

On December 12, 2018, the City Commission adopted Resolution No. 2018- 30652, authorizing the City Manager to negotiate Change Order No. 3 for additional design and construction changes associated with the recommendations made by the Columbia University Resiliency Accelerator Program, the Urban Land Institute (ULI) and for additional scope for a total of $17,763,900, including contingency.

On April 30, 2019, Change Order No. 3A was executed in the amount of $579,752 as the first partial request from Ric- Man of the approved Change Order No. 3 for the costs incurred in support of the Columbia University Resiliency Accelerator Workshop, re-start impacts after a 1-year delay and 10-year storm drainage modeling to allow for further design in order to be able to negotiate the price of the remaining change order scope.

On June 16, 2019, Change Order No. 3B was executed in the amount of $17,171,211 as the second partial request from Ric-Man of the previously approved Change Order No. 3 and includes emergency generator sets, street end enhancements, additional pumps, additional street improvements.

On September 17, 2019, Change Order No. 4 was executed in the amount of $327,093 to account for the 10% contingency for the above-ground improvements, which were previously added to the Agreements as Change Order No. 2.

On April 4, 2020, the City Commission adopted Resolution No. 2020-31243, authorizing the City Manager to negotiate Change Order No. 5 for design services associated with additional water quality treatment, as required by the Miami-Dade County Regulatory and Economic Resources Department (RER) for a total not to exceed $1,147,037, including contingency. The City negotiated a final change order in the amount of $1,101,959.

On June 23, 2021, City Commission adopted Resolution No. 2021-31752, approving and authorizing the City Manager to negotiate and execute Change Order No. 6 with Ric-Man Construction Florida, Inc., for the West Avenue Phase II Improvements North of 14th Street, for construction of additional water quality treatment, revised storm water criteria, relocation of the pump station, cost escalation, and a reduction in previously authorized owner' s contingency in the net change amount of $17,568,384, as well as an increase in contract time of 1,961 calendar days. The total contract value, subsequent to Change Order No. 6, is $69,688,675.

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 both Design/Build Agreements and inviting the City to negotiate a "Termination for Convenience" of the Design/-Build Agreements. The City has the right to terminate the design-build agreements for its convenience in addition to the right to terminate in the event of a breach by Ric-Man. The City had not elected to exercise either of these options and per the terms of the Agreements, Ric-Man can terminate the Design/Build Agreements only upon the occurrence of one of two conditions (i. e., the issuance of a stop work order by a court or other public authority for a period of more than 90 days due to no act or fault of Ric-Man or the City' s nonpayment of an undisputed amount owed), neither of which has occurred. In a subsequent letter dated May 6, 2022, Ric-Man reiterated its request that the City "should issue a Termination for Convenience," claiming "continuing project support costs, and escalation." On May 11, 2022, Ric-Man filed suit against the City.

On October 26, 2022, the City Commission adopted Resolution No. 2022-32384, approving and authorizing the administration to finalize, consistent with the conditions set for the resolution:

1) Amendment No. 1 and additive Change Order No. 7, modifying the terms and conditions to the Design/Build Agreement between the City and Ric- Man Construction Florida, Inc., for the West Avenue Phase II Improvements North of 14th Street Project, for additional design and engineering services, cost escalation of construction commodities and labor, extended pre-construction services, escalation of general conditions as a result of a seventeen (17) month delay, addition of three micro-pump stations at certain low lying properties, other miscellaneous scope, extension to the contract time of 521 calendar and the Change Order No. 7 total value of $12,726,291 plus a 10% owner' s contingency in the amount of $1,272,629, resulting in an increase of the total contract amount to $83,687,596;

2) The Amendment No. 1 also included a deductive Change Order No. 7 modifying the terms and conditions to the Design/Build Agreement between the City and Ric- Man Construction Florida, Inc for the West Avenue Phase II Improvements South of 14th street project, for a credit for work not performed in the amount of $13,998,920; and

3) Execution of a settlement agreement dismissing the lawsuit filed by Ric-Man Construction Florida, Inc., against the City asserting claims arising out of the West Avenue Phase II projects.

Amendment No. 1 and Change Order No. 7 were executed in December of 2022.

By October of 2023, however, Ric-Man again began seeking termination or rescission of the Design/Build Agreements, based on further alleged delays and added costs. Ric-Man has again retained counsel, threatening to file a lawsuit to seek such relief.

Under the existing terms of the Agreements, the City has the sole and absolute discretion to require mediation of claims, but mediation is a non-binding, non-adjudicative proceeding. Both Ric-Man and the City’s Office of Capital Improvement Projects Department , with the advice and counsel of the City Attorney’s Office, have agreed that it could be beneficial to explore a modification to the Agreements that would provide for arbitration (which is a binding, adjudicative proceeding), if such arbitration proceedings could be accomplished on an expedited basis and without inordinate cost or delay.