Miami-Dade County

Sewer contractor could earn $18 million over 12 years

Ralph Garcia-Toledo, president of G-T Construction Group Inc., explains some of the details of Miami-Dade’s Ocean Outfall sewer project in the Coral Gables offices of CH2M Hill on Friday, July 8, 2016.
Ralph Garcia-Toledo, president of G-T Construction Group Inc., explains some of the details of Miami-Dade’s Ocean Outfall sewer project in the Coral Gables offices of CH2M Hill on Friday, July 8, 2016. adiaz@miamiherald.com

A firm owned by the finance chairman of Miami-Dade Mayor Carlos Gimenez’s reelection effort could collect up to $18 million over 12 years for work on a 2014 county sewer-system contract, according to information released this week.

G-T Construction Group, owned by veteran county contractor Ralph Garcia-Toledo, is one of 14 subcontractors for CH2M Hill, which in 2014 won a $139 million agreement with Miami-Dade to supervise a costly rerouting of treated wastewater currently pumped into the Atlantic Ocean.

CH2M Hill, an engineering and project-management firm based in Englewood, Colorado, declared G-T Construction’s fees in the project to be “trade secrets” when responding to a public-records request from the Miami Herald in June. The company marked out financial information when it turned over the document, which county attorneys had declared a public record.

The Miami Herald objected to the redactions and threatened legal action over access to the documents. After extended negotiations and discussions, CH2M Hill this week provided access to the original contract. On Thursday, a reporter reviewed an unredacted version, which was signed in 2015.

It showed that CH2M Hill agreed to pay G-T Construction a maximum of $9 million during the first six years of the Ocean Outfall contract. The contract includes another $9 million cap if Miami-Dade extends the agreement in 2020 for another six years and retains G-T Construction as a sub.

I’m doing the same thing I’ve always done for 20 years. Which is construction-management services.

Ralph Garcia-Toledo

G-T Construction only collects money by billing work for Garcia-Toledo and a staff that CH2M Hill said in a statement is expected to hit 30 employees a year with an average payroll cost of $50,000 each. Invoices show G-T Construction has billed CH2M Hill about $672,000 for Garcia-Toledo and five employees since the contract began in 2014 through April. A CH2M Hill lawyer said the figure is a reminder that the Miami company may not collect even close to the maximum fee.

“G-T Construction is not on a path for $9 million during the six-year term,” said Al Dotson Jr., a lawyer and lobbyist at Bilzin Sumberg who represents CH2M Hill.

The original contract lays out two sets of tasks for G-T Construction. The first involves cost estimating, project scheduling, document control and other administrative and construction-management duties that CH2M Hill said would include field work and inspections. The other assigns Garcia-Toledo a role in “public and stakeholder outreach support,” which includes meeting with county officials, regulatory coordination and other briefings with Miami-Dade leaders throughout the 12-year project.

In past interviews, Gimenez said his relationship with Garcia-Toledo had no bearing on G-T Construction’s role in county business.

Gimenez cited Garcia-Toledo’s long history doing business with Miami-Dade, which dates back years before Gimenez became mayor in 2011. Garcia-Toledo’s firm was a subcontractor on the team that won the 2000 county contract to build the Adrienne Arsht Center for the Performing Arts, helped expand Miami International Airport’s North Terminal through a contract awarded in 2007, and was hired by Miami-Dade in 2003 to install seats at the Crandon Park tennis facility.

While Gimenez recommended CH2M Hill for the 2014 Ocean Outfall contract, Garcia-Toledo’s firm ended up on the losing side of another hard-fought procurement that year when the mayor recommended county commissioners pick a CH2M Hill rival, AECOM, for a $90 million sewer contract. “What he does, he does,” Gimenez said of Garcia-Toledo in June. “I let the process run its course.”

I let the process run its course.

Miami-Dade Mayor Carlos Gimenez

This week, Garcia-Toledo said his CH2M Hill deal is a reflection of past success in county projects and his track record as a problem solver in complex government jobs. “I’m doing the same thing I’ve always done for 20 years,” he said. “Which is construction-management services.”

Subcontractor agreements typically reserve firms a percentage of the total amount awarded to the main contractor. G-T Construction Group’s contract with CH2M Hill lists an award of 13 percent, a figure that was also redacted in the original document that CH2M Hill gave to the county in response to the Herald’s records request.

G-T Construction’s share of the CH2M Hill contract is larger than any of the eight small businesses signed on as subcontractors in a county set-aside program that requires public disclosure of maximum fees. The closest is the 9 percent assigned to ADA Engineering, a Doral firm that listed a payroll of 27 people when county commissioners approved CH2M Hill’s subcontractor package in 2014. G-T Construction listed only one employee at the time: Garcia-Toledo.

In a statement, CH2M Hill described G-T Construction as falling within a range of maximum fees — with ADA Engineering on the low end and the top slot belonging to Hazen and Sawyer, a national firm whose 12-year cap of $30 million would amount to about 22 percent of the total contract.

The Ocean Outfall work, along with AECOM’s contract to improve another network of county pipes and sewer systems, is part of a $14 billion public-works project slated to unfold over the next 20 years. County water rates are set to rise 8 percent this year to help fund part of the borrowing for the projects, along with other improvements.

Dotson said the $139 million maximum fee Miami-Dade awarded CH2M Hill would not have changed if another company won the bid or if G-T Construction hadn’t been brought on as a subcontractor. It didn’t matter “who was a member of the team,” he said.

All subcontractors earn their money by billing CH2M Hill for staff work. Like other county agreements, the Ocean Outfall contract includes a multiplier for various job designations designed to cover a company’s overhead expenses, benefit costs for employees and profit. The multiplier upped Garcia-Toledo’s hourly rate of $72 to roughly $200 an hour in invoices G-T Construction submitted to CH2M Hill and that were provided to the Herald from the Water and Sewer Department.

Gimenez tapped Garcia-Toledo to oversee what’s been a record-breaking fundraising operation in advance of the Aug. 30 mayoral primary, where the mayor faces a challenge from school board member Raquel Regalado and five other candidates. Garcia-Toledo also served as Gimenez’s volunteer finance chair in 2012, and often drove the candidate while lending time to the then-county commissioner’s successful bid to succeed Carlos Alvarez after he was recalled in a 2011 election.

“I’ve known him for some time,” Gimenez said of Garcia-Toledo. “I trust him to be a good finance chair, and he’s been a good finance chair.”

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