REPORT TO COUNCIL
SUBJECT
Title
Authorize the Issuance of Purchase Agreement to Hasa, Inc. for Purchase of Sodium Hypochlorite at the Water Pollution Control Plant (F23-159)
Report
REPORT IN BRIEF
Approval is requested to authorize the issuance of a purchase agreement to Hasa, Inc. of Saugus, California in an amount not to exceed $300,000 for the purchase of sodium hypochlorite at the Water Pollution Control Plant (WPCP) for a one-year period. Approval is also requested to authorize the City Manager to amend the not-to-exceed amount, subject to available budget and if pricing and service remain acceptable to the City.
EXISTING POLICY
Pursuant to Section 2.08.040 of the Sunnyvale Municipal Code (SMC) Council approval is required for the procurement of goods and/or services greater than $250,000 in any one transaction.
Further, SMC Section 2.08.220(a) authorizes the Purchasing Officer to direct the City’s participation with one or more governmental, public or quasi-public agencies in a cooperative agreement for the procurement of goods and/or services, provided that at least one of the agencies has solicited bids.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a "project" within the meaning of the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
BACKGROUND AND DISCUSSION
The final treatment process at the WPCP is the disinfection of treated wastewater using sodium hypochlorite (strong bleach). Sodium hypochlorite at a 12.5% concentration is delivered to the WPCP in 5000-gallon bulk tankers, 2-3 times per week, depending on operating conditions and the related chlorine demand. The chlorine in the sodium hypochlorite disinfects the treated wastewater, eliminating most of the remaining pathogens to acceptable limits for discharge.
Organic material is oxidized in the presence of chlorine. Sodium hypochlorite is pumped into the disinfection treatment process and given time (detention time) to oxidize any organic material. The WPCP measures bacteria to determine how well the disinfection process is working and measures the amount of chlorine residual present once the disinfection process has concluded. Having a bit of chlorine residual present ensures that as much organic material has been oxidized as possible. This critical treatment process ensures that the WPCP is discharging well-treated wastewater, meeting all effluent limitations related to disinfection and ensuring safety for anyone coming into contact with it.
The Bay Area Chemical Consortium (BACC) solicited bids for sodium hypochlorite in March 2023. Hasa Inc. was the lowest responsive bidder in this region. The BACC leverages volume purchasing power on behalf of over 60 water and wastewater agency members across the Bay Area. Bulk chemical purchases facilitated by the BACC create bidding efficiencies for participating agencies by offering volume pricing discounts during the bidding process.
Supply chain issues, raw material price increases, and transportation issues dramatically impacted this year’s bidding results. All resulted in a base unit cost increase from $1.42 to $2.88 per gallon, which is a 103% increase in the cost of sodium hypochlorite. This is on top of a nearly 70% percent increase in price per gallon in the last fiscal year.
The dollar amount requested is based on the volume (in gallons) of sodium hypochlorite needed for the disinfection of treated wastewater discharged to the Bay. This upcoming fiscal year, it is estimated that the WPCP will use approximately 160,000 gallons of odium hypochlorite. This is based on actual and predicted use of sodium hypochlorite to make recycled water (RW). Additional costs have been added as the WPCP is attempting to make RW that requires approximately three times more chlorine per million gallons of RW produced.
FISCAL IMPACT
Costs for chemicals are budgeted in Program 14600 - Wastewater Treatment. Chemical usage and corresponding cost fluctuates each year, sometimes substantially and has increased substantially from the previous year based on supply chain and raw material issues. Staff closely manages the various suppliers of chemicals under contract to meet treatment requirements while staying within budget.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
- Authorize the issuance of a purchase agreement to Hasa, Inc., in the not-to-exceed amount of $300,000 for the purchase of sodium hypochlorite;
- Authorize the City Manager to amend the not-to-exceed amount of the annual purchase order within operating budgeted appropriation limits if additional quantities are needed for wastewater treatment processes; and
Staff
Prepared by: Lisa Vo, Acting Purchasing Officer
Reviewed by: Tim Kirby, Director of Finance
Reviewed by: Ramana Chinnakotla, Director of Environmental Services
Reviewed by: Jaqui Guzmán, Deputy City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. BACC Bid Sheet