REPORT TO COUNCIL
SUBJECT
Title
Award of Contract to Purchase Chlorine for the Water Pollution Control Plant (F15-16)
Report
REPORT IN BRIEF
Council approval is requested to award a contract in the amount of $125,000 to Sierra Chemical Company of Sparks, Nevada to supply elemental (liquid) chlorine for use by the Sunnyvale Water Pollution Control Plant (WPCP or Plant). Approval is also recommended to delegate authority to the City Manager to renew the contract for up to two additional one-year periods, subject to available funding, operational need and acceptable pricing/service.
BACKGROUND AND DISCUSSION
Chlorine is used by the WPCP to disinfect the treated wastewater prior to discharge in the Moffett channel, or for reuse in the City's recycled water system. Pathogen reduction through disinfection is required by WPCP's National Pollutant Discharge Elimination System (NPDES) permit that specifies water quality requirements for discharge of treated wastewater. If the Plant fails to meet these requirements at any time the City may be subject to penalties and/or administrative orders.
The Plant currently uses elemental chlorine, which is stored under pressure as a liquid and converted to a gaseous state. Gaseous chlorine is highly volatile and is no longer in widespread use (Sunnyvale and Sacramento are the only known jurisdictions in Northern California who utilize gaseous chlorine). A capital project to convert from gaseous to liquid-only chlorine will be bid this fiscal year, but the current process will remain in place until the new system can be commissioned (at the earliest in FY 2015/16).
A competitive bid to establish the current contract was issued in October 2011. Sierra Chemical was the only bidder, and is the only known provider of elemental chlorine in the region. It is highly unlikely that the City will receive competitive bids from other firms, so an exemption from competitive bidding is recommended in this instance. Section 2.08.070 of the Municipal Code allows for such a bid exemption.
ENVIRONMENTAL REVIEW
N/A.
FISCAL IMPACT
The current contract (which expires November 17, 2014) was established at $110,000, and Sierra Chemical has requested a $40 per ton price increase, from $540/one-ton cylinder to $580, or an increase of 7.4%. This is due to increasing production, transportation and regulatory costs. Although the increase equates to approximately $118,000 for the new one-year period, an amount of $125,000 is requested due to anticipated fluctuations in chemical usage. Budgeted funds are available in operating program 365 (Wastewater Management).
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
1) Award a contract to Sierra Chemical Company in the amount of $125,000; and 2) Delegate authority to the City Manager to renew the contract for up to two additional one-year periods, provided the operational need exists, budgeted funding is available and pricing/service remain acceptable.
Staff
Prepared by: Pete Gonda, Purchasing Officer
Reviewed by: Grace K. Leung, Director, Department of Finance
Reviewed by: John Stufflebean, Director, Environmental Services Department
Reviewed by: Robert A. Walker, Assistant City Manager
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Draft Blanket Purchase Order