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DATE: July 10, 2018 TO: City Council THROUGH: Alexander Nguyen City Manager FROM: Rosemarie Gaglione Public Works Director SUBJECT: Approve the First Amendment to Agreement A-7929 with Univar USA, Inc. CONTACT: Rosemarie Gaglione, Public Works Director rosemarie.gaglione@oxnard.org, (805) 385-8055 RECOMMENDATION: That City Council approve and authorize the Mayor to execute the First Amendment with Univar USA, Inc. for the increased cost per gallon for chemicals. BACKGROUND On September 1, 2016, the City issued a request for bids (RFB) for treatment chemical purchases for the Oxnard Wastewater Treatment Plant (OWTP), the Advanced Water Purification Facility (AWPF), the Water Campus and Water Blending Station No. 3. The RFB stated that the City desired to enter into a one-year purchase agreement with the vendor with the option to renew for two (2) additional one-year periods upon agreement of both parties. The City sent the RFB to sixteen (16) companies who provide such chemicals and also advertised on the City’s website and in the Vida newspaper. Several companies responded with bids, and Univar USA, Inc. (Univar) was selected as the lowest bidder for the chemicals for these facilities. The City Council awarded Agreement No. A-7929 to Univar at the Council’s meeting on November 15, 2016. The Agreement allows the vendor to amend its prices annually with the City’s approval of those new prices. These chemical increases are listed below:
CITY COUNCIL
AGENDA REPORT
TYPE OF ITEM: Info/Consent AGENDA ITEM NO.: 12
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Sodium Bisulfite 25% Location Current Price New Price Wastewater $0.87 /Gal $0.87/Gal
Citric Acid 50%
Location Current Price New Price Advanced Water Purification Facility
$4.60/Gal $5.01/Gal
Sodium Bisulfite 38%
Location Current Price New Price Advanced Water Purification Facility
$0.87/Gal $0.87/Gal
Sulfuric Acid 98%
Location Current Price New Price Advanced Water Purification Facility
$1.49/Gal $1.64/Gal
Staff contacted the chemical companies who were not successful during the bid process. They provided current chemical unit costs that are similar to Univar’s unit cost. Thus, staff recommends that the Council authorize these price increases. Additionally, staff determined on the basis of what the City has paid for chemicals in the past few years that an annual fluctuation of 15% was standard in this industry. Thus, staff requests an edit to the Agreement permitting the Purchasing Agent to have approval for future annual increases up to 15%. If a chemical price increases from one year to the next by more than 15%, staff will return to the City Council for additional approvals and appropriations. STRATEGIC PRIORITIES This agenda item is a routine operational item or does not relate to the four strategic plans adopted by City Council on May 17, 2016. FINANCIAL IMPACT Based on current activity at the wastewater treatment plant and the advanced water purification facility, the chemical unit price cost increases can be accommodated within the FY18 Adopted budget and FY19 Proposed Budget for this item. There is no change to the overall Agreement amount which is still not to exceed $836,053. Sufficient funds for the purchase of chemicals for FY18 are already encumbered in the Wastewater Fund Account No. 621-6202-843-8106 (encumbered balance of $33,000) and in the
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Advanced Water Purification Fund Account No. 601-6012-843-8106 (encumbered balance of $59,000). The estimated total expense for FY19 is $52,000 for Wastewater and $141,000 for the Advanced Water Purification Facility. Sufficient funds have been budgeted in the FY19 Proposed Budget. ATTACHMENTS:
Attachment A- First Amendment to Agreement No. A7929
Attachment B - Executed Univar Agreement No. A-7929
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