Camarillo City Council
AGENDA REPORT
Date: May 22, 2024
To: Honorable Mayor and City Councilmembers
From: Greg Ramirez, City Manager
Submitted by: Dave Klotzle, Public Works Director
Subject: Sodium Hypochlorite – Pricing Agreement Amendment
BACKGROUND
Sodium hypochlorite is used at the City of Camarillo (City) groundwater wells to disinfect the water pumped into the distribution system prior to use by potable water customers.
Sodium hypochlorite is also used for disinfection at City water reservoirs on an as needed basis. The City uses approximately 20,000 gallons of sodium hypochlorite each year.
On June 9, 2021, City Council approved Pricing Agreement 2021-48 (Agreement) with JCI Jones Chemicals (JCI) for the purchase of sodium hypochlorite at $1.22 per gallon (not including a 2.1% mill assessment) plus freight for a three-year term and a total budgeted amount of $96,440. The agreement included annual Consumer Price Index (CPI) adjustments for years two and three if requested by the vendor.
On August 26, 2021, JCI notified the City with a request to increase the pricing for sodium hypochlorite by approximately 9% due to an increase in cost of raw materials. On September 29, 2021, City Council approved Agreement Amendment 2021-48A for the purchase of sodium hypochlorite at $1.33 per gallon (not including the 2.1% mill assessment) plus freight. The three-year term budgeted amount increased to $105,090.
On March 31, 2022, JCI notified the City with a request to increase the pricing for sodium hypochlorite due to an increase in raw material costs and a shortage of supplies by the producers of the chemicals. The increase in the price of the chemical was 59%. Staff contacted other vendors that had previously submitted formal bids for these chemicals and received responses that they were no longer taking new clients and unit prices were now higher than the increased price request from JCI. On June 8, 2022, City Council approved Agreement Amendment 2021-48B at $2.12 per gallon (not including the 2.1% mill assessment) plus freight. The three-year budgeted amount increased to $124,045.
Sodium Hypochlorite – Pricing Agreement Amendment
May 22, 2024
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In June 2023, per the Agreement, JCI requested, and the City approved, a CPI increase for year three, increasing the price per gallon 1.62% from $2.12 to $2.1544 per gallon.
DISCUSSION
Pursuant to Section 2 of the Agreement and by mutual consent of the City and JCI, the agreement may be extended for one (1) additional year, effective July 1, 2024, through June 30, 2025.
Staff is recommending a third amendment to the Agreement for the purchase of sodium hypochlorite at JCI’s proposed pricing of $2.2276 per gallon, a 3.4% increase (not including the 2.1% mill assessment) plus freight for FY 2024/25 for a budgeted amount of $48,000.
FISCAL IMPACT
Funds for the Agreement Amendment with JCI will be included in the FY 2024/25 Proposed Budget, Water Utility Fund, Chemicals Account No. 860-3630-436.61-61.
CEQA DETERMINATIONS
City staff has determined, in accordance with Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, that JCI Jones Chemical Inc. Pricing Agreement for sodium hypochlorite is not subject to CEQA review because it can be seen with certainty that there is no possibility that the Pricing Agreement for sodium hypochlorite may have a significant effect on the environment. The activity of services is limited to the purchase of sodium hypochlorite.
RECOMMENDATION
Authorize the City Manager to execute Agreement No. 2021-48C with JCI Jones Chemicals for the purchase of sodium hypochlorite at $2.2276 per gallon (not including the 2.1% mill assessment) plus freight for FY 2024/25.
ATTACHMENTS
1. CC Agreement No. 2021-48C
2. CC Agreement No. 2021-48B
3. CC Agreement No. 2021-48A
4. CC Agreement No. 2021-48
REFERENCE MATERIALS – AVAILABLE FOR REVIEW AT CITY HALL None