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City Council Staff Report
July 25, 2023
Agenda Item No. 5
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Mark Vukojevic, Utilities Director - 949-644-3011, [email protected]
PREPARED BY: Joshua Rosenbaum, Senior Management Analyst, [email protected]
PHONE: 949-644-3011
TITLE: Approval of Purchase Order for the Purchase and Delivery of Sodium Hypochlorite
ABSTRACT:
The Utilities Department administers the disinfection of the City of Newport Beach's (City's) drinking water supply. The main component of the disinfection is sodium hypochlorite (commonly referred to as chlorine). Following a Request for Bids process, the Utilities Department recommends that the City Council approves a purchase order for the purchase and delivery of sodium hypochlorite with JCI Jones Chemical, Inc.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and
b) Authorize the City Manager to approve a purchase order for the purchase and delivery of sodium hypochlorite from JCI Jones Chemical, over the current and next two fiscal years, up to a total amount of $750,000.
DISCUSSION:
Liquid sodium hypochlorite, a chlorine product, is used to disinfect the City's drinking water supply prior to entering the water distribution system. Licensed staff members from the Utilities Department use highly sensitive equipment and analyzers to measure, dose and monitor the liquid sodium hypochlorite amounts to specific set point parameters. The water is then retested by a laboratory at 30 different locations throughout the water distribution system. Approximately 100,000 to 120,000 gallons of sodium hypochlorite are used annually.
On December 13, 2022, the City Council approved a budget amendment to increase the Water Fund's appropriation for the purchase of sodium hypochlorite, as the price of the commodity doubled during that year. The cost increases stemmed from higher energy, transportation, raw material, and inflationary costs associated with producing the chlorine products. Although the situation has stabilized, there are ongoing concerns regarding chlorine production and product availability in the United States. 5-1
Approval of Purchase Order for the Purchase and Delivery of Sodium Hypochlorite July 25, 2023
The City issued a formal Request for Bids (RFB) solicitation for qualified companies to provide the City with bulk quantities of sodium hypochlorite. RFB23-74 was posted on the City's public procurement system (PlanetBids online portal) on June 8, 2023, with bids due on June 29, 2023. The City received two bids and the results of the cost proposals are as follows:
RANK
VENDOR
COST PER GALLON OF
SODIUM HYPOCHLORITE
1 JCI JONES CHEMICAL INC
$1.7519 per gallon
2 OLIN CORPORATION
$2.19 per gallon
JCI Jones Chemical, Inc., (JCI) has submitted the lowest responsible bid. JCI has a facility in Torrance, California and has provided water treatment chemicals and related products within California for over 60 years. Furthermore, the company has supplied sodium hypochlorite for water treatment to several Southern California water agencies. The company's products meet all of the industry standards as required by the City's specifications. Staff also believes, with the size of the company, its employees' experience and references, JCI will be able to source and deliver sodium hypochlorite to the City even during limited supply conditions. Utilities staff recommends the approval of a purchase order with JCI Jones Chemical, Inc., for the purchase and delivery of sodium hypochlorite.
FISCAL IMPACT:
The adopted budget includes sufficient funding for this purchase. The purchase of sodium hypochlorite will be expensed to the Water Enterprise Fund's Treatment Chemical account in the Utilities Department, 7019052-841018. Depending on the amount of water produced by the City, the Utilities Department estimates spending approximately $225,000 a year based on current bid pricing. The total purchase order cost includes contingencies for production and for wholesale price volatilities and inflationary factors in future years.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). 5-2