City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: May 19, 2025
Report #:2504-4582
TITLE
Approval of Blanket Purchase Order with Olin Finance Company LLC for the Purchase of Bulk Sodium Hypochlorite for the Regional Water Quality Control Plant for a Two-Year Term with an annual amount of $400,000, for a Total Not-to-Exceed Amount of $800,000; CEQA Status – Not a Project
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to execute a Blanket Purchase Order with Olin Finance Company LCC for the purchase of bulk sodium hypochlorite for the Regional Water Quality Control Plant for a two-year term (July 1, 2024 through June 30, 2026) with an annual amount of $400,000 and a total not-to- exceed amount of $800,000.
BACKGROUND
The Regional Water Quality Control Plant (RWQCP) treats wastewater from a total of six communities (Partner Agencies) and produces approximately 230 million gallons per year of tertiary-treated recycled water for beneficial reuse. The RWQCP operates under strict regulatory requirements for disinfection of recycled water; sodium hypochlorite is used as the primary disinfectant to meet these standards.
The City has a three-year (Fiscal Years 2024-2026) pricing agreement with Olin Finance Company (Olin) to purchase sodium hypochlorite. Given this chemical's essential role in ensuring uninterrupted plant operations and regulatory compliance, the initial contract allocation was promptly approved at the staff level in accordance with approval authority procedures and procurement requirements at the time.
For Year 1 (Fiscal Year 2024), blanket purchase order Number 4624000004 was issued in the amount of $200,000. For Year 2 (Fiscal Year 2025), blanket purchase order number 4625000022, staff anticipates that the current contract capacity is not adequate. As chemical needs and unit prices have increased, staff is now bringing this request forward for City Council
authorization to ensure compliance with procurement processes and reinforce transparency in managing these important operational expenditures.
ANALYSIS
On July 7, 2023, the City executed a three-year pricing agreement with Olin for purchase of bulk sodium hypochlorite. The three-year term pricing agreement included up to $250,000 per year with CPI-U-based price escalation. However, an unanticipated increase in chemical usage and unit pricing led to the projected depletion of funds ahead of schedule. In Year 2 (Fiscal Year 2025), this gap has become more apparent and is primarily driven by operational changes and data reliability issues associated with the ongoing construction of capital improvement projects at the RWQCP. Staff have observed a slight increase in both Biochemical Oxygen Demand (BOD) and ammonia in wastewater concentrations, which have required additional sodium hypochlorite dosing to maintain regulatory compliance for disinfection.
Additionally, equipment calibration issues with the RWQCP’s chemical analyzers have resulted in inconsistences in accurately recording sodium hypochlorite dosing volumes, potentially leading to higher-than-expected chemical use. Staff is actively working to address these instrumentation concerns, but the combined effect has contributed to greater than anticipated chemical consumption in Year 2.
For the Year 3 (Fiscal Year 2026) blanket purchase order, a similar increase in contract capacity is requested to account for anticipated increases in chemical usage and unit pricing.
Procurement Process
The RWQCP regularly conducts a competitive procurement process to secure contracts for purchase of bulk sodium hypochlorite, issuing a new Request for Quotation (RFQ) every three years. The most recent RFQ (No. 188055) for the purchase of bulk sodium hypochlorite and delivery was issued on PlanetBids on May 1, 2023 and was due May 30, 2023. The low bidder, Olin Corporation, quoted a unit price of $2.419 per gallon of sodium hypochlorite based on an estimated annual need of 120,000 gallons (Attachment A). The RFQ establishes a price increase based on CPI-U (Consumer Price Index for Urban Wage Earners and Clerical Works in the San Francisco-Oakland-San Jose, CA area) on a fiscal year basis.
Table #1: Summary of Request for Proposal
Proposed Length of Project Three years
Total Days to Respond to Bid 30 days
Pre-Bid Meeting None Scheduled
Number of Responsive Bids Received 2
Range of Proposal Amounts
(based on estimated annual quantities & unit prices) $290,280 to $371,400 per year
FISCAL/RESOURCE IMPACT
Funding for the recommended increase to the purchase order in this report is available in the Fiscal Year 2025 Adopted Wastewater Treatment Fund operating budget. Any unspent funds from the blanket purchase order will be returned to the Wastewater Treatment Fund. Funding in subsequent fiscal years is subject to Council’s approval of each fiscal year’s budget appropriation.
STAKEHOLDER ENGAGEMENT
Staff engaged with prospective vendors through a competitive RFQ process. Internal coordination also occurred between RWQCP Operations and Administrative Services to align on anticipated chemical usage with a strategic procurement and contractual approach. In addition, an interdepartmental team, including Administrative Services, Public Works, Utilities, City Attorney’s Office, and City Manager’s Office staff meets monthly to review and discuss the RWQCP, including the budget impacts and market trends.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the purchase of sodium hypochlorite for the RWQCP is a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2).
ATTACHMENTS
Attachment A: Request for Quotation Submitted Bid, Olin Finance Company LLC, Pioneer Americas LLC
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer