City Council Agenda Report
Meeting Date: May 16, 2023
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Administrative Analyst
Subject
Services Agreement with Waterline Technologies, Inc.
Recommendation
A. Accept the bid proposal from Waterline Technologies, Inc. (Waterline) as the lowest responsive and responsible bid for the supply of sodium hypochlorite 12.5 percent solution; B. Approve and authorize the City Administrator to execute a Professional Services Agreement with Waterline, in substantially the same form as submitted, for the supply of sodium hypochlorite
12.5 percent solution for a total amount not to exceed $234,490.56, for a three-year term; and C. Authorize a contingency amount of 10% or $23,449, in the event of increased system demands or price volatility and grant authority to the City Administrator to issue amendments for an amount up to the contingency amount, if necessary.
Background
Vernon Public Utilities (VPU) owns eight active production wells that provide potable water to customers within the City’s water service area. The water derived from the production wells is disinfected with a 12.5 percent sodium hypochlorite solution to ensure that the water is potable and bacteria-free. The system cannot be operated without the sodium hypochlorite disinfection solution.
Due to production plant outages, labor shortages, and transportation delays across the country during the COVID-19 pandemic, the industry has experienced a severe shortage of sodium hypochlorite over the past couple of years. The shortage has forced manufacturers and suppliers/distributors to increase product prices multiple times due to supply curtailments that suppliers/distributors have experienced. Consequently, the City’s water treatment costs have increased from $50,975 in Fiscal Year (FY) 2020-21, to $63,890 in FY 2021-22, to a projected $70,000 for FY 2022-23. While the current contract for 12.5 percent sodium hypochlorite solution with Waterline is set to expire on June 30, 2023, it is anticipated that all funds on the contract will be exhausted by the end of May.
Therefore, to avoid a lapse in this essential service and in accordance with Vernon Municipal Code (VMC) 3.32.070 regarding competitive bidding, staff issued a Notice Inviting Bids (NIB) on April 11, 2023 for the supply of sodium hypochlorite 12.5 percent solution. The NIB was published in the local newspaper, the Huntington Park Bulletin, on the City’s procurement website, PlanetBids, and staff directly notified five prospective vendors. Only one bid package was received by the April 24, 2023 deadline. Staff reviewed the bid received from Waterline and deemed it a responsive and responsible bid.
Staff recommends City Council approve the proposed Services Agreement with Waterline in the amount of $234,490.56; and recommends a ten percent (10%) contingency of the total contract value, in the event of increased system demands or price volatility, for a potential total cost not to exceed $257,939.56. Pursuant to VMC Section 3.32.040, City Council approval is required as the proposed contract exceeds $100,000.
The Services Agreement has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not-to-exceed $257,939.56. Sufficient funds are available in Water Fund, Water Treatment Account No. 058-070-700-520140 for Fiscal Year (FY) 2022-23 and will be budgeted in subsequent fiscal years.
Attachments
1. Services Agreement with Waterline Technologies, Inc.