City Council Agenda Report
Meeting Date: December 5, 2023
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Administrative Analyst
Subject
Amendment No. 1 to Services Agreement with Waterline Technologies, Inc.
Recommendation
Approve and authorize the City Administrator to execute Amendment No. 1 to the Services Agreement with Waterline Technologies, Inc., in substantially the same form as submitted, to add a 100-gallon minimum policy per facility for bulk deliveries.
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.
Accordingly, following a Notice Inviting Bid process and after receiving only one bid package, on May 16, 2023, the City Council approved a Services Agreement with Waterline Technologies, Inc. (Waterline) for the supply of sodium hypochlorite 12.5 percent solution in the amount of $234,490.56, for a term of three years. Staff recently became aware that Waterline implemented a 100-gallon minimum policy per facility for bulk deliveries of 12.5 percent sodium hypochlorite solution. Since this policy was not included in Waterline’s bid, staff contacted Waterline to resolve this issue. Unfortunately, due to the higher cost of transportation and related inflationary factors, including the higher cost of labor, any delivery per location that receives under 100 gallons will be charged for 100 gallons, no exception. After discussions with the City Attorney’s Office, staff researched sodium hypochlorite agreements that the City could piggyback on to potentially replace Waterline as a vendor; however, no viable option was found.
There are a very limited number of sodium hypochlorite vendors. In addition, due to production plant outages, labor shortages, and transportation delays across the country during the COVID19 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. Waterline’s bid price for bulk deliveries was reasonable compared to other vendors.
Additionally, staff can manage bulk deliveries to minimize cost impact, if any.
Staff recommends the City Council approve the proposed Amendment No. 1 to add the 100- gallon minimum policy to the agreement with Waterline. If approved, staff will strive to receive bulk deliveries at facilities that require near or beyond 100 gallons to control costs. Facilities requiring lower amounts of sodium hypochlorite solution will be filled by staff from VPU’s stock of 55-gallon sodium hypochlorite solution drums.
Amendment No. 1 has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
There is no fiscal impact associated with this report.
Attachments
1. Amendment No. 1 - Waterline Technologies, Inc.