REPORT TO THE CITY COUNCIL July 24, 2014 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities THROUGH: MARTIN A. QUERIN, PE, Assistant Director Department of Public Utilities - Water Division BY: KENNETH G. HEARD, Chief of Water Operations - Production/SWTF Department of Public Utilities - Water Division RUSSELL B. GUILLIAMS, Water System Supervisor - SWTF Department of Public Utilities - Water Division SUBJECT ..Title Award a requirements contract in the amount of $184,563 to Olin Corporation dba Olin Chlor Alkali Products ("Olin''), for bulk sodium hydroxide and authorize the Director of Public Utilities, or his designee, to execute a one-year contract with provisions for two one-year extensions - Bid File 9278 (Citywide) ..Body RECOMMENDATION Staff recommends City Council award a contract to Olin and authorize the Director of Public Utilities, or his designee, to execute the contract. EXECUTIVE SUMMARY The Department of Public Utilities - Water Division, routinely uses sodium hydroxide as an additive in finished drinking water at the North East Surface Water Treatment Facility (NESWTF) and T3 Surface Water Treatment Facility (T3). The execution of a requirements contract with one supplier establishes a firm price, secured through competitive bidding, for a specified time, and allows the City to make purchases as needed. Funding for this contract is included in the FY2015 budget. Staff recommends award of a requirements contract to Olin Corporation of Tracy, California, for these services in the amount of $184,563. BACKGROUND The Department of Public Utilities - Water Division, considers sodium hydroxide an extremely effective enhancement chemical for City of Fresno's water supply. It conditions raw water, thereby enhancing the chemical reaction with the primary coagulant, in order to facilitate cleansing of the water. It also adjusts the pH of the treated water entering the water distribution system, rendering the water non-aggressive and reducing the potential for corrosion-related failures in both the distribution system, as well as the end-users' facilities (homes and businesses, etc.). A Notice Inviting Bids was published on April 28, 2014, per the City of Fresno Charter Section 1208. Ten Building Exchanges were faxed Notice Inviting Bids, and 16 specifications were distributed to prospective bidders. The bid opening was on May 13, 2014, and two bids were received ranging from $184,563 to $191,704. Olin submitted the lowest bid price in the amount of 184,563 and is considered the lowest responsive and responsible bidder. The Notice of Staff Determination of Contract Award was posted on the City's website on June 10, 2014. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378 the award of this contract does not qualify as a "project" and is therefore exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE Local preference did not affect the award of this requirements contract since none of the bidders qualify for the local business preference according to the Fresno Municipal Code Section 4-108(a) in that the bid amount did not exceed the $500,000 threshold. FISCAL IMPACT The expenditure, which is citywide, will not have any impact to the General Fund. Appropriations for bulk sodium hydroxide are included in the Water Division's FY2015 Operating Program budget within the Water Enterprise Fund (40101). Funding for this expenditure was included in the water rate model used to create the four-year utility rate plan and subsequently adopted by City Council on August 15, 2013 (Resolution 2013-143). Attachment: Bid Evaluation