21 - Aluminum Sulfate Bid for Water TreatmentItem No. 21
Memorandum
TO: Mayor & City Council
Grayson Path, City Manager
FROM: Doug Harris, Director of Utilities
SUBJECT: AWARD WATER TREATMENT ALUMINUM SULFATE BID
DATE: September 28, 2020
BACKGROUND:
Bids for water and wastewater treatment chemicals were approved by City Council at the August
10, 2020 meeting.
STATUS OF ISSUE:
The low bid submitted for Aluminum Sulfate, used at the water treatment plant, was $137.10/ton,
received from Univar USA, Inc. This bid amount was verified with Univar's account
representative for accuracy prior to the August 10th City Council meeting. On Friday, September
11, 2020, Univar stated they were unable to honor the bid price and were withdrawing their bid,
due to an error by a Univar Municipal Specialist. City Staff attempted to insist that Univar honor
their bid given their assurance that led to the City Council awarding the bid and the City developing
their budget around this, but Univar has stated they cannot. In addition to Univar's bid, there were
five (5) other vendors which submitted bids for Aluminum Sulfate, the next lowest bidder was
Chameleon Industries, Inc., with a bid amount of $238.00/ton. Chameleon Industries was
contacted Monday, September 14, 2020, and verified they would honor the price of $238.00/ton.
The water and wastewater treatment chemical bid amounts were used in preparation of the FY
2020/2021 budget, the Aluminum Sulfate bid price of $238.00/ton constitutes an estimated
increase to the Water Production chemical budget by $100,900.00. After re-examining the Utility
Budget, we do not recommend amending the budget at this time. Instead, the increase will be offset
by 1) utilizing existing storage of treatment chemicals we have not used this FY19/20 but were
budgeted for in FY20/21, 2) the water treatment chemical budget buffer of $34,214.00, and finally
3) in a worst case scenario possibly delay one or more capital projects in the Water Production
budget until we get further in the FY and see how expense and revenue are netting out. In addition,
we will carefully monitor other line items to help offset as well to help fund capital projects with
this adjustment. Even if this issue had been known prior to awarding the bid and/or putting the
budget together, we simply would not have budgeted one or more of the projects, so at least this
way, if the chemical budget (which is always dependent on actual usage) comes in on track or less,
we can still proceed with the originally planned capital projects. Either way, we are confident we
can keep the Utility Department within budget.
Aluminum Sulfate is on the primary chemicals used at the water treatment plant, and is essential
in the treatment process.
BUDGET:
Department 82 - Water Production 10-0211-82-00 for Aluminum Sulfate $238,000.00. This is an
increase of $100,900.00 which is explained in the Status of Issue section above.
OPTIONS:
1. Approve the bid received from Chameleon Industries, Inc. for Aluminum Sulfate, in the
amount of $238.00/ton, to be used in FY 2020/2021 at the water treatment plant.
2. Deny the bid received from Chameleon Industries, Inc. for Aluminum Sulfate, in the
amount of $238.00/ton, to be used in FY 2020/2021 at the water treatment plant and
provide guidance to City Staff as how to next proceed.
RECOMMENDATION:
1. Approve the bid received from Chameleon Industries, Inc. for Aluminum Sulfate, in the
amount of $238.00/ton, to be used in FY 2020/2021 at the water treatment plant.
Note: City Staff will offset this expense as discussed in the Status of Issue section above,
monitoring as the FY goes on and adjusting Capital Improvement Projects as well as other
expenses as appropriate.