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APPROVE FINDINGS AND EXECUTE CONTRACT AGREEMENTS FOR THE PURCHASE OF WATER AND WASTEWATER TREATMENT CHEMICALS THROUGH THE BAY AREA CHEMICAL CONSORTIUM
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve findings pursuant to Stockton Municipal Code section 3.68.070 which justify and support an exception to the competitive bidding process.
2. Authorize the City Manager to execute four contracts for the purchase of chemicals for water and wastewater treatment for Fiscal Year 2025-26.
3. Authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of the resolution.
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Summary
The Municipal Utilities Department (MUD) is comprised of three enterprise funds including Water, Wastewater, and Stormwater Utilities. The Wastewater Utility includes a sanitary sewer collection system of approximately 900 miles of gravity sewer main, 554 miles of lower lateral pipe, 27 pump stations, and 30 miles of pressurized force main that route sewage to the Regional Wastewater Control Facility (RWCF) for treatment. The system collects sewage from properties within the City, special districts outside the City, and certain areas within San Joaquin County. The RWCF is an advanced tertiary treatment facility with a 55 million-gallon per day (MGD) capacity and is located adjacent to the San Joaquin River.
The Water Utility provides drinking water service to the northern and southern regions of the Stockton Metropolitan Area, with the California Water Service Company and San Joaquin County serving the central region. The Delta Water Treatment Plant (DWTP) began operation in May 2012, providing up to 30 million gallons per day of treated surface water from the San Joaquin Delta and Mokelumne River.
Various chemical compounds are frequently used under state and federals regulations, in water and wastewater treatment and are an essential part of treatment processes used to remove impurities, improve water quality, and ensure public safety.
If approved by the City Council, this action will approve the findings and authorize four contracts for the purchase of water and wastewater treatment chemicals to the most responsive, responsible, and competitive vendor for each chemical at the specified unit price.
Each contract will be for one year, with the option to extend annually for up to three renewals.
DISCUSSION
Background
In 2013, the City of Stockton (City) joined the Bay Area Chemical Consortium (BACC) to benefit from bulk product pricing for the purchase of water and wastewater treatment chemicals. BACC is a group of public agencies from eight regions located throughout the Central Valley and Bay Area that coordinate competitive bidding for chemical contracts. BACC awards a contract to the lowest overall bidder for each chemical in each region. There were fifty-two agencies that participated this year. Purchasing chemicals by participating in the BACC bid process has resulted in significant cost savings over the past 12 years.
The chemicals to be purchased and the recommended suppliers are:
1. KAAM Group of Carlsbad, California for the purchase of Aqueous Ammonia at $1.30 per gallon. (Exhibit 1 to the Resolution)
2. Univar Solutions USA, LLC. of Kent, Washington for the purchase of Sodium Bisulfite at $2.845 per gallon. (Exhibit 2 to the Resolution)
3. Brenntag Pacific, Inc. of Santa Fe Springs, California for the purchase of Sodium Hydroxide (25%) at $888.48 per dry ton and Sodium Hydroxide (50%) at $774 per dry ton. (Exhibit 3 to the Resolution)
4. Univar Solutions USA, LLC. of Kent, Washington for the purchase of Sodium Hypochlorite at $3.29 per gallon. (Exhibit 4 to the Resolution)
BACC members pay a lump sum of approximately $500 per bid to facilitate the bidding process. Participants are encouraged not to vary from the lowest overall bid, as it would undermine the prices quoted for bulk quantities.
MUD staff participated in the preparation of the bid specifications and selected the specific chemicals required at the RWCF and DWTP. The combined request for bids from all the agencies is a cooperative purchase agreement that offers vendors an opportunity to sell larger quantities of their products, while offering lower prices for participating agencies.
Present Situation
The Bay Area Clean Water Agencies (BACWA) coordinated all bid specification preparations and advertisements on behalf of BACC since 2020. The invitation to bid for each chemical was advertised by BACWA in the Alameda Times Star newspaper on January 23, 2025. As the coordinating agency, BACWA received bids electronically through PlanetBids.com by February 20, 2025. Results were then released to BACC members.
The lowest bids of interest to the City are shown in the following table:
|
Chemical |
Unit |
FY 24-25 Rate $/Unit |
FY 24-25 Lowest Bidder |
FY 25-26 Rate $/Unit |
Unit Price Change |
|
Aqueous Ammonia (19%) |
Gal |
$2.15 |
KAAM Co |
$1.30 |
-40% |
|
Sodium Bisulfite (40%) |
Gal |
$2.80 |
Univar Solutions USA LLC |
$2.845 |
2% |
|
Sodium Hydroxide (25%) |
Dry Ton |
$840.15 |
Brenntag Pacific, Inc |
$888.48 |
6% |
|
Sodium Hydroxide (50%) |
Dry Ton |
$748.61 |
Brenntag Pacific, Inc |
$774.00 |
3% |
|
Sodium Hypochlorite (12.5%) |
Gal |
$3.25 |
Univar Solutions USA LLC |
$3.29 |
1% |
The chemical industry experienced widespread price increases in the years following the COVID-19 pandemic, predominantly due to material and labor shortages, production disruption, and increased transportation costs. The current prices reflect more stability in the chemical supply markets.
The lowest responsible, responsive bidder was determined by the overall lowest cost provided to all the BACC member agencies in each region. Contracts are awarded to the lowest overall bidder of all the agencies within the designated regions to take advantage of the lower bulk quantity bids. Choosing a bid other than the lowest overall bid undermines the intent of the consortium and negates the value of participation in the consortium.
Findings
Pursuant to the Stockton Municipal Code (SMC) section 3.68.070, the City Council may approve findings which justify and support an exception to the competitive bidding process. The following findings justify and support an exception:
1. The Bay Area Chemical Consortium (BACC) is a group of 52 public agencies that coordinates their chemical bids to obtain the best possible bulk bid price.
2. BACC conducts a competitive bid process to obtain the best possible bulk bid price.
3. The City of Stockton joined BACC to participate in the public bidding of chemicals necessary for the treatment of water and wastewater.
4. The bid specification used by BACC has been reviewed and determined to be compatible with City of Stockton standards.
5. Participating in the BACC cooperative purchase agreement benefits the City by reducing costs on large scale chemical purchases.
6. All four proposed contracts are cooperative purchasing agreements for the purchase of supplies or services through other governmental jurisdictions or public agencies.
FINANCIAL SUMMARY
Funds will be available following the City Council approval of the FY 2025-26 Wastewater Utility and Water Utility budget for the procurement of each chemical for FY 2025-26.
The respective Utility funds will be allocated annually as shown below:
|
Chemical |
Est. Annual Quantity |
Cost/ Unit |
Wastewater Estimated Annual Cost* |
Water Estimated Annual Cost |
Total 4-year Not to Exceed Amount |
|
Aqueous Ammonia |
60,000 Gal WW |
$1.30 |
$86,000 |
$0 |
$86,000 |
|
Sodium Bisulfite |
220,000 Gal WW 9,500 Gal W |
$2.845 |
$683,000 |
$34,000 |
$717,000 |
|
Sodium Hydroxide (25%) |
325 Dry Ton WW 110 Dry Ton W |
$888.48 |
$315,000 |
$98,000 |
$413,000 |
|
Sodium Hydroxide (50%) |
155 Dry Ton WW |
$774.00 |
$131,000 |
$0 |
$131,000 |
|
Sodium Hypochlorite** |
502,750 Gal WW |
$3.29 |
$1,803,000 |
$0 |
$1,803,000 |
|
|
|
TOTAL |
$3,018,000 |
$132,000 |
$13,178,600 |
* Wastewater Estimated Annual Cost includes 9% for taxes. Estimated annual costs rounded up to the nearest thousand dollars.
The quantities listed above are estimates only. The actual quantities purchased may vary depending on treatment needs and will be purchased at the contracted rates. The not-to-exceed amount represents the total expense for both water and wastewater throughout the potential 4-year contract term. The contracts allow for price changes if the contracts are extended. The not-to-exceed total includes a 3% annual escalation per year to account for potential cost of living increases.
Funds for future chemical purchases will be budgeted in the same accounts, in subsequent fiscal years, and subject to approval by the City Council through the annual budget development process.
This action has no impact on the General Fund or any other unrestricted funds.