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ADOPT A RESOLUTION APPROVING FINDINGS AND AUTHORIZING CONTRACT AMENDMENT NO. 3 WITH USALCO, LLC FOR THE PURCHASE OF WASTEWATER TREATMENT POLYMER
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RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve findings pursuant to Stockton Municipal Code Section 3.68.070 in support of an exception to the competitive bidding process.
2. Authorize the City Manager to execute a two (2) year contract extension with USALCO, LLC for a not-to-exceed amount of $17,791,945.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
In the wastewater treatment process, a specialized polymer chemical is frequently added to wastewater to help consolidate suspended materials. Following a performance-based bid process, the City Council authorized a five (5) year contract with USALCO, LLC (USALCO) by Motion No. 2019-05-21-1115 for the purchase of polymer for the Municipal Utilities Department (MUD) Wastewater Operations Division. The total price for the five-year contract was $10,500,000. Subsequent Amendments No. 1 and No. 2 approved unit cost changes and added $2,500,000 to the contract. The contract total price was increased to $13,000,000.
If approved by the City Council, this action will accept the findings of exceptions to the competitive bid process and authorize Contract Amendment No. 3 with USALCO LLC extending the contract for two additional years through June 30, 2026, and increasing the not-to-exceed amount to $17,791,945.
DISCUSSION
Background
The Regional Wastewater Control Facility (RWCF) uses various polymer chemicals as coagulants that thicken solids in wastewater to make it easier to separate and remove them during the treatment process. The type, quantity, and dosing rate of polymer used in the wastewater treatment process is determined by the characteristics of the type of wastewater being treated. A product that works for one treatment plant, or process, may not work for another due to the varying nature of wastewater and the need to meet specific treatment criteria.
Following scaled performance testing, the City Council authorized a five (5) year contract with USALCO, by Motion No. 2019-05-21-1115, for the purchase of polymer for use at the MUD Tertiary Treatment facility. The total price for the five-year contract was $10,500,000. Subsequent Amendments No. 1 and No. 2 approved unit cost changes and the latter added $2,500,000 to the contract by Motion No. 2022-03-01-1206. The contract total price was increased to $13,000,000.
Present Situation
As part of the Regional Wastewater Control Facility (RWCF) Modifications Project (Project), the method for disinfecting tertiary treated wastewater has been changed from chlorination/dechlorination to ultraviolet dechlorination. Since polymer usage is dependent on the unique characteristics of the wastewater stream, a period of testing is needed to determine if the current polymer will be as effective with the new disinfection process as it was with the previous.
In addition, a new discharge outfall has been constructed on the east bank of the San Joaquin River. This equipment will also require a commissioning and testing period. It is important to continue using the same polymer product to make adequate comparisons between the prior disinfection and outfall and the new systems. The commissioning and testing period will confirm if the current product is still effective. Otherwise, MUD will proceed with a new performance-based bid process, which can be a lengthy process and take over six months to complete.
Staff recommends that the City Council accept the findings supporting exceptions to the competitive bidding process and authorize Contract Amendment No. 3 with USALCO, LLC extending the contract for two additional years through June 30, 2026, and increase the not-to-exceed amount to $17,791,945.
Findings
Pursuant to Stockton Municipal Code Section 3.68.070, Council may approve findings that support an exception to the competitive bidding process. Proposed findings to support this purchase are:
1. The RWCF has a unique wastewater stream that requires performance-based bidding to determine the specific product that will achieve desired treatment results.
2. The performance-based bid process is lengthy and can take over six months to complete.
3. The new ultraviolet disinfection system and outfall are now undergoing commissioning and start-up testing.
4. It is necessary to continue using the same polymer for start-up testing to provide an adequate comparison with the old system and permit requirements.
5. It is economically feasible to determine if the current polymer remains the most effective product for use.
6. USALCO has provided a consistent polymer product and service to the City throughout the contract period.
7. It is in the City’s best interest to extend the current contract for an additional two (2) years while startup commissioning of the RWCF Plant Modifications Project is completed and all processes are online and operating as designed.
FINANCIAL SUMMARY
There is sufficient budget in the Wastewater Chemicals account in Fiscal Year 2023-24. Future annual purchases will be budgeted in the same account and be presented to the Council for approval during the annual budget process.
There is no impact to the General Fund, or any other restricted fund, as a result of taking the recommended action.