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RESOLUTION APPROVING THE PURCHASE OF MEMBRANE FILTERS FROM FILMTEC CORPORATION FOR THE DELTA WATER TREATMENT PLANT
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RECOMMENDATION
It is recommended that the City Council approve a resolution to:
1. Approve findings pursuant to Stockton Municipal Code Section 3.68.070 for an exception to the competitive bidding process.
2. Authorize the purchase of membrane filters from FilmTec Corporation.
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
The Delta Water Treatment Plant (DWTP) utilizes advanced membrane ultra-filtration to provide Stockton residents with high-quality drinking water that meets all State and Federal regulations. Under normal operations, membrane filter units have a service life of five to ten years. The filter units require replacement to maintain water production operations at the treatment plant. Currently, FilmTec Corporation (formerly Evoqua Water Technologies, Inc.) is the only manufacturer of membrane filter units approved by the State Water Resources Control Board (SWRCB) that are the correct size for the membrane filtration system used at the DWTP. Staff recommends approval of a sole-source purchase agreement with FilmTec Corporation for membrane filters in the amount of $380,437.66. Upon purchase and delivery, membrane installation will be completed by the Municipal Utilities Department (MUD) staff to ensure the continued production of high-quality drinking water for Stockton residents.
DISCUSSION
Background
The MUD operates and maintains the DWTP. When the DWTP was designed and constructed, advanced membrane ultra-filtration was installed in the treatment process to provide Stockton residents with high-quality drinking water that meets all State and Federal regulations. The membrane filtration system uses filter units that have a finite service life of five to ten years and require replacement under a regular maintenance program. If the filters are not replaced under the maintenance program, drinking water quality may fail to meet State and Federal standards, and the DWTP may need to stop production.
On December 31, 2019, the Memcor membrane product line was purchased from Evoqua Water Technologies LLC by DuPont de Nemours Inc. (DuPont) and is now operating under the DuPont FilmTec Corporation business unit. The contracts issued for the supply of Memcor membranes were transferred with the sale of the Memcor product line to FilmTec Corporation, including all bonds and insurance certificates. The Memcor business line is 100% owned by FilmTec Corporation.
Present Situation
In 2014, Evoqua Water Technologies, Inc. (FilmTec Corporation) supplied new membrane filters for the ten-skid membrane filtration system at the DWTP. These filter units have a finite service life of five to ten years and require replacement to ensure the membrane filtration system continues to perform as designed by the manufacturer. To make certain the filter units are replaced before the end of service life, the MUD in 2019 developed a maintenance program where filter units are replaced in two membrane skids each year. Under the current program, all filter units installed in 2014 will be replaced by FY 2023. This ongoing maintenance program will ensure the membrane filtration system is properly maintained and operated into the future.
The use of membrane filter technology is required to be approved by the SWRCB. FilmTec Corporation is currently the only approved manufacturer of membrane filters for water treatment by the SWRCB. In addition, this manufacturer has the correct type and size membranes designed for installation at the DWTP.
Staff recommends the City Council approve a sole-source purchase agreement for membrane filter units from FilmTec Corporation to service two membrane skids. FilmTec Corporation is providing the same pricing and free shipping for the filter units, the same conditions provided by Evoqua Water Technologies last year. The cost of the filter units is $380,437.66 including tax (Exhibit 1 to the Resolution).
A purchase order (PO) will be issued to FilmTec Corporation for purchase and delivery of the filter units. The PO includes the City’s standard terms and conditions (Exhibit 2 to the Resolution) with revisions requested by FilmTec Corporation, which afford certain protections related to the filter unit purchase. This purchase will ensure the DWTP is properly maintained for normal water treatment operations.
Findings
Stockton Municipal Code Section 3.68.070(A)(4) provides an exception to the competitive bidding requirements for purchases exceeding $75,000 when City Council approves findings that support and justify the purchase.
Proposed findings to support this purchase are:
1. There are no other alternative membrane filter units that meet National Sanitation Foundation standards that have been approved by the SWRCB and are the correct type and size for the DWTP membrane filter skid.
2. Membrane filter replacement is a standard maintenance practice required to preserve the quality of the filtration treatment process and the production of high-quality drinking water. If the filter units are not replaced before the end of service life, the City’s water production may fail to meet state and federal standards.
3. Maintaining the drinking water production system with the current type of membranes is more cost-effective than replacing them with a different filtration system, due to the supporting infrastructure, piping, structures, connections, electrical, tooling, and instrumentation in place for the existing membrane filtration system. Therefore, using the current type of membranes is in the public’s best interest.
4. The membrane filtration system warranty covers material costs for repairs due to defective membrane filters. The use of any membrane filter not supplied by FilmTec Corporation will void the existing warranty.
Staff recommends the City Council approve these findings as an exception to the competitive bidding process and authorize the purchase membrane filters from FilmTec Corporation in the amount of $380,437.66.
FINANCIAL SUMMARY
The cost of the FilmTec Corporation filters is $380,437.66. The FY 2021-22 Annual Budget includes appropriation to cover the purchase and delivery of membrane filters in the Water Utility Capital Maintenance account.
There is no impact to the General Fund or any other unrestricted fund from this action.