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Agenda Item: 7(e) |
Prepared By: Jeffrey E. Poteet, General Manager, Water & Sewer |
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Business: City Council Item |
Department: Water & Sewer |
Subject:
Title
Approval of a Purchase Order Increase to Allied Universal Corporation for Sodium Hypochlorite Supply for Water Treatment Facilities in the amount of $141,650 - Jeffrey E. Poteet, General Manager, Water & Sewer
Body
BACKGROUND:
The City previously approved a purchase order with Allied Universal Corporation for the supply of sodium hypochlorite utilized at the City’s water and wastewater treatment facilities. Sodium hypochlorite is a critical chemical used in the disinfection process to ensure compliance with state and federal drinking water and wastewater treatment regulations and to maintain the safe and reliable operation of all treatment facilities.
The original purchase order was budgeted based on a unit cost of $1.54 per gallon. Due to market conditions and supplier pricing adjustments permitted under the contract, the current cost has increased to $1.67 per gallon, representing an increase of approximately 8.4%. In addition to the increase in unit pricing, the South Water Treatment Plant (SWTP) has experienced higher-than-anticipated demand flows, resulting in increased consumption of sodium hypochlorite.
The original purchase order funding for sodium hypochlorite was allocated among the City’s treatment facilities based on projected usage for the fiscal year. Since staff’s submittal of their budget request, sodium hypochlorite pricing has increased and treatment demand has exceeded original projections, particularly at the South Water Treatment Plant (SWTP). As a result, additional funding is required to maintain adequate chemical inventory and uninterrupted disinfection operations throughout the remainder of the fiscal year.
The SWTP currently has approximately $50,000 available within its chemical budget, as the original purchase order did not encumber the full budgeted amount for sodium hypochlorite. Based on the increased chemical costs and operational demand, a total additional appropriation of $141,650 is required to ensure an adequate supply of sodium hypochlorite through the remainder of the fiscal year and to maintain uninterrupted disinfection operations at all treatment facilities.
After application of the available $50,000 within the SWTP chemical general ledger account, the remaining $91,650 is proposed to be funded from the Water and Sewer unrestricted reserve account. The Water and Sewer unrestricted reserve balance is currently estimated at approximately $14 million, which is sufficient to support this expenditure while maintaining adequate reserve levels.
FUNDING SOURCE / FISCAL IMPACT:
The requested purchase order increase of $141,650 will be funded through a combination of available operating budget funds account 4005332-525245 and Water and Sewer unrestricted reserves. Approximately $50,000 is available within the South Water Treatment Plant (SWTP) chemical budget due to the original purchase order not encumbering the full budgeted amount for sodium hypochlorite. The remaining $91,650 will be funded from the Water and Sewer unrestricted reserve account. The Water and Sewer unrestricted reserve balance is currently estimated at approximately $14 million, which is sufficient to support this expenditure while maintaining adequate reserve levels.
RECOMMENDATION:
Staff recommends that the City Council approve the increase to the purchase order with Allied Universal Corporation in the amount of $141,650 for the continued supply of sodium hypochlorite necessary to maintain uninterrupted disinfection operations at the City’s water and wastewater treatment facilities and authorize the funding transfer of $91,650 from the Water and Sewer unrestricted reserve account.
POTENTIAL MOTION:
“I move to approve the increase to the purchase order with Allied Universal Corporation in the amount of $141,650 for the purchase of sodium hypochlorite for the City’s water and wastewater treatment facilities, and approve the transfer of $91,650 from the Water and Sewer unrestricted reserve account to fund the remaining balance of the purchase order increase.”