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Agenda Item: 8(d) |
Prepared By: Jeffrey E. Poteet, General Manager, Water & Sewer |
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Business: Consent Agenda Item |
Department: Water & Sewer |
Subject:
Title
Approval of a Purchase Order Increase to Mississippi Lime Company for SM Hical Pebble Lime (CaO Pebble) for North Water Treatment Facility in the amount of $125,000 - Jeffrey E. Poteet, General Manager, Water & Sewer
Body
BACKGROUND:
The City previously approved a purchase order with Mississippi Lime Company for the supply of pebble lime used at the North Water Treatment Plant (NWTP). Pebble lime is an essential treatment chemical in the lime softening process, where it is converted to a lime slurry (calcium hydroxide) and added, along with aluminum sulfate (alum), to raw water in the reactor/clarifier. The addition of lime raises the water's pH, causing total organic carbon (TOC), color, hardness, and alkalinity to form nearly insoluble precipitates that settle to the bottom of the reactor/clarifier. The clarified water then proceeds through filtration, disinfection, and distribution. This process is critical to meeting state and federal drinking water standards and ensuring the safe, reliable operation of the City's potable water system.
The original purchase order was based on a contract price of $414.50 per ton. In accordance with the contract, the current renewal price increased to $446.84 per ton, an increase of approximately 7.8% due to supplier pricing adjustments and market conditions. In addition to the higher unit cost, pebble lime consumption has exceeded original projections.
The increased lime usage was driven by operational conditions associated with the Biological Aerated Filter (BAF) Improvement Project. During replacement of the North Water Treatment Plant's raw water pump, the plant operated almost exclusively on Aquifer Storage and Recovery (ASR) recovery water from December 28, 2025, through July 31, 2026. Unlike the plant's normal raw water source, ASR recovery water requires additional lime to raise the treatment from pH 7.0 to approximately 10.0, resulting in significantly higher lime consumption over this period. Increased potable water production to meet customer demand also contributed to the higher chemical usage.
The original purchase order funding was established using projected Fiscal Year 2026 chemical usage and the contract pricing in effect at the time the budget was developed. During the annual contract renewal, the supplier implemented a contract-authorized price escalation driven by increased production costs, resulting in higher unit pricing for lime. In addition, the NWTP required more lime than originally projected due to the increased treatment of Aquifer Storage and Recovery (ASR) recovery water. The combination of the contract-authorized price escalation and the additional lime consumption exhausted the original purchase order funding. The proposed Fiscal Year 2027 NWTP operating budget, presented to the City Council on July 20, 2026, incorporates the updated contract pricing.
The original purchase order was issued in the amount of $647,836.20. An increase of $125,000 is requested to provide sufficient funding for pebble lime purchases through the remainder of Fiscal Year 2026 and maintain an adequate inventory to ensure uninterrupted drinking water treatment operations. The Water and Sewer unrestricted reserve balance is currently estimated at approximately $14 million, which is sufficient to support this expenditure while maintaining appropriate reserve levels.
FUNDING SOURCE / FISCAL IMPACT:
The requested purchase order increase of $125,000 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 an increase of $125,000 to the purchase order with Mississippi Lime Company for supply of SM Hical Pebble Lime (CaO pebble) for North Water Treatment Facility. The additional funding will ensure uninterrupted supply of critical treatment chemicals and maintain continuous operations at the City’s NWTP. Staff further recommends authorizing transfer of funds from the Water and Sewer unrestricted reserve account to support this purchase.
POTENTIAL MOTION:
“I move to approve the increase to the purchase order with to Mississippi Lime Company for SM Hical Pebble Lime (CaO pebble) for North Water Treatment Facilities in the amount of $125,000.”