Placement: Consent Agenda
Action Requested: Motion / Vote
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Approve Amendment #1 to Agreement Between the City of Port St. Lucie and Brenntag Mid-South, Inc. for Chemicals for Water and Wastewater Treatment (Piggyback Competitive Award)
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Submitted By: Anibal Barreto, Procurement Agent I, Procurement Management Division.
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Anibal Barreto, Procurement Agent I, PMD.
2. Parties: City of Port St. Lucie and Brenntag Mid-South, Inc.
3. Purpose: To provide 50% caustic soda to the water plant at the Utility Systems Department.
4. New/Renewal/Modified: Renewal.
5. Duration: July 3, 2022, through July 2, 2023.
6. Benefits to Port St. Lucie: This chemical is delivered via tanker to two (2) water treatment facilities. Brenntag provides a stable service of delivery and consistent product. Caustic Soda is used post-treatment to maintain balanced pH levels in the City’s Drinking water.
7. Cost to Port St. Lucie (Annual and Potential): Estimated annual expenditure is $1,052,202.35. Future expenditures will be appropriated each budget year.
Presentation Information: N/A.
Staff Recommendation: Move that the Council waive the bidding, per Chapter 35.04 (c) of the City’s code of ordinances, for good cause shown, and approve Amendment #1 to Agreement Between the City of Port St. Lucie and Brenntag Mid-South, Inc. for Chemicals for Water and Wastewater Treatment (Piggyback Competitive Award).
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve Amendment #1 to Agreement Between the City of Port St. Lucie and Brenntag Mid-South, Inc. for Chemicals for Water and Wastewater Treatment (Piggyback Competitive Award).
2. Move that the Council not approve Amendment #1 to Agreement Between the City of Port St. Lucie and Brenntag Mid-South, Inc. for Chemicals for Water and Wastewater Treatment (Piggyback Competitive Award) and provide staff with direction.
Background: The City’s water treatment facilities use a fifty percent (50%) solution of Sodium Hydroxide (liquid caustic soda) for pH adjustment in the odor control scrubbers that remove hydrogen sulfide from the product water and to adjust the pH of the final product water to ensure that it is non-corrosive when it is released into the distribution system for the customers. The City uses caustic soda to maintain regulatory compliance with FDEP Standards at the City’s Reverse Osmosis Water Treatment Plants. This is the most cost-effective method to maintain balanced pH levels in the City’s drinking water. On September 14, 2020, the City Council approved participation in Martin County's Contract #RFB2019-3133 for Chemicals for Water and Wastewater Treatment with Brenntag Mid-South, Inc. The City has been using the Martin County Contract to purchase this chemical. The contract was recently renewed on July 3, 2022. However, Martin County authorized a price increase on August 24, 2022, via Amendment #1 for 50% caustic soda from $1.80/gal to $3.55/gal.
The major factors that contributed to these increases were 5 major events in 2021 and the continued economic challenges we have faced in 2022. The 100-year freeze in the Gulf region in February, a fire at Formosa in May, brine treatment issues at Westlake and Oxy, Hurricane in New Orleans in late August and further industry consolidation. There were 3 major capacity closures of caustic producers in the US. These capacity reductions lead to reduction in product availability with plant closures and capacity rationalization. Domestic producers have also increased the amount of Sodium Hydroxide exported due to a higher return than selling product domestically leading to short supply in the US. At the same time domestic demand increased causing further tightness on the remaining available product in the US. These shortages lead to further increases as supply and demand imbalances came into play.
Issues/Analysis: Staff has reviewed the contract rates and finds them reasonable, acceptable and they meet all the requirements of the City’s procurement ordinance.
Financial Information: Funds will be appropriated by #431-3310-552300-00000 (Prineville Water Treatment Facility) #431-3312-552300-00000 (JEA Water Treatment Facility).
Special Consideration: The USD received a quote for the same chemical from Florida Chemical Supply at a rate of $4.976/gal. In light of that quote, the USD recommends approval of this Amendment #1.
Location of Project: Prineville Water Treatment Facility & JEA Water Treatment Facility
Attachments:
1. Amendment #1 to Piggyback Agreement with Brenntag Mid-South, Inc.
2. PSL Amendment #1
3. PSL Piggyback Agreement with Brenntag Mid-South, Inc.
4. Martin County-Renewal #1 with Brenntag Mid-South, Inc.
5. Brenntag Mid-South Price Increase Justification.
6. Florida Chemical Supply Formal Quote
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 9058
Legal Sufficiency Review:
Reviewed by Ella M. Gilbert, Senior Deputy City Attorney. Approved as to Legal form and sufficiency by James D. Stokes, City Attorney.