REPORT TO THE CITY COUNCIL
FROM: PAUL AMICO, PE, Interim Director
Department of Public Utilities
BY: CORY ASHER, Assistant Director
Department of Public Utilities - Wastewater Management Division
KRISTINA MATTHEWS, Program Manager
Department of Public Utilities - Wastewater Management Division
SUBJECT
Title
Approve the Second Amendment to the Requirements Contract with Kemira Water Solutions, Inc., a Delaware corporation, to increase the not-to-exceed amount by $1,703,279.59 and increase the total contract amount not-to-exceed $9,721,461.39, for the fifth and final year of the Contract to purchase ferric chloride and authorize the Director of Public Utilities, or designee, to sign the second amendment on behalf of the City. Bid File 9562 (Citywide)
Body
RECOMMENDATION
Staff recommends that Council approve the second amendment to the Requirements Contract (Contract) with Kemira Water Solutions, Inc., a Delaware corporation (Kemira), to increase the not-to-exceed amount by $1,703,279.59 for the fifth and final year of the Contract for a revised total contract amount of $9,721,461.39, for the continued purchase of ferric chloride, a chemical additive used for controlling hydrogen sulfide levels in the waste streams at the Fresno-Clovis Regional Wastewater Reclamation Facility, and authorize the Director of Public Utilities or designee, to sign the second amendment on behalf of the City.
EXECUTIVE SUMMARY
The Department of Public Utilities seeks approval for the second amendment to the current Requirements Contract with Kemira. This amendment increases the not-to-exceed amount by $1,703,279.59 for the fifth and final year of the Contract, for a total contract not-to-exceed amount of $9,721,461.39. Ferric Chloride (Ferric) is used at the Fresno-Clovis Regional Wastewater Reclamation Facility (RWRF) to control hydrogen sulfide concentrations in the liquid waste stream, which ultimately reduces hydrogen sulfide emissions in the digester gas. Hydrogen sulfide emissions are regulated under Environmental Protection Agency rules administered by the San Joaquin Valley Air Pollution Control District. Approval of the second amendment is recommended to achieve continued regulatory compliance and uninterrupted operations.
BACKGROUND
The Regional Wastewater Reclamation Facility (RWRF) currently treats approximately 60 million gallons of wastewater per day from Fresno, Clovis, and some unincorporated areas of Fresno County. The wastewater takes approximately 8 to 10 hours to reach the RWRF, and it arrives in a septic condition containing hydrogen sulfide. Hydrogen sulfide is a toxic and malodorous gas, and ferric chloride is used to control hydrogen sulfide concentrations in the liquid waste stream. Ferric chloride is added at the headworks as part of the odor control strategy to reduce the release of hydrogen sulfide in the headworks building, and adding it at the start of the liquid treatment process ultimately controls emissions of hydrogen sulfide in the digester gas. Control of hydrogen sulfide emissions is required as part of the RWRF air permit requirements.
The original Requirements Contract with Kemira was awarded by City Council on January 28, 2021, following a competitive bid process (Bid File 9562). Two bids were received, with Kemira submitting the lowest responsive and responsible bid proposal for $1,218,821.80 based on estimated annual usage.
On November 4, 2021, City Council approved the first amendment, which increased the not-to-exceed amount for the initial year to $1,798,821.80 and $1,554,840.00 for contract years two through five, resulting in an amended contract not-to-exceed total of $8,018,181.80.
Since the award of the Contract, actual ferric chloride usage has exceeded initial estimates due to unanticipated operational demands. Ferric chloride prices have also been subject to cost escalation driven by inflationary pressures, raw material price increases, and supply chain disruptions. The current unit price for ferric chloride has escalated at a rate higher than initially projected at the start of the contract term. With the unit price increase and higher actual usage, the total cost of ferric chloride under the Contract is projected to exceed the contract amount. Sufficient product supply is essential to maintain compliance with regulatory permit conditions for air emissions, and the contract needs to be amended to maintain adequate supply of ferric chloride.
This second amendment requests an additional $1,703,279.59 to cover increased costs and secure sufficient ferric chloride supply for the fifth and final year of the Contract. With this amendment, the revised total not-to-exceed contract amount will be $9,721,461.39. The City Attorney has reviewed and approved as to form.
ENVIRONMENTAL FINDINGS
By the definition provided in the California Environmental Quality Act Guidelines Section 15378, the increase to the requirements contract does not qualify as a “project”.
LOCAL PREFERENCE
Local preference is not applicable because this is an increase to an existing contract.
FISCAL IMPACT
The General Fund is not impacted by this expenditure, as the appropriations for the purchase of Ferric Chloride are included in FY2025 and FY2026 Enterprise Fund operating budget.
Attachments:
Second Amendment to the Requirements Contract
First Amendment to the Requirements Contract
Requirements Contract
Vicinity Map