RTC#03-119

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RTC#03-119 April 8, 2003

SUBJECT: Amendment of an Existing Contract for Wastewater Treatment Chemicals (F0203-71) (RTC #03-119)

REPORT IN BRIEF

Approval is requested for a three-year extension of an existing contract with Monolyte Laboratories, Inc., of Sandy, Utah, to provide polymer flocculant and related services for the Department of Public Works Environmental Services Division.

BACKGROUND

Polymer flocculants are used by the Water Pollution Control Plant (WPCP) to treat wastewater, including recycled water. The current product supplier, Monolyte Laboratories, was selected through a competitive proposal process in 2001. Request for Proposals No. F0006-86 was designed to identify a supplier with the technical expertise to formulate and supply polymer flocculants and to assist WPCP staff in optimizing production.

On July 31, 2001 (RTC 01-267), Council awarded a three-year contract in an amount not to exceed $3,576,600 to Monolyte Laboratories with an option to extend the contract for three additional years.

DISCUSSION

Monolyte Laboratories has now agreed to a six percent reduction in product cost if the three-year contract extension option is exercised at this time. This will result in cost savings of approximately $101,600 during the remainder of the existing contract term (sixteen months).

Under the terms of the contract, cost increases for the recommended three-year extension cannot exceed the change in the Consumer Price Index (CPI). Although future polymer usage and potential future changes in the CPI are hard to predict, if one assumes current levels of polymer usage and a six percent CPI increase in July 2004, potential cost savings during the three-year contract extension will be as follows:

Three-year extension at current polymer prices

$3,791,196

Three-year extension, based on six percent reduction in polymer prices

$3,530,104

Estimated cost savings

$261,092

When combined with the $101,600 savings during the balance of the existing contract, the total potential savings for the City is $362,692.

FISCAL IMPACT

The estimated total cost for the contract (with the recommended price reduction and three-year contract extension) is approximately $7 million. Potential cost savings through July 31, 2007, are $362,692. Funds for the purchase of polymer flocculants are budgeted in the Wastewater Management Program.

RECOMMENDATION

It is recommended that Council authorize the amendment of an existing contract with Monolyte Laboratories, Inc., in substantially the same form as the attached draft amendment, extending the Agreement through July 31, 2007, and reducing product costs by six percent.

Prepared by:
Elaine Wesely
Purchasing Officer

Reviewed by:
Mary J. Bradley
Director, Finance
Marvin Rose
Director, Public Works

Approved by:
Robert S. LaSala
City Manager

Attachments

Draft Second Amendment to Agreement
First Amendment to Agreement
Agreement

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REPORT IN BRIEF
Approval is requested for a three-year extension of an existing contract with Monolyte Laboratories, Inc., of Sandy, Utah, to provide polymer flocculant and related services for the Department of Public Works Environmental Services Division.

BACKGROUND
Polymer flocculants are used by the Water Pollution Control Plant (WPCP) to treat wastewater, including recycled water. The current product supplier, Monolyte Laboratories, was selected through a competitive proposal process in 2001. Request for Proposals No. F0006-86 was designed to identify a supplier with the technical expertise to formulate and supply polymer flocculants and to assist WPCP staff in optimizing production. On July 31, 2001 (RTC 01-267), Council awarded a three-year contract in an amount not to exceed $3,576,600 to Monolyte Laboratories with an option to extend the contract for three additional years.

DISCUSSION
Monolyte Laboratories has now agreed to a six percent reduction in product cost if the three-year contract extension option is exercised at this time. This will result in cost savings of approximately $101,600 during the remainder of the existing contract term (sixteen months). Under the terms of the contract, cost increases for the recommended three-year extension cannot exceed the change in the Consumer Price Index (CPI). Although future polymer usage and potential future changes in the CPI are hard to predict, if one assumes current levels of polymer usage and a six percent CPI increase in July 2004, potential cost savings during the three-year contract extension will be as follows:

Three-year extension at current polymer prices		$3,791,196
Three-year extension, based on six percent reduction in polymer prices		$3,530,104
Estimated cost savings		$261,092
When combined with the $101,600 savings during the balance of the existing contract, the total potential savings for the City is $362,692.

FISCAL IMPACT
The estimated total cost for the contract (with the recommended price reduction and three-year contract extension) is approximately $7 million. Potential cost savings through July 31, 2007, are $362,692. Funds for the purchase of polymer flocculants are budgeted in the Wastewater Management Program.

RECOMMENDATION
It is recommended that Council authorize the amendment of an existing contract with Monolyte Laboratories, Inc., in substantially the same form as the attached draft amendment, extending the Agreement through July 31, 2007, and reducing product costs by six percent.

Prepared by: Elaine Wesely Purchasing Officer

Reviewed by: Mary J. Bradley Director, Finance Marvin Rose Director, Public Works


Approved by: Robert S. LaSala City Manager


Attachments Draft Second Amendment to Agreement First Amendment to Agreement Agreement