HomeMy WebLinkAboutE-5.1. Approve Second Amendment to PSA with Northstar ChemicalCONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: MANNY ROBLEDO, DIRECTOR OF UTILITIES
DATE: JUNE 28, 2021
SUBJECT: APPROVE SECOND AMENDMENT TO THE PROFESSIONAL SERVICES
AGREEMENT WITH NORTHSTAR CHEMICAL TO PROVIDE WATER
TREATMENT CHEMICAL AND EQUIPMENT SERVICES
BACKGROUND:
On May 28, 2019, the Azusa Utility Board (“Utility Board”) approved the First Amendment to
the Professional Services Agreement (“PSA”) with Northstar Chemical (“Northstar”) for “mini-
bulk” delivery of 12.5% sodium hypochlorite used in water treatment. The PSA was amended to
extend the term for two years, with three additional one-year extension options. Northstar has
continued to perform well at a competitive price, and Azusa Light & Water (“ALW”)
recommends exercising its option to extend the PSA for one year, effective July 1, 2021, in an
amount not to exceed $187,000.
RECOMMENDATION:
Staff recommends the Utility Board take the following actions:
1) Approve the Second Amendment to the Professional Services Agreement (“Second
Amendment”) with Northstar Chemical, as a DBA of Pacific Star Chemical, in an
amount not to exceed $187,000, in accordance with Azusa Municipal Code Section 2-
517(a)(24); and
2)Authorize the Mayor to execute the Second Amendment, in a form acceptable to the
City Attorney, on behalf of the City.
ANALYSIS:
Northstar Chemical has been supplying 12.5% sodium hypochlorite to ALW since August 2014.
This chemical is used for chlorination at each of ALW’s eleven groundwater wells. In 2017, the
Utility Board approved a two-year PSA with Northstar to continue to supply 12.5% sodium
E-5Approved
Utility Board
6/28/21
Approve Second Amendment – Northstar Chemical
June 28, 2021
Page 2
hypochlorite at $1.50 per gallon. On May 28, 2019, the Utility Board approved the First
Amendment to the PSA, extending the term of the PSA for two (2) years from July 1, 2019 to
June 30, 2021, with three (3) additional, one (1) year extension options to be exercised by the
City of Azusa.
With the current two-year term expiring, ALW again negotiated pricing with Northstar.
Northstar has agreed to commit to a price of at $1.60 per gallon over an additional one-year term.
This $0.10 per gallon increase is mostly attributed to high demand for chlorine products as well
as local supply shortages. It is noteworthy that Northstar has held their price of $1.50 per gallon
for the last four years.
The purchase of chemicals for water treatment is exempt from competitive bidding pursuant to
Azusa Municipal Code Section 2-517(a)(24); however, Northstar has consistently been the
lowest cost provider to date. For reference information, a 12.5% sodium hypochlorite quote was
obtained from Univar-USA at a price of $2.21 per gallon, which is 32% higher than Northstar.
FISCAL IMPACT:
There are sufficient funds budgeted for water treatment chemicals in Water Fund 32, Account
No. 32-40-722-744-6563 – Chemicals & Filtering Materials, Supplies/Special.
Prepared by: Reviewed and Approved:
Jared Macias Manny Robledo
Assistant Director of Utilities - Water Operations Director of Utilities
Reviewed and Approved:
Sergio Gonzalez
City Manager
Attachments:
1) Second Amendment to Professional Services Agreement
2) Northstar Chemical Proposal
3) Univar-USA Quote