HomeMy WebLinkAboutE-2.1. Approve 4th Amendment PSA Northstar Chemical for Water Treatment ChemicalsCONSENT CALENDAR E-2
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: TIKAN SINGH, GENERAL MANAGER
DATE: MAY 22, 2023
SUBJECT: APPROVE THE FOURTH AMENDMENT TO THE PROFESSIONAL
SERVICES AGREEMENT WITH NORTHSTAR CHEMICAL TO PROVIDE
WATER TREATMENT CHEMICALS AND EQUIPMENT SERVICES
BACKGROUND:
On June 27, 2022, the Azusa Utility Board approved the Third 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 Agreement was amended to extend the term
until June 30, 2023, with three additional one-year extension options. Northstar continues to
provide water treatment chemicals at a competitive price, and Azusa Light & Water (ALW)
recommends exercising its option to extend the PSA for one-year, effective July 1, 2023 in an
amount not to exceed $175,000.
RECOMMENDATION:
Staff recommends the Utility Board take the following actions:
1) Approve the Fourth Amendment to the Professional Services Agreement with
Northstar Chemical, as a DBA of Pacific Star Chemical, in an amount not to exceed
$175,000, in accordance with Azusa Municipal Code Section 2-517(a) (24); and
2)Authorize the Mayor to execute the Fourth Amendment, in a form acceptable to the
City Attorney, on behalf of the City.
ANALYSIS:
Northstar delivers Azusa Light & Water 12.5% sodium hypochlorite. This chemical is used for
groundwater disinfection at eleven groundwater wells throughout the ALW water system. In
2017, the Utility Board approved a two-year PSA with Northstar to continue to supply 12.5%
Approved
Utility Board
05/22/2023
Approve Fourth Amendment – Northstar Chemical
May 22, 2023
Page 2
sodium 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 until June 30, 2021. The 12.5% sodium
hypochlorite was at $1.50 per gallon. On June 28, 2021, the Azusa Utility Board approved the
Second Amendment to the Professional Services Agreement with Northstar to extend the term
until June 30, 2022, the 12.5% sodium hypochlorite was at $1.60 per gallon. On June 27, 2022,
the Azusa Utility Board approved the Third Amendment to the Professional Services Agreement
with Northstar to extend the term until June 30, 2023, with three additional (1) one-year
extension options. The 12.5% sodium hypochlorite was at $2.88 per gallon.
With the current one-year extension expiring, ALW is losing the one-year locked price.
Northstar this year has experienced substantial price increases for chemicals. The best rate
Northstar can lock in is for two-quarters July 1, 2023 until December 31, 2023 for 12.5% sodium
hypochlorite at $3.18 per gallon. The increase is due to inflation, high demand for chlorine
products, and local supply shortages. For the remaining two quarters from January 1, 2024 until
June 30, 2024 Northstar will honor a not to exceed price increase of $0.25 per gallon per quarter
for 12.5% sodium hypochlorite.
As part of this agreement, Northstar will furnish a new 405-gallon tank which will replace a
smaller tank at ALW Well #8. The double wall tank will be provided at no cost to ALW, per our
tank agreement. ALW will have the option to purchase the tank per the following schedule,
beginning after first delivery into the new tank:
Year Price
1-2 $3,925.00
3-5 $2,750.00
5 and beyond $1.00
Univar Solutions quote last year was $3.62 per gallon for 12.5% sodium hypochlorite for one
quarter, July 1, 2022 until September 30, 2022. This year Univar Solutions quote is $3.21 per
gallon for 12.5% sodium hypochlorite for one quarter only, July 1, 2023 until September 30,
2023.
The purchase of chemicals for water treatment is exempt from competitive bidding pursuant to
Azusa Municipal Code Section 2-517(a) (24); however, ALW Water Division is committed to do
all the due diligence to provide the best for ALW customers to provide safe reliable drinking
water that meets or exceeds all the water quality standards. Northstar also delivers to several
water agencies in Southern California including City of Monrovia, San Gabriel Valley Water
Co., City of Colton and West Basin MWD to name a few. Northstar continues to work with
ALW.
FISCAL IMPACT:
The chemicals are budgeted in the Water Division’s Operating Budget. There are sufficient funds
for water treatment chemicals in Water Fund Account 32-40-722-701-6563 – Chemicals &
Filtering Materials, Supplies/Special.
Approve Fourth Amendment – Northstar Chemical
May 22, 2023
Page 3
Prepared by:
Carlos Solis
Water Treatment Supervisor
Prepared by: Reviewed and Approved:
Melissa Barbosa, PE Tikan Singh
Assistant General Manager General Manager
Water Operations
Reviewed and Approved:
Sergio Gonzalez
City Manager
Attachments:
1) Fourth Amendment to Professional Services Agreement
2) Northstar Chemical Quote
3) Univar-USA Quote