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SR 10-09-2018 3C City Council Report City Council Meeting: October 9, 2018 Agenda Item: 3.C 1 of 4 To: Mayor and City Council From: Susan Cline, Director, Public Works, Water Resources Subject: Award Purchase Orders for Water Treatment Antiscalants and Cleaner Chemicals Recommended Action Staff recommends that the City Council: 1. Award RFP #180 to Avista Technologies, a California-based company, as primary vendor; and King Lee Technologies, a California-based company, as secondary vendor, for the provision of water treatment antiscalants and cleaner chemicals for reverse osmosis membranes as required by the Public Works Department; 2. Authorize the Purchasing Services Manager to issue a purchase order with Avista Technologies for the provision of water treatment antiscalants and cleaner chemicals in the amount not to exceed $80,000 for one year, with four renewal options to extend on the same terms and conditions for year 2 and up to 3% annual increases for years 3 to 5 based on the Chemical Provider Price Index, for a total amount not to exceed $475,000 over a five-year period, with future year funding contingent on Council budget approval. 3. Authorize the Purchasing Services Manager to issue a purchase order with King Lee Technologies for the provision of water treatment antiscalants and cleaner chemicals in the amount not to exceed $20,000 for one year, with four renewal options to extend on the same terms and conditions, for a total amount not to exceed $100,000 over a five-year period, with future year funding contingent on Council budget approval. Summary To ensure a safe, reliable water supply for residents, the City uses antiscalant and cleaner chemicals in conjunction with water treatment reverse osmosis membranes to treat water at the Arcadia Water Treatment Plant. Staff recommends that the City award purchase orders to provide antiscalants and cleaner chemicals through October 2023 with Avista Technologies, as primary vendor, in an amount not to exceed $475,000; and King Lee Technologies, as secondary vendor, in an amount not to exceed $100,000. King Lee Technologies would be used if Avista Technologies could not meet City orders or operational requirements on a timely basis. 2 of 4 Discussion The City uses reverse osmosis membranes at the Arcadia Water Treatment Plant as part of a multi-stage process to treat groundwater sourced from the Santa Monica Basin to supply drinking water for approximately 18,000 Santa Monica residential, commercial and institutional service accounts. Reverse osmosis membranes filter out minerals, organic materials and salts, and require antiscalants and cleaner chemicals to prevent fouling from mineral scale, biological debris, and other buildup. Without antiscalants and cleaners, water-processing efficiency would decrease due to clogged membranes, and the expected five-year membrane lifespan would be shortened dramatically and require costly replacements. Due to proper maintenance and regular application of antiscalants and cleaners, the City was able to get seven years of use out of its inventory of 1,608 Toray membranes, recently replaced in November 2017 at a cost of $800,000. In support of the City’s water self-sufficiency goal, it is anticipated that Arcadia Water Plant modifications would expand treatment capacity from approximately 9,900 acre - feet per year to 13,400 acre-feet per year and improve water processing efficiency (percentage of finished drinking water produced from raw groundwater) from 82% to 92%. If approved, the modifications to the Arcadia Water Plant would add a closed circuit reverse osmosis system, which would require an increase in the use of antiscalant and cleaner chemicals by approximately 30%. This has been included in the purchase order award amount for years 4 and 5 for Avista Technologies. Vendor Selection The antiscalant and cleaner chemical industry has evolved since the City established its 2011 list of seven pre-approved combinations of antiscalant dosages/pHs for the Arcadia Water Plant. Therefore, the City asked vendors to recommend updated specifications and demonstrate their compatibility with the City’s water supply as part of the bidding process. The City issued a Request for Proposals (RFP) inviting vendors to submit new antiscalant dosage/pH combinations along with compatible cleaner chemical(s)/dosage recommendations. Vendors were required to take water samples from the Arcadia Water Plant and provide laboratory analyses demonstrating the 3 of 4 efficacy and compatibility of their products with the City’s reverse osmosis treatment system and current water quality characteristics. To evaluate pricing, vendors were asked to provide costs per million gallons of finished water produced for: 1) Antiscalants; 2) Acid to adjust the water pH to an optimal treatment level; and 3) Cleaner chemicals. RFP Data RFP Posting Date RFP Posted On RFP Advertised In (City Charter & Municipal Code) # of Vendors Downloaded # of Submittals Received Date Publicly Opened 7/12/2018 City's Online Bidding Site Santa Monica Daily Press 26 4 7/31/2018 Proposals Received American Water Chemicals, Inc. Avista Technologies King Lee Technologies BASF Corporation Justification for Best Bidder Responses to the RFP were reviewed by a selection panel of staff from the Public Works Department. Avista Technologies’ Vitec 1400 antiscalant and ROClean L403 and P112 cleaners were deemed as the best product combination based on laboratory testing of Arcadia Water Plant water samples, dosage recommendations, cleaning frequency requirements, and overall cost. Staff checked references with other local water agencies including West Basin Municipal Water District, the City of Oceanside, and Eastern Municipal Water District and found that Avista’s antiscalant products were effective on reverse osmosis membranes processing groundwater with similar chemistry to Santa Monica and reduced the need for cleaning chemicals. Cleaning chemicals provided by Avista were found to be effective at reasonable cost. Avista also previously assisted the City during the Arcadia Water Plant startup in 2011 to successfully resolve a reverse osmosis membrane silica scaling issue. Based on these criteria and the criteria in SMMC 2.24.072, Avista Technologies is recommended as the primary provider of water treatment antiscalants and cleaner chemicals. To ensure continuity of water treatment operations, King Lee Technologies is recommended as a secondary provider of antiscalants and cleaner chemicals. King Lee Technologies has supplied the City with antiscalants and cleaners over the past six years and reduced their proposal pricing by 40% for antiscalants and 10%-15% for cleaners from current levels. While the Pretreat Plus Y2K antiscalant has been reasonably effective and is priced below Avista’s Vitec 1400 product, the frequency of membrane cleanings required has led to higher than expected chemical costs and additional labor for water plant staff. Staff would only order from King Lee Technologies if 4 of 4 primary vendor Avista could not provide products on a timely basis or if operational issues occurred during use of Avista products on a full-scale basis. Financial Impacts and Budget Actions Staff seeks authority to award purchase orders with Avista Technologies, as primary vendor, and King Lee Technologies, as secondary vendor, for the provision of water treatment antiscalants and cleaners for reverse osmosis membranes through October 2023. An additional $60,000 for Avista Technologies has been allocated to accommodate potential reverse osmosis system upgrades at the Arcadia Water Plant in 2022. Purchase Order Request Request Amount FY 2018-19 Budget Public Works Department Account # Total Purchase Order Amount Avista Technologies $80,000 50500003-525081 $475,000 King Lee Technologies $20,000 50500003-525081 $100,000 Future year funding is contingent on Council budget approval. Prepared By: Kevin Nagata, Senior Administrative Analyst Approved Forwarded to Council Attachments: A. Avista Technologies Oaks Initiative Disclosure Form B. King Lee Technologies Oaks Initiative Disclosure Form Please attach additional pages if more space is required.  CITY OF SANTA MONICA OAKS INITIATIVE DISCLOSURE FORM In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Public benefits include: 1.Personal services contracts in excess of $25,000 over any 12-month period; 2.Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-month period; 3.Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period; 4.Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period; 5.Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000; 6.Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12-month period; or 7.Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12-month period. Name(s) of persons or entities receiving public benefit: Name(s) of trustees, directors, partners, and officers: Name(s) of persons with more than a 10% equity, participation, or revenue interest: Prepared by: ____________________________Title: __________________________ Signature: ______________________________________ Date: ________________ Email: ____________________________________ Phone: ____________________