REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Chau Vu, Director of Public Works
PREPARED BY: Chris Davis, Senior Management Analyst
Subject:
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Approve Sole Source Procurement Request with Jones Chemical (JCI) for Chlorine Gas
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Statement of Issue:
Submitted for City Council approval is a sole source procurement request in the amount of $150,000 annually for the purchase of chlorine gas from JCI.
Financial Impact:
Staff is requesting authorization for procurement of chlorine in an amount up to $150,000 annually. There is sufficient funding for the purchase of chlorine within the FY 2024/25 Water Fund Budget and no additional appropriations are requested at this time.
Recommended Action:
recommendation
Approve the sole source procurement request for the annual purchase of chlorine gas from JCI.
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Alternative Action(s):
Do not approve the recommended action and direct staff accordingly.
Analysis:
The City annually produces approximately 20,000 acre-feet (AF) of water from the City’s nine potable drinking water wells. Water produced from these wells is continuously chlorinated using gaseous chlorine, which is American National Standards Institute/National Science Foundation (ANSI/NSF) Standard 60 certified, as required under the City’s Domestic Water Permit.
The City has used chlorine gas as the primary disinfection method since the Utility Division’s creation in 1964. Up until Fiscal Year 2019/20, the average annual chlorine supply cost had been less than $30,000 and was procured in accordance with Huntington Beach Municipal Code (HBMC) Section 3.02.070 for Small Procurements. However, the price of chlorine has more than doubled due to raw material cost increases for chlorine and sodium hydroxide products. Additionally, the Orange County Water District has allowed groundwater producers to pump a larger portion of their potable water demand, which, while much cheaper than importing water, results in a corresponding increase in demand for chlorine. As a result, the annual procurement cost of chlorine gas will exceed the amount allowable for small procurements.
JCI is the only supplier of ANSI/NSF Standard 60 certified 1-ton and 150-pound chlorine gas cylinders suitable for use in public potable water distribution systems. JCI’s nearest facility is in Torrance, CA. The closest alternate chlorine supplier is Olin Corporation in Freeport, Texas.
Per Huntington Beach Municipal Code Chapter 3.02 Purchase of Goods and Service, sole source procurements are allowed in cases where the procurement of any product or supply is obtainable only from a single, or sole source. Such purchases above $50,000 require City Council approval.
Chlorine disinfection allows the City to serve well water at a current cost of $688 per acre-foot. Without chlorine gas and the ability to sole source from JCI, the City would be forced to import its water supply from the Municipal Water District of Orange County (MWDOC) at a cost of $1,256 per acre-foot.
Environmental Status:
This action is covered by the General Rule that the California Environmental Quality Act (CEQA) applies only to projects that have the potential for causing a significant effect on the environment (Section 15061.b.3 of the State CEQA Guidelines). It can be seen with certainty that there is no possibility that this activity will have a significant effect on the environment. Therefore, this activity is not subject to CEQA.
Strategic Plan Goal:
Non Applicable - Administrative Item
For details, visit www.huntingtonbeachca.gov/strategicplan.
Attachment(s):
1. Sole Source Justification
2. Power Point