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HomeMy WebLinkAboutEDB Chemical Supplier 20-21-A5 Renewal AGENDA ITEM: EXECUTIVE SUMMARY Proposed Approval of Contract Renewal for the Chemical Supplier Contract ITB# 20/21-A5 Date: January 27, 2022 ' BACKGROUND: The Chemical Supplier Contracts with Thatcher Chemical of Florida, Inc., and Odyssey Manufacturing Company are scheduled to expire on March 8, 2022. The terms of the contracts allow for annual renewals for a period of up to six(6)years,contingent upon the mutual agreement of both parties. Staff contacted the parties to determine the interest to renew the contracts.All firms are interested in renewing the contracts and requested a rate increase. Per the Contract, if parties agree to renew the agreement, Clay County Utility Authority may consider a price increase in either of the renewal years based on verifiable changes in the marketplace. Staff compared the rates to the verifiable changes in the marketplace and have determined the rates to be consistent. ITB#20/21-A5 Chemical Unit Old c Supplier Description Type Price New Price m Thatcher Chemical of o Florida,Inc. Sodium Bisulfite 38%-40% Gallon $1.37 $1.85 _ = Sodium Hypochlorite(NaOCI)- L 12.5 Trade Percent Non-Tanker ce Odyssey Manufacturing Co. Deliveries Gallon $0.567 $0.775 BUDGET IMPACT: The annual cost for these chemicals will increase by $196,390.62. RECOMMENDATION: Staff respectfully requests the Board of Supervisors approve the renewal for the Chemical Supplier Contracts, ITB #20/21-A5 to be extended for an additional one-year term and rate increase. ATTACHMENTS: Chemical Suppliers Rate Increase Request //ACW(Author) //AW,AB, and TS(Review) //TS (Final) ``0 COUA.,r` Clay County Utility Authority Working together to 3176 Old Jennings Road protect public health, Middleburg,FL 32068-3907 conserve our natural GJ Telephone(904)272-5999 resources,and create ww.Cla tili long-term value for ��Y_Ai1TtAO W Yu ty'or g our ratepayers. October 14, 2021 Mr. Craig N. Thatcher Thatcher Chemical of Florida, Inc. PO Box 27407 Salt Lake City, UT 84127-0407 Re: Renewal of Chemical Supplier Contract No. 20/21-A5 for Sodium Bisulfite Dear Mr. Thatcher: The above referenced contract is scheduled to expire on March 8,2022. However,the terms of this contract allow for the renewal of an additional year,contingent upon the mutual agreement of both parties. The new contract period will continue from March 9, 2023. If you wish to continue the contract under the current terms, please sign, date and return this letter to us by October 26. 2021, and we will consider this confirmation of acceptance of the current terms as stated above. to We appreciate your operation and look forward to continuing doing business with you in the coming year. Sincerely, CLAY COUNTY UTILITY AUTHORITY ACCEPTANCE: YES NO OTHER Thatc r Chemical of Florida,Inc. 1.14.6,e/ H -1/41.,"(C71#. Leslie Hess NAME: ai atg N. Thatcher Administrative Assistant/Water and WastewaterX.E.O. TITLE: /lnh January 17, 2022 DATE: cc: Jeremy D. Johnston Teri Shoemaker Dennis Martin Ross Bland X:\OPERATIONS\CONTRACTS\FY_21-22\THATCHER CHEMICAL RENEWAL 20 2I-A5.DOC THATCHER CHEMICAL OF FLORIDA, INC. Phone (386) 490-1638 245 Hazen Road Fax (386) 490-1641 Deland, FL 32720 CHEM January 17, 2022 Angelia Wilson Clay County Utility Authority 3176 Old Jennings Road Middleburg, Florida 32068 awilson@clayutilitv.orq Re: Chemical Supplier Contract No. 20/21-A5 for Sodium Bisulfite : Renewal 1 of 4 Period: 3/9/22 through 3/8/23 Dear Ms. Wilson: Thatcher Chemical of Florida, Inc. is appreciative of the opportunity to serve the Clay County Utilities Authority for the chemicals listed below. We are interested in renewing our contract to provide the chemicals listed below for another year. This year has seen historic inflation in the chemical raw materials required to manufacture Sodium Bisulfite (SBS). Chemical Package Bid Price New Price to Sodium Bisulfite 38%-40% bulk $1.37 $1.85/ gallon Since the beginning of 2021 the cost of the raw material used to manufacture Sodium Bisulfite at our plants in Deland and Palmetto has increased by 45.5%. This raw material, Sodium Metabisulfite, represents 92% of the cost to produce Sodium Bisulfite. The recent market changes are a result of three primary factors; sulfur cost increases, ocean freight increases and reduced refinery output. Reduced refinery production is a result of unscheduled plant shutdowns and the closure of several refineries throughout the US. Sulfur is a derivative produced from crude oil refining and the primary raw material for SBS. The reduced output combined with an increased global demand for sulfur has had a direct impact on the availability and produced cost of SBS. These inflationary pressures are expected to persist through 2022. These are the reasons why we need the requested increase in Sodium Bisulfite to continue servicing Clay County. If you require additional information, please contact Mike Jackson mike.jackson@tchem.com We appreciate your business and look forward to meeting your chemical requirements in the coming months and years. Sincerely, .7-( Craig N. That er, C.E. cov Clay County Utility Authority 440) ) N Working together to 3176 Old Jennings Roadprotect public health, Middleburg,FL 32068-3907conserve our natural Telephone(904)272-5999 resources,and create amlong-term value for 14A UTH� www.clayutility.org our ratepayers. October 14, 2021 Mr. Patrick Allman Odyssey Manufacturing Company 1484 Massaro Blvd. Tampa, Florida 33619 Re: Renewal of Chemical Supplier Contract No. 20/21-A5 for Hypochlorite Dear Mr. Allman: The above referenced contract is scheduled to expire on March 8,2022. However,the terms of this contract allow for the renewal of an additional year,contingent upon the mutual agreement of both parties.The new contract period will continue from March 9, 2023. If you wish to continue the contract under the current terms, please sign, date and return this letter to us by October 26. 2021, and we will consider this confirmation of acceptance of the current terms as stated above. to We appreciate your operation and look forward to continuing doing business with you in the coming year. Sincerely, CLAY COUNTY UTILITY AUTHORITY ACCEPTANCE: YES NO THER Odyssey Manufact ring Company Heys Leslie Hess NAME: Administrative Assistant/Water and Wastewater 'd Irr,(t� • . tnutl 6fril itittOater TITLE: /lnh iU• Z© ZvL� DATE: cc: Jeremy D. Johnston Teri Shoemaker X -,<. I (kcClark 1642124 Dennis Martin Ross Bland X:\OPERATIONS\CONTRACTS\FY 21-22\ODYSSEY RENEWAL\ODYSSEY RENEWAL 20 21-A5.DOC ODYSSEY MANUFACTURING CO. October 22,2021 Ms. Leslie Hess Administrative Assistant Clay County Utility Authority 3176 Old Jennings Road Middleburg, FL 32068-3097 Re: RENEWAL REQUEST FOR CHEMICAL SUPPLY CONTRACT 20/21-A5 FOR SODIUM HYPOCHLORITE Encl: (1)Producer Price Index—PCU325180325180S (2)Clay County Renewal Ltr dated October 14,2021 Dear Ms. Hess, As you know,Odyssey Manufacturing Co. has been supplying the Clay County sodium hypochlorite under the current subject contract at a unit price of$.567 per gallon since March 9,2021. The contract expires on March 8,2022 and has four more one-year renewals remaining. Odyssey Manufacturing Co.hereby offers to renew the subject agreement for an additional year effective March 9,2022 through March 8,2023 at a revised unit price of$.775 per gallon. This price is fixed to the water and wastewater treatment plants and there are no fuel surcharges,delivery fees or other hidden charges. As part of the chemical supply,Odyssey will continue to provide technical assistance to your facilities as required as we have done in the past at your Water and Wastewater Treatment facilities. As you are aware,we are in a period of unprecedented inflation in this county. In particular,the chemical market has been going crazy the past six months and all of our costs have been wildly escalating. In the past six months,we have seen the following cost increases at Odyssey: (1)Annual Payroll $600,000(just to keep drivers primarily because of the CDL driver shortage); (2)Annual Fuel Bill$850,000;(3)Annual Liability Insurance $100,000 (we have never had a claim except on the auto); (4)Annual Property Insurance$100,000(we have never had any claims in our history); (5) Annual Hydrochloric Acid for Plant$175,000; (6)Annual Sodium Hydroxide for our Plant$350,000; (7)Annual Electricity($600,000); etc.,you get the idea. Enclosure(1)is a copy of the Producer Price Index(PPI)for sodium hypochlorite and as you can see it has gone up over 71.4% in the past twelve months. Our proposed price increase is 36.7%which is significantly less than this amount. Thank you for your consideration. We value our supplier relationship with the Clay County Utility Authority both as a customer and business partner. We look forward to the opportunity to serve your sodium hypochlorite needs in the future. Please do not hesitate to contact me at(813)ODYSSEY or cellular(813)335-3444 if I can be of further assistance. Sincerely, )'a nc .Allman General Manager MANUFACTURERS OF U LT lit A CHLOR (800) ODYSSEY THE C L E www.odysseymanufacturing.co 1484 MASSARO BLVD TAMPA, FL 33619 • (81 3) 635-033` FAX (813) 630-2589 _lw U.S.BUREAU OF LABOR STATISTICS Databases, Tables & Calculators by Subject Change Output Options: From:i 2011 v. To: 2021 v 0 include graphs 0 include annual averages More Formatting Ootionsimil► Data extracted on:October 22,2021(5:11:36 PM) PPI Industry Data Series Id: PCU325180325180S Series Title: PPI industry data for Other basic inorganic chemical manufacturing-Secondary products,not seasonally adjusted Industry: Other basic inorganic chemical manufacturing Product: Secondary products Base Date: 201012 Download: (.xlsx Year Jan Feb Mar Apr I May Jun Jul Aug Sep Oct Nov Dec i • 2011 100.0 100.0 100.0!100.0 100.01 100.0 100.0 100.0 100.0 100.0 100.0 99.0 j �f 2012 99.8 102.7 102.71 102.7 102.7 102.7 102.4 102.3 102.3 102.3'102.4 102.4 i `f3 a,c -- t(}`7,7 2013 102.8 102.3 102.6!102.2 102.0 101.5 101.7 101.6 102.3 102.3 102.3 102.4 7 2016 109.3 109.7 I I e4 f� 2017 110.9 111.1 111.01111.8 113.7 114.1 113.8 118.8 119.4 121.0121.5 121.6 1 1)-7 .7 2018 123.3 123.8 123.91 123.6 127.E 127.6 131.5 131.5 131.5 131.5 128.3 128.3 2019 130.9 130.9 134.01 133.9 117.3 117.3 117.3 108.7 108.7 108.7 107.1 107.1 2020 109.4 109.4 109.4!109.4 109.4 109.4 108.2 107.7 107.7 144.0 156.0 156.0 i 2021 154.1 154.1 154.1!158.3 176.4 176.5(P) 181.3(P) 184.5(P) 184.6(P) 1 1" P:Preliminary.All indexes are subject to revision four months after original publication. 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