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Home My WebLink About05.b.01.a ITB 20-21-A5 Chemical Supplier Contract 3rd Renewal REVISED FINAL EXECUTIVE SUMMARY AGENDA ITEM: Proposed Third Renewal for the Chemical Supplier Contract ITB#20/21-A5 Date: February 1, 2024 BACKGROUND: The Chemical Supplier Contracts with Thatcher Chemical of Florida, Inc. and Odyssey Manufacturing Co. are scheduled to expire on March 8, 2024. 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 and the Suppliers are interested in renewing the contract with the requested rate increases shown below. Per the contract, if all parties agree to renew the agreement, CCUA 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 Unit Chemical Supplier Description Type Old Price New Price Thatcher Chemical of Florida, Inc. Sodium Bisulfite 38%-40% Gallon $2.36 $2.44 Sodium Hypochlorite (NaOCI)- Odyssey 12.5 Trade Percent Non-Tanker Manufacturing Co. Deliveries Gallon $1.19 $1.45 BUDGET IMPACT: The budget impact will be $1,300,000 per year. This is based on the amount used in the past fiscal year. RECOMMENDATION: Staff respectfully requests the Board of Supervisors approve the Chemical Supplier Contracts,ITB #20/21-A5 third renewal for an additional one-year term with rate increases. ATTACHMENTS: Chemical Suppliers Rate Increase Requests //DP(Author) //DP,LH,AB (Review) //DM(Final) 1,1 cov4,-, Clay County Utility Authority Working together to 3176 Old Jennings Rd. protect public health, Middleburg,Florida 32068-3907 conserve our natural ,� Telephone(904)213-2413 resources,and create / Facsimile(904)213-2436 long-term value for our ratepayers. January 8, 2024 Mr. Patrick H. Allman Odyssey Manufacturing Company 1484 Massaro Blvd. Tampa, FL 33619 Re: Third Renewal of Chemical Supplier Contract for Sodium Hypochlorite ITB No. 20/21-A5 Dear Mr. Thatcher: The above referenced contract is scheduled to expire on March 7,2024.The contract terms allow for a renewal period of 12-months, contingent upon the mutual agreement of both parties. The Clay County Utility Authority(CCUA)is hereby providing written notice of interest in renewing the existing contract for an additional 12-month period,continuing from March 8,2024,through March 7,2025.Please provide any requested price adjustments to accompany this letter for the contract renewal. Please notify CCUA and advise if you agree and would like to renew the existing contract for the additional 12-months before January 26, 2024 by signing this letter below and returning it our office. CCUA appreciates your cooperation. We look forward to continuing business with you and your organization in the coming years. Sincerely, CLAY COUNTY UTILITY AUTHORITY ACCEPTANCE: CD NO OTHER 0.4 �maP w, O sse Manufacturing Com. Darrin rmM my son:I`mma aNnor ofmis Parkerdp.Ea�,,� .ar Darrin G. Parker NA E: A/� Contract& Procurement Specialist ( C ii 1 J4►i TITLE: /dpnu,� IS, 2o2 ti DATE: cc: Jeremy D. Johnston Darryl Muse 4s \N Ti ehl,LC3 1 h oX t for duied +/Z. o2 4 ODYSSEY MANUFACTURING CO. January 23,2024 Mr. Darrin G. Parker Contract& Procurement Specialist 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 Dear Mr. Parker, As you know, Odyssey Manufacturing Co. has been supplying the Clay County sodium hypochlorite under the current subject contract since March 9, 2021. The contract initially expired on March 8, 2023, and was renewed for another year through March 8, 2024 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, 2024 through March 8, 2025, at a revised unit price of$1.45 per gallon(an increase of 21.8%). This price is fixed for 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 have been in a period of unprecedented inflation in this county over the past three year in this country. In particular,costs in the chemical industry have risen dramatically over this period. Because of the timing of your contract, Clay County currently has the lowest sodium hypochlorite pricing in the State of Florida and we have not been able to pass on the increases we have seen as of yet. Frankly, our sodium hypochlorite pricing to Clay County has not kept up with the industry cost increases. Additionally, over the past twelve months, our labor costs have increased 4.5%, which were necessary to retain employees in this tight labor market and basically just matched the Consumer Price Index for inflation. Our biggest cost increases in the past year have been from property and liability insurance,which between them have increased by over$1 million per year. Despite no claims, our worker's compensation insurance doubled in January 2024 because"the chemical industry is too high a risk and they want a surcharge to insure you"which is what I was told by our broker. The fact that Clay County benefitted from Odyssey's long-term contracts which kept its costs below the market pricing is reflected in the pricing shown in the below table which represents all of the bids in the State of Florida for sodium hypochlorite for the past twelve months. Unfortunately, our major supply contracts all increased over 40% on October 1,2023. As you can see,the proposed increase is very reasonable in light of these bids and would still make Clay County one of the lowest priced utilities in Florida. MANUFACTURERS OFJI `-1 RA,aCHI.OR (800) ODYSSEY www.odysseymanufacturing.com Bid Date Utility Annual Gallons Allied Odyssey 10/26/22 City of Lakeland 90,000 $1.57 $1.58 10/27/22 Pinellas County 1,481,223 $1.45 No Bid 11/18/2022 City of Wildwood 115,000 $1.57 $2.56(H) 11/22/2023 City of Winter Haven 714,777 $1.55 No Bid 12/8/2022 City of Clearwater 957,000 $1.67 $1.28 1/10/2023 City of Tallahassee 625,000 $1.60 $1.59 1/25/2023 City of Edgewater 240,000 $1.73 $1.49 3/6/2023 Peace River Manasota 750,000 $1.43 $1.69 6/2/2023 City of New Port Richey 320,000 $1.44 $1.85 6/15/2023 Okeechobee County 30,000 No Bid $1.80 6/27/2023 Town of Jupiter WTP 314,000 $1.44 $1.85 6/27/2023 Town of Jupiter Booster Station 4,000 $1.54 $3.50 7/6/2023 City of Fort Lauderdale-Full Tankers 9,214,000 $1.47 $2.25 7/6/2023 City of Fort Lauderdale-Partial Tankers 356,000 $1.57 $2.45 7/10/2023 City of Ocala 325,000 $1.90 $1.75 7/24/2023 South Martin Regional 185,000 No Bid $1.65 7/26/2023 The Villages 700,000 No Bid $1.85(*) 7/27/2023 Palm Beach County-Full Tanker 4,785,000 $1.44 $1.98 7/27/2023 Palm Beach County-Partial Tanker 35,500 $1.54 $2.10 7/31/2023 City of Ormond Beach 320,000 $1.95 $1.69 8/9/2023 Martin County 800,000 $1.45 $2.05 8/16/23 Charlotte County 606,000 $1.53 No Bid 8/25/2023 City of Port St.Joe 62,000 No Bid $1.69 9/11/2023 City of Lake Wales 109,000 $1.95 $1.70 9/27/2023 City of Lakeland 105,000 $1.69 $1.76 10/4/2023 Seminole County 1,794,000 $1.68 $1.95 11/9/2023 Central Florida Tourism Oversight Dist. 641,648 $2.10 $1.53 12/18/23 Hillsborough County 10,724,040 $1.43 $1.89 12/18/23 City of Tampa WTP 1,700,000** $1.42 $1.49 * Odyssey's Distributor ** Bid Misstated amount as 170,000 gallons 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, Pa rick H. Allman General Manager Page 2 of 2 > Clay County Utility Authority Working together to 3176 Old Jennings Rd. protect public health, t.Wit Middleburg,Florida 32068-3907 conserve our natural Telephone(904)213-2413 resources,and create 441NCIis Facsimile(904)213-2436 tong-term value for our ratepayers. January 8,2024 Mr. Craig N. Thatcher Thatcher Chemical of Florida, Inc. PO Box 27407 Salt Lake City, UT 84127 Re: Third Renewal of Chemical Supplier Contract for Sodium Bisulfite ITB No. 20/21-A5 Dear Mr. Thatcher: The above referenced contract is scheduled to expire on March 7,2024.The contract terms al low for a renewal period of 12-months, contingent upon the mutual agreement of both parties. The Clay County Utility Authority(CCUA)is hereby providing written notice of interest in renewing the existing contract for an additional 12-month period,continuing from March 8,2024,through March 7,2025. Please provide any requested price adjustments to accompany this letter for the contract renewal. Please notify CCUA and advise if you agree and would like to renew the existing contract for the additional l2-months before January 26, 2024 by signing this letter below and returning it our office. CCUA appreciates your cooperation. We look forward to continuing business with you and your organization in the coming years. Sincerely, CLAY COUNTY UTILITY AUTHORITY ACCEPTANCE: YES NO OTHER Thatcher Chemical of Florida, Inc. Damnk Parker Parker. ` ! Darrin G. Parker NAME: Michael T. Mitchell Contract& Procurement Specialist President TITLE: /dp January 26, 2024 DATE: cc: Jeremy D. Johnston Darryl Muse THATCHER CHEMICAL OF FLORIDA, INC. Phone (386) 490-1638 245 Hazen Road Fax (386) 490-1641 Deland, FL 32720 CHEM January 26, 2024 Angelia Wilson Clay County Utility Authority 3176 Old Jennings Road Middleburg, Florida 32068 awilson@clayutility.org Re: Chemical Supplier Contract No. 20/21-A5 For Sodium Bisulfite: Renewal 3 of 5 Period: 3/9/24 through 3/8/25 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. Inflation of chemical raw materials required to manufacture Sodium Bisulfite(SBS)has slowed in the previous year but still persists. Chemical Package Current Price New Price Sodium Bisulfite 38%-40% Bulk $2.36/gallon $2.44/gallon We are requesting a very modest increase due to the continuing commodity inflation of the chemicals used to manufacture Sodium Bisulfite as well as significantly increased cost manufacturing labor. Sulfur, a vital component in the manufacture of Sodium Bisulfite,has experienced an inflation rate of 13%this past year according to Green Markets commodity chemicals survey. This increases our cost of manufacturing. As you are probably aware, labor costs have also increased significantly over the past year as well. If you require additional information,please contact Mike Jackson at mike.jackson@tchem.com We appreciate your business and look forward to meeting your chemical requirements in the coming months and years. Sincerely, Michael T. Mitchell President