2013 2:00:00 PM

Monday, October 28, 2013 2:00 PM
City Council Chambers, Legislative Building, 745 4th Street, Sparks, Nevada

Consent Items: 5.10

Title: Consideration and possible approval of Bid # 13/14-008, for an initial one year contract with the possibility of four, one year extensions to Thatcher Company of Nevada, Inc. for the mark-up amount of $.549 per gallon to supply Methanol to the Truckee Meadows Water Reclamation Facility (TMWRF).

Petitioner/Presenter: Neil C. Krutz, P.E - Deputy City Manager/Michael Drinkwater, P.E. TMWRF Plant Manager

Recommendation: Staff recommends that the Council approve a contract for Thatcher Company of Nevada, Inc. as submitted.

Financial Impact: There is no General Fund impact. Annual costs for Methanol are estimated at $2,520,000 based on 23,000 gallons weekly. Methanol pricing is on a month to month index, the City currently utilizes the Jim Jordan Reporter (Jim Jordan and Associates Global Methanol Report). This expense will be charged to TMWRF, Fund 5605, Account 603330, Methanol, under Program 131505, TMWRF Operations. Following quarterly reconciliation of TMWRF’s operating expenses, affecting the Sanitary Sewer Operations fund (1630), Sparks is quantifying reimbursement from the City of Reno based on actual flow splits provided by ADS Environmental. The flow split for the Fiscal Year ending June 30, 2013, was 32.39% / 67.61% for the Cities of Sparks and Reno respectively . The anticipated cost to the City of Sparks is $778,255.26, based upon current commodity pricing.

Total Costs: $778,255.26

Fund: Joint Treatment Plant Account: 603330
Program: TMWRF Operations (131505)
Amount: $778,255.26 Budget Status: Budget Exists

Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.

Agenda Item Brief: This is a contract beginning on November 1, 2013 and expires on October 31, 2014, with an option to extend for four (4) additional twelve (12) month extensions. The last extension of the current contract, entered into on October 27, 2008, expires October 31, 2013. Methanol was placed out for bid on October 1, 2013 and Thatcher was the lowest bidder and met all of the specifications within the bid specifications.

Background: Methanol, otherwise known as Methyl Alcohol or Wood Alcohol is used as a carbon source in the denitrifying fluidized bed reactors. The denitrifying organisms use the methanol as a food source during the process convert nitrate to nitrogen gas. TMWRF uses approximately 23,000 gallons of Methanol per week to meet this standard.

Analysis: If approved the City of Sparks will enter into a contract with Thatcher Company of Nevada, Inc. Methanol pricing can be volatile and has risen from $1.60 per gallon to $2.10 per gallon over the last year. Companies that provide methanol calculate their pricing on a monthly basis tied to an index. The companies we contacted in the buildup of the bid specifications all used the Jim Jordan Reporter (Jim Jordan and Associates Global Methanol Report). Since the bidding firms are tied to a common index price for the commodity, the bid is measured and evaluated using only the mark-up amount. The total unit cost will fluctuate based on monthly adjustments to the index with the mark-up amount fixed. Solicitation for the methanol contract, under Bid #13/14-008, was advertised on October 1, 2013 in the Reno Gazette Journal and known interested vendors were alerted to the availability to the bid package via the City of Sparks internet website. Three (3) bids were publicly opened on October 9, 2013 at 2:00 PM at Sparks City Hall. A summary of those bids are presented as an attachement to this Staff Report.

Alternatives: The City Council could reject the bid award and provide the City Manager with direction.

Recommended Motion: I move to approve that Council award Bid # 13/14-008, Bid for Methanol, to Thatcher Company of Nevada, Inc. calculated monthly on the Jim Jordan & Associates (JJ&A) Index plus the fixed mark-up (bid) price of $.549/gallon.

Attached Files:

Bid Results for Bid 13-14-008.pdf

Thatcher Contract - Methanol.pdf

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