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Item 4C Item 4C Page 1 of 2 M E M O R A N D U M (June 18, 2019) To: Shana Yelverton, City Manager From: Rob Cohen, Director of Public Works Subject: Approve an annual purchase agreement for providing odor control treatment at City wastewater lift stations with Premier Magnesia, LLC. in an amount not to exceed $140,000 for a 12- month period. Action Requested: Approve an annual purchase agreement for providing odor control treatment at City wastewater lift stations with Premier Magnesia, LLC. in an amount not to exceed $140,000 for a 12-month period. Background Information: The City pre-treats the wastewater flows at the Shady Lane and Lonesome Dove wastewater lift stations before it flows to the Trinity River Authority (TRA) treatment plant. The pre-treatment with Thioguard is necessary for several reasons including controlling odor, maintaining infrastructure integrity, breaking up grease, and managing treatment costs. The City has to pre-treat the wastewater to manage the effects of hydrogen sulfide gas in the sewer system. Hydrogen sulfide gas has a very strong “rotten egg” odor and is highly corrosive to concrete manholes and the cast iron manhole ring and lid . Treating with Thioguard provides odor control that would otherwise have an impact on residents. In addition, it aids in the reduction of said gas, so the integrity of the wastewater infrastructure is not compromised. Premier Magnesia has been providing Thioguard for Southlake since 2006 because previous attempts to control the hydrogen sulfide with other products were not successful. Another benefit to this technology is the preventio n of grease buildup in the wastewater lift station wet-wells and downstream sewer mains. Grease causes blockage in the mains that may lead to potential sewer overflows and Texas Commission on Environmental Quality (TCEQ) fines. Additionally, TRA charges the City a surcharge for high levels of BOD (Biochemical Oxygen Demand) attributed to grease in the wastewater flows. In utilizing Item 4C Page 2 of 2 this chemical treatment, it eliminates the need for City crews to remove and dispose of excess grease. Financial Considerations: Funding for odor control treatment at the City’s wastewater lift stations is provided in the annual Public Works Wastewater Operating Budget. Under the proposed agreement, the cost per gallon will increase from $2.84 per gallon to $2.91 per gallon for the upcoming year. Premier Magnesia is a sole source provider for Thioguard technical grade magnesium hydroxide slurry. The increase per gallon will not affect the overall annual costs, as the usage between Lonesome Dove and Shady Lane lift stations will decrease from previous usage levels. Strategic Link: This item links to the City’s Strategy Map strategic focus area of Performance Management and Service Delivery. It specifically relates to the City’s Corporate Objective, B2: Collaborate with Select Partners to Implement Service Solutions and F2: Invest to Provide & Maintain High Quality Public Assets. Citizen Input/ Board Review: N/A Legal Review: N/A Alternatives: The City Council may approve or deny the agreement. Supporting Documents: Attachment A: Premier Magnesia, LLC - Thioguard Annual Contract Pricing Attachment B: Premier Magnesia, LLC - Sole Source Letter 2018 Staff Recommendation: Approve an annual purchase agreement for providing odor control treatment at City wastewater lift stations with Premier Magnesia, LLC. in an amount not to exceed $140,000 for a 12-month period. Staff Contact: Rob Cohen, Director of Public Works 6/3/19 Rob Cohen Director of Public Works 1950 East Continental Blvd City of Southlake, Texas 76092 Re: Premier Magnesia, LLC – Thioguard® Annual Contract Pricing FY 2019-2020 Rob: Pursuant to your request for a renewal of the annual contract for Thioguard, I am submitting this letter to update you on the terms of the agreement. You may submit Purchase Orders either on a per load basis, or a Blanket PO may be issued for the duration of the price in effect. The price per gallon for the upcoming year will be $2.91 effective July 1, 2019 through and ending June 30, 2020. Price increase is being driven by a rise in delivery costs associated with deliveries into the City of Southlake. Annualized transportation delivery costs for 2018 were $0.56/gallon. Current transportation and delivery costs for 2019 (to date) are $0.65/gallon, necessitating the increase. In addition, manufacturing costs for Chemical Products (PPI) have shown an increase in Chemical production costs from 275 in 2018 to 282 in 2019, resulting in a 2.54% change. That index can be found at the end of this letter. At the current combined rate of usage for Lonesome Dove and Shady Lane of 120 - 130 gallons per day, estimated annual costs are between $127,458 and $138,080 if the current BOD loading to these stations stays constant. However, ongoing analysis points to a higher BOD level in the collection system line that feeds Shady Lane, and consequently Round Hollow, which may result in the need to feed additional chemical to treat these lines in the future. Current levels of treatment measured by pH values indicate good Hydrogen Sulfide and corrosion control in the collections system at this time. Compilation of Testing Data Date Location Analysis Results pH Std/Units BOD mg/L 10/31/2016 Lonesome Dove NT 74 10/31/2016 Shady Lane NT 433 10/31/2016 Round Hollow NT 221 10/31/2016 Dove Road NT NT 3/2/2017 Lonesome Dove NT NT 3/2/2017 Shady Lane 8.14 386 3/2/2017 Round Hollow 8.15 170 3/2/2017 Dove Road 7.94 140 6/7/2017 Lonesome Dove NT NT 6/7/2017 Shady Lane 7.96 188 6/7/2017 Round Hollow 8.44 186 6/7/2017 Dove Road 8.54 81 3/22/2018 Lonesome Dove 9.23 100 3/22/2018 Shady Lane 9.27 264 3/22/2018 Round Hollow 9.52 324 3/22/2018 Dove Road 9.35 38 5/28/19 Lonesome Dove 8.44 Pending 5/28/19 Shady Lane 8.37 Pending 5/28/19 Round Hollow 8.22 Pending 5/28/19 Dove Road 8.59 Pending Premier Magnesia very much appreciates your cooperation and looks forward to a continued long-term relationship as a quality supplier. Sincerely, Mary P. Evans South Central Regional Account Manager Premier Magnesia, LLC Phone: 903.245.6316 20108 CR 186 Flint, Texas 75762 Email: mevans@premiermagnesia.com Acceptance: _________________________________________________________ Laura Hill, Mayor Date Attested By: _________________________________________________________ Amy Shelley Date City Secretary