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Departmental Item INDIAN RIVER COUNTY, FLORIDA DEPARTMENT OF UTILITY SERVICES 12.&.1. Date: April 1, 2019 To: Jason E. Brown, County Administrator From: Vincent Burke, P.E., Director of Utility Services Through: Jennifer Hyde, Purchasing Manager Prepared By: Terry Southard, Operations Manager, Utility Services Rich Meckes, Wastewater Superintendent ` Subject: Chemtrade Price Change BACKGROUND/ ANALYSIS: On September 11, 2018, the Indian River County (IRC) Board of County Commissioners (BCC) approved the award for Bid 2019003 for Liquid Aluminum Sulfate. IRC Department of Utility Services (IRCDUS) has been purchasing Liquid Aluminum Sulfate under this agreement since October 1, 2018. The approved bid award for Fiscal Year (FY) 2018/2019 was based on the price of $0.5672 per gallon. Paragraph 2. C. of the agreement states the Bid Award may be renewed, by mutual agreement, for two (2) additional ONE (1) YEAR periods, up to a cumulative total of THREE(3) YEARS at the same prices, terms and conditions. Any change in price, terms or conditions shall be accomplished by written amendment to this award with final approval requiring BCC action. Chemtrade Chemicals US LLC submitted correspondence on December 19, 2018, to our Purchasing Department with a request to increase their current pricing (see attached email). In their words, they listed the following reasons for their request: 1. The United States (US) government has instituted tariffs on imported aluminum products. This has had a greatly increased effect on the cost of alumina in all forms, as imported materials now have hefty tariff charges. This has caused the cost of raw alumina to increase globally well above market indexes for imported material as well as from the domestic suppliers. 2. Sulfuric Acid has seen dramatic increases for 2019. In many cases, we have seen our plants receive increases as much as $40+ per ton for 2019. At our Tampa Plant, which is what supplies your account, we received a $53/Ton increase for 2019. Alum consists of almost 50% acid, therefore the alum costs from acid increase alone has gone up $26.50 per dry ton. 3. As a result of a significant shortage in truck drivers in the US, trucking rates have seen unprecedented increases. In mid -2018, Chemtrade received rate increases from our tank truck common carrier that resulted in 50-70% increases, for many hauls, in our freight costs to deliver product. These are costs that were not able to be captured and taken into consideration in the original bid, which was conducted prior to Chemtrade receiving the increase. C:\Users\Legistar\Appdata\Local\Temp\BCL Technologies\Easypdf8\@BCL@A80D9BA2\@BCL@A80D9BA2.Doc Pagej ff