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HomeMy WebLinkAboutOrdinance No. 3303-2022KENAI CITY OF KENAI ORDINANCE NO. 3303-2022 Sponsored by: Administration AN ORDINANCE INCREASING ESTIMATED REVENUES AND APPROPRIATIONS IN THE WATER SEWER SPECIAL REVENUE FUND FOR OPERATIONAL CHEMICAL COSTS IN EXCESS OF BUDGETED AMOUNTS. WHEREAS, the Public Works Department secures annual purchasing agreements for required chemicals at the City's Water and Wastewater Treatment Plants; and, WHEREAS, chemicals typically purchased through these agreements include Sodium Hypochlorite, Sodium Bisulfite, Lime, and polymer; and, WHEREAS, these items were all competitively bid and the lowest bidder, Cascade Columbia's total bid was $28,390 in excess of budgeted amounts, approximately $12,000 toward the wastewater plant and $16,000 toward the water plant; and, WHEREAS, additionally Nalco Company provides proprietary chemicals that are acquired through sole source purchase for the water department, these chemicals assist with the removal of tannins in the water for clarification purposes; and, WHEREAS, Nalco's pricing has resulted in costs totaling approximately $29,000 in excess of budgeted funds; and, WHEREAS, the Public Works Department did anticipate cost increases for these chemicals and did budget larger amounts than previous years, however the increases came in higher than expectations due to supply chain and inflationary pressures within the industry; and, WHEREAS, these chemicals are essential for the continued safe operation of the utility to remain in compliance with permit requirements; and, WHEREAS, providing these supplemental funds to the operational budgets for the waste water and water division will allow the department to continue operations effectively; and, WHEREAS, the Administration is in support of this appropriation and providing the additional funds now is in the best interest of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS FOLLOWS: Section 1. That the estimated revenues and appropriations be increased as follows: Water and Sewer Special Revenue Fund: Increase Estimated Revenues — Appropriation of Fund Balance $2 00 Increase Appropriations — Wastewater Treatment Plant - Operating, Repair & Maintenance Supplies $12,000 New Text Underlined; [DELETED TExT BRACKETED] Ordinance No. 3303-2022 Page 2 of 2 Water Operating, Repair & Maintenance Supplies $45.000 $57 000 Section 2. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 3. Effective Date: That pursuant to KMC 1.15.070(0, this ordinance shall take effect immediately upon enactment. ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 17TH DAY OF AUGUST, 2022. ATTEST' Michelle S ner,)AMC, City Clerk Approved by Finance: Brian Gabriel Sr., Mayor Introduced: Enacted: Effective: New Text Underlined; [DELETED TEXT BRACKETED] August 3, 2022 August 17, 2022 August 17, 2022 KENAI _...enai 1210 Fidal. Ave, Kenai, AK 99611-7794 1907 283 7535 1 www.kenai.city MEMORANDUM TO: Mayor Gabriel and Council Members THROUGH: Paul Ostrander, City Manager FROM: Scott Curtin, Director of Public Works DATE: July 27, 2022 SUBJECT: Ordinance No. 3303-2022 Chemicals in excess of budgeted amounts The purpose of this memo is to request Council's support in providing supplemental funding to the Water and Wastewater operational budgets to account for Chemical purchases in excess of budgeted amounts. As Council is well aware of current supply chain and inflationary concerns affecting purchases across industries, the utility has incurred a larger than anticipated cost increase on our routine annual purchases of chemicals. Cost increases were anticipated by the department for these chemicals with the Water division's budget being increased by $10,000 from the previous year's budget, $108,000 in FY22 increased to $118,000 for FY23 with the actual FY23 now anticipated to be $163,000. The Wastewater division's FY22 budget for these chemicals was $50,600, with FY23 budget of $65,910 and an anticipated FY23 actual cost of $77,910. The department had sufficient funds to issue Purchase Orders to Cascade Columbia and Nalco Company from within the Operating, Repair and Maintenance Supplies budget to start the fiscal year and to avoid delivery delays of chemicals. This Ordinance will now provide the supplemental funding to replenish the account to allow the department to operate as anticipated throughout the fiscal year. Staff is investigating opportunities to become less dependent on these chemical purchases. Consideration for a future capital project to install new process equipment for the creation of our own chlorination chemicals is an option, as well as testing out new water clarification chemicals to a less expensive option from our current supplier. Council will be kept informed of any progress in this area. The additional funds being requested are necessary and imperative to our operations, providing them now is in the best interest of the City. Council's support is respectfully requested.