R2006-193 AUTHORIZING CHANGE ORDER

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. � COUNCIL COMMUNICATION FORM PURCHASING&1NTERNAL SERVICES MEMORANDUM #06-69 November 13, 2006 TO: Honorable Mayor Osborne and City Council FROM: Steve G City Manager p Ron Neuf Financial Management Director �1'� Deborah Perry, Purchasing Supervisor�,�� SUBJECT: Additional cost for Carbon SUMMARY RECOMMENDATION: Staff recommends increasing contract to Jacobi Carbons, Inc. to furnish bulk activated carbon for the treatment of potable water. BACKGROUND: A contract was previously awarded to Jacobi Carbons, Inc. in August of 2005 to furnish bulk activated carbon for water treatment for$679/ton. Several circumstances have occurred which have affected the marketplace for this chemical. A petition was filed earlier this year with the International Trade Commission (ITC) claiming that activated carbon produced in China was being dumped into the U.S. market. In turn, the ITC said there was a potential of dumping and forwarded the case to the Department of Commerce (DOC) for investigation. The DOC announced an anti- dumping duty on all imported carbon from China. The duty is preliminary until the DOC can verify that everything is correct. If confirmed by the ITC, the duties will remain in place for several years and if denied, they will end in April. This has caused an increase for this chemical by 49.09% due to the duty imposed. Staff has surveyed the marketplace and contacted other vendors, and their price was higher that the $960/ton request by Jacobi Carbons, Inc. Bulk activated carbon is a chemical that is used for taste and odor control, and reduces disinfection by-products and atrazine levels. Jacobi Carbons has been a good supplier during this contract period. Based upon the annual usage of this chemical, the estimated increase for the remainder of the contract period(until April 30, 2007) would be $18,000.