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TO: Mayor Richard C. Irvin
FROM: David E. Schumacher, P.E.; Superintendent of Water Production
DATE: July 9, 2018
SUBJECT:
A Resolution Authorizing an Addendum to the Amended and Restated Potable Water Service Agreement with Calgon Carbon Corporation (Calgon) for the continued lease of Granular Activated Carbon (GAC) in filter groups 5 - 8 and 9 - 12 for the Water Production Division (WPD).
PURPOSE:
To obtain City Council approval for an addendum to the subject agreement for pricing and installation of GAC for filters 5 - 8 in 2018 and for filters 9 - 12 in 2019 at the City of Aurora Water Treatment Plant (WTP).
BACKGROUND:
The WTP has 12 dual-media filters which contain sand and GAC which are used to remove solids prior to disinfection of the water. In addition, the GAC media serves to remove taste and odor compounds which are adsorbed onto the GAC in the filter bed. Over time the GAC is expended (spent) and needs to be replaced/refreshed, typically between 36 - 42 months. This is done on a staggered schedule in three groups of filters, filters 1 - 4, 5 - 8, and 9 - 12.
The WPD has standardized the use of the Calgon F-300 GAC product line as its primary filtration media do to its long-term (20+ years) successful and proven performance. F-300 can be considered a sole source product due to its attributes as a domestic, bituminous coal source and a specific manufacturing method referred to as reagglomeration which produces a high activity, durable, granular product capable of withstanding the abrasion associated with repeated backwashing, hydraulic transport, and reactivation for reuse. Recently, the WPD successfully tested and subsequently transitioned to utilizing reactivated GAC provided by Calgon under their Custom Municipal Reactivation (CMR) program. Spent GAC is reactivated via a high-temperature heating process which volatilizes the adsorbed compounds thus returning the used GAC to additional productive service. The cost savings from the utilization of CMR GAC is significant, without sacrificing substantial performance when compared to virgin GAC. As an example, the proposed 36 month lease cost for virgin GAC in filters 5 - 8 would be $512,459.20 versus CMR pricing of $324,183.20, a savings of $188,276.
DISCUSSION:
Under the 36 month lease arrangement, equal monthly payments are made to compensate Calgon for supplying, removing, and reinstalling reactivated material via a turn-key process. The City assumes no risk if the GAC must be replaced prematurely due to unforeseen circumstances, nor does the City need to make a lump sum purchase payment. This approach also allows the City to save money for a period of time under the Extended Use provision. Beginning with the 37th month, lease payments are reduced 50% until which time the spent GAC is replaced with reactivated material.
The most recent lease price for CMR GAC was $31.95/cubic foot in 2017 for filters 1 - 4. This price was held unchanged from 2016 when the GAC in filters 9 - 12 was replaced. Calgon is currently proposing an increase to $33.49/cubic foot, a 4.82% total increase or an approximate 1.6% increase on an annual average basis over the 4-year pricing period (2016 - 2019). The proposed new price will be held into 2019 when filters 9 - 12 are due for GAC replacement. The total 36 month lease cost proposed will be $324,183.20 for filters 5 - 8 and $277,297.20 for filters 9 - 12. Filters 9 - 12 require less GAC, thus the lower cost.
Funding for leasing GAC is provided annually in the WPD Budget Account No. 510-4058-511-38-28 and has been requested in the 2019 city budget.
IMPACT STATEMENT:
Negative impacts to the City of Aurora water quality are possible without the timely replacement of spent GAC with CMR GAC.
RECOMMENDATIONS:
That the City Council authorizes an addendum to the Amended and Restated Potable Water Service Agreement with Calgon for pricing of GAC to be installed in filters 5 - 8 during 2018 and filters 9 - 12 in 2019. It is further recommended that this matter be forwarded to the Buildings, Grounds, and Infrastructure Committee for their review and approval.
cc: Buildings, Grounds, and Infrastructure
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing an Addendum to the Amended and Restated Potable Water Service Agreement with Calgon Carbon Corporation for the continued lease of Granular Activated Carbon in filter groups 5 - 8 and 9 - 12 for the Water Production Division.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the Water Production Division utilizes granular activated carbon (GAC) in the City Water Treatment Plant filters and the GAC is leased from Calgon Carbon Corporation under an existing lease agreement; and
WHEREAS, the Water Production Division seeks to replace the GAC filter media with reactivated GAC in filters 5 - 8 during 2018 and filters 9 - 12 in 2019 at a unit cost of $33.49/cubic foot or 36-month lease costs of $324,183.20 and $277,297.20 respectively; and
WHEREAS, funding for leasing GAC is provided annually in the City Budget Account No. 510-4058-511-38-28 and has been requested in the 2019 city budget;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: does hereby authorize the Purchasing Director to execute the Addendum to the Amended and Restated Potable Water Service Agreement with Calgon Carbon Corporation for the lease of Granular Activated Carbon in filters 5 - 8 and 9 - 12 at the City of Aurora Water Treatment Plant.