Using Ratepayer Dollars Wisely
At DSRSD we look for ways to save money while protecting the quality and reliability of our services. Improving efficiency uses ratepayer dollars wisely, as does avoiding unnecessary spending through sound planning. Often we partner with other agencies to share costs. We also seek alternative funding for infrastructure through state and federal grants.
The stories below profile some recent examples of these strategies. Click Archived News to view items more than six months old.
District Saves More than $800,000 on Chemicals with Bidding Co-op
This year, DSRSD shaved an estimated $155,000 from its chemical budget by teaming up with other agencies when inviting bids from suppliers. Since creating a bidding cooperative seven years ago, the district has saved more than $800,000.
Situation: Recession Prompted Creative Approach to Controlling Chemical Costs
A supplier delivers sodium hypochlorite, an industrial strength bleach used for disinfection, to the District's wastewater treatment plant. In 2016 DSRSD paid half as much per gallon for sodium hypochlorite as it did in 2010 as a result of soliciting bids with other agencies through the Bay Area Chemical Consortium.
In late 2009, the economic downturn was hitting public agencies hard and everyone was looking for creative ways to reduce operating costs. Water and wastewater utilities in the northern Bay Area had formed a bidding cooperative that was generating lower prices on chemicals. After determining that the existing group was not interested in expanding to the East Bay, DSRSD began talking to purchasing and operations managers at nearby agencies about forming a new bidding cooperative, the Bay Area Chemical Consortium (BACC).
Chemical contracts are vital to water and wastewater agencies, which must ensure reliable supplies to keep treatment plants running around the clock. Price is also important. For many agencies, chemicals are a significant expense. DSRSD spends more than $400,000 a year on chemicals.
Solution: Joint Bids Produce Significant Savings
Multi-agency bids often translate to lower prices because vendors have an opportunity to sell greater quantities of their products. As a result, participating agencies usually obtain lower prices than by bidding alone.
In April 2010, eight agencies teamed up on BACC’s first bid request for 2.5 million gallons of sodium hypochlorite, an industrial strength bleach used for disinfection. Due to the large quantity, participants saw their unit-costs drop by as much as 25 percent.
The savings have continued to accumulate. In 2016 DSRSD paid half as much per gallon for sodium hypochlorite as it did in 2010. By soliciting bids through BACC, the District's annual cost for sodium hypochlorite has dropped from $223,000 in 2010 to $131,000 in 2016, saving nearly $100,000 each year.
BACC is an informal cooperative that advertises and opens sealed competitive bids and then prepares bid recommendations. Once bids are opened, the participating agencies complete their own contracts with the lowest responsive bidder. In 2016, BACC issued bids for 16 different chemicals.
Savings vary greatly by agency and by chemical, depending on historical pricing, volume, and delivery distance. But with more than 60 public agencies now participating, significant savings for chemical purchases are being passed along to the agencies’ water and wastewater customers.
DSRSD has continued to coordinate the program, receiving reimbursement from consortium members for the administrative cost of producing and advertising bids.
Read more about how the Bay Area Chemical Consortium works.