August 4, 1998

To:Audit Committee

From:City Auditor

Subject:Chlorine Contract

Recommendation:

It is recommended that this report be received for information.

Background:

In regards to the awarding of a contract relating to the supply of chlorine, Council at its meeting of July 8, 1998, approved the following:

"The period of the contract will be twelve months after all empty cylinders belonging to the present suppliers are removed from all the City yards, the commencement date to be determined by the City Auditor."

Comments:

For operational reasons, there are significant amounts of chlorine inventory on hand at various locations throughout the City. The supplier who was recently awarded the twelve month contract is concerned that inventory levels be depleted prior to the commencement of the new contract.

I have had discussions with both the new supplier, as well as senior representatives from the Water/Sewer Division of the Works and Emergency Services Division, and have obtained agreement in terms of a mutually acceptable delivery commencement date.

Staff have advised that they are required to have certain inventory levels on hand at all times for operational reasons. Consequently, inventory levels cannot be completely depleted prior to the commencement of the new twelve month contract. In this regard, I have suggested that the inventory levels at the end of the twelve month contract be at the same level as the inventory level at the commencement of the contract. The new supplier has agreed to this proposal in writing.

Conclusion:

The commencement date of the twelve month contract has been determined to be July 29, 1998. Both senior City staff, as well as the supplier concur with this particulate date.

Contact Name and Telephone No.:

Jeff Griffiths, 392-8461.

City Auditor

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