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HomeMy WebLinkAbout9G - Auto. Meter Reading CITY COUNCIL AGENDA REPORT MEETING DATE: AGENDA # PREPARED BY: AGENDA ITEM: April 1, 2002 9G Bud Osmundson, Public Works Director CONSIDER APPROVAL OF A RESOLUTION APPROVING THE SPECIFICATIONS AND ORDERING ADVERTISEMENT FOR BIDS FOR THE METER REPLACEMENT AND AUTOMATED METER READING SYSTEM DISCUSSION: Historv At the January 22, 2001 City Council workshop, Finance Director Ralph Teschner and r presented the issues of the need for water meter replacements and a better water meter reading system. Attached is a copy of the analysis that was handed out at that workshop. Council concurred with staff s recommendation that we should replace a significant number of meters and needed a more customer friendly and accurate meter reading system. Since that time, staff has been investigating these issues; what technology is available for meter reading, and how many meters we should replace. The purpose of this agenda item is to approve the specifications and authorize the advertisement for bids for the Meter Replacement and Automated Meter Reading System project. rfthe specifications are approved at tonight's meeting, bids will be let on May 7 and brought back to Council for award on May 20, 2002. The meter replacements would begin in June/July 2002 and be completed in about 1 year, at which time the new meter reading system would be completed and initiated. Current Circumstances Meter Replacement: We currently have about 5700 accounts or 5700 water meters in service within the city. Of these, about 4000 meters are pre-1995 which we are recommending to be replaced. Generally a water meter will work for 20 years or longer, but can be inaccurate after only 8 to 10 years of service. The meters generally short change the utility with wear, meaning they read less than the actual amount of water that flows through them. We have worked on a replacement justification program that shows the 4000 meter replacements, plus the cost of the fixed network radio read system, at a total cost of $1 ,300,000, has a payback of about 8 years. This means that the difference in water being invoiced between the existing meters and the new replacement meters would pay agenda approve $7J.)7aJi~lmann St. S.E., Prior Lake, Minnesota 55372 / Ph. (952) 440-9675/ Fax (952) 440-9678 AN EQUAL OPPORTUNITY EMPLOYER agenda approve specs radio read the cost of the replacement program and the new meter reading system in eight years. With the plan to replace 4000 meters or about 70 % of our existing meters, it is an opportunity to open the replacement plan up to a number of different meter manufacturers. We have used Sensus brand (or their forerunners) water meters in Prior Lake since we have had a City water system. We purchase new meters from the Sensus vendor every year, which are then sold to the plumbers for installation in newly constructed homes and commercial buildings, and for replacements by City Staff. Since the City is responsible for the maintenance of the water meters this "sole-source" method only makes sense. The City should not have to have spare parts for numerous brands of water meters on hand. However, since we are planning on replacing 70% of our meters, this is an opportunity for the City to possibly change our meter vendor. In all likelihood, whichever vendor is awarded this contract will be supplying the City's water meters for the next twenty or more years. One major additional benefit to changing out the bulk of our water meters is that the new specified residential meters will be made of lead free brass. This is not currently a requirement of any legislation, but will be in the future. Meter Reading System: Our current meter reading system is based on a customer reading of the meters. This is an antiquated system which was used by many utilities up until the 1960's or 1970's. It is not very customer friendly (which other utility expects the customer to read their own meter?) and it can lead to many "mis-reads" of the water meters during the course of our bimonthly water billings. Staff has investigated various meter reading systems. One system is to utilize our existing hardware which allows a person to read the water meters on the outside of the house. This is done through the use of a computerized "gun" which reads the meter when pressed against a remote sensor on the outside of a house. This information from the "gun" is then downloaded into a computer for incorporation into the utility billing software. If done by City staff or an outside vendor, this method is very personnel time intensive, and could cost in excess of $25,000 annually for meter reading when reading every other month. Another method is to utilize a drive-by technology where a meter reading device is carried in a vehicle around the community on a water billing schedule. This is accomplished only after each meter has had a radio wave emitting meter transmission unit (or MTU) attached to it, which sends out the meter reading when activated. This meter reading device is then brought back to a computer and the information is then downloaded into the utility billing software. Depending on the technology, this method can take from a few hours to a couple of days to read all the meters within the community. This again can be time consuming for meter reading personnel. A third system utilizes similar radio wave emitting MTU's at the meter, but utilizes a fixed network of relays, which relay the meter reads via cellular phone technology back to a central computer for incorporation directly to the utility billing softwear. This system allows a person sitting at the central computer to read any meter within the city at any time, and confer with a customer about their bill. Some systems will actually read the meters on a two-minute increment. There is a relatively small monthly cost for the cellular network connection for this system when in service. All of the radio systems require a battery type of power source which we are requiring to have a ten year warranty for replacement. All things considered, staff is recommending the fixed network system because of all the advantages this system has over the others. The initial capital cost of the fixed network system is not significantly higher than other radio read systems described, and does not have the associated ongoing personnel/reading costs which will only rise over time. ISSUES: The replacement of 70% of our water meters, and the installation of MTU's on the remaining meters will require the entrance into all structures within the city which are on the city water system. This does present some problems and that is why the proposed schedule allows one year for the completion of the work. Other cities have had success in completing similar projects in similar time periods and we feel it can be done here also. The specifications are quite detailed on the expectations of the contractor in the area of customer service and relations. For instance, all contractor personnel will be bonded, must wear approved uniforms and wear a badge, will have undergone background checks and will be trained in customer service. The prospective contractors are very aware of the personnel issues and will provide good personnel. The specifications have been written without naming any manufacturer's brand names for either the water meters or the radio read system. We have not specified Sensus meters, which many cities in similar circumstances have done. We feel there are up to four good meters available in the area which will meet our needs. We believe it is in the City's best interests to specify good meters, and not to allow any type of meter to be bid which may not have good track records, and may require a significant amount of maintenance in the future. Staff believes the fixed network system is the most economical and most technologically advanced system available today, which is why we did not specify any other type of radio read system. FISCAL IMPACT: Budf!et Impact The estimated cost for the entire Meter Replacement and Automated Meter Reading System is $1,300,000. The estimated total project cost for the different aspects of the project are as follows: . Meter replacement & MTU installation.......................... $900,000 . Furnish and install MTU only.... ................................ .$250,000 . Furnish and install Fixed Network system...................... ..$150,000 agenda approve specs radio read The Capital Improvement program had earmarked $850,000 for completion of the entire project. Since the time we have increased the number of meters that we want to change out, hence the higher estimated cost. The Water and Sewer Utility Fund is the source ofthe money for this project. ALTERNATIVES: The alternatives are as follows: 1. Approve a Resolution approving the specifications and authorizing the advertisement for bids for the Water Meter Replacement and Automated Meter Reading System. 2. Table this agenda item for a specific reason. 3. Deny this agenda item for a specific reason. RECOMMENDED MOTION: REVIEWED BY: agenda approve specs radio read RESOLUTION 02)... Q ~/ RESOLUTION APPROVING THE SPECIFICATIONS AND AUTHORIZING THE ADVERTISEMENT FOR BIDS FOR THE METER REPLACEMENT AND AUTOMATED METER READING SYSTEM MOTION BY: ~ SECOND BY: JP WHEREAS, The City Council directed staff to investigate the need for an improved meter reading system and the need to have a meter replacement program, and WHEREAS, City Staffhas investigated various options for meter reading systems and replacement programs, and WHEREAS, City Staff has prepared specifications for the Meter Replacement and Automated Meter Reading System, and WHEREAS, Such specifications have been presented to the Council for approval. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA: 1. That the specifications for Meter Replacement and Automated Meter Reading System, a copy of which is attached hereto and made a part hereof, are hereby approved. 2. The City Manager shall prepare and cause to be inserted in the official paper and in the Construction Bulletin, an advertisement for bids for the making of the improvement pursuant to the attached specifications. The advertisement shall be published not less than 21 days prior to the bid opening, shall specify the work to be done, and shall state that the bids will be received by the City Manager until 10:00 a.m. on Tuesday, May 7, 2002, at which time the bids will be publicly opened at the City Maintenance Center at 17073 Adelmann Street SE by the Public Works Director and Finance Director. No bids will be considered unless sealed and filed with the City Manager and accompanied by a cash deposit, cashier's check, bid bond, or certified check payable to the City of Prior Lake in the amount of five (5) percent of the amount of such bid. 3. The City reserves the right to reject any and all bids for any reason as determined solely by the City. agenda~(1t3spMelmafWdSt. S.E., Prior Lake, Minnesota 55372 / Ph. (952) 440-9675 / Fax (952) 440-9678 AN EQUAL OPPORTUNITY EMPLOYER _ '.. ,_~,., "_"_'_"~"""~"__""_'~"____ __, '. .. _...._~.."_.~,.,...._"_~~~. .'... _.m'_O___~_"_____~___"'~_"~_"__"~____"'_'__.~________'_~.__>>..__.~..."-....u ~"""""~",_,~"_~___'4'~"'_'___,,_,,,_____,,~,_,~,~ Passed and adopted this 1st day of April 2002. YES NO Haugen Haugen Gundlach Gundlach Petersen Petersen Zieska Zieska { Seal} City Manager, Frank Boyles agenda approve specs radio read 1. The Issues: H;\Water\MeletprOgram.doc Meter Chao2:e-out Pro2:ram Workshop Analysis Prepared By: Bud Osmundson, Ralph Teschner & Doug Hartman January 22,2001 Age of Water Meters There are 364 old Calumut water meters that have been identified which do not have outside reading registers that exceed 40 years in age. This total is equal to 7% of all household meters. Because this is a significant replacement beginning it is important that the following issues be considered: 1. Cost Implications The extension of Prior Lake's municipal water system from the general downtown area began in the early 1970's. The initial water meters are now over 30-40 years old. Over time the gears in the meters themselves become gummed up with mineral deposits from the water and slow down substantially. The result is, that based on bench testing, 25 year old meters may only register 85% or less of actual gallons of water used. Based upon the average annual residential use of 90,000 gallons (7,500gals./mo.) a 15% unregistered usage would represent a revenue loss of $57 per account. Assuming 20% of our 5200 plus accounts are of this age, the City is losing nearly $60,000 annually. Over the next 10 years our revenue loss would approach $1,000,000 if a water meter replacement plan were not established. Current Meter Reading Problems 1. Cost & Customer Service Implications Presently all residents in Prior Lake read and submit their meter reading along with their bill payment on a bi-monthly basis. There are numerous problems that are inherent in depending upon customers to read their own water meters: . Reliability - Too frequently customers just plain ignore reading their meter. The city follows up with hundreds of reminder notices each billing cycle. . Inaccuracy - Innumerous occasions where the meter is read wrong and verification time must be spent to either obtain a correct reading by clerical staff or maintenance personnel. . Inconsistency - Unless an individual reads the meter on the same date during each billing cycle, usage will fluctuate significantly from bill to bill. Depending upon the day read, usage could vary anywhere from 10 to 60 days. . Lag time - Because the meter reading is obtained from the customer at the time payment is submitted the usage time period is always two months in arrears. An example of this would be when a customer (upon receiving their 2/1 water bill) always reads their meter the 5th of the month and submits the return billing statement portion on the due date of 2/20. The next bill generated on 4/1 would then be for the period of time from December 5th until February 5th (60 days). · Customer Service - Residents for the most part perceive meter reading as a customer service function and many residents just do not want to take the time to read their meter which results in a certain level of dissatisfaction of a public service that they expect should be provided. II. Replacement Options: III. Advantages & Disadvantages: H:\Waler\Meterprogram.doc Generally, the following three types of water meter reading technology are available: A. Outside meter register that allows for manual meter reading input whereby the outside numeric reading is generated by impulse through a wire from the main household water meter. B. Touchpad meter register which has an electronic serial number that identifies the address and automatically downloads the meter reading from the main household meter via a wire to the outside pad and into a meter reading gun which is applied to the outside touchpad. C. Radio read meter registers that allow for a meter reading apparatus to obtain meter readings within a 1000' radius that would allow for the entire city to be read in one day. Radio- Read A. Advantaees Radio-read technology has a number of very promising features that have the following direct benefits to the City of Prior Lake: -} Customer Service · Customers will no longer have to read their water meters -} Billing accuracy . Automated readings are virtually 100% accurate -} Elimination of Estimated Readings · The city has nearly 400 accounts that are estimated each billing cycle because we do not receive current readings plus we send out an additional 200-300 what are known as "Oops" reminders for residents to call in their readings. -} Consistent usage · Contract reading will provide for constant reading dates, and therefore consistent usage time periods. -} Up-to-date billing · After a phase-in period during the first year of contract reading which would advance the reading dates 5 days each billing period to allow for a gradual catch-up, customers will have a relatively current bill. -} Troubleshooting time reduction · City personnel spend, on average, 40 hours per billing cycle on meter reading verification, final bill readings, reconciling inside and outside readings, correcting over-estimated accounts, etc. -} Elimination of annual audit read · Each year city maintenance personnel reads the entire city which takes approximately six weeks as an audit check on meter readings and to make sure no new housing starts have fallen through the billing cracks. This process will no longer become necessary. -} Safety · Meter reading carries a certain amount of risk associated with accidents such as falls and dog bites which either contract or mobile radio reading would avoid. ? IV. Who Reads the Meters: ~ Liability · There is always the potential for liability suits that can be greatly reduced if public contact can be avoided. ~ Property Access · This item is probably the greatest single benefit derived from a radio- read system. People today generally do not want anyone inside their home or even trespassing on their property. This attnbute has no measurable price tag but is extremely desirable from the public's perspective. B. Disadvantaees ~ Cost · Radio-read technology has a higher pnce tag than manual read registers. ~ Relatively New Technology · While there are not established track records in long term maintenance, cities such as Savage, Eden Prairie, Edina and RobbinsdaIe have connnitted to this automated technology and both Excel and Reliant Energy at this point are satisfied with the success they have experienced to date. ~ Lifespan · Depending upon the manufacturer, actual expressed warranties range anywhere from 5-7 years. However the vendors have stated these are very conservative estimates and that actual trial and experience has indicated reliability extending over 10-18 years. Time will tell. 1. Contract Read Funding has been provided within the Enterprise Fund budget (Water Department) to contract out meter reading on a community wide basis. RMR Services, Inc. has provided both manual meter reading and mobile meter reading for sixteen cities in the metro area i.e., Eagan, Lakeville, Rosemount among a few) They are presently involved in changing out the entire city of Eden Prairie to automatic radio read over a three year time frame. They also provide all the necessary radio read hardware and software plus they layout the reading routes. For just manual meter reading services, they have proposed a price per read of $.70. This amounts to an annual cost of $21,840 based upon 5200 metered services in Prior Lake. The reading cost would decline substantially over time if radio read meter registers are installed and manual outside units are eliminated. 2. City Read The City could not hire a person, and provide the additional equipment and associated overhead cost with a meter reader and expect to read meters for less cost than indicated above. Contract reading is more cost effective for manual read meter registers. However, if the City were to implement radio read technology, we could take over reading once the city is converted as we could probably read the entire city in less than one day. H:\Water\MeleIprognun.doc ~ V. Cost Recovery: VI. Timetable: VII. Industry Trends: VIII. Staff Recommendations : H:\Water\Meletprogram.doc . Water meters range in cost from $65.00 to $85.00 for the base meter including either a manual or touchpad register plus labor of $35 to install would result in a minimum total average unit price installation of $110.00. Assuming replacement of an existing 2500 meters (Pre-1985) or 50% of our existing stock, the actual meter exchange cost would be approximately $275,000.00 . Radio read units that may be applied either directly at the water meter or connected to the house exterior range in cost from $75.00 to $125.00. The addition of radio read units (including a labor additive for one-half of the units), depending upon the manufacturer, would on average cost an extra $515.000.00 for the conversion of 5000 water meters. . All future new home construction would be required to install radio- read water meters versus today's touchpad meter requirement and would continue to be incorporated into the building permit fee. . The total investment of $790,000.00 would be recovered over a 10- year period alone by the 15% increase in accuracy due to the replacement of new water meters. The timeframe for turning over our existing stock of meters is fairly important and somewhat dependent upon which type of meter technology is implemented. If radio-read meter technology is chosen then it probably makes sense to be fairly aggressive and replace all existing outside registers within a 3-5 year time span. Inside meters that are 10 years old or less would remain in place. Approximately 50% of our water meter stock would be replaced during this time. If the touchpad option were chosen then a 10 year time period could be accommodated. Cities such as Savage and Eden Prairie who are going with radio read meters are converting their entire communities on a wholesale basis. Both Reliant Energy and Excel Energy (gas and electric utility companies) have already converted to automatic reading technology. Virtually all (98%) Excel Energy's electric consumers' meters in the metro area are being read using auto-read technology and 72% statewide. Reliant Energy (formerly Minnegasco) will have upgraded almost 70% of all their accounts to this technology. Staff would recommend that the following actions should occur: . Initiate water meter change-out program. . Contract for meter reading services. . Implement radio-read technology. Turning over and replacing our water meters is a maintenance issue that is required and will ultimately pay for itself. The technological choice is of equally importance as it will in all likelihood be one that we will accommodate for at least the next 10 years. The City of Prior Lake is the only community that we are aware of which requires its residents to read their own meters. It is important that we change this situation and provide this service to our customers. 4 IX Action Steps: H:\Walel\MeterprognllIl.do<: Automating the meter reading process will pay dividends over the long term and is the direction virtually all utility companies, public and private are heading. Next Council Review ~ Formal Council Approval of Water Meter and Automatic Meter Read (AMR radio-read) Selection . A specific water meter would be selected based upon unit cost and radio-read compatibility. ~ Formal Council Approval of Meter Reading Services . Per reading quotes would be obtained to contract out meter reading ServIces. ~ Formal Council Approval of Meter Replacement Services . Per unit installation quote would be obtained for installing both water meter and AMR unit. . Plus a per unit installation quote would be obtained for AMR unit installation only. <i