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HomeMy WebLinkAbout9A AMRS Vendor Selection Report Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: MAY 7, 2017 AGENDA #: 9A PREPARED BY: JASON WEDEL, PUBLIC WORKS DIRECTOR/CITY ENGINEER PRESENTED BY: JASON WEDEL AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION APPROVING THE SELECTION OF A VENDOR FOR REPLACEMENT OF THE CITY’ WATER METERS AND AUTOMATIC METER READING SYSTEM (AMRS) AND AUTHORIZING NEGOTIATION OF A CONTRACT THEREFORE DISCUSSION: Introduction The City’s existing Automatic Meter Reading System (AMRS) was installed in 2002. The life expectancy of the batteries within the Meter Transmitter Units (MTUs) within that system is 20 years. The City is experiencing many of these MTU batteries already expiring, which is making the collection of data for water billing purposes difficult and often inaccurate. Staff has been replacing MTUs to keep the system functioning but is minimizing the replacements until the City Council selects a new vendor. Funds are included in the 2018 budget for this work. City staff have sent out Requests for Proposals (RFP’s) to three different vendors that provide these types of improvements. The City Council is being asked this evening to consider selection of the preferred vendor. Once the vendor is selected, City staff will negotiate with the vendor to finalize the specific improvements to be completed and what the final cost will be. The negotiated price will then be brought back to the City Council at a future date for final approval and authorization to proceed with the work. History The City of Prior Lake’s water meter transmitter units (MTUs) are reaching the end of their useful lives. In 2002 the City installed an automatic meter reading system (AMRS) consisting of water meters, transmitter units (MTUs), and centralized data collecting units (DCUs). Readings collected by the meter registers are transmitted to the central database once per day through a fixed radio system. At one-time residents read their own meters and mailed the results to the city. The system was fraught with inaccuracy and delays. That was replaced with a system that required the City staff to travel to each billing address once every two months to collect meter reading data. That system was satisfactory with 2000 dwelling units but does not work for 8900. This would take four staff members an entire week or 160 hours to complete. The current AMRS collects meter reading data multiple times every day. However, because of the city’s geography, there are meters that are not currently detected. The City has 14 DCUs spread throughout the City that read the signals coming from the MTUs at each billing address. The options for picking up these locations is adding more DCUs or having an alternative method for obtaining readings from those locations such as a drive-by detection unit. Due to the scattered nature of our missing meter reads, staff would prefer a drive-by option. Unfortunately, our current Aclara system does not offer a drive-by option. The City has had a long history of issues with the current Aclara AMRS. When the City reports a problem to the company, City staff must spend many hours of labor and weeks or months of support requests before Aclara will acknowledge and resolve the problem. In some instances, the problems are as simple as updating a script or data library, but in other cases the source of the error has been a complete hardware design failure. The significant investment in the AMRS infrastructure makes it difficult for the City to cut its ties with Aclara, but these failures have cost the City a substantial amount of money in lost staff productivity. With the increasing number of existing MTUs failing every day it was necessary to initiate the proposal process for their replacement this year. Delaying their replacement would put the City in a position where we cannot keep up with daily MTU replacements, which results in meters that go unread requiring Utility Billing to make estimates on the amount of water used by those accounts. Current Circumstances Request for Proposals (RFPs) were sent out at the end of February. The RFPs included not only replacing the MTUs, but also alternative bids for replacing the entire AMRS. We also included an alternative to replace all the water meters. The City currently has an assortment of styles, ages and models of water meters. Over half of these meters are to the point where they should be replaced as well. As water meters age they become less accurate and under report the actual amount of water being used. The City’s total water usage in 2017 was 758,737,000 gallons, which equates to 2,078,731 gallons per day. Knowing at least half of our meters are old and are under reporting that is half of the average gallons per day or 1,039,365 gallons. The older meters typically under report water usage by an average of 10%. That equates to 103,936 gallons every day going unreported. The value of 103,936 gallons at the City’s current base rate of $4.67 per thousand gallons is $485.38 per day. If you multiple that by 365 days per year it equates to $177,165 per year the City is losing in lost revenue. The City received three proposals. The proposers included the City’s current provider Aclara as well as Winwater and Ferguson. There is a significant amount of information included with each proposal, so they were not included with the City Council packets. If anyone would like to review the proposals, I invite you to view them in my office. As part of the proposal, each company was required to complete a propagation study to determine the number of DCUs that would be necessary to get complete coverage over the entire City and be able to read all the MTUs. Each company came back with significantly different results. Aclara estimated 13 DCU’s despite currently having 14 with no read areas. This was due to their proposal to move one existing DCU to the top of our north water tower which would eliminate the need for one of the other DCUs. Ferguson estimated a need for 21 DCUs and Winwater estimated they would need 4. A summary of the proposal results is shown below. We included the base totals as submitted. We also provided a modified cost based on using a consistent 13 DCU’s for all three companies. Finally, we included the totals which include replacing the water meters at the same time as the MTUs. The results are as follows: Ferguson Aclara Winwater MTU repl. As proposed $1,744,461.50 $1,620,046.49 $1,502,835.51 MTU w/13 DCUs $1,534,666.29 $1,620,046.49 $1,637,408.64 MTUs & Meters $2,079,079.22 $2,834,885.00 $2,699,520.38 What is apparent in these numbers is Ferguson’s superior ability to provide replacement water meters. We have checked the quality of the meters offered and find they are comparable to those which we have historically used and those which are proposed by Aclara and Winwater. ISSUES: Making a change to a different AMRS provider is a significant decision. The City has made a large investment in the existing system. City staff therefore would not make a recommendation for a change without careful consideration of all the alternatives. Aclara has a long history of performance miscues with the City. The customer service and support has been severely lacking, resulting in large amounts of staff time to self-diagnose and correct. Prior Lake is currently the only municipality within the state of Minnesota served by Aclara. We have been told that they won a contract with the City of Minneapolis but that has yet to be confirmed and there is no reason to believe that will change Prior Lake’s experience. Staff is recommending that Ferguson be selected to replace the AMRS system. Ferguson is a local company and serves several municipalities within Minnesota including the cities of Lakeville, St. Louis Park, and Oakdale. Ferguson is also the only provider of a drive-by option to read the MTUs. This is a huge benefit that allows City staff to get water meter reads in the random and obscure locations throughout the City that cannot be reached by DCUs. Ferguson has also included a much lower price than the other two companies for the replacement of all the City’s water meters. They can achieve a much lower price because they do the installation themselves. The other companies would hire subcontractors to do this work. Based on the low price to replace both the MTUs and the meters, staff is recommending that the City Council include the meter replacement alternative. The 2018 budget for the AMRS replacement this year is $1,700,000. Based on the bid from Ferguson, it will cost an additional $379,079.22 to include the meter replacement with the MTU replacement. The City’s the annual budget includes funding for miscellaneous water meter replacements. In 2018, the budget for meter replacements is $190,000. If water meter replacement is included with the AMRS project this budget line item could be reduced to $50,000. The resulting annual budget savings of $140,000 combined with the $177,165 gained by not under reporting water usage results in a combined annual savings of $317,165. Based on these cost savings, including the water meter replacement with the AMRS project will only take a little over one year to pay for itself. In addition to obtaining more accurate water meter readings, the other benefits to replacing the water meters now is that it only inconveniences our residents once. If we only replace the MTUs now we will be back in the near future replacing all the water meters. Each replacement requires making appointments and having residents at home to allow us access to their property to make the changes. The other advantage for City staff will be having one consistent water system throughout the City. It will therefore be much more efficient to maintain, because we will only have to stock one model of parts and we only need to train our staff on how to service one type of product. FINANCIAL IMPACT: The additional cost to replace the meters in addition to the MTUs is $379,079.22. This was not included in the 2018 budget. The funding for this would typically come from the Water Fund. However, depending on the Capital Improvement Plan and proposed projects for 2019, there may not be enough funding available for the additional cost. There are a couple of alternatives the City Council could consider to offset the extra cost. First, as part of the budgeting process this year the City Council could choose not to do a street reconstruction project in 2019. With the other costs the City will be incurring related to the CR21/TH13 project, it may be difficult financially to complete a street reconstruction project as well. Not completing a street reconstruction project would potentially free up Water Funds for the replacement of the meters. The second option would be to reduce the number of DCUs installed initially by Ferguson. As mentioned earlier, Ferguson is the only company that offered a drive-by meter reading option. The City could reduce the number of DCUs installed to stay within the existing budget and obtain the meter reads using the drive-by option. The remaining DCUs could then be installed incrementally over time as the City’s budget permits. The drive-by readings could be obtained by City Staff spending 4 to 6 hours each month driving around the City obtaining the meter readings. The City of Lakeville currently completes all their meter readings each month using the drive-by method. Due to the variables included in the proposal from Ferguson, staff is requesting that the City Council approve the selection of Ferguson as the vendor for the new AMRS system. The next step would be for staff to meet with Ferguson and negotiate the final system design and corresponding price. The contract price and the professional services agreement would then be brought back to the City Council at the first meeting in June for an award. ALTERNATIVES: 1. Motion and second to approve a Resolution selecting Ferguson as the approved vendor for the AMRS replacement project and instruct staff to enter into negotiations to prepare the final contract. 2. Deny this item for a specific reason and provide staff with direction. 3. Table this item until some date in the future. RECOMMENDED MOTION: Alternative #1 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 18-___ A RESOLUTION ACCEPTING PROPOSALS AND SELECTING THE VENDOR FOR THE 2018 AMRS PROJECT (WTR17-000004) Motion By: Second By: WHEREAS, Pursuant to the Request for Proposals for the 2018 AMRS Project (City Project #WTR17- 000004) which includes replacement of the Automated Meter Reading System (AMRS) including the Data Collection Units (DCUs) and the Meter Transmitter Units (MTUs) as well as the alternative replacement of the water meters; and WHEREAS, Proposals were received, opened, and tabulated according to law; and WHEREAS, The following proposals were received: COMPANY MTU ONLY MTU & METER FERGUSON $1,744,461.50 $2,079,079.22 ACLARA $1,620,046.49 $2,834,885.00 WINWATER $1,502,835.51 $2,699,520.38 and; WHEREAS, Ferguson is the lowest responsible vendor for replacement of both the MTUs and the water meters. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. Ferguson is the lowest responsible vendor. 3. The Public Works Director is hereby authorized to enter into negotiations for a contract with Ferguson for the 2018 AMRS Project (Project # WTR17-000004). 4. The final contract amount will be brought back to the City Council for approval. PASSED AND ADOPTED THIS 7TH DAY OF MAY 2018. VOTE Briggs McGuire Thompson Braid Burkart Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ 2 ______________________________ Frank Boyles, City Manager