8.4 Water Meter Replacement Performance ContractCITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
03/07/2011 4:00 P.M.
APPROVED FOR
AGENDA SECTION ORIGINATING DEPARTMENT:
NO: 8 AGENDA:
UTILITIES DEPARTMENT
ITEM
NO. 4
BY:
BY: Martha Tasker
Page 1
ITEM:
Award of Performance Contracting Agreement for the Water Meter Replacement, Project No. 11-2868
with Siemens Industry, Inc.
BACKGROUND:
Salina’s water system consists of approximately 20,500 water meters. Water meters typically slow
down or under-register as they age. The accepted i ndustry standard is to consider replacement of
water meters after 10-15 years of se rvice. A total of 70% of Sali na’s water meter stock is over 10
years old. Staff currently replaces 500 meters per year, which equates to 40 years to complete
replacement. In January of 2005, a policy was adopted to relocate meters from inside structures to
City right-of-way. There are approximately 7,900 meters located inside, and staff currently relocates
100 meters per year, which equates to 79 years to complete the relocations. Continuing at the current
pace is unacceptable.
Performance contracting was selected, which allows for a turn-key project to be paid with revenues
from enhanced meter accuracy, future capital cost avoidance and future operational savings.
Requests for Qualifications were received from four firms. One firm di d not meet the minimum
qualifications. Two companies were interviewed, and Siemens Industry, Inc. was selected for the
project development. Approximately 270 meters we re tested by a third party in accordance with
American Water Works Association (AWWA) Standards. Tested accuracy rates ranged from 42.3% to
98.2%. The AWWA Standard for new water meters is 98.5% to 101.5%.
Staff evaluated several solutions with multiple vendors to address the problem. A turn-key Sensus
FlexNet Advanced Metering Infrastructure (AMI) with Neptune meters was selected. The FlexNet
System operates with minimal infrastructure requiring two tower base stations with a 98% redundancy.
Additional FlexNet benefits include: operates on a dedicated fr equency licensed by the FCC; real-
time, on-demand view of water usage; hourly or dai ly reporting options; reduction of service order
calls; leak detection; backflow detections; cust omer access capabilities through the web; water
conservation monitoring and overall ability to boost customer satisfaction. Neptune meters provide
low flow sensitivity of 1/8 gallon per minute and meet all applicable lead free requirements. The City
has a long standing relationship with Neptune.
In addition, the project includes relocating approximately 7,900 meters from inside structures to City
right-of-way and testing and verifying of meters yearly for the 15 year life of the project.
The total project is $14,634,851. The construction period for the project is 18 months (April 2011
through September 2012).
The attached Performance Contracting Agreement includes:
Performance Contracting Agreement
Exhibit A – Scope of Work and Services
Exhibit B – Payment Schedules
Exhibit C – Performance Assurance
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
03/07/2011 4:00 P.M.
APPROVED FOR
AGENDA SECTION ORIGINATING DEPARTMENT:
NO: 8 AGENDA:
UTILITIES DEPARTMENT
ITEM
NO. 4
BY:
BY: Martha Tasker
Page 2
Exhibit C – Performance Assurance references 345 pages, which includes the following attachments:
Attachment 1: Meter Account List
Attachment 2: Meter Testing Data
Attachment 3: Baseline Consumption Data by Meter Size
Attachment 4: Current Rate Structures for Water and Sewer Services
Attachment 5: Revenue and Operational Savings Analysis
These attachments are considered supporting docum entation and are not included; they will be
attached to the executed agreements.
The current water charges include an Excess Use Charge. An Excess Use Charge applies to (1) all
irrigation meters (2) any use in excess of the Excess Use Baseline. A cust omer with meter water
consumption greater than three million cubic feet per year is not charged an Excess Use Charge. The
Excess Use Baseline equals the great er of 120% of the Winter Quar ter Average or 120% of the
Minimum Winter Quarter of 800 cubic feet. T he Winter Quarter Average is the average metered
consumption for the monthly bil lings of January, February and Marc h. Each customer’s Winter
Quarter Average is calculated in April each year and is utilized for the following months of May
through April.
As new water meters are installed, staff will re view accounts to ensure customers are not charged
additional Excess Use Charge, as a result of the increased water meter accuracy. In July of 2010,
18% of our customers incurred an Excess Use Charge. In the year of 2010, an average of 11% of our
customers incurred an Excess Use Charge.
In addition, wastewater charges are based on the Winter Quarter Average and will not be increased
until a Winter Quarter Average can be calculated based on the water consumption measured by the
new water meter.
FISCAL NOTE:
The Water Meter Replacement Project is included in the Capital Improvements Program. The project
will be financed with 15 year revenue bonds and will be funded wit h revenues from the improved
meter accuracy, future capital cost avoidance and fu ture operational savings. The project is cash
positive at year one (see attached sheet).
CONFORMANCE WITH THE STRATEGIC PLAN:
Related Strategic Plan goals may include:
GOAL #3: The City will provide the highest quality of services, consistent with governing body
direction, available resources and staff commitment to quality.
Action Item: The City Commission will maintain it s commitment to the muni cipal organization by
providing direction and resources that will allow them to meet established expectation.
COMMISSION ACTION:
It is recommended that the City Commission award the Performance Contracting Agreement for the
Water Meter Replacement, Project No. 11-2868 to Siemens Industry, Inc. of Buffalo Grove, Illinois in
the amount of $14,634,851.