The URL can be used to link to this page

Home My WebLink About10 Water Meter Implementation Plan Agenda Item # 10 ACTION To: Board of Directors From: Neil Kaufman Date: May 19, 2010 Subject: Consideration of the Award of a Contract for Phase 3 of the Water Meter Implementation Plan 1. WHY THIS MATTER IS BEFORE THE BOARD Board authorization is required for expenditures in excess of$15,000. 2. HISTORY AB 2572 requires that the District begin reading the water meters installed since 1992 and commence billing on a volumetric basis by January 1, 2010. AB 2572 also requires that all connections be equipped with water meters and billed on a volumetric basis by January 1, 2025. In the late Summer of 2008, the District issued a request for proposals for the provision of an automated meter reading (AMR) system and the installation of water meters. In response to that RFP, the District received five proposals, three for drive- by systems and two for fixed-base systems. The District determined that implementation of a fixed based system would best serve its needs and the review was focused on those two proposals. • A proposal from Measurement Control Systems (MCS) for a system utilizing meters manufactured by Neptune and radios manufactured by Aclara. • A proposal from Vulcan Construction for a system utilizing meters manufactured by American Meter Company (AMCO) and radios manufactured by Datamatic. Eventually, the Board awarded a contract to MCS for implementation of a pilot program consisting of about 400 meters. In May of 2009, the Board awarded a contract to MCS to cover Phase 2 of the Water Meter Implementation program. This Phase 2 contract covers the installation of about 6,750 meters in total. This existing contract was structured to begin in May 2009 with the final installations to be performed in June 2010. The total value of the Phase 2 contract was $2,107,000 (not including sales tax). The Board also established a 10% change order authorization for a total amount not to 3. NEW INFORMATION MCS has installed about 4,850 meters under the Phase 2 contract. In total, about 5,270 meters have been installed by MCS and District crews. MCS has resumed work on Phase 2 contract. This remaining work involves replacement of about 570 commercial meters and installation of about 1,330 residential meters, mainly in the Donner Lake and Tahoe Donner areas. MCS is currently concentrating its efforts on the commercial meters and will increase its staffing in the middle of May when installation of the residential meters begins. Completion of Phase 2 is currently on schedule for completion by the end of June. The Board previously set a goal of having all water system customers equipped with a meter by January 1, 2013. In order to meet that goal, it is recommended that the District proceed with Phase 3 of the Water Meter Implementation program during the Summer of 2010. Phase 3 will cover the installation of about 4,735 residential meters throughout the District and should be completed by November 2010. Upon completion of Phase 3 over 90 percent of the District's water customers will be equipped with a meter. Installation of meters for the remaining customers will require the installation and/or upgrade of new meter boxes. The Water Department plans to bid a number of contracts (3 to 5) covering installation of these meter boxes for construction during Summer of 2011 and Summer of 2012. After the meter boxes are installed, meters will be installed by District staff. Attached is a copy of the proposed contract with MCS for this Phase 3 work. The differences between the Phase 2 and Phase 3 contracts are: • Scope of work has been revised to delete items not relevant to Phase 3 • Contract dates and milestones have been changed to cover the Summer & Fall of 2010 • Price modifications as given below: Item Phase 2 Price Phase 3 Price Aclara MTUs $105.00 $108.15 Neptune 5/8"x 3/" Meter w/Re ister $93.75 $96.90 Retrofit Lid for existing Mueller box $35.00 $36.00 Retrofit Lid for existing Christy B9 box $18.50 $19.05 Retrofit Lid for existing Christy B16 box $23.15 $23.15 Retrofit Lid for existing Christy B30 box $37.50 $38.65 Retrofit Lid for existing Christy B24 box $57.50 $61.50 Retrofit Lid for existing Christy B36 box 1 $87.50 $85.00 No price increase was requested for MCS labor to perform installations. It is currently planned to begin the Phase 3 installations in July in the Tahoe Donner area. Work will then proceed towards the east, finishing in Glenshire at the end of October. 4. FISCAL IMPACT As noted earlier, the total value of the Phase 2 contract was $2,107,000, not including sales tax (or about $2,200,000 including sales tax). With the 10% change order authorization, the total amount authorized by the Board is $2,440,000. To date the District has paid $1,600,559.18 covering all of the work performed during 2009 and some QA/QC work performed during the Winter on 2009-2010. Payment of sales tax is included in the $1.6 million value. The proposed price from MCS for the Phase 3 contract is $1,471,592.06, including sales tax. This price is based upon the installation of 4,735 meters and 3,525 replacement meter box lids. It is recommended that a 10% change order authorization also be established. Therefore, the total amount authorized by the Board would be $1,618,000. Table 1 gives a current estimate of the overall project costs. The anticipated MCS costs for Phase 4 involve the purchase of meters only. Meters will be installed by District personnel and meter box lids will be installed by outside contractors. Table 1. Cost Estimate for Metering Installation Project MCS District Costs Outside Contracts Total Phase 1 $232,000 $38,000 $0 $270,000 Phase 2 — 2009 $1,545,000 $296,000 $0 $1,841,000 Phase 2 — 2010 $655,000 $205,000 $0 $860,000 Phase 3 —2010 $1,475,000 $185,000 $0 $1,660,000 Phase 4 — 2011 $112,500 $112,500 $900,000 $1,125,000 Phase 4— 2012 $112,500 $112,500 $900,000 $1,125,000 Phase 4— 2013 $50,000 $50,000 $400,000 $500,000 Total $4,182,000 $999,000 $2,200,000 $7,381,000 In 2008, the Board instituted a $5.00 monthly surcharge to fund a portion of the meter installation project. This surcharge will expire at the end of 2013. Other funding sources for the overall project include the Reserve for Future Meters Fund and rate monies. As shown in Table 1, total expenditures by the end of 2010 will be $4.63 million. This amount will exceed the available funds in the Reserve for Future Meters Fund and income generated by the meter surcharge. Therefore, it is recommended that the difference be made up using the Capital Reserve Fund. Table 2 shows the projected cash flow associated with this approach. As shown in Table 2, it is anticipated that about $2.34 million will be needed from the Capital Reserve Fund to complete the meter project. The Water Department is currently projecting operational surpluses during the time span of the project. It is recommended that this surplus be utilized to restore the money taken from the Capital Reserve Fund. The anticipated balance of the Capital Reserve Fund using this approach is given in Table 3. As shown in this table, the Capital Reserve Fund will be restored at the end of 2013, when the water meter surcharge will terminate. 5. RECOMMENDATION 1) Authorize the Board President to sign a contract with MCS for Phase 3 of the meter implementation project for $1,471,592.06 plus tax and a 10% change order authorization for a total amount not to exceed of$1,618,000. 2) Authorize the transfer of up to $1,608,000 from the Water Department Capital Reserve Fund to cover the cost of the contract. Michael D. Holley General Manager/ Water Utility Manager Table 2. Anticipated Meter Project Cash Flow Actual P r o j e c t e d 2008 2009 2010 2011 2012 2013 Total Meter Fund Beginning Balance $1,272 $ 1,418 $ 161 $ - $ - $ - $ 11272 Meter Surcharge Revenue - 751 751 754 761 769 $ 39786 Operational Surplus 200 835 541 248 225 225 $ 29274 Interest Earned 31 18 - - - - $ 49 Meter Project Expenditures (85) (2,026) (21520) (19125) (11125) (500) $ (7,381) From Capital Reserve - - 19608 371 449 500 $ 21928 To Ca ital Reserve - 835 541 248 310 994 $ 2,928 Meter Fund Ending Balance $1,418 $ 161 $ - $ - $ - $ - $ - C I S { { Table 3. Anticipated Capital Reserve Fund Cash Flow 2010 2011 2012 2013 Total Capital Reserve Fund Beginning Balance $4,009 $3,128 $3,218 $3,319 $ 41851 Ordinance 2006-05 Contribution 162 163 165 167 $ 657 Interest Earned 24 50 75 100 $ 249 From Meter Reserve 541 248 310 994 $ 29093 To Meters 1,608 371 449 500 $ 2,928 Capital Reserve Ending Balance $39128 $3,218 $3,319 $49080 $ 4,080