HomeMy WebLinkAboutCity Council Packet 11-18-2014 SpecialCITY OF PLYMOUTH
AGENDA
SPECIAL COUNCILMEETING
NOVEMBER 18, 2014) 5:30 p.m.
MEDICINE LAKE CONFERENCE ROOM
1. CALL TO ORDER
2. TOPICS
A. Water meter replacement project
B. Public Safety update
3. ADJOURN
Special Council Meeting 1 of 1 November 18, 2014
2A
To: rp)City0f
Plymouth
Prepared by:
Adding QuGhty to Life
MEMORANDUM Date:
Mayor and Council
Doran Cote, Public Works Director
Luke Fischer, Administrative Services Director
November 18, 2014
Item: Water Meter Replacement Project
The City Council was presented with a memo dated October 20, 2014 which outlined a high-level scope for a proposed
water meter replacement project. This memo will provide more detail for the proposed project.
There are over 22,000 water meters within the City which represent a vital piece of infrastructure. Many of these meters
are over 20 and 30 years old and are generally replaced after failure occurs and others are replaced when utility staff are
otherwise visiting a property. As meters age, a common issue is that they begin to slow — registering inaccurate
consumption reads. While Plymouth's meters have not been systemically tested for accuracy, cities and consultants with
experience in comparable meters report 8-12% inaccuracy. Edina did not benchmark through its replacement process
and estimates 3%, based on increased revenues.
Last year, the City pumped 3.184 billion gallons of water from its wells, but sales lagged behind by approximately 10%.
This unaccounted for water can be lost in inaccurate metering, leaks, hydrant flushing, etc. For the purposes of
Plymouth's project scoping, we estimate conservatively 5% meter inaccuracy on 75% of our total meter stock.
Estimated Meter Inaccuracy
Johnson Controls 11%
Minnetonka 10%
Edina 3%
Plymouth Estimate 5%
It is important to note that it will be extremely challenging to demonstrate with certainty that a specific level of
increased metering is achieved when comparing data from one year to the next. There are a number of mitigating
factors that will impact consumption trends that disallow data to be directly comparable from one year to the next.
Each year, the City budgets for over $13 million in total water and sewer revenues. Those revenues are based on volume
of water and sewer sold — so when a meter reads slow, revenue is lost.
Estimated Annual Revenue Loss
Residential
Commercial
Annual Total
331,662
158,906
490,569
These estimates were generated assuming 75% of the water meters have a 5% inaccuracy rate.
Page 1
If meters are replaced using the current practice, there is not a systemic correction in meter accuracy. Instead, the City
would continue to lose revenue each year with slow reads. Additionally, the City needs to continue to fund contract
meter readers and consider refilling a vacated position to collect consumption data.
Reading Cost:
Contract Readers $ 55,000
Personal Services $ 65,000
Total Read Cost $ 120,000
If the City were to consider a holistic meter replacement of the existing aging and original meter stock (approximately
17,000 meters), it would be able to realize an immediate increase in revenue and decrease in reading related expense.
Estimated Cost of System Change Out
Project Estimate $ 5,000,000
Inaccuracy Savings/10yrs $(4,905,686)
Staffing Savings/10yrs $(1,200,000)
Estimated cost/10 years $(1,105,686)
The total project cost is estimated from discussions with neighboring communities. The inaccuracy savings line assumes
that the current meters are reading slow and replacement meters read accurately for 10 years, before beginning to
slow. The staffing savings line assumes that reading technology is upgraded to minimize the manual reading process
currently in place, eliminating the need for contract readers or a dedicated staff member. It is assumed that utility staff
will continue to support meter reading if there is an error or recheck necessary. Although these are estimates and
preciseness would be difficult to prove, we expect the project to support itself over time.
Generally, staff anticipates the following improvements will be gained from system replacement:
Increased revenue through more accurate consumption data
Decreased staffing expense through automated reading process
Improved reporting through better, real-time data, and improved reporting technology
Staff is seeking authorization to continue to develop the project further and prepare an RFP to upgrade the City's
meters.
Attachments:
10-20-2014 Metering Project Scope Memo
Typical Monthly Residential Water Utility Bill
Page 2
rp)City of
Plymouth
GEMENNEEn—
Adding Quulity la Life
MEMORANDUM
To: Mayor and Council
Prepared by•
Luke Fischer, Administrative Services Director
Doran Cote, Public Works Director
Date: October 20, 2014
Item: Metering Project Scope
Background
The City of Plymouth has over 22,000 utility billing accounts. About 75% of these accounts require manual reading—
meaning a person must walk door-to-door to collect usage data. About one quarter of the City's system sends this
information with an electronic transponder to a receiver unit in a vehicle. In general practice, the City has installed this
type of electronic meter reading in "newer" developments. Existing meters have not been changed until a failure occurs.
At that time, the replacement typically includes radio read technology.
The City currently has a relationship with RMR, which completes a majority of the residential reading at a current cost of
0.45 per read. In 2013, when the City's full-time meter reader retired, staff sought to increase the City's contract with
RMR, but was unable to do so due to timing and the contractor's capacity. As a general trend, communities are shifting
away from manual reading and, as such, the private market has fewer service providers. These providers are trending
into new market space because demand has diminished over the past decade — leaving Plymouth with limited options to
collect this consumption data.
As a stop -gap measure, the City was able to hire two part-time employees to complete commercial meter reading. These
individuals are anomalies. Both are retired US Postal workers and have a very specific skill -set that meets the City's
needs. If these individuals were to discontinue service with the City, full-time staff would likely be required to fill these
duties until an alternative person or people could be found. Staff believes that this type of work will become increasingly
challenging to find in the private market — potentially requiring the City to hire additional employees to complete the
work.
Adjusting to Market Trends
As noted above, many communities are moving from a manual read process to an automatic reading technology'. Staff
has begun a high level review of options available to the City to determine if a project could provide efficiencies in
reading, increase metering accuracy, and simplify the overall process. This review has considered what a transitional
project may look like in terms of timing and budget. Staff consulted with Johnson Controls, Metrics AMI Consulting
Group, SL Serco, the City of Brooklyn Park, City of Golden Valley, and the City of Maple Grove to determine project
scope. Staff believes that this project will cost $4-$5.5 Million, take approximately 18 months to complete, and show a
payback of 15-20 years, depending upon the final scope of the project, product selected, and other factors.
Financing a Prosect
The City of Plymouth has the resources available to complete the project through an internal loan from the Water -Sewer
Replacement Fund (412). This fund has an available cash balance of $9.6 Million. Loan repayment would be completed
through Water and Sewer Fees and incorporated in the utility rate study. It should be noted that staff anticipates that
1 Most recently, Maple Grove completed this transition
Page 3
collections will increase through more accurate reading, which will be accomplished with more accurate and right -sized
meters.
Recommendation
Staff recommends the City Council authorize staff to continue project development and refine a more specific project
scope, which would be presented in the future.
Page 4
MINNEAPOLIS/Sl PAUL METRO AREA
Maple Grave, MN# 263
White Bear Lake, MN# 8.41
Cottage Grove, MIN 9.83
Eagan, MN# 9.93
Farmington, MN# 10.90
Plymouth, MN# imm 11.66
Minnetonka, MN# 12.53
Mounds View, MN# jam, 12.73
Oakdale, MN# 13.05
Hopkins, MN# 1313
Apple Valley, MN# 13.16
Brooklyn Park, MN# 13.43
Fridley, MN# 13.89
Eden Prairie, MN# 15.62
Chaska, MN# 15.76
Anoka, MN# 15.81
Bloomington, MN# 15.89
Ramsey, MN# 1612
Spring Lake Park, MN# 18.65
Richfield, MN# 21.04
Mahtomedi, MN# 21.91
Waconia, MN# 22.03
Prior Lake, MN# 22.43
West St, Paul, MN'" 22.52
Robbinsdale, MN# 22,86
North 5t Paul, MN# 23.79
Falcon Heights, MN"" 24.03
Orono, MN# 29.48
Minneapolis, MN" 29.66
Golden Valley, MN*" 30.08
Columbia Heights, MN"" 31.46
Mound, MN# 39.01
0.00 $13.00 $26.00 $39.04
TYPICAL MONTHLY RESIDENTIAL WATER UTILITY BILL ($)
52.00 $65.00
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