3. Award Bid - Water Meter Replacement ProjectON of
Post Office Box 1997 • Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758
REPORT TO: Mayor and City Council
FROM: James C. Hansz, Director of Public Works
SUBJECT: Award Bid, Water Meter Upgrade Project
MEETING DATE: May 21, 2001
BACKGROUND: The City Council approved a project in the current budget year to begin
upgrading the City's water metering with the goals of improving meter accuracy, reducing meter
reading work load, and improving our water accountability so future rate increases would be
minimized. To begin this project we initiated a market survey to identify the options for meeting
these goals. From this study it became clear that our original concept of systematically replacing
meters by simply beginning with the oldest was not the most cost effective when the goal is to
generate the greatest improvement in accuracy and enhanced revenues at a reasonable cost. The
most cost/beneficial approach is to replace the largest meters first. The large meters are the least
accurate components in the system. They are designed to register large flows, but fall short when
measuring small flows. Their accuracy also rapidly deteriorates so that in a short time they fail to
register large flows with consistent accuracy. Our research also showed that large meter
replacement is the first step taken by most utility systems facing the same problems we have in
Kalispell.
Therefore we have developed a project to replace 229 large meters (size 1 —1/T' and
larger), not counting irrigation meters, that serve the City's largest customers. The project
replaces these large meters with highly accurate and long-lived single jet meters. These meters
differ greatly from our current large meters in their basic design. This new design provides a
high degree of low flow accuracy coupled with extraordinary durability. In addition, another
project goal is to obtain a state-of-the-art remote reading system. We have included the RAMAR
remote meter reading system as an integral part of the project. This remote reader system is
reliable, compatible with our billing system to permit direct down -load of billing data, and one
that is used by a number of large water utilities. We also intend that this reading system have the
flexibility to allow for future joint meter reading with the power company if circumstances allow
it. We also included a revenue guaranty as a bidding option.
The project was advertised for bids to be opened May 9, 2001. Two sets of project
specifications were requested, but only a single bidder responded by the deadline. The sole
response was from Metron Farnier of Boulder, Colorado in the amount of $292,250.00 for the
base bid. This is slightly less than we estimated, and averages $1,276.00 per meter. Their
supplemental bid for a revenue guaranty was $32,473.00.
We initially felt the revenue guaranty might be a wise investment hence our inclusion of
it as a separate bid item. We found three utilities that have utilized the revenue guaranty
provision. We contacted each and all were in agreement that the performance of the installed
meters exceeds their revenue projections and a revenue guaranty is not worth the added cost. The
City of West Palm Beach, Florida specified a three-year payback for their project. The payback
occurred in one year. None of the three recommended the added expense of the guaranty. The
experiences of these three utilities mirror others we checked regarding performance of the
meters.
After reviewing the bid we recommend acceptance of the base bid and rejection of the
supplemental bid for a revenue guaranty. The project manager's analysis is attached along with
notes of conversations with the three utilities referenced above.
RECOMMENDATION: Award the Water Meter Replacement Project to Metron Farrier of
Boulder, Colorado based on their bid of $292,250.00. Reject the supplemental bid for a revenue
guaranty.
FISCAL IMPACT: There is presently $62,000.00 budgeted for meter replacement in the water
fund, line 948, and $45,000.00 in the sewer fund, line 948. This award will require a budget
amendment.
ALTERNATIVES: As suggested by the City Council
Respectfully submitted,
James C. Hansz, P.E.
Chris A. Kukulski
Director of Public Works/City Engineer City Manager
Report compiled May 15, 2001
MEMORANDUM
Date: May 11, 2001
To: James Hansz, Director of Public Work
From: Fred Zavodny, Project Manager
Re: City of Kalispell Water Meter Replacement Project - Bid Analysis
The City of Kalispell Water Meter Replacement Project consists of replacing 229 conventional
large water meters with state of the art accuracy meters that substantially outperform previous
meter technologies. The bid included a complete and operational Automatic Reading System that
is compatible with the City's current billing system.
Bids were opened on Wednesday, May 9, 2001. One bid was received from Metron-Farmer
headquarted in Boulder, Colorado. The total bid price for the project amounted to $ 292, 250.00
which equates to $ 1,276.00 per meter. The per meter cost includes the meter and all necessary
fittings, scheduling, installation and a proportional share of the Automatic Reading System
including the associated work to integrate it into our existing billing system and train personnel
in its operation. I recommend that the City accept Metron- Farnier's bid for installation of 229
water meters for the amount of $ 292, 250.00.
The bid included a Revenue Guaranty in the form of a Supplemental Bid that may be accepted or
rejected by the City. The purpose of the Revenue Guaranty is to assure that the City of Kalispell
will receive a five year payback on the total project cost. The bid for the Revenue Guaranty
amounted to $ 32, 473.00. A revenue shortfall of $ 32,473.00, plus the lost revenue on that sum
must occur over the five year period in order to make the guaranty monetarily justifiable. The
research we have conducted combined with customer testimonials and a recent article in Water
World provide sufficient evidence that the Metron meters will yield precise water measurement
thereby increasing billable revenue. I am recommending that the Supplemental Bid be excluded
from the contract.
Revenue Guarantee — Metron-Farnier Meters
West Palm Beach — Wayne Schooley 561)371-9886
3 year payback guaranteed — met payback two years ahead of schedule. Would not pay
the cost of the guarantee again, not necessary.
North Miami Beach — Jack Strain 305)787-1007
Approximately 20,000 water accounts. Changed out 800 large meters less than a year
ago. It definitely appears that they will meet the revenue guarantee with no problem,
even though they are in the middle of a severe drought. Something to keep in mind is
that the guarantee has a clause built-in regarding water conservation controls. They used
the guarantee as a tool to assure the City Council that the water meter replacement project
was a win win situation.
Dana Beach — Leo Williams 954)924-3743
They have had the meters in place for approximately 2 years, not sure where they are at
on payback but confident they will meet it even though they are having a drought. They
had a 6% - 8% loss of water before changing out meters. Since the meter change -out
they are down to less than 1% water loss. Residents starting calling about their increased
water bills and when they investigated they found several water leak problems. Since
they are in the noddle of a drought, this has been a great benefit to them. They didn't
realize they had paid an additional cost for the guarantee. Leo didn't think Metron-
Farnier would offer the guarantee unless they were confident that they could meet the
requirements of it. Would not recommend paying extra for it.
5115101
CITY OF KALISPELL
P.O. Box 1997
Kalispell, MT 59903
Account Number:
APPLICATION FOR WATER SERVICE
-- Lj /, �" 7 Work Order # —
THE UNDERSIGNED OWNER/OWNER'S AGENT OF THE PREMISES AT
ADDRESS: .�- D Lf 5- P6- a -e
hereby applies to the City of Kalispell for Water Service at said premises.
The undersigned agree to abide by all rules, regulations and ordinances of the -City
relating to Water Service and to pay promptly for all water and sewer charges
therefore. The undersigned owner is aware of and agrees that he will be liable for
all water and service charges to said premises, as provided by Section 26-2, Code
of the City of Kalispell, Montana.
MAIL TO
AILLTO OWNER
Print Name:
- / s
Mail To Address: ,SO y S—' AP-C �l
Telephone:
Social Security #
Date�rdered:
Number of Units
Sewer
Out of City Charge
Start service:
`oi'
Turned on: By:
Signature:
Remarks:
• .........................•...................................----...................................------................................
NOTICE TO DISCONNECT/RECONNECT WATER SERVICE
Account #
Owner:
Address:
Mai] Final to:
Date Ordered:
Completed:
..................
Meter Size
SN#
Meter Reading:
Customer Signature:
Turned Off -
Turned Off:
Meter Rcv'd
Signature
0
!-M
Date
ROM Date / Initials