Automated Meter Reading February 26, 2011 1
What is Automatic Meter Reading? l 2 Automatic Meter Reading, or AMR is the technology of automatically collecting consumption, diagnostic, and status data from a water meter and transferring that data to a central database for billing, troubleshooting, and analyzing.
Historical Information l l 3 Automated Meter Reading was first tested approximately 48 years ago by AT&T in cooperation with a group of utilities and Westinghouse. At that time, the $2. 00 per meter cost was four times the monthly cost of a person to read a meter at $0. 50 cents per meter. As such, the program was considered economically unfeasible.
Historical Information l l 4 In 1977, Metretek, Inc. developed and produced the first fully automated, commercially available remote meter reading and load management systems. In 1985, Hackensack Water Company and Equitable Gas Company were the first to commit to full-scale implementation of AMR on water and gas meters.
Historical Information l l 5 Today, many communities throughout the United States and the State of North Carolina have already proceeded with the acquisition and implementation of the AMR Technology for their water system. AMR Technology has a proven and well established track record.
Background Information l l 6 The discussion concerning the purchase and utilization of the AMR Technology here in Eden was first raised by city staff on February 23, 2008. On May 21, 2008, city staff traveled to North Wilkesboro, N. C. to see the AMR Technology in action.
Background Information l l 7 In early 2009 staff investigated funding opportunities through the American Recovery and Reinvestment Act. In February 2009, a funding application was submitted to the North Carolina Department of Environment and Natural Resources through its Public Water Supply Section of the Drinking Water Supply Revolving Fund.
Background Information l l Unfortunately, neither of these funding applications were approved. l 8 A second funding application was submitted to the Clean Water State Revolving Fund. In February 2010, a power point presentation on the AMR Technology was presented by Ms. Tammie Mc. Michael, Director of Finance and Personnel.
Background Information l l 9 As a result of Council’s continued interest in the AMR system a total of $207, 800 was included in the approved FY 2010 -11 budget to begin the implementation of this project if formally approved by the City Council. In June 2010, city staff and Councilman Jim Burnette attended an AMR Technology seminar sponsored by Carolina Meter in Greensboro.
Background Information l l 10 From June 2010, through September 2010, city staff worked with representatives from Brady Energy Services to evaluate a number of different initiatives – one of which was the AMR Technology. On September 9, 2010, representatives from Brady Energy Services submit a formal Energy and Infrastructure Optimization Proposal which included the implementation and installation of the AMR system.
Background Information l l 11 The AMR Technology proposal from Brady Energy Services was $1, 899, 358 +/- 10% depending upon the final findings of an investment grade audit. On September 17, 2010, I informed each of you that staff was not recommending the acceptance of the Brady proposal because we felt the cost estimate was very excessive.
Background Information l l 12 At this same point in time, staff received a preliminary price quote of $1, 789, 475. 82 from Mr. Brad Bersch of Carolina Meter. Mr. Bersch noted that this price was a very rough estimate and he thought the actual cost would be much lower if we actually decided to proceed with Carolina Meter.
Background Information l 13 While investigating the procurement procedures Ms. Erin Gilley, City Attorney determined the City could proceed with the purchase and installation of the system without the formal development and receipt of bids under the guidelines of NC General Statutes 143129(e)(6) which states an exemption from competitive bidding is allowed when the purpose of “standardization or compatibility is the overriding consideration. ”
Background Information l l 14 Nearly every meter currently in use within the City of Eden is a Badger meter and the ability to stay with this brand the intended retrofit in lieu of replacement of approximately 9. 37% (656) of our existing active meters (6, 998 as of December 2010) qualifies us for this exemption according to Ms. Gilley. We discovered this is the same process that has been used by many of the other communities who have already converted to the AMR Technology with Carolina Meter.
Background Information l l 15 On September 27, 2010, Ms. Mc. Michael and I met with Mr. Bersch and Mr. Mark Mc. Millen, Co -Owner of Carolina Meter and Vice-President of Sales. During that meeting they gave us a formal price of $1, 552, 956. 74. In addition, they stated the cost would be good through September 2011, so staff could complete its internal analysis and remaining due diligence work.
Background Information l l 16 From October – December 2010, additional due diligence work was completed an indepth analysis was conducted on each of our inactive meters – i. e. meters that are in the ground, are read on a monthly basis but are not active and producing revenue. We discovered that 741 meters had been inactive for at least two years.
Background Information l In an effort to reduce our costs even further we decided to reduce the number of meters we would be replacing from the original plan of 7, 083 meters to just 6, 442 meters. l Active meters as of December 2010: Minus meters to be retrofitted: Plus 100 of the 741 inactive meters: Plus 641 inactive meters not being bought: 17 6998 656 6, 342 100 6, 442 641 7, 083
Background Information l l 18 As you will see, this reduction in the number of meters being purchased and installed translates into an additional savings of $100, 396. 69. Due to length of time associated with many of the inactive accounts and the minimal cost difference associated with purchasing the meters now or later (estimated at $13. 50 per meter) we did not feel like it made sense to replace every single meter at this time.
Background Information l l 19 In January 2011, we received an updated quote from Mr. Bersch for the AMR system that is $1, 452, 560. 05. This translates into a substantial savings of $446, 797. 95 when compared to the price quoted from Brady Energy Services which was $1, 899, 358 and even a savings of $336, 915. 77 when compared to the initial preliminary quote we received from Carolina Meter at the beginning of September 2010.
Automated Meter Reading l Solving Tomorrow’s Problems With Today’s Technology – Utilities today are being challenged with maintaining and managing an efficient water system in the face of l l l 20 Declining revenues Increased operating costs Infrastructure improvement needs
Current Problems l l l 21 Prolonged leak detection. Tamper detection. Recurring personnel and operational costs for 3 FTE employees to read meters. Possibility of inaccurate meter readings. Resolving billing issues. Revenue loss due to inaccurate meters
Current Meter Reading Schedule l Two Monthly Billing Cycles (15 th & 30 th) – 3 Meter Readers l Reading approximately 161 meters each day 6 hours per day eight days straight per billing cycle – 2 billing cycles = reading 16 days out of 21. 75 work days each month – l Handle an average of 406 work orders per month – l l l 22 Processed every day from 3: 00 -5: 00 Rereads an average of 50 per month Leave an average of 30 door hangers per month Check stop meters an average of 50 per month
Current Meter Reading Schedule l Two Monthly Billing Cycles (15 th & 30 th) – 3 Meter Readers l l 23 Cutoffs/Reconnects for non payment an average of 150 per month Pull meters for non payment (lock or pull) an average of 50 per month Replace old meters an average of 5 per month Allow for weekends, holidays, weather, and personal time off
Current Meter Reading Schedule l Two Monthly Billing Cycles (15 th & 30 th) – 2 Billing Clerks l After readings submitted. Run reports for no reads, rereads – Bills Processed for approximately 7, 000 accounts per month l Approximately 3, 500 bills each cycle l Reviewed l Continuous bill forms folded/burst l Stamped and mailed – 24
Current Meter Reading Schedule l Two Monthly Billing Cycles (15 th & 30 th) – 2 Billing Clerks l Reminder notices processed for 800 -1, 000 accounts per month 400 -500 reminder notices each cycle – Reviewed – Continuous forms folded/burst – Stamped and mailed – l l l 25 Cut off list Pull meters list Stop meters list
Current Meter Reading Schedule l Two Monthly Billing Cycles (15 th & 30 th) – 2 Billing Clerks l l Handling customer service telephone calls-everyday Collecting & Posting payments-everyday – l 26 Approximately 50% of our customers come in the office to pay Issue and update work orders-everyday
Current Meter Reading Schedule l Two Monthly Billing Cycles (15 th & 30 th) – 2 Billing Clerks l l Balancing cash drawers and making deposits-everyday Other responsibilities Large Customer W&S Billings – Billing for Waste Management Services approximately 297 (commercial) bills per month – l 27 As you can see, we can’t afford to let one day pass us by…. . there is a great deal involved in our monthly billing and collection process
Comprehensive Technology Solution l Automated Meter Reading System – Orion meter reading technology from Badger Meter l l l The New Technology Will Meet Our Needs – – – 28 656 of our existing meters will be retrofitted with data transmitters for integration into the new AMR system. 6, 442 meters will be replaced entirely with new meters fitted with data transmitters. Meter reading Data analysis Business operation
The Depth of Our Meter Reading Technology l 29 There has to be a better way……
Features/Benefits of AMR l l More accurate and precise measurement of water consumption. Consumers will be billed for what they are actually consuming. l 30 Low-cost, fast and efficient data collection. Elimination of two full-time equivalent positions and reduced operational costs which translates into a reduction in actual spending equal to approximately $97, 575 on a recurring basis each year.
Features/Benefits of AMR l l Ability to be retrofitted on 656 existing meters that are less than seven years old. l 31 Promotes efficient operations and conservation. Increased revenues over time. Water meters whether manual or automated, are mechanical devices that decrease in accuracy over time. Because many of our meters are older and less accurate, the City is losing revenue from both water service charges as well as sewer service charges.
Features/Benefits of AMR l l 32 Leak detection capabilities – Meters will sample water consumption 24 hours a day and notify the City if water has been running continuously when the meter is read. This will assist the citizens in identifying leaks in a more timely manner thereby reducing the amount of money they are ultimately charged on their bills as a result of a leak.
ORION In-Home Display l l Promotes efficiency and conservation. l 33 Optional customer service tool available to all users Displays consumption reads hourly, daily or monthly or in seven-day graphic intervals.
Features/Benefits of AMR l l A built-in magnet allows for its location on a refrigerator or other appliance. l 34 With the In-Home Display unit customers can monitor their at-home water use on an easy-to-read, remote display. Monitors can be purchased for $135 each and we will have some on hand for trial testing on a rotating checkout basis.
Features/Benefits of AMR l l Improved call resolution with in-depth data profiling capabilities for each account. l Minimized needs to access customer’s property to read meters. l 35 Short payback period per Opportunity Analysis. ORION transmitters, batteries and Badger Meter Encoder Register are covered by a twenty year prorated warranty.
Features/Benefits of AMR l l 36 The new system will be comprised of an ORION transmitter located at the meter that will measure the water flow then transmit a signal containing the current meter reading to an ORION mobile reading receiver. The meter reader simply drives down the street with a laptop computer device that receives the signals and records the reads. This information is then downloaded into the billing system in the Finance Department office.
ORION Transmitter Features l Unparalleled protection against water intrusion l Factory pre-wired, assembled and tested l No field programming required l Ready to install! 37
Date Profile Viewer - Bar Graph 38
ORION Drive-by Reading System l l Touch screen operation l Utilizes an FCC non-licensed radio frequency band l Transmits latest meter reading every 4 -5 seconds. l 39 Low-cost, fast, accurate and efficient data collection and data auditing. Receiver passes readings directly to PC during download process.
ORION Reading Software (ORS)Premium Kit 40
Project Cost, Warranty/Maintenance Agreements l l The ORION Transmitters, batteries and Badger Meter Encoder Register are covered by a twenty year prorated warranty. l 41 Carolina Meter has submitted a price quote for this system that equals $1, 452, 560. 05. The ORION Mobile Reading System, Trimble Ranger Handheld and Charging Cradle and the READCENTER Reading Data Management Software and Route Management Module are covered by a one year warranty but will then be covered by a series of annual maintenance agreements.
Project Cost, Warranty/Maintenance Agreements l There will be some one time programming costs with Logics for the AMR interface and change-out at a cost of $7, 000. l Annual maintenance agreements will be as follows: Badger READCENTER Annual Maintenance Agreement Logics Programming Annual Maintenance Costs Trimble Ranger Handheld Annual Maintenance Agreement ORION Reading Software Annual Maintenance Agreement Total l 42 $ 1, 050 $ 675 $ 450 $ 2, 875 $ 5, 050 Reductions in funds allocated for the annual replacement of meters will be used to offset the costs associated with the recurring maintenance agreements.
Projected Payback l l 43 The opportunity analysis information has been prepared by Mr. Bersch. He will be happy to address any questions concerning the opportunity analysis or the AMR system at the conclusion of this power point presentation. Two opportunity analysis were included in the information you received prior to today’s meeting.
Projected Payback l l 44 The first analysis assumes existing rates remain unchanged from their current level for the next ten years (most conservative scenario possible). Based on these assumptions, Mr. Bersch has estimated a project payback period of only 3. 3 years assuming a six month change out period.
Projected Payback l l 45 The second analysis assumes existing rates are increased by an annual average of 3% per year for the next ten years. Based on these assumptions, Mr. Bersch has estimated a project payback period of only 3. 1 years assuming a six month change out period.
Projected Payback l l 46 The opportunity analysis preapred by Mr. Bersch reveal that he is using a 92% water meter accuracy figure in the projection of his revenue numbers for all meter sizes of 2 inches and lower. In addition, he did not include any gains that may be realized on meters that are larger than 4 inches.
Projected Payback l l 47 Past modeling in both North Wilkesboro, N. C. and Pulaski, VA. indicated the opportunity analysis prepared by Carolina Meter was very effective. Mr. Bersch’s approach is very conservative when compared to the 95% - 99% accuracy guarantees that were actually offered by Brady Energy Services.
Projected Payback l 48 Based on our discussions with other communities who have installed the AMR system and the guarantees offered by Brady Energy Services we feel that a 92% water meter accuracy figure is probably low. This means the potential payback has a good possibility of being even less than the estimates provided by Carolina Meter.
Primary Reasons Other Utility Providers Implement AMR l l l Inaccurate meters Transition from a bi-monthly to monthly reads To reduce personnel and operational costs. Elimination of manual reads Features and benefits – – – 49 Leak detection Data profiling In-Home Monitoring Display
Others’ Experience with AMR l North Wilkesboro, North Carolina – – Very satisfied with ORION system and Carolina Meter. – 50 Increase in revenue and cash flow. Reading time decreased by 90% Mr. David Webb, Utilities Maintenance Supervisor stated it paid for itself in a short period of time.
Others’ Experience with AMR l Franklin, North Carolina – – Very satisfied with the service and support they receive from Carolina Meter. – 51 Mr. Jay Gibson, Director of Public Works stated he would recommend the ORION system to everyone. Have been using the AMR Technology for two years and have no regrets.
Others’ Experience with AMR l Graham, North Carolina – – 52 Mr. Frank Maness, Assistant City Manager stated they have been very satisfied with Carolina Meter as well as the AMR Technology. Only regret is not implementing the system sooner.
Others’ Experience with AMR l Moore County, North Carolina – – Realizing an increase in revenues as projected. – 53 Ms. Peggy Deak, Customer Service Supervisor stated, “the ORION AMR System is great!” Very satisfied with ORION system and Carolina Meter.
Others’ Experience with AMR l Aiken, South Carolina – – Ms. Kim Abney, Director of Finance stated they completed installation of their ORION system in May 2004. “The system has been working out great and has performed exactly as promised. ” – 54 20, 000 customers on their AMR system. Would highly recommend the system to any municipality.
Others’ Experience with AMR l Lynchburg, Virginia – – Data profiling feature is terrific in terms of investigating customer concerns about their bills. – 55 Mr. Jimmy Austin, Meter Operations Supervisor has been working with Carolina Meter and Mr. Bersch for the past five years. He stated that they are excellent to work with. Absolutely no regrets and system has performed as projected.
Payment Arrangements l l 56 According to the audited financial statements for the period ending June 30, 2010 the equity in the Water and Sewer Fund was equal to $10, 351, 396. This was an increase of $2, 266, 894 when compared to the June 30, 2009 equity in the Water and Sewer Fund which was equal to $8, 084, 502.
Payment Arrangements l l 57 This growth in the Water and Sewer Fund equity was due primarily to the $2, 746, 894 payment we received from Hanes. Brand International on August 8, 2010 for their FY 2009 -10 take-or-pay and capital repayment obligations. The equity in the Water and Sewer Fund for the period ending June 30, 2000 was $4, 345, 594.
Payment Arrangements l l 58 Again, the equity increase from June 30, 2009 to June 30, 2010 is equal to $2, 266, 894. This piece of information coupled with the fact that interest rates on our investment earnings continue to be at record low levels (. 21% -. 25%) has resulted in our belief that we should pay outright for the acquisition of this system over the course of the six month installation period as opposed to borrowing funds.
Payment Arrangements l 59 Based on the existing lending environment we can save between $56, 698 and $122, 411 on anticipated interest paid minus anticipated interest earned if we pay for the system on a cash basis as the project is being completed inlieu of either a 3 year or 5 year loan-financing agreement.
Payment Arrangements l l An additional allocation of $1, 244, 760. 05 will need to be included in the FY 2011 -12 budget which is scheduled to be adopted on May 17, 2011. l 60 Currently $207, 800 is included for this project in the current FY 2010 -11 budget. If the Council votes to proceed we will spend the $207, 800 between May 18 – June 30, 2011 and the remaining $1, 244, 760. 05 during FY 2011 -12.
Staff Recommendations l l 61 Request the City Manager to include an allocation of $1, 244, 760. 05 (from existing equity in the Water and Sewer Fund) in the FY 2011 -12 budget for the implementation of the AMR system. A formal vote by the City Council to actually allocate and authorize the expenditure of these funds will take place on May 17, 2011 when the FY 2011 -12 Budget Ordinance is submitted for Council’s formal approval.
Staff Recommendations l 62 Authorize the City Manager during the May 17, 2011 meeting of the City Council to proceed with executing an agreement with Carolina Meter for the purchase and installation of the city-wide standardized AMR system as quoted by Carolina Meter under the guidelines of NC General Statutes 143 -129(e)(6) which states an exemption from competitive bidding is allowed when the purpose of “standardization or compatibility is the overriding consideration. ”
Staff Recommendations l l 63 Work with Matchpoint, Inc. prior to the actual installation to disseminate information to existing customers about the AMR Technology. A copy of a sample letter from the Mayor as well as a copy of a Frequently Asked Questions (FAQ) informational piece were included with the report that was distributed to each of you previously.
Questions? ? 64
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