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HomeMy WebLinkAbout05/04/2010 14 Automated Meter Reading System Loan Application 0 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. I Li For Meeting of May 4, 2010 ITEM TITLE: Consideration of a resolution authorizing the City Manager to execute documents and agreements pursuant to a loan application to the Washington Public Works Trust Fund for $5,000,000 to drill an automated meter reading system. SUBMITTED BY: Dave Brown, Water /Irrigation Manager Dave Zabell, Assistant City Manager CONTACT PERSON/TELEPHONE: Dave Brown / 575 -6204 SUMMARY EXPLANATION: The City of Yakima Water /Irrigation Division requests Council approval to apply for a $5,000,000 loan from the state Public Works Trust Funds for an automated meter reading 0 system consistent with the policy issue adopted by Council with the 2010 budget. This application would be for 2011 -20012 funds, with the work scheduled to be completed from 2011 to 2012. In order to secure the lowest program interest rate of 0.5 %, the City is required to provide a local match (from non -grant sources) of at least 15 %. The Water /Irrigation Division is proposing the match be provided from the Water and Wastewater Capital Improvements Program budgets (reserves). The total project cost is estimated at $10,481,250. Resolution X Ordinance Contract Other(Specify) Contract Mail to (name and address): Phone: Funding Source 477 Water CIP Fund APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Approve resolution authorizing the City Manager to execute all necessary documents to complete and submit an application for a loan from the Washington State Public Works Trust Fund in the amount of $5,000,000 for an automated meter reading system and, if the loan application is approved, to execute all necessary certifications, agreements and other documents to complete the loan transaction. BOARD /COMMISSION RECOMMENDATION: • COUNCIL ACTION: • ® RESOLUTION NO. R -2010- A RESOLUTION to authorize the City Manager to execute all necessary documents to complete and submit an application for a loan from the Washington State Public Works Trust Fund in the amount of $5,000,000 for an Automated Meter Reading System, and, if the loan application is approved, to execute all necessary certifications, agreements and other documents to complete the loan transaction WHEREAS, the City of Yakima recognizes that the provision of infrastructure is important to all residents and businesses of the community; and WHEREAS, in the 2004 Water System Plan Update an evaluation of the domestic water system identified deficiencies in the water meter reading system for the City of Yakima, including the need for an automated meter reading system; and WHEREAS, installation of an automated meter reading system will help correct the deficiencies identified in the aforementioned plan to optimize water meter reading, and meet the water use efficiency goal and measures established by the City of Yakima,; and WHEREAS, these improvements are consistent with both the 2004 Cost of Service and Rate Study and the City's Capital Improvements Plan (CIP); and • WHEREAS, this project is consistent with the Automated Meter Reading policy issued a dopted by the Council with the 2010 budget; and WHEREAS, the Washington State Public Works Trust Fund has made low- interest loan funds available for the construction and repair of water utilities; and WHEREAS, the amount of local match funds provided will afford to the City a generous interest rate of 0.5% on the $5,000,000 loan; and WHEREAS, based on the foregoing, the City Council has determined that it is in the best interest of the City to apply for funding from the Washington Public Works Trust Fund for an automated meter reading system, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized and directed to execute all necessary documents to complete and submit an application for a loan from the Washington State Public Works Trust Fund in the amount of $5,000,000 for an automated meter reading system and, if the loan application is approved, to execute all necessary certifications, agreements and other documents to complete the loan transaction. ADOPTED BY THE CITY COUNCIL this 4 day of May, 2010. Micah Cawley, Mayor ATTEST: • City ty Clerk • 2010 MAJOR POLICY ISSUE DEPARTMENT: City Management DIVISION: Water /Irrigation & Wastewater POLICY ISSUE TITLE: Automation of Meter Reading (Automated Meter Reading (AMR)) -- Budgeted Proposal — This proposal is to automate the water meter reading functions. This is also known as Automated Meter Reading (AMR) and Automated Meter Infrastructure (AMI). This is where water meter reads can be sent via radio signal to a central location. This can be as often as several times an hour, several times a day or once every two months. The Cascade Natural Gas has automated their meters and the PacifiCorp is in the process of automating all of their meters, they are about half done with their over 300,000 customers. Automated meter reading (AMR) was contemplated in the 2004 Water System Plan as part of the • Conservation Measures and as a way to assist in Demand reduction. The Plan also anticipated using AMR to help reduce /control "Unaccounted for Water (water produced but not sold through water meters, this is also lost revenue). Unaccounted for Water is near 20 %, the State requires it to be less than 10 %. AMR was included in the 2007 Water Cost of Service and Rate Study. This study included this project in the financial plan and required rate design. The Study did anticipate using a Public Works Trust Fund loan (PWTF), however as the PWTF has been eliminated from the State budge we will need to finance with a revenue bond. Part of the City's Water Use Efficiency Goals and Measures, adopted by Council in January 2008 was to reduce water loss to below 10 %. AMR was anticipated to be integral part of the process of reducing water loss by having the ability determine water lass on a daily basis. The beginning of the AMR project was included in both the 2008 and 2009 budgets. In 2008 a major distribution leak study and in 2009 and the beginning of the AMR evaluation. At the July 21, 2009 Council meeting an inter -local agreement with Selah and Nob Hill Water was adopted and a contract for the Upper Yakima County Water Meter Automation Evaluation Study was approved. Through this evaluation we will determine the possibilities of using some shared equipment, the type of system(s) we will need and the estimated costs of the system(s) including any projected revenue increases and personnel savings. • a. Fiscal Impact — The Upper Yakima County Water Meter Automation Evaluation Study contract was approved by Council on July 21, 2009. It is too early in the evaluation to have a firm figure on the total cost. Cost will depend on many factors including items like type of system selected/recommended and number of meters requiring upgrade /replacement. Proposed Funding Source — It is anticipated that a revenue bond with the repayment shared between Water and Wastewater will finance the infrastructure. Wastewater shares in the costs as accurate meter reading directly affects the wastewater revenue stream. Public Impact - Improved reliability of water service, greater control over maintenance activities, more accurate meter reading, ability to inform customer of excessive water consumption as the issue arises vs waiting up to tow months, ability to help large uses complete water use audits as an AMR system can transmit water use up to several times an hour, and eliminate estimated meter reading. Personnel Impact — The Upper Yakima County Water Meter Automation Evaluation Study contract was approved by Council on July 21, 2009. It is too early in the evaluation to have a firm plan for personnel. It is anticipated there will be some reassignment of meter reading personnel and possibility some position elimination. Required Changes in City Regulations or Policies — An amendment to the job classification, Civil Service approval, and pay ordinance may be required. Legal Constraints, if applicable — None. • Viable Alternatives — Leave as is or do a portion of the reorganization No action would result in meter reading program remaining as is.. Conclusion and /or Staff Recommendation — Staff recommends approval of the policy direction.