HomeMy WebLinkAboutAgenda Report - August 4, 2010 D-04AGENDA ITEM b-�g
CITY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: Adopt Resolution Authorizing Sole Source Procurementof Residential Water
Meters from Badger Meter, Inc., of Milwaukee, Wisconsin, for City of Lodi
Residential Water Meter Program
MEETING DATE: August 4,2010
PREPARED BY: Public Works Director
RECOMMENDED ACTION: Adopt a resolution authorizing the sole source procurement of
residential water meters from Badger Meter, Inc., of Milwaukee,
Wisconsin, for the City of Lodi Residential Water Meter Program.
BACKGROUND INFORMATION: The City of Lodi has implemented three water meter installation
projects resulting in 2,882 residential propertiesthat are ready for
metered billing as of January 1, 2011. The remaining 13,839
residential water meter installations are scheduled to be completed
in phases over a five-year period beginning in Spring 2011.
The water meter procurementwill be performed by the City in order to take advantage of potential cost
savings associated with large volume purchases over the life of the program. The City has the option of
purchasing meters directly from multiple meter manufacturers or a single designated manufacturer. The
water meter consists of three main components packaged as a single unit —the meter body, encoder
register, and the encoder-receiver-transmitter(ERT).
On December 19, 2007, Council adopted a resolution to standardize three meter manufacturers (Hersey,
Sensus and Badger) that were determined to be the most appropriate for the City's needs based on
meter performance, ease of installation, and product support experienced during the initial pilot project.
The City currently allows only the ERT manufactured by Itron for both water and electric meters because
both are compatible with the meter reading system.
Of the 2,882 water meters installed to date, all have been procured using the competitive bid process;
2,482 (two of the three projects) have been supplied by Badger Meter, and the remaining 400 were
supplied by Hersey Meter as part of the City's initial pilot project. Sensus has not submitted bids on the
last two projects for reasons unknown.
Because of the size and implementation schedule of the City's water meter program, a traditional
competitive bid process is not recommended. The benefits of sole sourcing a meter manufacturer
include:
Large volume pricing where the City will enjoy the economy of scale when purchasing
substantial numbers of meters over an extended period of time.
APPROVED:
rtlam, Interim City Manager
\K:\WP\PROJECTS\WATER\Meters\CBadgerMeterSoleSource.doc 07/26/2010
Adopt Resolution Authorizing Sole Source Procurementof Residential Water Metersfrom Badger Meter, Inc.,
of Milwaukee, Wisconsin, for City of Lodi Residential Water Meter Program
August 4,2010
Page 2
Minimizing the spare parts needed to service the water meters once in place, which simplifies
operations and maintenance efforts and reduces inventory requirements.
A single manufacturer can better ensure that all meters are sequentially numbered and
integrated into the City's billing system.
Sole sourcing of water meters has been done in other communities in California to achieve similar
benefits. See attached ExhibitA for more details.
It has been staffs experience that Badger Meter has provided an excellent product and superior technical
product support and customer service to the City. Badger has also met the City's delivery and storage
schedules, which will be a key element of successfully implementing very large projects.
Staff recommendsthat Council authorizethe sole source procurementof residential water metersfrom
Badger Meter, Inc., of Milwaukee, Wisconsin, for the City of Lodi Residential Water Meter Program.
Once purchases are actually made, staff will return for purchase authorization with the relevant
agreements.
FISCAL IMPACT: Water meter procurement costs will be reduced due to largevolume pricing
and operations and maintenance costs will be reduced minimizing the
amounts and types of spare parts needed to properly maintain the water
meters placed in operation.
FUNDING AVAILABLE: Not applicable.
F. Wally Sa elin
PublicWorks Director
Prepared by Charles Swimley, Deputy Public Works Director— Utilities
FWS/CS/dsg
Attachment
K:\WP\PROJECTS\WATER\Meters\CBadgerMeterSoleSource.doc 07/28/2010
Technical Memorandum
Lodi Water Meter Program
Subject: Meter Sole Source Recommendation
Prepared For: City of Lodi
Prepared by: Tony Valdivia, P.E., Aaron Hope
Reviewed by: Michael Matson, P.E.
Date: June 29, 2010
Reference: 140-007
Overview
RMC
Water and Environment
As part of its Water Meter Program, the City of Lodi has implemented three water meter installation
projects at residential parcels within the City. As of March 2010, these meter installation projects have
resulted in 2,882 properties that are ready for meter -based water billing. The City will complete the
remaining 13,839 residential property water meter installations in five phases, beginning in the spring of
2011 and continuing through 2015.
Prior to the start of each phase, the City will solicit contractor bids under the City's procurement policies
and the State of California Public Contracting Code requirements. Construction will consist of a range of
efforts depending on location of the existing service, the size of the serving distribution main and the
presence or absence of an existing meter and meter box. A large quantity of 3/4 -inch and 1 -inch water
meters will be needed for this work.
As defined in the City of Lodi Standard Detail Nos. 403 and 412, the water meter consists of three main
components, packaged as a single, assembled unit:
• Water Meter — measures water volume using a nutating disk technology.
• Encoder Register — converts meter measurements into volumetric water use data. The encoder is
typically that of the meter manufacturer.
• Encoder -Receiver -Transmitter (ERT) — transmits water usage (register) data via radio frequency
to a nearby fixed or mobile receiver. The ERT can be that of the meter manufacturer or another
manufacturer if compatible.
Sole -Source Procurement of Water Meters
Meter procurement will be done directly by the City to take advantage of the potential cost savings
associated with a large quantity of meters over the five-year construction phasing plan. Direct purchase
will allow the City to maintain some control over inventory and distribution management through
negotiation of the terms and conditions of the meter procurement agreement. Direct purchase also avoids
material markups from general contractors, which can be substantial.
The City has the option to directly purchase meters from multiple meter manufacturers or a single
designated manufacturer. The City has approved three meter manufacturers, as listed in Standard Details
403 and 412 for residential 3/4 -inch and 1 -inch water meter installations: Badger, Sensus and Hersey. The
City allows only ERTs manufactured by Itron for both the water utility and the electric utility (the City's
Electric Utility Department [EUD] currently uses Itron ERTs). Badger meters are readily compatible with
Itron ERTs.
Because of the nature of the project, a traditional competitive bid process may not be in the City's best
interest. Instead, purchasing from a single manufacturer will have several benefits:
• Purchasing all meters from a single manufacturer will be more cost effective than purchasing
from several different suppliers (larger volume is expected to lead to smaller cost per meter).
June 2010
Lodi Water Meter Program
Meter Sole Source Recommendation
• A single manufacturer can better ensure that all meters are sequentially numbered and correctly
integrated into the City's billing database. Future upgrades to the City's automated meter
reading (AMR) systems will be more streamlined if consistent meter and ERT models are used
throughout the City.
• A single meter type and manufacturer will simplify the City's ongoing operation and maintenance
efforts. Fewer spare parts would be needed in inventory and maintenance staff can more easily
troubleshoot problems.
Sole -sourcing of a meter manufacturer has been done in several communities in California to achieve
similar benefits to the local water utility. Other cities that have sole -sourced water meter contracts are
shown in Table 1.
Table 1: Water Meter Sole -Sourcing by Other Cities
Notes:
1. City of Sacramento Contracting Processes Review, Report Number 2007-02. May 16th, 2008.
2. Morgan Hill City Council Staff Report, Approve Water Meter Sole Source Purchase. November 4th, 2009.
3. City of Woodland, Report to Mayor and City Council Water Meter Implementation, Project No. 07-51 (08-08)
Phase 1; Adopt Sole Source Findings. December 16th, 2008.
Sole -Source Meter Manufacturer
Several of the more important considerations in selecting a sole -source meter manufacturer include:
• Meter performance — the City must have confidence that the meter manufacturer's product will
perform well over the service life of the product.
• Compatibility — the meter manufacturer's product (meter and register) must be compatible with
the Itron ERT to ensure seamless integration into and the City's electric and water billing
systems.
• Service and Customer Support — The meter manufacturer must have a robust customer service
and technical support capability.
• Past experience — the City should have a positive prior experience with the meter manufacturer.
Of the 2,882 water meters installed to date, all have been procured using the competitive bid process;
2,482 (two of the three projects) have been supplied by Badger Meter with the Itron ERT, and the
remaining 400 were supplied by Hersey Meter with the Itron ERT as part of the City's initial pilot project.
Sensus has not submitted bids on the last two projects for reasons unknown.
It has been City Staff's experience from these projects that Badger Meter has provided an excellent
product and superior technical product support and customer service to the City. Badger has also met the
City's delivery and storage schedules which will be a key element of successfully implementing very
large projects.
Recommendation
The City should proceed with the sole -source procurement of meters, registers and ERTs for the Water
Meter Program from Badger Meter, Inc. Badger Meter, Inc. has a proven product delivery and
performance record with the City of Lodi. The Badger Meter, Inc meters have been installed on previous
City metering projects and sole -sourcing will match the existing meter inventory within Lodi and result in
reduced investment in spare parts inventories long-term.
June 2010
RESOLUTION NO. 2010-125
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING SOLE
SOURCE PROCUREMENTOF RESIDENTIALWATER METERS
WHEREAS, City of Lodi has implemented three water meter installation projects
resulting in 2,882 residential properties that are ready for usage -based billing as of January 1,
201 1 The remaining 13,839 residential water meter installations are scheduled to be completed
in phases over a five-year period beginning in the Spring of 2011; and
WHEREAS, the water meter procurementwill be performed by the City in order to take
advantage of potential cost savings associated with large volume purchases over the life of the
program; and
WHEREAS, on December 19, 2007, Council adopted a resolution to standardize on
three meter manufacturers (Hersey, Sensus, and Badger) that were determined to be the most
appropriate for the City's needs based on meter performance, ease of installation, and product
support experienced during the initial pilot project; and
WHEREAS, of the 2,882 water meters installed to date, all have been procured using
the competitive bid process; 2,482 have been supplied by Badger Meter, and the remaining 400
were supplied by Hersey Meter as part of the City's initial pilot project; and
WHEREAS, the benefits of sole sourcing a meter manufacturer include I ) large volume
pricing where the City will enjoy the economy of scale when purchasing substantial numbers of
meters over an extended period of time, 2) minimizing the spare parts needed to service the
water meters once in place which simplifies the operations and maintenance efforts and
reduces inventory requirements, and 3) a single manufacturer can better ensure that all meters
are sequentially numbered and integrated into the City's billing system; and
WHEREAS, sole sourcing of water meters has been done in other communities in
California to achieve similar benefits; and
WHEREAS, Badger Meter has provided an excellent product, superior technical product
support, and customer service and met the City's delivery and storage needs.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the sole source procurement of residential water meters from Badger Meter, Inc., of
Milwaukee, Wisconsin, for the City of Lodi residential water meter program.
Dated: August 4, 2010
hereby certify that Resolution No. 2010-125 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held August 4, 2010, by the following vote:
AYES: COUNCIL MEMBERS — Hansen, Hitchcock, Johnson, and
Mayor Katzakian
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Mounce
ABSTAIN: COUNCIL MEMBERS — None
AlarZHL
City Clerk
2010-125