Our Focus: Your Future QUOTATION FOR THE SUPPLY AND INSTALLATION OF RESIDENTIAL WATER METERS

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1 Town of Fort Erie Our Focus: Your Future Infrastructure Services Prepared for Committee of the Whole Report No. IS Agenda Date October 22, 2007 File No Subject QUOTATION FOR THE SUPPLY AND INSTALLATION OF RESIDENTIAL WATER METERS Recommendations THAT THAT Council accepts the unit prices quoted by Ontario Water Products Inc. for the supply and installation of approximately 500 residential water meters, and further Council authorize the issuance of a purchase order to Ontario Water Products Inc. for the supply and installation of approximately 500 residential water meters at the estimated cost of $151, including all applicable taxes. Relation to Council s Corporate Strategic Plan Priority: D - Infrastructure Goal: D2 - Reduce Treated Water Loss Initiative: Not Applicable List of Stakeholders 1) Mayor and Council of the Town of Fort Erie 2) The Ratepayers of the Town of Fort Erie 3) Ontario Water Products Inc. 4) Neptune Technologies Group (Canada) Ltd. Prepared by: Approved by: Ron Tripp, P. Eng. Director of Infrastructure Services Harry Schlange, MBA Chief Administrative Officer

2 Infrastructure Services Page 2 of 6 Report No. IS Purpose of Report The purpose of this report is to seek Council s authorization for the issuance of a purchase order to Ontario Water Products Inc. for the supply and installation of approximately 500 residential water meters. This report is being presented to Council ahead of other Infrastructure Services reports scheduled for consideration on November 19, 2007 so as to take advantage of competitive pricing which is being held by Ontario Water Products Inc. until October 31, Analysis Water Distribution System Description The Fort Erie water distribution system services over 12,000 metered connections. The following is a breakdown of the types of metered connections: Residential Customers 11,826 (water service size smaller than 1 ) Commercial & Industrial Customers 267 (water service size 1 or greater) The Fort Erie water distribution system obtains all of its water from the Rosehill Water Treatment Plant. The treatment plant is owned and operated by the Regional Municipality of Niagara. The raw water source for the treatment plant is Lake Erie. The Region is also responsible for all water storage facilities and trunk transmission mains that are intended to ensure sufficient water flow / capacity throughout the system and provide for overall system integrity. All other distribution water mains, valves, service connections and water meters within Fort Erie are owned and operated by the Town. Condition of Fort Erie Water Meters The useful service life for a typical water meter is estimated to be between 15 and 18 years. Based on experience in the Town of Fort Erie and the Niagara area municipalities, a residential water meter begins to loose accuracy as it approaches approximately 15 years of service life. By virtue of its basic design, the degradation of a water meter s accuracy is in one direction only. A water meter never over-registers water consumption. A water meter incrementally under-registers water consumption as it begins to fail. Over 11,000 of the water meters in the Town of Fort Erie were installed between 1994 and Several of these meters are approaching the end of their useful service life. Staff recommends that the Town initiate a systematic water meter change-out program in order to address current water meter deficiencies. The initiation of the program prior to the 15- year target will also serve to avoid the replacement all of the water meters within a short period of time. Staff recommends that this first phase of the change-out program include the replacement of 500 water meters. Subject to the availability of funding, Staff will be recommending that subsequent phases of the program include the replacement of

3 Infrastructure Services Page 3 of 6 Report No. IS approximately 1000 meters. The replacement of approximately 8-10% of the Town s water meter inventory per year will ensure meter reliability and accuracy. Changes in Water Meter Technology A working group comprised of utility operations, finance, and purchasing Staff including the directors of both Corporate and Infrastructure Services has met on several occasions over the past two years to review the Town s current and future water meter needs. The mandate of this working group was to establish the most appropriate timing / strategy for a residential meter change-out program and determine the metering technology best suited for the Town now and into the future. The group s work included a comprehensive review of both current and emerging water meter and meter reading technologies. Although the body of the meter itself and its basic design have not changed in several decades, water metering technology has made several advances in the accuracy and reliability of the meter registers (odometer) and in the efficiency of reading technologies. The following is a brief description of the meter reading alternatives available to the Town: Manual Visual Reading This requires physical access to the meter (in the home) and as the name suggests, involves visually reading the register and manually recording the volume consumed. This method is the most labor intensive of all of the alternatives. The Town utilized this method prior to 1994, but with the introduction of mandatory metering, the Town moved toward a more efficient means of meter reading. Touch Pad Reading This technology involves the installation of an electronic touch pad unit on the exterior of the home. This touch pad provides a communication link between the meter register and a corresponding data collection device. The touch pad must be hard wired to the meter register. The meter reader must physically touch the data collector device to the touch pad unit. The consumption information is stored in the data collection device along with several other readings. Once a meter reading route has been completed, all consumption information is seamlessly downloaded to the Town s billing software package. This was the meter reading technology that the Town adopted when mandatory metering was introduced. Currently, the Town retains a Contractor to read all Town meters on a monthly basis. Mobile Radio Reading This technology represents the next step in the evolution of meter reading and a significant increase in efficiency. A radio transmitter unit is utilized as the communication link between the meter register and the meter reader. This eliminates the need for invasive wiring within the home and simplifies the meter reader s tasks. The corresponding radio receiver unit does not require physical contact with the transmitter unit. Based on typical meter installation conditions, a meter reading can be acquired from several hundred metres away. The radio receiver unit can be a portable hand-held unit, which would require the meter reader to walk down the sidewalk. Meter readings would be automatically collected as the reader crosses the frontage of a property. Should an entire municipality (or neighborhood) have this technology, a vehicle mounted receiver unit may be utilized. A reader would simply drive through the middle of that neighborhood and

4 Infrastructure Services Page 4 of 6 Report No. IS automatically collect readings from a radius of several blocks. The Town s technical working group has contacted municipalities that have adopted this technology and have received very favorable feedback. Through the efforts of the working group, the Town also participated in a pilot installation program (30 units) and found this technology to perform very well within the Town. This is the technology that Staff is recommending for all new meters installed under this contract and through new construction. As indicated, the Town retains a Contractor to read all Town meters. This contract includes provisions for rebated meter reading rates should the Town install radio read technology. It should be noted that these savings would not be significant until a large number of radio read devices have been installed. Fixed Base Receiver This is the most recent step in the development of meter reading technology and by far, the most efficient method of reading any type of consumption meter. As one would expect, the most effective method also comes with the highest price tag. This technology is similar to radio read, but requires much more powerful radio transmitters and the installation of a permanent radio receiver tower(s) similar to a cell phone tower. The technical working group looked at this technology initially, but very quickly established that it was not the most effective solution for the Town of Fort Erie. Due to the geographically spread-out character of Fort Erie, several receiving towers would be required. The adoption of this technology would require a significant capital investment (>$1,000,000) and the Town would not benefit from this investment until most, if not all of the meters in the Town have been replaced. This technology is best suited for urban centers with a much higher density than Fort Erie, especially in conjunction with a municipality wide meter replacement program. Water Meter Change-Out Strategy With the exception of very few specialized industrial and commercial meter installations, the water meter inventory within the Niagara Region is comprised of meter products supplied by only two manufacturers. These manufactures are currently referred to as Sensus Metering Systems and Neptune Technology Group Ltd. Although the incorporated names of these companies have changed throughout the years, both of these companies have been developing metering technology and producing water meter products for more than 80 years. Based on Staff s experience within Niagara and the prevailing use of these products throughout North America, Staff is of the opinion that Sensus and Neptune produce the most effective and dependable products for the purpose of metering municipal water. Based on the City of Welland s recent tendering experience, Staff does not believe that an open tender call would attract any other water meter manufacturers. Consequently, Staff solicited quotations from only these two manufacturers. Quotations were requested for all labor and material required for the removal of no less than 500 residential water meters (5/8 ) and the supply and installation of 500 new water meters. The quoted unit prices also included all costs associated with the coordination and scheduling of the work with the individual property owners. Although each of their quotations included cost provisions for a variety of installation configurations, the vast majority of the proposed change-outs will be for what are considered to be basic water

5 Infrastructure Services Page 5 of 6 Report No. IS meter installations. The following unit prices include all applicable taxes and represent the change-out of a basic water meter installation: Sensus Metering Systems $ per meter (supply and installation by Ontario Water Products Inc.) Neptune Technology Group $ per meter (supply and installation by Neptune Technology Group(Canada) Ltd.) The detailed unit price information and meter component specifications for each of the quotations are available in the Engineering Division and are available for Council s review upon request. Council should note that the pilot radio read program referred to previously was a part of a manufacturers promotion offered through Sensus Metering Systems. In order to participate in the program, Sensus loaned the Town a brand new hand-held radio receiver unit. The pilot program included a promotional offer that specified should an order be placed for a minimum of 500 meters, no later than October 31, 2007, the hand-held radio receiver unit and software communication link that was utilized for the program, would be provided to the Town free of charge ($12, retail value). Financial/Staffing Implications The City of Welland tendered for 13,350 water meter units plus installation costs in Based on per unit pricing provided by Neptune to the City of Welland, Staff has surmised that the cost quoted to the Town is very competitive based on the volume of our order and that pricing includes the installation of units purchased. The 2007 capital budget included $166,000 specifically identified for the initiation of this program. Based on the quotations received and the estimated quantity of 500-meter change-outs, the estimated budget for this project is $151,300 (including all applicable taxes), which is within the budget allocation. Policies Affecting Proposal In addition to various provincially legislated requirements, the Town s comprehensive water by-law (By-Law No , Being a By-Law to Regulate the Management of a System of Water Works in the Town of Fort Erie) was adopted in order to ensure the safe and cost effective management of the water distribution system. Although a competitive bid process was followed for this proposed work, the provisions of the Town of Fort Erie s Purchasing and Tendering Policy No were not strictly adhered to during the solicitation of this quotation. Based on the overall value of this work, the policy normally requires a full-scale contract tender call. Sensus and Neptune water meters are currently the only type of water meters installed within the Town of Fort Erie. It was felt by Staff that more competitive pricing could be achieved through a quotation/ negotiation process with pre-selected vendors that utilize these meter types.

6 Infrastructure Services Page 6 of 6 Report No. IS Staff will ensure that the contractor will follow the Town of Fort Erie Health and Safety Regulations and Procedures and the Occupational Health and Safety Act. Comments from Relevant Departments/Community and Corporate Partners As indicated, recommendations within this report have been developed through the cooperative efforts of several individuals representing both the Corporate Services and Infrastructure Services. Alternatives Council may choose not to authorize the issuance of the purchase order to Ontario Water Products Inc., and further to follow formal tendering procedure. This alternative is not recommended as sufficient funds are available to proceed at this time and the pricing quoted is only available until October 31, Attachments Not Applicable.