Iowa Power Fund Application_Smart Water Meter ProjectTHE CITY OF Dubuque
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Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Iowa Power Fund Application for Smart Water Meter Project
DATE: June 10, 2009
With the support of three studies conducted by HDR Engineering, the Water
Department identified the need to replace all residential and commercial water meters in
the city. The complete replacement is scheduled to be completed in phases in the next
three years. The identification of the Unmetered Flow Reducer (UFR) device,
manufactured by A.Y. McDonald Inc. of Dubuque, provides an opportunity to
significantly increase water meter accuracy. Total cost of the installation of new meters,
including UFR devices, is approximately $9,296,600.
Water Department Manager Bob Green and Management Intern Cori Burbach
recommend City Council approval of the submittal of a $2,000,000 Iowa Power Fund
grant application to implement the Smart Water Meter Replacement Program.
An additional $1,000,000 has already been secured through the Iowa Department of
Natural Resources State Revolving Fund (SRF)'s American Recovery and
Reinvestment Act (ARRA) funds.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Bob Green, Water Department Manager
Cori Burbach, Management Intern
THE CITY OF Dubuque
-~.
1 -
Masterpiece on the Mississippi
2007
TO: Michael C. Van Milligen, City Manager
FROM: Bob Green, Water Department Manager
Cori Burbach, Management Intern
SUBJECT: Iowa Power Fund Application for Smart Water Meter Project
DATE: June 10, 2009
INTRODUCTION
The purpose of this memorandum is to bring to your attention that the City Water
Department has submitted an application to the Iowa Power Fund for the
implementation of the Dubuque Smart Water Meter Replacement Program.
BACKGROUND
The Iowa Office of Energy Independence began awarding funds to projects in the areas
of commercialization of new technology, research and development, and education
through the Iowa Power Fund in 2008.
With the support of three studies conducted by HDR Engineering, the Water
Department identified the need to replace all residential, commercial, and industrial
water meters in the city. The complete replacement is scheduled to be completed in
phases in the next three years. The identification of the UFR device, manufactured by
A.Y. McDonald Inc. of Dubuque, provides an opportunity to significantly increase water
meter accuracy in residential and commercial meters. Total cost of the installation of
new meters, including UFR devices, is approximately $9,296,600.
DISCUSSION
The water meter studies conduced by HDR Engineering identified significant accuracy
deficiencies in the city's water meter stock which has outlived its expected lifetime of 15
to 20 years. Initial plans to replace all water meters, at a cost of approximately
$7,300,000, were expanded when the Water Department was contacted by A.Y.
McDonald with a proposal that includes the installation of UFR devices in every new
residential and commercial meter. The UFR supports the accuracy of water meter
usage by allowing it to pick up extremely low flows that otherwise would go undetected.
The implementation of this new technology would be the first citywide project of its kind
in the country.
The addition of the UFR device, along with costs for performance measurement, adds
approximately $2,000,000 to the project. Application was made to the Iowa Power Fund
to fund this portion of the project.
An additional $1,000,000 has already been secured through the Iowa Department of
Natural Resources State Revolving Fund (SRF)'s American Recovery and
Reinvestment Act (ARRA) funds in the form of a forgivable loan.
RECOMMENDATION:
Staff recommends Council approval of submittal of the Iowa Power Fund grant
application to implement the Smart Water Meter Replacement Program in the amount of
$2,000,000.
cc: Cindy Steinhauser, Assistant City Manager
Teri Goodman, Assistant City Manager
Sheila Samuelson, Sustainable Community Coordinator
Ken TeKippe, Finance Director
Jenny Larson, Budget Director
Iowa Office of Energy Independence Office Use Only:
PRE-APPLICATION FOR IOWA POWER FUND Project No:
Date Received:
IPF Tracking Number:
Form updated: April 28, 2009
Section 1: Applicant Information
Project Title
Dubuque Smart Water Meter Replacement P rogram
Applicant Legal Name:
City of Dubuque
Applicant Address: City, State, Zip Code:
50 W 13th St, Dubuque, IA, 52001
Applicant County: Headquarters Location (if different from above):
Dubuque
Telephone Number: Fax Number: Website:
563-589-4110 563-589-4149 ww.cityofdubuque.org
Person Authorized to Sign Contracts Project Manager/Contact (name):
Michael Van Milligen Bob Green
Title of Representative: Title of Project Contact:
City Manager Water Department Manager
Mailing Address (if different from above): Mailing Address (if different from above):
Telephone Number: Telephone Number:
563-589-4110 563-589-4291
E-mail: E-mail:
ctymgr@cityofdubuque.org bgreen@cityofdubuque.org
Section z: Nroiect ~nrormation
Please include a one paragraph summary of the proposed project:
The City of Dubuque proposes to install 22,000+ Unmetered Flow Reducers (UFRs} on its water meters.
This will be done in conjunction with a meter replacement program that will replace all water meters in
the City. The purposes of this project are to detect small amounts of water that, without the UFR, are
undetectable, decrease energy and water use, increase consumer knowledge of energy and water
use, and develop a local green economy.
Has this project previously been reviewed by the Iowa Power Fund Due Diligence Committee, if so
please address the concerns of the committee, or indicate how this proposal is different:
No
Application Category mark Eligibility Criteria-select all that apply:
one box: ^ Utilization of crops and products grown or produced in Iowa that
^ Commercialization maximize the value of crops used as feedstock in biomanufacturing
® Research/Development products and as co-products;
^ Education ®Reduction of greenhouse gas emissions and carbon sequestration;
^ Other: ®Commercialization of technology and product development for sale in
the national and international market;
® Renewable energy and energy efficiency
Please complete this form using instructions at:
http:/lwww.energy.IOwa.gov/Legislation/pre_app.html
Project Area of Focus (select one)
^ Algae
^ Biodiesel
^ Corn Based Biofuel Technology
^ Economic Development
^ Energy Education
® Energy Efficiency
^ Hydrogen
^ Land Sustainability
^ Model Buildings
^ Nitrogen/ Fixation
^ Second Generation Biofuels
^ Solar
^ Thermal Energy/ Geothermal
^ Transportation
^ Wind
^ Other:
Number of years funding is Form of Assistance:
requested (1, 2, or 3): ^ Loan
^ Forgivable Loan
3 years ®Grant
Other:
Budget of Anticipated Expenditures
Iowa Power Funds Requested Applicant or 3`d Party Contributions
Year 1 Year 2 Year 3 Total Year 1 Year 2 Year 3 Total
Salaries and Wages125,000 187,500 187.500 500.000 577.550 577,550 577,500 1,732,650
Fringe Benefits
Equipment
Supplies/Materials375,000 562,500 562,5001,500,000 1,732,650 1,732,650 1,732,650 5 197 750
Travel
Sub-agreements
Tuition
Other Direct Costs 366,000
Total Direct Costs 500,000 750,000 750,0002,000,000 2 676,200 2,310,200 2,310,200 7 296 600
Indirect Costs
Total Budget 500,000 750,000 750.0002,000,000 2,676,200 2,310,200 2,310,200 7,296 600
Funding Received or Contributed by Applicant Current Funding Requested:
Related to this Project
SOURCE AMOUNT SOURCE AMOUNT
Water & Sewer GO Bonds $6,296,600 Iowa Power Fund $2,000,000
Total $ 6,296,600 Power Fund Contribution 22
Applicant's Cost Share 57
Number of years the applicant has been in Experience developing or deploying the
business?176 technology or programming in the proposal? See
Years the applicant has been in Iowa? 176 Sec 3: Experience
Please complete this form using instructions at:
http:l/www.energy. iowa.gov/Legislation/pre_app.html
Section 3: Proiect Executive Summary
Provide a summary of the project, not to exceed 4 pages. This statement should include:
^ Need or statement of the problem and how does this project meet the goals of the Iowa Power Fund
^ Methodology or Business Plan Summary
^ Evaluation of the project (Return on Investment from the project -jobs, environmental impact,
financial savings; also specify measures to determine success of the project
^ Describe how this technology, project, or program will propel Iowa towards energy independence
^ Summarize qualifications and/or experience of the project leader/team
^ Budget Summary to include Sources and Uses of Funds
^ Describe information on the financial partners and their commitments.
^ Describe public availability of any technology/intellectual property that may result from this project.
See attached Project Summary.
Section 4: Minority Impact Statement
Pursuant to 2008 Iowa Acts, HF 2393, Iowa Code Section 8.11, all grant applications submitted to the
State of Iowa which are due beginning January 1, 2009 shall include a Minority Impact Statement. This
is the state's mechanism to require grant applicants to consider the potential impact of the grant
project's proposed programs or policies on minority groups. Please choose the statement(s) that
pertains to this grant application. Complete all the information requested for the chosen statement(s).
The proposed grant project programs or policies could have a disproportionate or unique ositive
impact on minority persons. Yes or No No
Indicate which group is impacted:
^ Women
^ Persons with a Disability
^ Blacks
^ Latinos
^ Asians
^ Pacific Islanders
^ American Indians
p Alaskan Native Americans
^ Other
Describe the positive impact expected from this project?
The proposed grant project programs or policies could have a disproportionate or unique negative
impact on minority persons.
Describe the negative impact expected from this project
Please complete this form using instructions at:
http:l/www.energy.iowa.goy/Legislation/pre_app.html
Present the rationale for the existence of the proposed program or policy.
Provide evidence of consultation of representatives of the minority groups impacted.
Indicate which group is impacted:
^ Women
^ Persons with a Disability
^ Blacks
^ Latinos
^ Asians
^ Pacific Islanders
^ American Indians
^ Alaskan Native Americans
^ Other
I hereby certify that the information on this form is complete and accurate, to the best of my
knowledge:
Name:
Title: Q-(,~'
Definitions
"Minority Persons", as defined in Iowa Code Section 8.11, mean individuals who are women, persons with a
disability, Blacks, Latinos, Asians or Pacific Islanders, American Indians, and Alaskan Native Americans.
"Disability", as defined in Iowa Code Section 15.102, subsection 5, paragraph "b", subparagraph (1}: b. As
used in this subsection:
(1) "Disability" means, with respect to an individual, a physical or mental impairment that substantially
limits one or more of the major life activities of the individual, a record of physical or mental impairment
that substantially limits one or more of the major life activities of the individual, or being regarded as an
individual with a physical or mental impairment that substantially limits one or more of the major life
activities of the individual.
"Disability" does not include any of the following:
(a) Homosexuality or bisexuality.
(b) Transvestism, transsexualism, pedophilia, exhibitionism,voyeurism, gender identity
disorders not resulting from physical impairments or other sexual behavior disorders.
(c) Compulsive gambling, kleptomania, or pyromania.
(d} Psychoactive substance abuse disorders resulting from current illegal use of drugs.
"state Agency", as defined in Iowa Code Section 8.11, means a department, board, bureau, commission, or
other agency or authority of the State of Iowa.
Please complete this form using instructions at:
http:/lwww.energy.Iowa.gov/Legislation/pre_app.html
Section 5: Signature of Legally Authorized Representative
I, the undersigned, certify that the information provided in this pre-application is true and accurate to
the best of my knowledge. I have also reviewed rules Chapter 350, 4.1-4.11 and understand the
following regarding the processes to receive financial assistance from the Iowa Power Fund:
• Appropriation of money is subject to the actual receipt of monies by the fund.
• Eligible uses of the funds awarded by the board maybe limited, at the board's discretion.
• Approval for assistance is a 2 step process; request for submittal of a full application does not
guarantee that my project will be funded.
• Additional information may be requested by the board, committee, or office at any time.
• All information submitted with an application may be reviewed by the board, committee, office,
or other state agencies as appropriate.
• Negotiations may take place and the need for modification to the project may be requested.
• The board or committee may request an applicant to obtain an independent technical, scientific
or financial review of a proposal which may wholly or partially come at the applicant's expense.
Technical reviews rovided by the applicant do not guarantee funding.
5/29/09
Leg'I Authorized Representative Signature Date
Section 6: Attach a Technical Assessment (if applicable)
Please complete this form using instructions at:
http://www.energy.Iowa.gov/Legislation/pre_app.html
United States residents and businesses consume one trillion gallons of water each year. With only
60% of that use metered and an estimated 30% of all homes containing significant leaks, water
generation and treatment are massive energy consumers in our country. The Dubuque Smart Water
Meter Replacement Proeram will be the first citywide implementation of developing "smart meter"
technology and serve as a worldwide model for smart water and energy use and public education It
has the potential to serve as the foundation for future best management practices in the use of water
and the energy used to produce it.
The City of Dubuque proposes to install approximately 22,000 Unmetered Flow Reducers (LJFRs) on
its water meters. This will be done in conjunction with a meter replacement program that will
replace all water meters in the City. The purposes of this project are to detect small amounts of water
that, without the UFR, are undetectable, decrease energy use, and increase consumer knowledge of
energy and water use.
Statement of Need The City of Dubuque's last meter replacement program began in Fiscal Year
1982 and concluded in 1987. The expected lifetime of these meters -which have aged 22 and 27
years - is 15 to 20 years. As meters age, they become worn, which over time reduces or slows the
overall registration of the meter. This meter inaccuracy affects water consumption measurement,
which in turn decreases consumer awareness of usage, increases demand on the water system, and
reduces collected revenue for actual water used.
A need for replacement of the City of Dubuque's water meters has been justified through review and
two types of testing procedures. Current meters of all ages have shown significant inaccuracies in
measuring water flow and detecting low flows. All meters currently require inefficient manual
readings, requiring staff and use of a vehicle to visit over 22,000 meters monthly.
Dubuque's need for the Smart Water Meter program is a need that is experienced across the country.
Forty percent of the country's water use is not metered; this results in wasted water and wasted
energy used to deliver that water to homes and businesses. While 60% of water use is measured,
inefficiencies in current water meter technology cause millions of gallons of water to be produced but
never detected or used by the end consumer This wasted water, which trickles through our indoor
and outdoor fixtures unnoticed, is the equivalent of the "phantom energy" produced in our homes
when we leave appliances plugged in but not in use. While the country has finally begun to address
phantom energy use, the Smart Water Meter program will be the first to prevent phantom water use.
Power Fund Goals The Smart Water Meter project meets the goals of the Iowa Power Fund and
will be yet another way in which Iowa leads the nation in energy efficiency and technology
development. The UFR, a device added to the standard water meter, has shown positive results in
small test programs, but has yet to be tested in a full system operation. It has been available
internationally for five years, but has not yet been implemented system-wide in the United States. A
citywide pilot project in Dubuque will accelerate the product's development and accessibility to
municipalities across the country. The installation of this device in homes will also be a crucial tool
in educating the public about smart energy and water use.
Methodology The intent of this project is to replace 22,559 water meters that have exceeded their
useful life and/or have failed accuracy testing. New meters will greatly increase metering accuracy
and efficiency by including a fixed base radio read as part of the program. Energy will be saved in
the following areas: 1) production of water and delivery to homes and businesses, 2) monthly
transportation to manually read 22,000 meters, and 3) treatment of waste water at the City's Water
Pollution Control Plant.
The meter replacement program will include the installation of a UFR that allows measurement of
low-flows that are currently undetectable, even by new meters. The change out is intended to include
the installation of an American-made device manufactured from 100% recycled materials by the
A.Y. McDonald Corporation of Dubuque, Iowa, that will allow the water meter to measure flows
below %a gallon per minute -such as leaks and drips -that have been previously unmeasurable, even
by new meters.
Design and installation of the new meters and UFR devices will occur over a three year period, with
all new equipment installed by December 2011. Software installation will allow all meters to be read
from a fixed base, eliminating the need for thousands of vehicle trips to inspect 22,000+ meters. This
installation will not only improve detection of "phantom water use," but will allow real-time water
use tracking. It is anticipated that this increase in available information will cause consumers to
change their water and energy use behaviors.
Project Evaluation The project will be evaluated on the basis of 1} energy and water saved; 2)
utility revenue captured; 3) environmental benefit, and 4) benefit to local economy. Water meter
testing completed by the City indicates that 35.7% of small meters (5/8 inch to 1 inch) and 40.3% of
large meters (1.5 inch to 8 inch) failed accuracy tests in 2007 and 2008. Although there are relatively
few large meters in the system, they may measure up to 1,000 times the volume of water measured
by a residential meter. Revenue analysis estimates 6.9% of annual consumption is not recorded by
water meters, leading to a projected loss of water and sewer revenue of approximately $676,000 in
Dubuque for fiscal year 2009 that could be collected simply by installing new water meters.
Energy & Water Savings Actual water usage tracking will create informed consumers who are not
currently aware of existing drips and leaks in their home that increase their costs. Studies completed
by A.Y. McDonald, the City's partner in this project, indicate that up to 30% of U.S. homes have
water leaks. The impact of this Iniowledge will increase voluntary consumer conservation measures
that reduce the amount of energy and chemicals currently consumed to process water both upstream
and downstream. It is the City's belief that as consumer's monthly statements reflect their actual
water use, they will take measures to prevent leaks and drips and conserve water and energy as
natural resources. Combined. it is anticipated that this project has the potential to save up to 14% of
the Citv's annual water production energy costs
Utility Revena~e Captured In addition to revenue collected from new meter installation, pilot studies
have shown an average increase of 5 to 10% of measured water for each UFR installed-water that
could not be detected by new meters. In 2008, the Dubuque water consumption rate was
approximately two billion gallons. Energy costs per million gallons for water production alone equal
$167. Chemicals and sludge removal, respectively, cost $152 and $41 per million gallons. Under
this scenario, the cost of UFR installation would be recouped in just two to three ears
Through the installation of a UFR and aloes-flow detection system, utilities are more accurately able
to charge consumers for their water usage. This potential increase in cost to the consumer will be
offset by the savings to the operation of the system with the reduction or elimination of manual
inspections. Vast inefficiencies in the current system are represented by the total estimated
opportunities to increase revenues by over $1.3 million in fiscal year 2009, and save $142,000 in
meter reading expenses.
Environmental Benefrt As municipalities and utilities become active participants in reducing carbon
emissions and energy, management of fleet and reduction of vehicle miles is part of the gathering of
"low-hanging" fruit that can be implemented. Manual meter reading is a highly inefficient system
that results in a negative impact on carbon emissions because of the required vehicle miles each
month. The reduction and elimination of thousand of vehicles trips each year will positively impact
local air quality and health.
Benefit to Local Economy The UFR will be manufactured by a company with a 150 year history in
Dubuque, Iowa and will support local green jobs. The device will directly support 10 positions and
indirectly support a team of 200 manufacturing employees at A.Y. McDonald. In addition, it is
anticipated that as consumers identify inefficiencies in their water systems, local plumbers and others
in this field will experience a significant increase in business.
Propelling Iowa Toward Energy Independence The pilot of the Smart Water Meter nro~ram will
establish Dubuaue and Iowa as worldwide leaders in the development of enerey efficient water
production. It will change the awareness level and habits of water consumers, drastically decrease
the cost of energy consumption for municipalities and water utilities, and establish new demand for a
green manufacturing industry based in Iowa.
Experience & Success Every community in the United States must provide safe drinking water for
its residents. This basic need is currently met through inefficiencies in the way water is produced,
delivered, and measured. Dubuque is poised to help Iowa become a leader of the greater
sustainability and smart energy use movement, as well as the development of new technology and
citizen education in this field.
Since 2006, the Dubuque City Council has identified making Dubuque an "Energy Efficient
Sustainable Community" as one of its top priorities. Changing consumer behaviors, in addition to
developing new technologies that use energy more efficiently and enable those consumers, are both
vital to making this priority a success. A community task force has defined the goal of becoming a
Sustainable Community as one that balances Energy/Environmental Conservation with Economic
Prosperity and Social/Cultural Vibrancy.
In order to achieve that goal, Dubuque has implemented several projects, partnered with national
organizations, and has received recognition for their leadership role in sustainability and energy
conservation. Included in our achievements are the foliowing:
• The City's Housing and Community Development Department is leading an initiative
enabling homeowners and rental property owners in low- and moderate-income
neighborhoods to make energy-efficient modifications to their homes and improve
conservation practices.
• The City is a member of International Council for Local Environmental Initiatives (ICLEI)
and Climate Cities, organizations that support the development of climate protection
programs and smart energy use policies.
• Dubuque was one of 30 cities selected across the United States to partner with the Carbon
Disclosure Project and ICLEI in a Carbon Disclosure pilot program, a program designed to
help cities understand their own operations more in depth and their impact on Green House
Gas Emissions.
The City has a long history in providing high quality water. This quality level of city water is
manufactured and delivered safely without impurities to each home within the city corporate Iimits at
a low cost per state and industry standards. The City water system has been recognized in local and
international competition for having the best municipal, potable water available to its users. The
Water Department continues its commitment to health and safety as being recognized with having a
Class 2 water distribution system per the Insurance Services Office, Inc. (ISO) in providing a high
level of water storage with excellent pressure to support fire fighting capabilities. Maintaining and
improving technology and education in the process and delivery of this product demonstrates our
commitment to improve the quality of life to our citizens with minimal to no impact to the
environment.
Badget Summary The cost for the Smart Water Meter Replacement Program, including design,
implementation, and performance evaluation, totals $9,296,600. The City of Dubuaue is re uq esting
Iowa Power Funds to finance the addition of the UFR to the new water meters and fundin for the
evaluation of UFR performance This device can be implemented in Dubuque water meters for
$1,500,000; an additional $500,000 to implement a performance evaluation system.
Use of Funds Year 1 Year 2 Year 3
Design & planning $356,000
Legal fees $10 000
Replacement of 22,000+ meters $2,310,200 $2,310,200 $2,310,200
Installation of UFRs $500,000 $500,000 $500,000
Performance evaluation $250,000 $250,000
Total Expenses $3,176,200 $3,060,200 $3,060,200
Total Iowa Power Fund Request $500,000 $750,000 $750,000
Source of Funds Year 1 Year 2 Year 3
Iowa Power Fund $500,000 $750,000 $750,000
Iowa Green Projects SRF Funding $666,666 $666,667 $666,667
City of Dubuque Capital Funding $2,009,534 $1,643,533 $1,643,533
Total Revenue $3,176,200 $3,060,200 $3,060,200
A.Y. McDonald Partnership Dubuque will partner with A.Y. McDonald, an Iowa company with a
150 year history of innovations in the water industry, to deliver this project. A.Y. McDonald is
committed to developing this new green technology which is manufactured using recvcled brass foi
rts housma, to decrease the ener~y consumption of water providers across the country The company
shares Dubuque's goals of providing an essential service to citizens in the most energy-efficient way
possible while educating the public on ways that they can live more sustainably and decrease their
water and energy consumption. The system-wide pilot project in Dubuque will enable the company
to evaluate the technology and prepare it for implementation across the country.
Availability of Technology Dubuque intends to work with A.Y. McDonald to commercialize this
technology so that water utilities nationwide can provide their services in a more energy-efficient
way. Performance data will be made publicly available. Dubuque looks forward to the opportunity
to develop best management practices for use in other communities.
The upgrade to this efficient meter system will provide consumers increased awareness of their
personal usage as well as provide accurate billing for the amount of water used. The program will
identify phantom water use and create an incentive to be more efficient in the use of this valuable
resource. As customers change their habits, it will decrease energy and chemicals required by
municipalities and water utilities to produce and deliver water while increasing revenue to water
utility providers.