Meter Interface Unites (MIU) ProjectMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Change Order Request in the Estimated Amount of $43,056 to Replace
Approximately 509 Existing Neptune R -900 Meter Interface Units (MIUs)
with the R -450 Units. - Fund Code 740 -2052 - Projected Project
Completion Balance including this Change Order
DATE: July 14, 2011
Dubuque
All-America City
2007
The purpose of this memorandum is to advise you of a Change Order to this Project in
the estimated amount of $43,056 to change out approximately 509 existing Neptune R-
900 Meter Interface Units (MIUs) with the Neptune R -450 MIUs and the removal of four
(4) Gateway Antennas. The net cost after equipment resale is estimated at $4,390,
which will be funded by available project savings. It is also to advise you on the
approach to fund an anticipated revenue shortfall of $153,089 in the Fiscal Year 2012
water budget revenues.
This Change Order request is for purchase of the MIU equipment and the removal of
the four (4) Gateway antennas that will be performed by a local contractor. The
installation of the MIUs will be performed by city staff. The MIUs are attached to the
exterior of the house. Replacement of these units would not require entering the
citizens' home and will not cause any interruption to their water service.
By the end of September, 2011, each of the approximately 22,500 water meters in the
City of Dubuque will be replaced with new meters. The new meters feature automated
meter reading (AMR) abilities — eliminating the need to manually read each meter every
month which will save the City more than $144,000 per year.
The new water meters, manufactured in the U.S. by Neptune Technology group, are
also fitted with an unmeasured . flow reducer (UFR), manufactured locally by A.Y.
McDonald Manufacturing. The UFR allows measurement of flows below'/ gallon per
minute — such as leaks and drips — that have been previously immeasurable, by aged
meters and customers can easily read the display to see if they have an intermittent
leak.
The new system is an example of the City's ongoing sustainability initiative and allows
water customers to identify waste and consider corrective measures which will translate
into "smarter" water use and increased energy savings. More efficient water use will
also reduce the use of both energy and chemicals in treating and delivering water.
According to national research, 30 percent of households have water leaks. The city
has created a grant program for financial assistance on costs of repairs of leaks
identified through the project. The City will pay 50 percent of the replacement cost, not
to exceed $100, for repairs made to devices inside the home. To date there have been
200 homeowners who have filed for assistance in the combined total amount of
$8,968.98 being paid out.
Prior to beginning the citywide meter replacement program, volunteers were solicited for
Dubuque's "Smarter" Water Project, a pilot study of volunteer households were provided
with advanced water meter technology, or "smart meters." The 12 -month study is part
of the City of Dubuque's Smarter City partnership with IBM Research. IBM technology
has interfaced with the City's system to process water consumption data and provide
near real time visibility into the overall city water consumption. The project will help
citizens become more aware of their habits and how they can change them in order to
save money as well as the environment. "A critical objective of the Smarter Sustainable
Dubuque initiative with IBM is to provide Dubuque citizens with information that will be
directly helpful in reducing their costs and conserving resources.
The R -900 MIUs were used at the start of the IBM Pilot Project to obtain the 15 minute
reading versus the hourly readings provided with the R -450 MIUs that are being used
throughout the rest of this Project.
Through discussions with staff, we have learned that during the past few months IBM
has created a portal that will operate successfully in using the R -450 data thereby
eliminating the need for the R -900 MIU system.
Utility Billing and Information Services strongly support the replacement of R900 MIUs
with R450 MIUs.
At the beginning of this Project it was anticipated that the City would experience an
increase in revenue to cover the expense of this Project. In review of this past year's
consumption with 95% of the water meters installed we find this not to be the case.
The FY -11 water revenue budget was $5,607,743. The actual water revenue receipts
were $5,192,381.15 resulting in a $415,361.81 revenue shortfall.
There is a debt service savings of $527,459 to cover the meter revenue short fall for
FY2011.
As a result of this shortfall staff has evaluated the projected revenue for 2012.
Budget Director Jenny Larson advises that there will be an estimated $70,000 in debt
service saving in 2012 due to the projected cost savings on the water meter
replacement project.
2
Jenny has informed me that she built in an allowance for water revenue not received of
$350,430 per year in the 5 Year CIPs beginning with the FY2012 Budget.
In using both these funds in the total estimated amount of $420,430 to cover the
projected 2012 revenue shortfall of $573,519 would result in a negative revenue
projected balance of $153,089.
This negative revenue balance of $153,089 would be absorbed in Fiscal Year 2012 by a
combination of Capital Improvement Projects being rescheduled and from other water
Project cost savings.
I concur with the recommendation to replace the 509 R -900 Meter Inter Face Units
(MIUs) and the removal of four Gateway antennas, and respectfully request Mayor and
City Council approval of the change order.
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Bob Green, Water Department Manager
David Lyons, Smarter Dubuque Project Manager
Michael C. Van Milligen
3
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Bob Green, Water Department Manager
DATE: July 13, 2011
1
Dubuque
heal
AN- AmedcaCity
r
2007
SUBJECT: Change Order Request in the Estimated Amount of $43,056 to Replace
Approximately 509 Existing Neptune R -900 Meter Interface Units (MIUs)
with the R -450 Units. — Fund Code 740 -2052 — Projected Project
Completion Balance including this Change Order - $1,259,965
INTRODUCTION:
The purpose of this memorandum is to request your approval of a Change Order to this
Project in the estimated amount of $43,056 to change out approximately 509 existing
Neptune R -900 Meter Interface Units (MIUs) with the Neptune R -450 MIUs and the
removal of four (4) Gateway Antennas.
DISCUSSION:
This Change Order request is for purchase of the MW equipment and the removal of
the four (4) Gateway antennas that will be performed by a local contractor. The
installation of the MIUs will be performed by city staff. The MIUs are attached to the
exterior of the house. Replacement of these units would not require entering the
citizens' home and will not cause any interruption to their water service.
SMART WATER METER PROJECT:
By the end of September, 2011, each of the approximately 22,500 water meters in the
City of Dubuque will be replaced with new meters. The new meters feature automated
meter reading (AMR) abilities — eliminating the need to manually read each meter every
month which will save the City more than $144,000 per year.
The last time the water meters were replaced was in the early 1980's. In 30 years, not
only has technology changed but so, too, has our environmental awareness in which
there is a greater need to conserve resources such as water. The old meters are being
replaced due to their age and inaccuracy of reading accurate flows. The new meters
are outfitted with radio frequency meter interface unit (MIU), which collects meter usage
data and remotely transmits the information to data collectors. The MIU and water
meter work as a unit to detect intermittent leaks, continuous leaks, reverse flow
situations, and zero usage situations. The system will automatically transmit meter
usage data over radio frequency waves each hour to data collectors placed throughout
the community and will also allow for customers to see their own reading. The City
opted to change invoicing customers based on cubic feet of water used to gallons so
that customers could be more aware of just how much water they are using.
Eliminating the manual reading of the water meters not only better benefits the
environment, but it reduces costs for the City. The old meters were read once a month,
but with the new meter installation the data can be read daily. If there are billing issues
or problems, we can see them immediately. This will provide more data at our fingertips
to share with customers if there are questions.
The new water meters, manufactured in the U.S. by Neptune Technology group, are
also fitted with an unmeasured flow reducer (UFR), manufactured locally by A.Y.
McDonald Manufacturing. The UFR allows measurement of flows below 1 /4 gallon per
minute — such as Teaks and drips — that have been previously immeasurable, by aged
meters and customers can easily read the display to see if they have an intermittent
leak. A small water faucet icon displayed continuously on the meter shows the
customer there's a continuous flow of water.
The new system is an example of the City's ongoing sustainability initiative and allows
water customers to identify waste and consider corrective measures which will translate
into "smarter" water use and increased energy savings. More efficient water use will
also reduce the use of both energy and chemicals in treating and delivering water.
According to national research, 30 percent of households have water leaks. The city
has created a grant program for financial assistance on costs of repairs of leaks
identified through the project. The City will pay 50 percent of the replacement cost, not
to exceed $100, for repairs made to devices inside the home. To date there have been
200 homeowners who have filed for assistance in the combined total amount of
$8,968.98 being paid out.
The new meters are being installed by geographic "zones" over an 18 month period.
Customers will receive a notification letter when it is time for them to schedule an
installation appointment. The City has contracted with Northern Water Works Supply
(NWWS) to install the new meters. A NWWS representative will arrive during that time
and will require access to the water meter inside the home or business. Each
installation will take approximately 60 minutes. Water service will be interrupted at each
location while the meter is replaced, but customers can use water as soon as the install
is completed. All NWWS installers have completed training and background checks
and will have identification, wear identifiable uniforms, and drive marked vehicles.
Prior to beginning the citywide meter replacement program, volunteers were solicited for
Dubuque's "Smarter" Water Project, a pilot study of volunteer households were provided
with advanced water meter technology, or "smart meters." The 12 -month study is part
of the City of Dubuque's Smarter City partnership with IBM Research. IBM technology
has interfaced with the City's system to process water consumption data and provide
near real time visibility into the overall city water consumption. The project will help
citizens become more aware of their habits and how they can change them in order to
2
save money as well as the environment. "A critical objective of the Smarter Sustainable
Dubuque initiative with IBM is to provide Dubuque citizens with information that will be
directly helpful in reducing their costs and conserving resources.
As part of our project IBM Research is building new service systems integration, data
management, and analytic technologies that will create new insights for our consumers
which will translate into better water utilization and energy savings.
Participating customers will have access to new technology that will provide data and
insights into how water can be utilized more efficiently in their home. The benefits of the
project will not only affect the individual customer, but the entire community. "Data
should be available that will help citizens choose actions that make the most sense both
in terms of their personal financial and environmental goals, as well as the long -term
sustainability of the community in which they live." The data collected will also help the
City make better decisions about water production and distribution, ultimately lowering
costs. Participating households will be given priority access to free water audits,
matching grants to fix water Teaks, and participation in future Smarter City projects for
electricity, gas and solid waste management.
The citizens of Dubuque have been extremely cooperative in supporting this project and
the project is on schedule with a completion date of September, 2011.
The funding for this $8.7 million project is from $7.7 million State Revolving Fund (SRF)
loan and a $1 million American Recovery and Reinvestment Act (ARRA) forgivable
loan.
PROJECT STATUS:
The Project is approximately 95.3% complete with 21,099 meters of the contracted
22,317 installed. There have been 17,528 unmeasured flow reducers installed. These
devices were installed when the proper application applies, ie, proper water pressure
and no pressure reducing valves installed.
Northern Water Works Supply installed between 250 to 350 meters weekly depending
on holidays and weather conditions.
The Project is on schedule to be completed by September, 2011.
WATER LEAK REPAIR GRANT PROGRAM (CIP # 740 - 2200):
To date, through our monitoring ability, there are 1,791 accounts showing to have
continuous usage through their meter and there are 3,536 accounts showing to have
intermediate usage.
To date, there have been two hundred (200) Grant Applications received with one
hundred sixty -four (164) being reimbursed. There are thirty -four (34) applications being
reviewed for processing. Twenty -five (25) have been denied due to lack of information.
3
A total of $8,568.98 in refunds have been paid out of the $10,000 budget in FY2011.
This is an ongoing program with monies budgeted annually in its support.
Those accounts with intermediate Teaks could be the result of having ice makers,
automatic humidifiers, and other devices using water or a toilet not working correctly.
FINANCE REVENUE COMPARISON:
In comparison of water consumption billed as of June 30, 2011 with the consumption
use last year shows an increase of approximately 81,000,000 gallons. There has been
an increase of 5.9% or $306,000 of revenue during the fiscal year.
WATER PLANT PUMPAGE:
The Water Plant pumpage demand as of June 30, 2011 in comparison to this time last
year is down by .62% or 17,450,000 gallons resulting in an estimated manufacturing
cost savings of $6,847.28.
In review of these facts it is possible with the system pumpage demand being reduced
and accountability in product being billed up by 5.9% we feel is the result of the new
water meters being installed.
PROJECT EXPENSE TO DATE WITH PROJECTED END BALANCE:
The Project has progressed very well. The attached Expense Chart (Exhibit I — Page
11) provides information on the current cost of the Project, expenses associated with
the IBM Pilot Program and the projected end cost.
NEPTUNE R -900 MIU TO R -450 MIU CHANGE ORDER REQUEST:
The R -900 MIUs were used at the start of this Project to obtain the 15 minute reading
versus the hourly readings provided with the R -450 MIUs that are being used
throughout the rest of this Project. The 15 minute readings were required as part of the
water study conducted by IBM research.
Through discussions with staff, we have learned that during the past few months IBM
has created a portal that will operate successfully in using the R -450 data thereby
eliminating the need for the R -900 MIU system.
As the result of this information, generated me to ask the following question during a
recent water meter change out meeting. "Where are we at with the Neptune R -900 MIU
system ?"
As a follow -up to this question, I sent an email to Dave Lyons asking the following:
"1 would appreciate it if you are able to let me know what IBM's plans are
in continuing their needs for data collection from the R -900 series meters.
Will they continue with these or is it their intention to phase away from
them and focus only on the data collection from the R- 450s ?" (Attachment
Page 16)
4
IBM AND STAFF'S RESPONSES AND JUSTIFICATION FOR THE CHANGE OUT:
IBM RESPONSE:
1. Rationale for phasing out the R900s and moving to R450s.
Having a single meter system simplifies the technical infrastructure and data
processing. The R450 meters will obviously have coarser granularity of data. However
having only 300 households with finer grained data will not yield sustainability savings
that are substantial.
2. Any cost savings or advantages that would come with moving to R450s.
The cost savings are in terms of simplifying the data processing and making it easier for
IBM to provide a single solution with the identical end to end processing for all meters.
The assumption is that there are greater cost savings to the city by simplifying
maintenance and management.
3. Timing requirements, and whether there is a reason to incur extra costs to
accomplish this by July 31st or if timing could be extended over a longer period (if City
needed the time to do the change -outs itself).
There is no reason to incur extra costs to accomplish this by July 31st. But it would be
much easier for the water pilot extension to start once all meters are in place than to
have to incrementally change meter types in the middle of the extension. If the decision
is to sunset the R900s at some point, it makes it difficult for IBM to justify maintaining a
separate processing pipeline for what is a temporary set of meters. (Attachment Page 17)
City Information Services Response:
Information Services perspective, we would offer the following reasons in support of
replacement of the R900 MIU's with R450 MIU's:
- R900 system is much more difficult to monitor because it is a cell backhaul instead of
going through our network. We do not get alerts when a gateway collector goes down.
We have to remember to check the FTP site every so often to make sure that we are
getting the necessary files which is a manual operation.
- The R900 database is not as reliable as the R450 database. We have had data
corruption issues as well as having to restore from backup a few times because the
database has crashed. We have not had these issues in the R450 system.
- Maintaining two sets of MIU types requires two completely different pieces of hardware
to manage, two IBM FTP transfer processes to manage, and two software pieces to
manage.
- Twice a month (billing routes 3 & 4 and 5 & 6) User Technology Specialist Jim
Vosberg has to run an additional process for the R900 MIU's. This process would take
him an extra hour each time because of having two different systems.
- Data in the R450 software is much more reliable, accurate, and robust that the data in
the R900 system.
5
- Reporting, as well as information that is given to the citizen (especially the
graphs) is far more complete and useful in the R450 software.
- The R450 runs on a virtual server, the R900 runs on a physical workstation. The
virtual server is much more stable, energy efficient, and easier to manage.
- Troubleshooting a R900 gateway issue is much more difficult than troubleshooting a
R450 collector. Because of the technology involved with the gateways and location of
them, Ken Fleege (from Racom) needs to get involved for gateway issues and this
incurs an expense — usually $200+ depending on the nature of the issue. We are able
to take care of most R450 collector issues in house, thus not incurring an additional
expense.
-The R900 gateway collectors require a cellular connection for the backhaul from the
collectors versus the fiber optic and wireless backhaul used for the R450 gateways.
The cellular connection costs the City $277 /month that would be saved if all of the R900
MIU's were converted to R450s. (Attachment - Page 20)
City Utility Billing Department Response:
Utility Billing fields many inquiries from citizens regarding, among other things, unusual
water consumption. We believe one central database for all customers is most efficient.
Currently two separate databases are maintained and before data can be reviewed it
must be determined which MIU the customer has installed and then the appropriate
software opened. Only 3 of the 8 computers in Utility Billing currently have the R900
system installed, mainly because of the small number of R900 customers. Only one
user is allowed to be logged in at any time, not only in utility billing but system -wide. For
instance if Information Services is logged in, Utility Billing cannot log in and therefore
assist a customer without contacting Information Services to log out. Time would be
saved responding to customers if only one system was needed. Six additional license
fees ($250.00 - $300.00 each) would be required if the R900 database were to be
installed on all UB computers.
In some cases, manual monthly reads of R900 MIUs are required. Several addresses
simply do not send reads frequently enough to be able to get even one read per month
for billing. Foliage seems to be a factor with read interference. This makes it impossible
to investigate high or low consumption concerns a customer has, and in effect, is no
different from the manual readings Black Hills Energy provided in the past. We have
not seen this issue with R450 MIUs.
Inconsistent R900 data makes it more difficult to determine if a customer has a water
leak. There are no "flags" in the data which show if a continuous or intermittent flow of
water is detected in the customer service screens. In order to determine how much
water a customer uses based on readings, a manual calculation must be performed.
6
There is not an area in the R900 data which shows 15 minute, hourly or even daily
consumption history. Without physically creating a chart, this information cannot be
shared with a customer if they request such data. Consumption data is also a
requirement for Utility Billing when determining leak adjustments to accounts and Water
Leak Repair reimbursements. We have found the R450 data to be much easier to
review and interpret, and saves time for both utility billing staff and customers. It has
the capability to compile graphs and charts which show usage patterns and
consumption totals, and can be printed or emailed and sent directly to the customer.
This is not the same with R900 data. Missed readings and data out of order make this
feature difficult or impossible to share with customers, and requires more time from staff
to confirm and validate reads and consumption.
The only search option in the R900 database is to enter the 9 digit MIU number. With
the R450 system, searches are available by customer name, address, utility billing
account number and MIU number. A considerably longer amount of time is spent
searching for data in the R900 system than in the R450 system.
There are 2 billing routes which contain both R900 and R450 MIUs. When this occurs
(twice per month) 2 sets of reports have to be generated and reviewed prior to billing.
For other routes which contain exclusively R450 MIUs only 1 set up reports is
necessary. Besides taking more time to review, each set of reports has different
thresholds and has to be interpreted accordingly.
By utilizing one database Utility Billing will be able to provide more accurate, timely
responses to customer inquiries regarding water usage and requests from customers
who are starting or stopping service. In addition, training by Neptune during their next
visit to Dubuque will not be required, saving staff time.
Our service workers would be available to assist on the installs. Hopefully proceeds
from the sale of the gateways and R900 MIUs would partially offset the cost of
approximately 500 additional R450 MIUs at $81.12 each. In addition, significant
savings from not installing UFR devices on all meters provides project funds to cover
the outlay. A recap with IBM pilot program information is attached.
In conclusion, Utility Billing strongly supports the replacement of R900 MIUs with R450 MIUs
Note: I have attached for your review copies of IBM's email (Page 17) and City Staff's
memos (Page 19 -23) in providing their complete detail of communication with me on
this request.
IBM PILOT PROGRAM COSTS:
The following expenses are being provided for the IBM pilot program and the cost for
the requested R -900 MIUs to be replaced with the R -450 MIUs. The additional cost to
change out the R -900 MIUs with the R-450 MIUs is estimated to be $43,056. This cost
7
is for the R -450 MIUs only and the removal of four (4) Gateway antennas by a local
contractor.
By changing out the R -900 MIUs with the R -450s would have a negative impact cost to
the project. This being from the purchase and installation of equipment that would no
longer be needed. These expenses to the project are as follows:
506 R -900 MIUs $ 41,046.72
5 Gateway Antennas $ 50,000.00
4 Gateway install cost $ 10,056.00
4 Gateway removal cost $ 1,056.00
Software cost $ 36,246.25
Total estimated negative cost $138,404.97
The 506 R -900 MIUs and the 5 Gateway antennas could be sold in an effort to recoup
some of these original expenses.
Estimated monies from resale of used equipment:
506 R -900 MIUs resale value $13,666
5 Gateway antennas resale value $25,000
Estimated resale monies $38,666
Estimated negative cost
Estimated monies from equipment resale
Net estimated negative cost:
The removal of the four Gateway antennas would provide an annual operating savings
of $3,324 on the cellular connections backhaul cost.
Additional project expenses requested:
Estimated cost to purchase the R -450 MIUs
Estimated cost for the removal of equipment
Total additional estimated cost
$ 138,404.97
$ 38,666.00
$ 99,738.97
$ 42,000
$ 1,056
$ 43,056
The current cost in support of the IBM project including Engineering and support
services is $185,457.42. The cost to remove the four Gateway antennas would bring
the IBM Pilot Program estimated costs to $186,513.04.
ESTIMATED REVENUE SHORTFALL:
At the beginning of this Project it was anticipated that we would experience an increase
in revenue to cover the expense of this Project. In review of this past year's
consumption with 95% of the water meters installed we find this not to be the case.
The FY -11 water revenue budget was $5,607,743. The actual water revenue receipts
were $5,192,381.15 resulting in a $415,361.81 revenue shortfall.
8
ACTION:
It is being recommended that all the R -900 MIUs be replaced with the R -450 MIUs at an
estimated cost (material only) of $42,000 and that the four Gateway antennas be
removed at an estimated cost (labor and material) of $1,056. Bringing a total estimated
change out request to $43,056. NOTE: Should the resale of equipment be $38,666
would then bring the final Change Order amount to $4,390.
Installation of the R -450 MIUs will be performed by City staff.
Funds to support this cost would come from the projected savings of $1,262,349 from
the project and the potential $38,666 from the resale of used equipment.
The original budget for the SRF Loan on this Project was $8,675,700. With the
$1,000,000 as a forgivable loan that was granted to the City and with the Project
$1,262,349 estimated savings will bring the estimated Project debt to $6,612.61.
This estimated project savings of $1,262,349 would reduce the original annual projected
debt service payment from $527,928 to $441,268.
I have attached for your review, IBM's response with Information Services and Utility
Billing's memos in support of this request, including its cost.
I would appreciate your decision on this request as soon as possible as it is staff's
hopes, if approved, that this change out could be completed by July 31, 2011.
Staff and I are available at your convenience to discuss and answer questions you may
have.
BG:ve
Attachments
cc: Dave Lyons, Smarter City Project Manager
Cindy Steinhauser, Assistant City Manager
Chris Kohlmann, Information Services Manager
Ken TeKippe, Finance Director
Jenny Larson, Budget Director
Mike Brekke, Water Distribution Supervisor
File
10
There is a debt service savings of $527,459 to cover the meter revenue short fall for
FY2011.
As a result of this shortfall we have evaluated the projected revenue for 2012.
By using a six year average of water consumption billed in the amount of 1,850,530,668
gallons suggest a projected shortfall in revenue for 2012 in the amount of $724,967,
and;
In using FY2011 actual water consumption billed of 1,903,364,420 gallons provides us
with a projected revenue shortfall of $573,519. (Attachment Page 12 - 13)
It would be staff's position to use the numbers from the FY2011 actual as it relates to
the installation of the new water meters.
As per Budget Director Jenny Larson, it is my understanding that there will be an
estimated $70,000 in debt service saving in 2012 due to the projected cost savings on
the water meter replacement project.
Jenny has informed me that she built in an allowance for water revenue not received of
$350,430 per year in the 5 Year CIPs beginning with the FY2012 Budget.
In using both these funds in the total estimated amount of $420,430 to cover the
projected 2012 revenue shortfall of $573,519 would result in a negative revenue
projected balance of $153,089.
This negative revenue balance of $153,089 would be absorbed by a combination of
Capital Improvement Projects being rescheduled and from other water Project cost
savings.
The following projects are those that could be rescheduled in following year(s):
CIP #740 -2309
CIP #740 -1397
CIP #740 -2312
CIP #740 -2225
Eagle Point Plant Driveway and $ 60,000
Parking Lot Overlay
Laboratory Renovation Project $ 50,000
Source Water Protection Program $ 15,000
Mobile GIS for Distribution Vehicles $ 40,000
Estimated Expense Reduction Total $165,000
WATER RATES, SERVICE AND CONNECTION FEES:
During the past few months staff and I have been conducting a review of our multi -user
tier water rate structure, service call and connection fees.
Staff and I are scheduled to meet with you on Thursday, July 28, 2011 in your office to
provide the results of our findings from this review with staff's recommendations.
9
City of Dubuque
Water Meter Changeout Project
EXHIBIT I
Estimated Costs
Initial Estimated Expenses Through IBM Costs for Through Project R900 to R450
Costs 6/30/11 Pilot Program* Completion Changeout
NWWS Project Costs:
Meters /MIUs Provided & installed, along with installation of UFR - E -Coder Option ** 5,166,328 4,667,973 5,400,000
AMR System Reading Equipment - pmts part of main contract 326,965 260,605 300,000
Hand held Meter Reading Devices 10,000 13,790 13,790
Stock - Meters, supplies, city installs, etc 137,000 201,415 225,000
Unmeasured Flow- Reducers (UFR) - AY McDonald 1,500,000 880,628 900,000
HDR Consulting Fees 350,000 262,463 38,267 357,000
1% Loan Origination Fee 76,757 76,757 76,757
Legal Fees 10,000 8,539 8,539
Contingency - 20% of NWWS project costs 1,098,659 53,333 100,000
Modifications /Replacements /Repairs of Plumbing on large meters /residential 55,132 75,000
Ancillary Operation Support, Materials & Supplies 9,375 9,375
m..■ IBM Costs- R900's, Gateways, Data Management, etc. 147,190 147,190
P`' R450 MIUs (506 x $81.12) 41,050
Estimated Revenue from Sale of Used Gateways (25,000)
Estimated Revenue from Sale of Used R900 MIUs (13,666)
Total 8,675,709 6,490,010 185,457 7,612,651 2,384
Original Budget for SRF Loan * ** 8,875,000 8,875,000
Estimated Savings 199,291 1,262,349 1,259,965
* IBM Pilot Program cost excludes cost of meters, installation of meters and MIU's and installation of UFRs since required for citywide water meter changeout project.
** Actual meter sizes installed vs proposed varied, strainers were required for larger installs, cost per strainer was furnished, although no estimate for number of strainers was known at
the time of proposal.
** *Budget includes $1M forgivable loan; accordingly, the amount borrowed for the project will be approx. $6.6M. This would reduce the annual debt service payment from $527,928 to
$441,268
\ \DBQNW \VOL1 \123DATA \Finance \Ken Ltr- Memos- Misc \7402052.xls
7/7/11
FY'l 1
FY' 10
FY'09
FY'08
FY'07
FY'06
* * * No longer billing in CCFs.
6 year average
City of Dubuque
Utility Billing
Billed Consumption
CCF
* **
2,435,898
2,455,826
2,474,346
2,498,217
2,434,937
FY'l l Water Billings
FY Water Billed (Gallons)
Average rate per gallon
FY' 12 Rate increase
Projected FY' 12 Rate per gallon
6 year average gallons billed
FY'12 Projected dollars generated
FY'12 Budget
Difference
Consumption data prior to FY'06 is not available
GALLONS
1,903,364,420
1,822,051,488
1,836,957,848
1,850,810,808
1,868,666,316
1,821,333,125
1,850,530,668
$ 5,204,539
1,903,364,420
$ 0.00273
5%
$ 0.00287
1,850,530,668
$ 5,304,546
$ 6,029,513
$ (724,967)
FY' l 1
FY' 10
FY'09
FY'08
FY'07
FY'06
* * * No longer billing in CCFs.
6 year average
CCF
* **
2,435,898
2,455,826
2,474,346
2,498,217
2,434,937
FY' l 1 Water Billings
FY' l 1 Water Billed (Gallons)
Average rate per gallon
FY' 12 Rate increase
Projected FY'12 Rate per gallon
FY' l 1 gallons
FY'12 Projected dollar generated
FY' 12 Budget
Difference
Consumption data prior to FY'06 is not available
City of Dubuque
Utility Billing
Billed Consumption
GALLONS
1,903,364,420
1,822,051,488
1,836,957,848
1,850,810,808
1,868,666,316
1,821,333,125
1,850,530,668
$ 5,204,539
1,903,364,420
$ 0.00273
5%
$ 0.00287
1,903,364,420
$ 5,455,994
$ 6,029,513
$ (573,519)
City of Dubuque
Water Revenue
64010640 -51105
Year Budget YTD Receipts Difference
12 6,029,513
11 5,607,743 5,192,381 (415,362)
10 5,331,619 4,886,006 (445,613)
09 4,991,367 4,748,263 (243,104)
08 4,725,844 4,436,539 (289,305)
07 4,548,189 4,280,761 (267,428)
06 4,320,184 4,246,044 (74,140)
14
City of Dubuque,
Utility Billing
Total Consumption (Includes City non - billed accounts)
* ** No longer billing in CCF.
Consumption data prior to FY'06 is not available
CCF Gallons
FY'l1 * ** 1,975,049,394
FY'10 2,523,461 1,887,548,667
FY'09 2,530,474 1,892,794,552
FY'08 2,635,718 1,971,517,064
FY'07 2,580,092 1,929,908,816
FY'06 2,463,474 1,842,678,178
6 year average 1,916,582,779
Bob Green - Re: IBM /Neptune R -900 Meter Needs
From: David Lyons
To: Green, Bob
Date: 6/23/2011 2:49 PM
Subject: Re: IBM /Neptune R -900 Meter Needs
CC: Kohlmann, Chris; Tekippe, Ken
Bob: I have put this issue on tomorrow's SSD update call with IBM. Will let you kow.
dave
»> Bob Green 06/22/11 4:16 PM »>
Good afternoon Dave,
I would appreciate it if you are able to let me know what IBM's plans are in continuing their needs for data collation
from the R -900 series meters. Will they continue with these or is it their intention to phase away from them and
focus only on the data collection from the R- 450's.
Please let me know.
Thanks
Bob
16
Page 1 of 1
file: / /C: \Documents and Settings \bgreen.DBQDOMAIN \Local Settings \Temp \XPgrpwise \... 6/28/2011
Bob Green - Re: Proposal to phase out R900s to R450s
From: Milind Naphade <naphade @us.ibm.com>
To: "David Lyons" <dlyons @cityofdubuque.org>
Date: 6/24/2011 4:08 PM
Subject: Re: Proposal to phase out R900s to R450s
CC: 'Bob Green" <Bgreen @cityofdubuque.org >, "Chris Kohlmann" <Ckohlman @cityo...
David
Here is our response
Page 1 of 2
1. Rationale for phasing out the R900s and moving to R450s.
Having a single meter system simplifies the technical infrastructure and data processing. The R450 meters will
obviously have coarser granularity of data. However having only 300 households with finer grained data will not
yield sustainability savings that are substantial.
2. Any cost savings or advantages that would come with moving to R450s.
The cost savings are in terms of simplifying the data processing and making it easier for IBM to provide a single
solution with the identical end to end processing for all meters. The assumption is that there are greater cost
savings to the city by simplifying maintenance and management.
3. Timing requirements, and whether there is a reason to incur extra costs to accomplish this by July 31st or if
timing could be extended over a longer period (if City needed the time to do the change -outs itself).
There is no reason to incur extra costs to accomplish this by July 31st. But it would be much easier for the water
pilot extension to start once all meters are in place than to have to incrementally change meter types in the
middle of the extension. If the decision is to sunset the R900s at some point, it makes it difficult for IBM to justify
maintaining a separate processing pipeline for what is a temporary set of meters.
Thanks
Sincerely
Milind
Milind Naphade
Program Director, Smarter City Services, Smarter Cloud
Research Staff Member, Watson Research Center
httD : / /www.research.ibm.com/oeoDle /m/milind
htto://www.ibm.com/oio
From: "David Lyons" <dlyons @cityofdubuque.org>
To: Milind Naphade/Watson/IBM @IBMUS
Cc: "Bob Green" <Bgreen @cityofdubuque.org >, "Chris Kohlmann" <Ckohlman @cityofdubuque.org >, "Ken Tekippe"
<Ktekippe @cityofdubuque.org >, Tian Chao/Watson /IBM @IBMUS
Date: 24/06/2011 15:46
Subject: Proposal to phase out R900s to R450s
17
Milind:
1. Rationale for phasing out the R900sand moving to R450s.
2. Any cost savings or advantages that would come with moving to R450s.
Dave
Dubuque
All- Amirric3 Cly
1 111r
2007
18
Page 2 of 2
Pursuant to our recent SSD Update conversation, we are advancing the concept of phasing out the R900s and
moving all homes to R450 status. Mike Van Miligen would like a comprehensive proposal put together for his
consideration. City staff will be putting together technical and financial projections for the work from the City's
side. We also need a memorandum from IBM reviewing the following:
3. Timing requirements, and whether there . is ; a reason to incur extra costs to accomplish this by July 31st or if
timing could be extended over a longer period (if City needed the time to do the change -outs itself).
Thank you Milind. This information will allow Dubuque to make a decision and respond to your recommendation
if it makes technical and financial sense. Please copy Chris, Bob and Ken (cc'd above) on your response so things
can move as quickly as possible.
Masterpiece on the Mississippi
TO: Bob Green, Water Department Manager
FROM: Chris Kohlmann, Information Services Manager
Joe Pregler, Lead Applications /Network Analyst
SUBJECT: Replacement of R900 Hybrid MIU's and Associated Software
DATE: June 27, 2011
Dubuque
AIAmeticanif
2007
BACKGROUND
This memo is prepared per your request as discussed at the bi- weekly IBM/Water Meter
Replacement Project meeting held on June 22, 2011 that you lead and facilitate and
subsequent follow -up meeting held with you and Finance Director Ken Tekippe on
Friday June 24, 2011 regarding future options for the R900 meter interface units
(MIU's). It is my understanding that replacement of the R900 MIU's with R450 MIU's is
currently under your consideration and evaluation. You have met with the City Manager
and he has directed you to collect information from a variety of sources for feedback on
this proposed change out.
As a reminder and background roughly 500 R900 MIU's are installed in the geographic
location referred to as the "IBM Pilot Project Area" with around 320 of the 500 installed
locations that were an active part of the IBM water study. The R900 MIU's were
deployed to obtain the 15 minute readings versus the hourly readings obtained from the
R450 MIU's which are deployed throughout the rest of the project. The 15 minute
readings were required as part of the water study conducted by IBM research.
It is my understanding that IBM has now created a portal that can operate successfully
using the R450 data and there is a contract extension that will be proposed in the near
future to extend the portal to a greater number of participants.
The MIU is placed on the outside of the house and can be replaced without entry to the
house or any disruption of the water services.
DISCUSSION
From an Information Services perspective, we would offer the following reasons in
support of replacement of the R900 MIU's with R450 MIU's:
19
- R900 system is much more difficult to monitor because it is a cell backhaul instead of
going through our network. We do not get alerts when a gateway collector goes down.
We have to remember to check the FTP site every so often to make sure that we are
getting the necessary files which is a manual operation.
- The R900 database is not as reliable as the R450 database. We have had data
corruption issues as well as having to restore from backup a few times because the
database has crashed. We have not had these issues in the R450 system.
- Maintaining two sets of Mill types requires two completely different pieces of hardware
to manage, two IBM FTP transfer processes to manage, and two software pieces to
manage.
- Twice a month (billing routes 3 & 4 and 5 & 6) User Technology Specialist Jim
Vosberg has to run an additional process for the R900 MIU's. This process would take
him an extra hour each time because of having two different systems.
- Data in the R450 software is much more reliable, accurate, and robust that the data in
the R900 system.
- Reporting, as well as information that is given to the citizen (especially the
graphs) is far more complete and useful in the R450 software.
- The R450 runs on a virtual server, the R900 runs on a physical workstation. The
virtual server is much morestable, energy efficient, and easier to manage.
- Troubleshooting a R900 gateway issue is much more difficult than troubleshooting a
R450 collector. Because of the technology involved with the gateways and location of
them, Ken Fleege (from Racom) needs to get involved for gateway issues and this
incurs an expense — usually $200+ depending on the nature of the issue. We are able
to take care of most R450 collector issues in house, thus not incurring an additional
expense.
- The R900 gateway collectors require a cellular connection for the backhaul from the
collectors versus the fiber optic and wireless backhaul used for the R450 gateways.
The cellular connection costs the City $277 /month that would be saved if all of the R900
MIU's were converted to R450s.
In e-mail and telephone conversations with Milind Naphade Program Director, Smarter
City Services, Smarter Cloud Research Staff Member, Watson Research Center, Milind
stated the following rationale and information from IBM's perspective regarding the switch
from the R900 MIU to the R450 MIU:
1. Rationale for phasing out the R900s and moving to R450s.
Having a single meter reading data collection system simplifies the technical
infrastructure and data processing for IBM. The R450 MIU's will obviously have
20
coarser granularity of data. However having only 500 households with finer grained
data will not yield sustainability savings that are substantial.
2. Any cost savings or advantages that would come with moving to R450s.
The cost savings are in terms of simplifying the data processing and making it easier
for IBM to provide a single solution with the identical end to end processing for all
meters. The assumption is that there are greater cost savings to the city by
simplifying maintenance and management.
3. Timing requirements, and whether there is a reason to incur extra costs to
accomplish this by July 31st or if timing could be extended over a longer period (if
City needed the time to do the change -outs itself). There is no reason to incur extra
costs to accomplish this by July 31st. But it would be much easier for the water pilot
extension to start once all meters are in place than to have to incrementally change
meter types in the middle of the extension. If the decision is to sunset the R900s at
some point, it makes it difficult for IBM to justify maintaining a separate processing
pipeline for what is a temporary set of meters. Therefore it would make most sense to
not open the "city- wide" portal opportunity until the transition from the R900 to R450
is done.
ACTION STEP
Please review information as requested and utilize in your response to the City
Manager. Thank -you.
Cc: Ken Tekippe, Finance Director
David Lyons, Smarter City Project Manager
Milind Naphade Program Director, Smarter City Services, Smarter Cloud Research
Staff Member, Watson Research Center
21
Masterpiece on the Mississippi
TO: Bob Green, Water Department Manager
FROM: Ken TeKippe, Finance Director
Rose Hoerner, Utility Billing Supervisor
DATE: June 28, 2011
22
SUBJECT: Replacement of R900 Hybrid MIUs and Associated Software
Dubuque
kalkd
Ap-i'IntericaClty
r 11 r
2007
Utility Billing fields many inquiries from citizens regarding, among other things, unusual water
consumption. We believe one central database for all customers is most efficient. Currently
two separate databases are maintained and before data can be reviewed it must be determined
which MIU the customer has installed and then the appropriate software opened. Only 3 of the
8 computers in Utility Billing currently have the R900 system installed, mainly because of the
small number of R900 customers. Only one user is allowed to be logged in at any time, not only
in utility billing but system -wide. For instance if Information Services is logged in, Utility Billing
cannot log in and therefore assist a customer without contacting Information Services to log out.
Time would be saved responding to customers if only one system was needed. Six additional
license fees ($250.00 - $300.00 each) would be required if the R900 database were to be
installed on all UB computers.
In some cases, manual monthly reads of R900 MIUs are required. Several addresses simply do
not send reads frequently enough to be able to get even one read per month for billing. Foliage
seems to be a factor with read interference. This makes it impossible to investigate high or low
consumption concerns a customer has, and in effect, is no different from the manual readings
Black Hills Energy provided in the past. We have not seen this issue with R450 MIUs.
Inconsistent R900 data makes it more difficult to determine if a customer has a water leak.
There are no "flags" in the data which show if a continuous or intermittent flow of water is
detected in the customer service screens. In order to determine how much water a customer
uses based on readings, a manual calculation must be performed. There is not an area in the
R900 data which shows 15 minute, hourly or even daily consumption history. Without physically
creating a chart, this information cannot be shared with a customer if they request such data.
Consumption data is also a requirement for Utility Billing when determining leak adjustments to
accounts and Water Leak Repair reimbursements. We have found the R450 data to be much
easier to review and interpret, and saves time for both utility billing staff and customers. It has
the capability to compile graphs and charts which show usage patterns and consumption totals,
and can be printed or emailed and sent directly to the customer. This is not the same with R900
data. Missed readings and data out of order make this feature difficult or impossible to share
with customers, and requires more time from staff to confirm and validate reads and
consumption.
The only search option in the R900 database is to enter the 9 digit MIU number. With the R450
system, searches are available by customer name, address, utility billing account number and
MIU number. A considerably longer amount of time is spent searching for data in the R900
system than in the R450 system.
There are 2 billing routes whicbcontain both R900 and R450 MIUs. When this occurs (twice
per month) 2 sets of reports have to be generated and reviewed prior to billing. For other routes
which contain exclusively 8450 MIUs only 1 set up reports is necessary. Besides taking more
time to review, each setof reports hasdifferent thresholds and has to be interpreted
accordingly.
By utilizing one database Utility Billing will be able to provide more accurate, timely responses to
customer inquiries regarding water usage and requests from customers who are starting or
stopping service. In addition, training by Neptune during their next visit to Dubuque will not be
required, saving staff time.
Our service workers would be available to assist on the installs. Hopefully proceeds from the
sale of the gateways and R900 MIUs would partially offset the cost of approximately 500
additional R450 MIUs at $81.12 each. An addition, significant savings from not installing UFR
devices on all meters provides project funds to cover the outlay. A recap with IBM pilot program
information is attached.
In conclusion, Utility Billing strongly the replacement of R900 MIUs with R450 MIUs.
23
3190 Cedar. Cross Ct'
Duixtilue, 52003
563 - 583-2245
Fax 563- 583 -2460
www.raCoril.net
ken.fieege@racom.net
Removal of GPRS 900 water collectors 6- 29- 11.9em - Pnnled 829/2011
Critical Com;run canons
R900 Water Collector. Removal
Proposal Presented By: Ken Fleeqe - Manager Dubuque Operations
Proposal Accepted By: Date:
24
Proposal Prepared for: Chris Kohlmann
Address 50 W 13th Steet
_City Dubuque'
State & Zip Code Iowa 52001
COLIIty Dubuque
Phone/F -
Contact Name Chris Kohlmann
Contact E -mail CkohYran(dcita e.oro
Date: 6 -29 -11
- REM
12
PART NO. • • •
REMOVAL O)= 4
DESCRIPTION•`, •
REMOVE 900, SERVICEANTENNA AND 800 /1600 CELLULAR ANTENNA CABLING AND
MOUNTING HARDWARE. REMOVE SOLAR PANEL, HARDWARE, AND POWER CABLES
DISCONNECT AND REMOVE REMOVE BATTERY BOX AND'CABLING. UNDO
VAPOR-LOCKON CONNECTORS. REMOVE GPRS RADIO BOX, POLE WEDGE MOUNTS.
AND STRAPPING HARDWARE.. WHERE APPLiCABLE REMOVE ROOF MOUNTS AND CINDER.
BLOCKS, SCHEDULE WITH CITY ELECTRICAN`FOR USE OF BUCKET TRUCK.
THIS-WORK REFLECTS THE REMOVAL Of ALL 4 COLLECTORS
Terms of Purchase: PAYABLE AFTER COMPLETION
Tax Rate
UNIT
$ 88.00'
$' •
$..
Total Equ pment Price
Installation
Subtotal
Taxes
Shipping
Total
• .:EXTENDED
$' • .1,056.00
$'
1056.00
1,056.00
$'
$ 1,056.00
System Descrlption:REMOVE 2 POLE MOUNT GPRS COLLECTORS AND ALL COMPONENTS FROM FIRE SIREN
POLES. REMOVE 2 ROOF MOUNT GPRS COLLECTORS AND ALL COMPONENTS: TEAR DOWN ROOF
MOUNTS, AND REMOVE THE 8 CINDER BLOCKS FROM THE ROOFS OF EACH LOCATION. THIS COST REFLECTS
THE REMOVAL OF ALL 4 WATER COLLECTORS