REQUEST FOR COUNCIL ACTION CITY OF SAN DIEGO CERTIFICATE NUMBER (FOR COMPTROLLER’S USE ONLY) . TO: FROM (ORIGINATING DEPARTMENT): DATE: CITY COUNCIL Purchasing and Contracting 03/29/2012 SUBJECT: Water Meter Contracts PRIMARY CONTACT (NAME, PHONE): SECONDARY CONTACT (NAME, PHONE): William Broderick,(619)236-6653 Ed Plank, (619)236-6158 COMPLETE FOR ACCOUNTING PURPOSES FUND DEPT / FUNCTIONAL AREA ORG / COST CENTER OBJECT / GENERAL LEDGER ACCT JOB / WBS OR INTERNAL ORDER C.I.P./CAPITAL PROJECT No. AMOUNT 720040 1514120012 $0.00 0.00 0.00 0.00 0.00 FUND DEPT / FUNCTIONAL AREA ORG / COST CENTER OBJECT / GENERAL LEDGER ACCT JOB / WBS OR INTERNAL ORDER C.I.P./CAPITAL PROJECT No. AMOUNT 0.00 0.00 0.00 0.00 0.00 1514120012 511036 COST SUMMARY (IF APPLICABLE): Contracts are issued through Central Stores Fund (720040) Contracts combined value of $11.5 M AMI compatible Direct Read(Mueller) Direct Read(Badger) FY 2011 $2,484,155 $0 FY 2012 $ 842,338 $ 973,075 FY 2013 $1,173,507 $ 667,550 FY 2014 $ 500,000 $ 517,550 FY 2015 $ 500,000 $ 235,555 FY 2016 $0 $ 235,555 $ $0 $ 233,029 $1,067,400 $ 722,000 $ 674,143 674,143 ROUTING AND APPROVALS APPROVING CONTRIBUTORS/REVIEWERS: AUTHORITY Environmental Comptroller ORIG DEPT. Analysis Equal Opportunity CFO Contracting APPROVAL SIGNATURE Baer, Jeffrey DATE SIGNED 4/11/2012 Liaison Office Water Department Financial Management DEPUTY CHIEF Hill, Wally 5/15/2012 COO CITY ATTORNEY Jung, Jeremy 6/12/2012 COUNCIL Jurado-Sainz, Diana 6/14/2012 PRESIDENTS OFFICE PREPARATION OF: RESOLUTIONS ORDINANCE(S) AGREEMENT(S) DEED(S) 1. Ratify the current contract with Mueller Systems,LLC for the purchase of AMI compatible water meters through July 11, 2012 and authorize the Mayor, or his designee, to approve and execute three (3)-one (1) year extensions with a total contract amount not to exceed $ 5,500,000 total. 2. Authorize the Mayor to approve and execute four (4) one (1) year extensions to the existing contracts with Mueller Systems,LLC and Badger Meter for the purchase of direct read water meters with a total contract amount not to exceed $ 6,000,000 total. 3. Authorize the Chief Financial Officer to appropriate and expend in FY 2013 the amount not to exceed $1,173,507 for AMI compatible meters and $1,734,950 for direct read meters, in FY2014 the amount not to exceed $500,000 for AMI compatible meters and $1,239,550 for direct read meters, in FY2015 $500,000 for AMI and the amount not to exceed $909,698 for direct read meters and in FY2016 the amount not to exceed $909,698 for direct read meters from Central stores Revolving Fund 720040 contingent upon the passage of the Annual Appropriations Ordinance for the applicable fiscal year and provided that the City Comptroller first furnishes one or more certificates certifying that the funds necessary for expenditure are, or will be, on deposit with the City Treasurer. STAFF RECOMMENDATIONS: Adopt the Resolutions SPECIAL CONDITIONS (REFER TO A.R. 3.20 FOR INFORMATION ON COMPLETING THIS SECTION) COUNCIL DISTRICT(S): All COMMUNITY AREA(S): All ENVIRONMENTAL IMPACT: This activity is exempt from CEQA pursuant to State CEQA Guidelines Sections 15301 (existing facilities) and 15302 (replacement or reconstruction). CITY CLERK INSTRUCTIONS: COUNCIL ACTION EXECUTIVE SUMMARY SHEET CITY OF SAN DIEGO DATE: 03/29/2012 ORIGINATING DEPARTMENT: Purchasing and Contracting SUBJECT: Water Meter Contracts COUNCIL DISTRICT(S): All CONTACT/PHONE NUMBER: William Broderick/(619)236-6653 DESCRIPTIVE SUMMARY OF ITEM: The Purchasing and Contracting Department (P&C) procures AMI (Advanced Metering Infrastructure)and direct read water meters in support of the Public Utilities Department through the Central Stores Inventory Fund. Based on separate competitive bid processes in 2010 and 2011 the City contracted with Mueller Systems,LLC and Badger Meters for both types of meters. Based on extensive increases in utilization of meters in 2011 as well as current projections for future replacements, authorization to increase the maximum contract values for both AMI compatible and direct read meter contracts is requested to ensure availability of meters for ongoing replacement. STAFF RECOMMENDATION: Adopt the Resolutions EXECUTIVE SUMMARY OF ITEM BACKGROUND: The Purchasing and Contracting Department (P&C) procures AMI (Advanced Metering Infrastructure) compatible and direct read water meters in support of the Public Utilities Department. These water meters are purchased through the Central Stores Inventory Fund, fund 720040, and allow Public Utilities Department to continue the planned water meter replacement program and to handle reactive repairs as needed. All contracts with Mueller Systems,LLC and Badger are of an indefinite quantity type contracts. In accordance with the Muni Code, Purchasing and Contracting Department issued a Request for Bid (RFB) with a closing date of May 27, 2010 to furnish the City of San Diego with AMI compatible water meters. Bid #10007038-10W resulted in an award to multiple companies for different meter types and sizes, all equipped with AMI registers. The most used meters were awarded to Hersey Meters, a Division of Muellers Company on 7/12/2010. Subsequently Muller Systems, LLC has merged with Hersey Meters Co. LLC A subsequent Request for Bid for direct read water meters with a closing date of May 31, 2011 was also issued by Purchasing and Contracting Department. The second RFB, Request for Bid 10015515-11W, also resulted in awards to multiple companies (including Mueller Systems,LLC and Badger Meter), based on price, for various sized direct read meters. The Public Utilities Department continues to evaluate the deployment of AMI technology throughout the system. AMI technology generally provides utilities with remote meter reading capabilities such that meters are read electronically rather than through direct visual inspection by field staff. Meters are replaced with AMI compatible or direct read meters based on the expected future system needs and the most cost effective approach available. As a result, extensive increases in utilization of AMI compatible meters occurred during 2011 which has exceeded the Muni Code authority under the Mueller AMI compatible meter contract. P&C in conjunction with the Public Utilities Department prepared a Request for Council Action to increase the contract authority which was presented to the Budget and Finance Committee in November 2011. Based on subsequent review of meter replacement projections by the Public Utilities Department it was determined that the requested increase in contract dollar value to $2.8 million was not sufficient to meet the department’s meter replacement needs through FY 2015. Based on the replacement activity which has occurred and the projected needs for the next 3 years, this item requests the Hersey AMI compatible meter contract be increased to $5,500,000 and that a contract extension through July 11, 2012 be ratified and three additional extensions up to a five year term ending in 2015 be authorized. The Public Utilities Department continues to install direct read meters as well as AMI compatable since direct read meters are less costly for the typical residential meter. The residential water customers are not anticipated to be included in the future deployment of AMI technology. However direct read meters can be retrofit with an AMI register to provide automated read capability if necessary. The meter body and internal measuring components for direct read and AMI compatible meters are the same. Based on current projections for direct read meter utilization this item requests the Hersey direct read meter and Badger Meter contracts be increased to $2,629,285,and $3,370,715 respectively for a combined total of not to exceed $6,000,000 and that the Mayor be authorized to execute contract extensions up to a five year term ending in 2016 with both contracts having four, one year extensions available to the City. FISCAL CONSIDERATIONS: The contracts are issued through the Central Stores Inventory Fund (720040). All funding is contingent upon the adoption of each Fiscal Year's Annual Appropriation Ordinance and contingent upon the City Comptroller furnishing one or more certificates certifying that the funds necessary for expenditure under the established contracts are, or will be on deposit with the City Treasurer. AMI compatible Meters Direct Read Meters Direct Read Meters (Mueller Systems,LLC) (Badger) FY11 $ 2,484,155 $ 0 FY12 $ 842,338 $ 973,075.00 FY13 $ 1,173,507 $ 667,550.00 FY14 $ 500,000 $ 517,550.00 FY15 $ 500,000 $ 235,555.00 FY16 $ 0 $ 235,555.00 $ 233,029 $1,067,400 $ 722,000 $ 674,143 $ 674,143 ENVIRONMENTAL STATEMENT: This activity is exempt from CEQA pursuant to State CEQA Guidelines Sections 15301 (existing facilities and 15302 (replacement or reconstruction) EQUAL OPPORTUNITY CONTRACTING INFORMATION (IF APPLICABLE): This agreement is subject to the City’s Equal Opportunity Contracting (San Diego Ordinance No. 18173, Section 22.2701 through 22.3501 22.2708 and Non-Discrimination in Contracting Ordinance (San Diego) Municipal Code Sections 22.3501 through 22.3517 PREVIOUS COUNCIL and/or COMMITTEE ACTION (describe any changes made to the item from what was presented at committee): An item to extend and increase the Mueller Systems,LLC, AMI compatible meter contract authorization was docketed at Budget and Finance Committee on November 16, 2011. The commitee approved the item to be moved to full council. Based upon subsequent review of meter replacement projections by the Public Utilities Department it was determined that the requested increase in contract authorization was not sufficient to meet the department’s meter replacement needs. As a result, this item, which comprehensively addresses both AMI compatible and direct read meters was prepared for Council consideration. This item will be presented to the Budget and Finance Committee in May 2012. COMMUNITY PARTICIPATION AND PUBLIC OUTREACH EFFORTS: NA KEY STAKEHOLDERS AND PROJECTED IMPACTS: Mueller Systems,LLC, Badger Meter, City of San Diego Facilities and project sites Baer, Jeffrey Originating Department Hill, Wally Deputy Chief/Chief Operating Officer