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SR 08-23-2022 5M City Council Report City Council Meeting: August 23, 2022 Agenda Item: 5.M 1 of 5 To: Mayor and City Council From: Rick Valte, Public Works Director, Public Works, Water Resources Subject: Award Bid and Enter Into an Agreement with Badger, Inc. for AMI Smart Water Meters & Cloud-Based Interface Recommended Action Staff recommends that the City Council: 1. Award RFP# 320 to Badger Meter, Inc. to deliver, replace and install approximately 12,444 Advanced Metering Infrastructure (AMI) ready water meters along with AMI encoders and provide a cloud-based interface for an AMI System for the Public Works Department; 2. Authorize the City Manager to negotiate and execute an agreement with Badger Meter, Inc., in the amount not to exceed $13,500,000 (including 15% contingency). 3. Authorize the City Manager to negotiate and execute a Software as a Service (SaaS) Agreement with Badger Meter, Inc. in the amount not to exceed $300,000 over a five-year period. Summary The City’s Public Works Department – Water Resources Division delivers high-quality drinking water to approximately 18,400 metered water connections in the City. The current water meters are read manually on a bi-monthly schedule to bill each customer for their water use. For example, a customer’s June water bill is for water that is consumed during the prior two months (April and May). The Water Resources Division issued a request for proposals (RFP) for an Advanced Metering Infrastructure (AMI) system or smart water meters. The AMI Project was approved in the City’s CIP Budget and is funded through the 2021 Water Revenue Bonds. The AMI is a cloud-based system that transmits data via cellular network in near real time. The AMI system includes the replacement of aging non-AMI compatible meters, meter box lids, 5.M Packet Pg. 149 2 of 5 installation of cellular data transmitters (encoders) on every meter, data migration capability to the City’s billing software and a customer water monitoring portal. Because the AMI provides real time information on water usage it allows for improved leak detection, which would significantly improve the City’s water conservation efforts, and provide customers with the ability to track their water use on a daily basis. Past studies have demonstrated that AMI systems could provide 5-7% in water savings from reduced residential water leaks. Long term benefits of the AMI system include more efficient billing, and improved accuracy in meter reads. Staff recommends that RFP #320 be awarded to Badger Meter, Inc. and that an agreement be negotiated and executed for the AMI System. Discussion Over the past five years, the Water Resources Division has conducted three independent AMI pilot tests utilizing different technologies. The current pilot test has been expanded and over 5% of the City’s water meters currently have AMI transmitters installed. The City’s meters are divided into 51 meter reading routes based on geographic location. As part of the pilot project, AMI transmitters have been fully installed in one of these routes and the data is currently being electronically transmitted into the City’s billing software and used for billing. This contract award is for the full- scale implementation of an AMI system for the City’s 18,400 meters. The manual meter reading for the approximately 18,400 meters in the service area is performed on a bi-monthly schedule. Identifying hidden leaks or excessive water usage based on water consumption in a timely manner is difficult due to the meter reading cycle of 60 days. It takes one or two billing cycles, up to 120 days, for a leak or excessive usage to be identified from the meter reads. The end result is excessive water loss/usage and a high water bill due to this time delay. An AMI system would allow the customer to monitor their individual water usage and create alerts, via cell phone or e-mail, to notify them within a day or two of a potential water leak. 5.M Packet Pg. 150 3 of 5 The savings and efficiency benefits of the AMI system are mostly realized on the customer’s end from early detection of water leaks to real-time monitoring of daily water usage to minimize their water costs. The AMI system also provides cost savings to the City (estimated at $290,000 annually) by reducing the City’s reliance on more costly imported water and contractual services for meter reading. The best qualified bidder, Badger Meter Inc., proposed a comprehensive scope of services to fully convert the City’s water metering infrastructure to an AMI system. The scope of services includes: • Replacing approximately 12,444 water meters and upgrading them with AMI compatible water meters (approximately 67% of the total number of meters, the remaining 33% are AMI compatible and less than 8 years of age and do not need to be replaced),; • Installation of cellular AMI transmitters (referred to as encoders) on new meters as well as meters in the system that are compatible; • Replacement/modification of meter box lids to allow for cellular signal transmission; • Staging and storage facilities for project implementation; • Migration of data into the City’s billing system, and • A customer portal to improve the customer’s experience in understanding their water usage. The additional services offered by Badger Meter Inc. include a two-year cellular subscription fee and conducting a service line material survey during meter replacement for both the public and private side of the water service connection to replace lead service lines in compliance with the Environmental Protection Agency’s Lead and Copper Rule Revisions. Majority of the project costs are one-time costs to convert the City’s current water meter infrastructure to AMI. The lowest bid, Metron-Farnier, was not as comprehensive as the other three bids because it did not include the cost of the AMI compatible water meters and labor for installation. 5.M Packet Pg. 151 4 of 5 Vendor Selection Bidder Recommendation Best Bidder Badger Meter, Inc. Evaluation Criteria • Experience – 20% of total score • Technical Competence – 20% of total score • Ability to Meet Project Work Plan and Timeliness – 20% of total score • References – 10% of total score • Cost of Services, Cost Control – 30% of total score Municipal Code SMMC 2.24.190 Submittals Received Vendor Base Scope of Services Additional Services Total Aqua-Metrics Sales Company $11,345,202 $407,717 $11,752,919 Badger Meter, Inc. $11,305,418 $426,247 $11,731,665 Ferguson Waterworks $13,986,434 $0 $13,986,434 Metron-Farnier $6,198,3104 $0 $6,198,310 Bid Data Date Posted Posted On Advertise In City Charter & SMMC Vendors Downloaded Date Publicly Opened 5/9/2022 City’s Online Bidding Site Santa Monica Daily Press 47 June 10, 2022 Best Bidder Justification The proposals were reviewed by a selection panel consisting of staff from the Public Works Department – Water Resources Division. Evaluations were based on the following selection criteria: Experience; Technical Competence; Ability to Meet Project Work Plan and Timeliness; References; and Cost of Services, Cost Control. Based on these criteria, the selection panel unanimously ranked Badger Meter as the best qualified firm to provide the City with an AMI system. Badger Meter has successfully deployed over 10 million ORION endpoints for more than 3,000 utilities. They are the firm which provides the lowest cost while providing all the components for a successful deployment of an AMI system. The lowest bidder, Metron-Farnier, did not meet the full scope of services requirements as the bid only includes the AMI cellular transmitters and customer portal while the water meters were not included. Financial Impacts and Budget Actions Staff seeks authority to approve funding from the Water Fund to award a contract with 5.M Packet Pg. 152 5 of 5 Badger Meter, Inc for implementation of the AMI system in the City and ongoing software maintenance costs for the cloud-based portal. The initial capital outlay, which includes a 15% contingency, is being funded through proceeds from the 2021 Water Revenue Bond issuance, and staff seeks authority to approve use of bond proceeds to fund the award. Ongoing annual software maintenance costs will be funded through the Water Fund’s operating budget. Contract Request FY 2022-23 Request Amount CIP Account # Total Contract Amount $13,500,000 C5008200.689740 $13,500,000 $36,432 505000001.550010 $300,000 $13,436,432 Total $13,800,000 Prepared By: Chris Aguillon, Water Resources Protection Specialist Approved Forwarded to Council Attachments: A. Oaks Initiative Disclosure (Badger) B. Written Comment 5.M Packet Pg. 153 CITY OF SANTA MONICA OAKS INITIATIVE DISCLOSURE FORM In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Public benefits include: 1. Personal services contracts in excess of $25,000 over any 12-month period; 2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period; 3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period; 4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period; 5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000; 6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or 7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period. Name(s) of persons or entities receiving public benefit: Name(s) of trustees, directors, partners, and officers: Name(s) of persons with more than a 10% equity, participation, or revenue interest: Prepared by: ____________________________Title: __________________________ Signature: ______________________________________ Date: ________________ Email: ____________________________________ Phone: ____________________ FOR CITY USE ONLY: Bid/PO/Contract # ____________________________ Permit # ___________________________ ______________ Korrine L. Fleming Assistant Secretary June 10, 2020 bids@badgermeter.com 414-371-2728 Badger Meter, Inc. - On November 1, 2019, DBA National Meter & Automation is re-branded as Badger Meter, Inc. See Attached See Attached July 20, 2021July8, 2022 5.M.a Packet Pg. 154 Attachment: Oaks Initiative Disclosure (Badger) (4945 : Award AMI Smart Water Meter Bid) 081518 CERTIFICATION OF SIGNATURE AUTHORITY I certify as follows: By Board Resolution adopted by the Board of Directors of Badger Meter, Inc. and in full force and effect as of this date: The following elected executive officers are, among other things, hereby authorized to execute, amend, and cancel bids and contracts for the sale of products, distributor and representative agreements, bid bonds, surety bonds, contracts, leases and certain other legally binding documents in the ordinary course of business, in the name of Badger Meter, Inc. Kenneth C. Bockhorst Chairman, President and Chief Executive Officer Robert A. Wrocklage Senior Vice President - CFO Kimberly K. Stoll Vice President – Sales and Marketing William R. A. Bergum Vice President – General Counsel & Secretary The following elected non-executive officers are hereby authorized to execute, amend, and cancel bids, bid-related contracts and documents, requests for proposals and quotes, and all other bid-related documentation in the name of Badger Meter, Inc. Charla D. Dury Assistant Secretary Proposal Specialist – Bid and Contract Administration Frank J. Fenton Assistant Secretary Director – Utility Sales Korrine L. Fleming Assistant Secretary Manager – Bid and Contract Administration Nathaniel R. Hawley Assistant Secretary Director – Distribution Operations Rebecca L. Loomans Assistant Secretary Proposal Lead – Bid and Contract Administration Christopher D. Washington Assistant Secretary Supervisor - Bid and Contract Administration Maikou Yang Assistant Secretary Proposal Lead – Bid and Contract Administration BY: ________________________ Date William R. A. Bergum, Vice President - General Counsel & Secretary Badger Meter, Inc. -XQH 5.M.a Packet Pg. 155 Attachment: Oaks Initiative Disclosure (Badger) (4945 : Award AMI Smart Water Meter Bid) BADGER METER, INC. BOARD OF DIRECTORS 6/7/20 Kenneth C. Bockhorst x President and Chief Executive Officer: Badger Meter, Inc. Todd A. Adams x President and Chief Executive Officer: Rexnord Thomas J. Fischer x Principal: Fischer Financial Consulting LLC Gale E. Klappa x Non-executive Chairman: WEC Energy Group Gail A. Lione x Senior Counsel: Dentons x Adjunct Professor of Intellectual Property Law: Georgetown University School of Law x Retired Executive Vice President, General Counsel and Corporate Secretary & Chief Compliance Officer: Harley-Davidson Corporation Richard A. Meeusen x Chairman, and Retired Chief Executive Officer: Badger Meter, Inc. Tessa Myers x Regional President- North America: Rockwell Automation James F. Stern x Executive Vice President, General Counsel and Secretary: A.O. Smith Corporation Glen E. Tellock x President and Chief Executive Officer: Lakeside Foods Todd J. Teske x Chairman, President and Chief Executive Officer: Briggs & Stratton Corporation 5.M.a Packet Pg. 156 Attachment: Oaks Initiative Disclosure (Badger) (4945 : Award AMI Smart Water Meter Bid) Badger Meter, Inc. Corporate Officers April 21, 2020 Elected Executive Officers: Kenneth C. Bockhorst President and Chief Executive Officer Robert A. Wrocklage Vice President – Chief Financial Officer Karen M. Bauer Vice President – Investor Relations, Corporate Strategy and Treasurer Fred J. Begale Vice President – Engineering William R.A. Bergum Vice President – General Counsel and Secretary Gregory M. Gomez Vice President – Global Flow Instrumentation and International Utility Trina L. Jashinsky Vice President – Human Resources William J. Parisen Vice President – Global Operations Kimberly K. Stoll Vice President – Sales and Marketing Daniel R. Weltzien Vice President – Controller Elected Non-Executive Officers*: Joanne K. Crumer-Pascale Assistant Treasurer Milwaukee Accounting Manager Charla D. Dury Assistant Secretary Project Manager – Bid & Contract Admin. Frank J. Fenton Assistant Secretary Director – Utility Sales Korrine L. Fleming Assistant Secretary Manager– Bid & Contract Admin. Nathaniel R. Hawley Assistant Secretary Director – Distributor Administration David A. Kutil Assistant Treasurer Director – Accounting & External Reporting Rebecca L. Loomans Assistant Secretary Proposal Lead – Bid & Contract Admin. Benjamin E. Loomis Assistant Secretary Milwaukee Credit Manager Pamela G. Stokke-Ceci Assistant Secretary Assistant General Counsel and Director Christopher D. Washington Assistant Secretary Supervisor – Bid & Contract Admin. *Scope of authority for Assistant Secretaries determined by job description and duties, as approved by the Corporation’s Secretary 5.M.a Packet Pg. 157 Attachment: Oaks Initiative Disclosure (Badger) (4945 : Award AMI Smart Water Meter Bid) Badger Meter, Inc. Company Ownership of Five Percent and Greater February 28, 2019 Shareholders of Common Stock Percentage Interest in Shareholders’ Equity BlackRock, Inc. 55 E. 52nd St. New York, NY 10055 14.7% The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355 11.2% Kayne Anderson Rudnick Investment Management, LLC 1800 Ave. of the Stars, 2nd Fl. Los Angeles, CA 90067 6.4% Badger Meter obtains the shareholder ownership information from the SEC 13-F forms filed by holders no later than 45 days after each quarter end, and compiled by an outside service provider. 5.M.a Packet Pg. 158 Attachment: Oaks Initiative Disclosure (Badger) (4945 : Award AMI Smart Water Meter Bid) 1 Vernice Hankins From:Tricia Crane <1triciacrane@gmail.com> Sent:Monday, August 22, 2022 6:49 PM To:councilmtgitems; Gleam Davis; Oscar de la Torre; Sue Himmelrich; Kristin McCowan; Lana Negrete; Christine Parra; Phil Brock; david.white@santamonic.gov; Santa Monica City Manager's Office; Sunny Wang Subject:Council Agenda Item 5-M, Aug. 23, 2022: Proposal to Implement Citywide Smart Water Meter & Cloud-Based Interface EXTERNAL  To: Santa Monica City Council  From: Tricia Crane  Re: Support for Agenda Item 5-M. - Award Bid and Enter into an Agreement with Badger, Inc. for AMI Smart Water Meters & Cloud-Based Interface  Council meeting of August 23, 2022  Dear City Council,  As a beneficiary of a Smart Water meter pilot project some years ago, I feel strongly that a citywide plan would be highly beneficial. It was because of the real-time tracking made possible by the smart meter installed at our home that we were able to identify a leak and make a simple and inexpensive repair that saved money and water. Smart water meters implemented citywide will allow all residents to identify and track leaks in their system in real time. This has value.  However, I do think the City should direct staff to present data that makes plain what the cost of the proposed system will be. It appears that the cost will be $1,079 per meter ($13,436,432 ÷ 12,444 meters). Council would be wise to ask Staff to provide budget data that comments on the per unit cost with the preferred provider as well as information on the performance of that provider with other cities with which it has contracted for the same system.  There is another matter that should be discussed in a public meeting: These units depend on WiFi. We need to know whether the city’s network can handle this system. The current WiFi coverage in the city looks sparse. If we must build out WiFi to support the full use and benefit of this system, is that expense covered in the cost?  Item 5.M 08/23/22 1 of 5 Item 5.M 08/23/22 5.M.b Packet Pg. 159 Attachment: Written Comment (4945 : Award AMI Smart Water Meter Bid) 2 Thank you  Tricia Crane  Item 5.M 08/23/22 2 of 5 Item 5.M 08/23/22 5.M.b Packet Pg. 160 Attachment: Written Comment (4945 : Award AMI Smart Water Meter Bid) 1 Vernice Hankins From:NSA <eltheous@roadrunner.com> Sent:Monday, August 22, 2022 8:52 PM To:councilmtgitems Subject:Agenda Item 5.M -- Smart Water Meters EXTERNAL    Many of us Santa Monica residents are severely sensitive to EMF waves.   My bedroom window is right next to the water  meter.    Please do not approve any Smart Water Meter contract that does not allow residents to opt out of having smart water  meters.    Opting out of smart water meters should also be free.    thank you    Marion Goldfarb  Item 5.M 08/23/22 3 of 5 Item 5.M 08/23/22 5.M.b Packet Pg. 161 Attachment: Written Comment (4945 : Award AMI Smart Water Meter Bid) 1 Vernice Hankins From:Elizabeth Van Denburgh <emvandenburgh@gmail.com> Sent:Monday, August 22, 2022 11:09 PM To:councilmtgitems; Sue Himmelrich; Kristin McCowan; Christine Parra; Oscar de la Torre; Lana Negrete; Phil Brock; Gleam Davis Cc:David White Subject:City Cnl. Meeting 8/23/22 - Pull Consent Calendar Item M - AMI Smart Water Meters & Cloud-Based Interface - Further analysis and explanation needed for multifamily buildings EXTERNAL    Mayor Himmelrich and City Council members,    I request that you pull Consent Item M ‐ Award Bid and Enter into an Agreement with Badger Inc. for AMI Smart Water  Meters & Cloud‐Based Interface for further analysis.  While the advantages of smart meters for electricity are clear  because almost every unit in the city be it a single family home, apartment, condo, duplex or triplex has its own  electricity meter so each owner/renter has greater visibility and thereby control over their usage.  With water meters,  the vast majority of apartment buildings and condos have a single water meter i.e., a single bill for a multifamily  building.  How will the outlay of $13,500,000 (not including staff time and expenses) improve the ability of multifamily  buildings to save water and thus water cost if there continues to be only one water meter in the building.  For single  family homes, I understand that it has been somewhat helpful to find leaks, but it will provide no help for multifamily  buildings to better understand their water usage due to a single meter handling the entire building.  How does installing  new smart water meters help multifamily buildings reduce their water usage and help save money?  $13.5 million  dollars is alot of money to spend to find leaks and then there is the $300,000 Software as a Service (SaaS) cost/five  years.     On the top of page 3 of 5 of the staff report it states: "The savings and efficiency benefits of the AMI system are mostly  realized on the customer's end from early detection of water leaks to real‐time monitoring of daily water usage to  minimize their water costs,"  Can the water department explain how that will be done by multifamily buildings that only  have one water meter?  70% of Santa Monica residents are renters with landlords with condos being created from  converted apartment buildings.   How does this help them save money?  Both renters and landlords and condo  owners?  If it doesn't, then I don't see the cost/benefit penciling out of this capital cost.    Regards,  Elizabeth Van Denburgh  Item 5.M 08/23/22 4 of 5 Item 5.M 08/23/22 5.M.b Packet Pg. 162 Attachment: Written Comment (4945 : Award AMI Smart Water Meter Bid) 1 Vernice Hankins From:news4jd@verizon.net Sent:Tuesday, August 23, 2022 11:55 AM To:councilmtgitems; Sue Himmelrich; Kristin McCowan; Christine Parra; Oscar de la Torre; Lana Negrete; Phil Brock; Gleam Davis Cc:David White Subject:Fwd: City Cnl. Meeting 8/23/22 - Pull Consent Calendar Item M - AMI Smart Water Meters & Cloud- Based Interface - Further analysis and explanation needed for multifamily buildings EXTERNAL    Dear City Council Members, I support the email below. I can add additional comments to support this request, but this says it very well. Thank you. John Dahl ---------- Forwarded message --------- From: Elizabeth Van Denburgh <emvandenburgh@gmail.com> Date: Mon, Aug 22, 2022 at 11:09 PM Subject: City Cnl. Meeting 8/23/22 - Pull Consent Calendar Item M - AMI Smart Water Meters & Cloud-Based Interface - Further analysis and explanation needed for multifamily buildings To: <councilmtgitems@santamonica.gov>, Sue Himmelrich <sue.himmelrich@santamonica.gov>, <kristin.mccowan@santamonica.gov>, Christine Parra <christine.parra@santamonica.gov>, Oscar de la Torre <oscar.delatorre@santamonica.gov>, <lana.negrete@santamonica.gov>, Phil Brock <phil.brock@santamonica.gov>, <gleam.davis@santamonica.gov> Cc: David White <david.white@santamonica.gov> Mayor Himmelrich and City Council members, I request that you pull Consent Item M - Award Bid and Enter into an Agreement with Badger Inc. for AMI Smart Water Meters & Cloud-Based Interface for further analysis. While the advantages of smart meters for electricity are clear because almost every unit in the city be it a single family home, apartment, condo, duplex or triplex has its own electricity meter so each owner/renter has greater visibility and thereby control over their usage. With water meters, the vast majority of apartment buildings and condos have a single water meter i.e., a single bill for a multifamily building. How will the outlay of $13,500,000 (not including staff time and expenses) improve the ability of multifamily buildings to save water and thus water cost if there continues to be only one water meter in the building. For single family homes, I understand that it has been somewhat helpful to find leaks, but it will provide no help for multifamily buildings to better understand their water usage due to a single meter handling the entire building. How does installing new smart water meters help multifamily buildings reduce their water usage and help save money? $13.5 million dollars is alot of money to spend to find leaks and then there is the $300,000 Software as a Service (SaaS) cost/five years. On the top of page 3 of 5 of the staff report it states: "The savings and efficiency benefits of the AMI system are mostly realized on the customer's end from early detection of water leaks to real-time monitoring of daily water usage to minimize their water costs," Can the water department explain how that will be done by multifamily buildings that only have one water meter? 70% of Santa Monica residents are renters with landlords with condos being created from converted apartment buildings. How does this help them save money? Both renters and landlords and condo owners? If it doesn't, then I don't see the cost/benefit penciling out of this capital cost. Regards, Elizabeth Van Denburgh Item 5.M 08/23/22 5 of 5 Item 5.M 08/23/22 5.M.b Packet Pg. 163 Attachment: Written Comment (4945 : Award AMI Smart Water Meter Bid)