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SR 09-26-2023 5H City Council Report City Council Meeting: September 26, 2023 Agenda Item: 5.H 1 of 4 To: Mayor and City Council From: Rick Valte, Public Works Director, Public Works, Water Resources Subject: Award Purchase Order with Badger Meter, Inc. to Furnish and Deliver Water Meters Recommended Action Staff recommends that City Council: 1. Adopt a finding of categorical exemption pursuant to Section 15302 (Replacement or Reconstruction) of the California Environmental Quality Act (CEQA) Guidelines. 2. Authorize the Procurement Manager to issue a purchase order with Badger Meter, Inc. for the purchase of positive-displacement water meters for the Water Resources Division of the Public Works Department. This recommended award is made as an exception to the competitive bidding process pursuant to Santa Monica Municipal Code (SMMC) Section 2.24.250(b) and is for a total amount not to exceed $1,658,000 over a five-year period, with future year funding contingent on Council budget approval. 5.H Packet Pg. 1079 2 of 4 Summary The City of Santa Monica’s Water Resources Division is charged with providing safe and reliable water and wastewater services to all residential, commercial, and institutional accounts within the City of Santa Monica. Each account is connected to the city water supply through a water meter that registers usage for bimonthly billing for water and wastewater services. New meters are installed for new construction projects and to replace aging meters on an approximate 20-year cycle to ensure the accuracy of meter reads and billing. Staff recommends issuing a purchase order with Badger Meter in an amount not to exceed $1,658,000 over a five-year period for the purchase of positive-displacement water meters along with data transmissions fees to transmit customer water usage data for billing. Discussion The City owns and maintains over 18,000 water meters throughout its water distribution system which are used to record water usage so that the Billing and Collections Office in the Revenue Division of the Finance Department may establish the quantity of water used and wastewater discharged to be billed to the customer. Water meters contain mechanical components which deteriorate over time, resulting in a loss of accuracy as water passes through the meter without being registered. Replacing meters on a timely basis can reduce water losses or “non-revenue” water from the City’s distribution system. New meters are also requested for new construction or tenant improvements through the Public Works Department permit counter. The City recovers the cost for the new meter purchases and installations through permit fees. On August 23, 2022, City Council awarded an agreement to Badger Meter, Inc. to remove and replace approximately 65 percent of the City’s existing meters and equip 100 percent of the City’s meters with Advanced Metering Infrastructure (AMI)-ready water meters (“AMI project.”) The AMI project will enhance customer experience by providing real-time monitoring of their water usage and leak alerts. The completion of the AMI project in late 2026 will result in modernizing the majority of the City’s existing water meters to Badger AMI-equipped advanced water meters. 5.H Packet Pg. 1080 3 of 4 Approximately 35% of the meters will not be replaced through the AMI project as they were either already AMI ready, scheduled for replacement prior to the AMI project, or were replaced within the last 7 years. Eventually all of the City’s water meters would be replaced with Badger meters with data transmitting abilities. The purchase order requested is for operational maintenance and replacement of the existing badger meters not replaced during the AMI project and any new meters requested to be installed by water customers. Vendor Selection This purchase order is being requested under the exception to the competitive bidding process for maintenance of the city’s meters (e.g., defective meters) and installation of new meters for new construction that are not covered by the AMI project. Exception to Competitive Bidding Staff recommends Badger Meter, Inc. to furnish and deliver positive-displacement water meters as an exception to competitive bidding per Muni Code 2.24.250 (b). This purchase meets the City’s exception to the competitive criteria (b), as the meters are proprietary to Badger. b. when a good or service is copyrighted, patented or only available form one license holder, including, proprietary goods, original equipment manufacturers and/or exclusive distributors. Environmental Review The replacement of water meters is categorically exempt pursuant to Section 15302 (Replacement and Reconstruction) of the California Environmental Quality Act (CEQA) Guidelines. Section 15302 exempts Class 2 projects which “consists of replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced”. The new water meters would replace existing meters with essentially the same purpose and capacity, and therefore, the award for replacement water meters is categorically exempt from CEQA. Past Council Actions 5.H Packet Pg. 1081 4 of 4 Meeting Date Description 8/23/2022 (Attachment A) Bid Award for Advanced Metering Infrastructure (AMI) Meter Replacement Financial Impacts and Budget Actions Staff seeks authority to approve available funding from the Water Fund to award a purchase order to Badger Meter, Inc. for the purchase of positive-displacement water meters. Purchase Order Request FY 2023-24 Request Amount Department Account # Future Years Amount Total Contract Amount $300,000 50500001.525080 $1,358,000 $1,658,000 Future year funding is contingent on Council budget approval. Prepared By: Thomas Poon, Senior Administrative Analyst Approved Forwarded to Council Attachments: A. Staff Report - August 23, 2022 B. Oaks Initiative Form - Badger Meter, Inc. 5.H Packet Pg. 1082 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.H.a Packet Pg. 1083 Attachment: Staff Report - August 23, 2022 (5916 : Badger Water Meters) 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.H.a Packet Pg. 1084 Attachment: Staff Report - August 23, 2022 (5916 : Badger Water Meters) 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.H.a Packet Pg. 1085 Attachment: Staff Report - August 23, 2022 (5916 : Badger Water Meters) 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.H.a Packet Pg. 1086 Attachment: Staff Report - August 23, 2022 (5916 : Badger Water Meters) 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.H.a Packet Pg. 1087 Attachment: Staff Report - August 23, 2022 (5916 : Badger Water Meters) 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 personwhois:(a)trustee,(b)director,(c)partner,(d) officer,orhas(e)morethan a ten percent interest in theentity. Public benefits include: 1.Personal services contracts in excess of $25,000 over any 12-monthperiod; 2.Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-monthperiod; 3.Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- monthperiod; 4.Non-competitive franchise awards with gross revenue of $50,000 or more inany 12-monthperiod; 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-monthperiod. 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: Permit # FOR CITY USE ONLY: Bid/PO/Contract # Kim K. Stoll Vice President - Sales & Marketing 08/09/2023 bids@badgermeter.com (800)876-3837 Badger Meter, Inc. None Refer to Attached List 5.H.b Packet Pg. 1088 Attachment: Oaks Initiative Form - Badger Meter, Inc. (5916 : Badger Water Meters) BADGER METER, INC. BOARD OF DIRECTORS 2/2023 Kenneth C. Bockhorst •Chairman, President and Chief Executive Officer: Badger Meter, Inc. Todd A. Adams •Chairman, President and Chief Executive Officer: Rexnord Gale E. Klappa •Non-executive Chairman: WEC Energy Group Gail A. Lione •Senior Counsel: Dentons •Adjunct Professor of Intellectual Property Law: Georgetown University School of Law •Retired Executive Vice President, General Counsel and Corporate Secretary & Chief Compliance Officer: Harley-Davidson Corporation James W. McGill •Retired Executive – Eaton Corporation Tessa Myers •Global Vice President- Software & Control: Rockwell Automation James F. Stern •Executive Vice President, General Counsel and Secretary: A.O. Smith Corporation Glen E. Tellock •President and Chief Executive Officer: Lakeside Foods Henry F. Brooks •President - Power & Controls, Collins Aerospace (Raytheon Technologies Corporation) 5.H.b Packet Pg. 1089 Attachment: Oaks Initiative Form - Badger Meter, Inc. (5916 : Badger Water Meters) Badger Meter, Inc. Corporate Officers December 22, 2023 Elected Executive Officers: Kenneth C. Bockhorst President and Chief Executive Officer Robert A. Wrocklage Sr. 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 Sheryl L. Hopkins 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*: Jennifer A. Awah-Manga Assistant Secretary Proposal Lead – Bid & Contract Administration Joanne K. Crumer-Pascale Assistant Treasurer Milwaukee Accounting Manager Wayne Dennis Assistant Secretary Senior Director – International Sales and Marketing and Business Development Charla D. Dury Assistant Secretary Proposal Lead – Bid & Contract Administration Frank J. Fenton Assistant Secretary Director – Utility Sales Charity Granberry Assistant Treasurer Milwaukee Accounting Manager David A. Kutil Assistant Treasurer Director – Accounting & External Reporting Benjamin E. Loomis Assistant Secretary Milwaukee Credit Manager David A. Miller Assistant Secretary Counsel I Pamela G. Stokke-Ceci Assistant Secretary Assistant General Counsel and Director *Scope of authority for Assistant Secretaries determined by job description and duties, as approved by the Corporation’s Secretary 5.H.b Packet Pg. 1090 Attachment: Oaks Initiative Form - Badger Meter, Inc. (5916 : Badger Water Meters)