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Home My WebLink AboutH-2 Staff Report - Approval of Advanced Metering Infrastructure Purchase Order and Budget AmendmentCONSENT CALENDAR H-2 TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: MANNY ROBLEDO, DIRECTOR OF UTILITIES DATE: SEPTEMBER 21, 2020 SUBJECT: APPROVAL OF A CHANGE ORDER WITH SENSUS INC AND AN ADVANCED METERING INFRASTRUCTURE CAPITAL IMPROVEMENT PROJECT BUDGET AMENDMENT BACKGROUND: The Advanced Metering Infrastructure (AMI) project (Project), approved October 2017, set the path to modernize Azusa Light & Water’s (ALW’s) operations and services to customers. Since the approval of the AMI contract in 2017, 80% of the AMI water and electric meters have been installed and are operational, and the Project is at the tail end of the full deployment phase. Over 15,500 electric meters and over 18,000 water meters (approximately 80%) have been either exchanged or retrofitted, and all billing systems are working as planned. Unfortunately, there were abnormal field conditions, water lid and software changes, and additional meters for new customers, which were required for the successful completion of the Project. The recommended action would increase the Project budget from $12,861,870 to $16,178,985 and authorize a $1,892,000 change order to the Sensus, Inc. (Sensus) purchase order. RECOMMENDATION: Staff recommends the Utility Board take the following action: 1) Approve a $1,892,000 increase to the Sensus purchase order authorization; and 2) Approve a $3,317,115 increase in the Advanced Metering Infrastructure capital improvement project budget. APPROVED UTILITY BOARD 9/21/2020 Special Meeting AMI Project Change Order and Budget Amendment September 21, 2020 Page 2 ANALYSIS: Sensus Change Order: The City’s AMI modernization project has progressed successfully to date, and the full deployment phase is expected to conclude by the end of November 2020. Unfortunately, the Project experienced additional costs since it was approved in 2017, which were not included in the budget or the Sensus agreement. These changes are required for the successful completion of the Project. One significant change was the replacement of all water box lids with polymer based lids, which included a bored opening to accommodate smart transmitters required for AMI communication back to the utility billing system. The original agreement estimated only $414,000 for lid replacement while the actual cost was $806,000. The City’s water system is composed of diverse water box sizes based on size of service. Thus it was required to procure different AMI-ready lid sizes to match the existing water meter box housings. Next, Sensus’ installation subcontractor, Utility Partners of America (UPA). initiated the project’s full deployment phase in September 2019 by exchanging electric meters as well as exchanging or retrofitting water meters. As full deployment progressed UPA technicians observed a substantial quantity of existing water boxes full of debris or dirt mainly due to age and/or burrowing wildlife preventing a successful water meter exchange. Per contract, UPA would replace water meters in boxes reasonably clean of dirt or debris; however, for those debris-filled water meter housings, it was necessary to incur additional labor costs to remove such dirt obstructing the access to the water line and meter. The additional labor cost for debris removal by UPA at the conclusion of the full deployment phase is estimated to be $190,000. Third, sales tax on the meters and equipment was not included in the original purchase order authorization, and it is a required payment that must be included in the Sensus purchase order increase. Sales tax on meter orders is approximately $660,000. Lastly, the ALW service territory has evolved since 2016 when the AMI project was being developed, and accessory dwelling units (ADUs) and other new developments have increased the number of meters required to complete the Project. Based on current and forecasted service requirements, the cost of these additional meters is estimated at $650,000. The following is a summary of the recommended changes to the Sensus purchase order: -New modern polymer AMI compatible lids: $392,000 -Debris/dirt removal of aged water meter boxes: $190,000 -Sales tax on electric & water meters / smartpoints: $660,000 -Additional meter (ADU/new developments: $650,000 -Added cost to Sensus, Inc. purchase order: $1,892,000 AMI Project Change Order and Budget Amendment September 21, 2020 Page 2 AMI Budget Amendment In addition to the recommended increase to the Sensus purchase order described above, there were several other requirements that were separately authorized and contribute to the need for a budget amendment in the total amount of $3,317,115, as detailed in the table below. The AMI contract allowed for the installation of tamper-deterring locking rings to newly exchanged electric meters by UPA. The Board approved the procurement of such rings in 2019. The project also took on the additional cost of a virtual server upgrade by Converge One as well as an Azusa police monitored security surveillance equipment by Security Lines. On a positive note no theft occurred at Azusa’s Paramount yard (AMI meter storage and staging area) during the full implementation phase of the project. Additionally, the project allowed for the hiring of third party testers after the pilot phase to ensure properly working systems prior to full deployment. Staff undertook this function on its own successfully and avoided triggering additional third party costs to the project. ALW staff currently uses a dated version of its Systems & Software billing software. In order to achieve full functionality of the AMI system it is necessary to upgrade the software version from Version 4.0 to Version 6.0. The Utility Board approved the necessary upgrade on July 20, 2020. Such upgrade will allow for billing complex electric solar and time of use rates, enhance security, customer web and mobile interfaces, as well as automation of bill batch processing. While trying to predict as many field conditions unknown at the projects inception, a smooth implementation required proper lid procurement, debris removal, tax consideration, theft deterring equipment, locking rings, and a virtual server and billing system version upgrade. In consideration of the items utilized for the proper transition to AMI, Staff’s project cost is summarized below: AMI Project Change Order and Budget Amendment September 21, 2020 Page 2 It is recommended Utility Board approve an increase to the existing purchase order with Sensus in the amount of $1,892,000 and approve a $3,317,115 increase to the AMI CIP Project budget. FISCAL IMPACT: The fiscal impact of this project was previously described in the October 23, 2017 AMI Project Approval Agenda Item. At that time the project’s estimated cost was $12.9 million. Reserves in both the water and electric funds are adequate to fund the recommended budget amendment increase. Upon Utility Board approval of the recommended actions, staff will prepare a budget amendment and increase the AMI CIP budget by $3,317,115. Such amended increase will be allocated as follows: Name Fund Account Number Amount Infrastructure / Computer Software 32-80-000-721-7143/72118B-7143 $402,014 Advanced Meter / Computer Software 33-80-000-730-7143/73018B-7143 $491,351 Infrastructure / Equipment & Machinery 32-80-000-721-7140/72118B-7140 $1,326,700 Advanced Meter / Equipment & Machinery 33-80-000-730-7140/73018B-7140 $1,097,050 Prepared by: Reviewed and Approved: Richard Torres Manny Robledo Assistant Director of Utilities - Resource Management Director of Utilities Reviewed and Approved: Sergio Gonzalez City Manager