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Agenda Item: 12(a) |
Prepared By: Jeffrey E. Poteet, General Manager |
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Business: City Council Item |
Department: Water and Sewer |
Subject:
Title
Award of Contract to Johnson Controls, Inc. (JCI), to Conduct an Investment-Grade Audit (IGA) in the Amount of $309,811 - Jeffrey E. Poteet, General Manager, Water & Sewer Department
Body
BACKGROUND:
The Water and Sewer Department (W&SD) is committed to continual improvement and efficiency in service delivery. An integral component of our annual Capital Improvement Program (CIP) focuses on the upkeep and modernization of our water metering infrastructure. Currently, our department oversees approximately 11,500 water meters, which are predominantly mechanical and critical for measuring consumer water usage accurately, thus ensuring precise billing.
With a significant portion of our meters aged 10 years or older, we face challenges with accuracy due to the natural degradation of mechanical meters over time. This degradation often results in underreporting of water consumption, leading to revenue losses for the City. To address this, replacing aging meters has become a priority for ensuring continued accuracy in consumption measurement and billing.
During the Fiscal Year 2024 Water and Sewer (W&S) Capital Improvement Plan (CIP) workshop, our team outlined to the City Council the significant advantages of shifting towards an Advanced Metering Infrastructure (AMI) system. This modern metering solution uses fixed-base technology to collect, analyze, and transmit water usage data efficiently from treatment facilities to consumers. Our investigation into AMI, conducted in collaboration with the Finance Department over the past 10 months, suggests that AMI could significantly improve operational efficiencies, reduce costs, and elevate the level of service provided to our customers. AMI systems allow consumers to access their water usage data in real-time, fostering greater awareness and promoting conservation.
The adoption of AMI is estimated to cost between $7.5 and $8.3 million, with an expected return on investment within 8 to 9 years, thanks to enhanced operational efficiencies and revenue recoveries from accurate metering. To ensure a detailed understanding of the project's financial and operational implications, an Investment-Grade Audit (IGA) is recommended. This audit will deliver a comprehensive analysis of potential water and energy savings, a robust financial plan for the project's rollout, and a plan for verifying savings post-implementation.
Given the complexity of AMI systems and the specialized knowledge required for an effective IGA, engaging a consultant with a proven track record is advisable. Johnson Controls, Inc. (JCI), an Energy Service Company (ESCO) with extensive experience in AMI implementation, is considered a prime candidate for this role. JCI's expertise is supported by successful AMI projects nationwide, leveraging performance savings contracts-a method sanctioned under Florida Statute 489.145 for water meter upgrades.
The proposed IGA with JCI is priced at $309,811. This cost will be integrated into the overall construction contract if the decision is made to proceed with JCI for the AMI implementation. Should the City decide against moving forward post-IGA, the audit expense remains the sole financial commitment.
Pursuant to Section 2-255(g)(5) of the City of Marco Island Purchasing Ordinance, the City may adopt contracts or purchasing agreements established through competitive procurement processes by federal, state, county, or other municipal entities (cooperative purchasing agreement) instead of initiating its own Requests for Bids (RFBs) or Requests for Proposals (RFPs). For this contract, it is the staff’s recommendation to use a cooperative purchasing agreement. The Equalis Group is a cooperative purchasing organization that secures contracts through competitive solicitations on behalf of public agencies. Following a comprehensive review of both the solicitation process and resultant contract, the City has determined that the JCI contract with the Equalis Group aligns with the City's objectives regarding the acquisition and implementation of an Investment Grade Audit for our water meters. Furthermore, the agreement includes provisions for upgrading the meters, a move anticipated to generate cost savings for the City while enhancing the efficiency of data collection processes.
This initiative represents a forward-thinking approach to utility management, promising enhanced operational efficiency, cost savings, and superior customer service through the strategic use of technology and data analytics. Our department is dedicated to ensuring that the City Council is well-informed and confident in making a decision that aligns with our shared objectives of financial stewardship and service excellence.
FUNDING SOURCE / FISCAL IMPACT:
The approved FY-2024 Water and Sewer Capital Improvement Program budget has sufficient funding for this crucial project. The Meter Replacement Program (MRP) is funded annually in the amount of $800,000, Fund 430, GL account 430-5300-5336-606400-16117. Currently, there is $800,527 available in the MRP, of which $309,811 could be used for the Investment-Grade Audit.
RECOMMENDATION:
Authorize the City Manager to execute a contract with Johnson Controls, Inc. to perform an Investment-Grade Audit in the Amount of $309,811.
POTENTIAL MOTION:
“I move to authorize the City Manager to execute a contract with Johnson Controls, Inc., to perform an Investment-Grade Audit in the Amount of $309,811.“