Agenda Item No: N.5
AGENDA REPORT
DATE: April 7, 2026
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2026-47 PW Water Enterprise Capital Budget Adjustment for Advanced Metering Infrastructure (AMI) Project (CPW-090055)
Authorizing an Update to the Fiscal Year 2025-2026 and Fiscal Year 2026-2027 Water Enterprise Capital Budget for the Advanced Metering Infrastructure Implementation
Funding Source: $10,250,000; Water Enterprise Capital Fund
Contact: Michael J. Hether, (707) 428-7493
RECOMMENDED ACTION
Adopt resolution.
STATEMENT OF ISSUE
City staff are seeking an update to the fiscal year (FY) 2025 -2026 and FY 2026 -2027 Water Enterprise Capital Fund Budget for the Advanced Metering Infrastructure (AMI) Implementation (Project; CPW090055).
DISCUSSION
Fairfield Municipal Utilities serves over 30,000 customers who consume water from its system.
AMI is the modern iteration of water metering technology. The City primarily uses Automated Meter Reading (AMR) technology which requires staff to drive by the meters with a device to collect meter read data. The data is then imported into the billing system by staff. AMI meters are connected devices which automatically transmit data to the designated systems. AMI systems collect real time data, and this data can be transmitted on an interval designated by the Utility. These devices and systems also contain built-in analytics which help detect possible leaks.
Not only do the meters benefit the utility in terms of data collection, analytics, and reductions in time to bill, but using real -time data aids the City in generating the State required reporting for water use and conservation. As state reporting requirements cont inue to expand, it is increasingly important for water systems to adopt AMI technology.
Staff previously retained the Shpigler Group (Shpigler) to perform feasibility, systems, and business analyses as well as provide project management support for the con version to AMI.
Based on the results of these analyses, staff determined that the appropriate strategy to implement the conversion is to modernize the utility billing system (currently in a Request for Proposal process) along with other supporting systems and to extend the existing pilot Metron system throughout the entire water utility instead of removing and replacing working equipment.
Approximately one -third of the system (about 11,000 meters) is already equipped with the Metron AMI which was installed as a pilot in previous years. Moving to a new system would require disposal of existing functional equipment. The aforementioned approach creates the following benefits for the City:
Significantly reduces the apparent wa ter loss in a faster timeframe which is now a State regulatory measure of water utility performance
Reduces revenue loss due to unbilled water consumption caused by reading inaccuracies Allows the City to retain existing functional hardware reducing cost o f equipment, integration, and implementation costs
Reduction of manual processes by staff which results in increased efficiency and decreased probably of errors
City staff are seeking to accelerate the budgeted amounts outlined in FY 2028 and the subsequent years of the current 5 -year Capital Improvement Projects (CIP) to FY 2026 and FY 2027. The current budget allocates $7.25 million in FY 2027, $3.25 million in FY 2028, and $7 million in future years. The proposed acceleration would reallocate the $7 mi llion initially planned for future years to FY 2026, thereby increasing the FY 2026 budget. Additionally, the $3.25 million allocated for FY 2028 would be reallocated to FY 2027 to enhance that year's budget. This adjustment relates to the timing of fund a vailability for the Project and does not change the overall Project budget. The Project was included in the City's water rates study, which established the basis for the recent rate schedule. Expenses related to the AMI conversion and updates to associated systems are consistent with capital improvement requirements.
Authorization for the purchase of the AMI hardware and any associated systems will be sought in separate requests to City Council.
FINANCIAL IMPACT
The total budget adjustment for this FY 2025-2026 and FY 2026 -2027 budget adjustment is $10,250,000 which will be allocated from the Water Enterprise Capital Fund Balance (Fund 462).
The distribution of these funds to Fund 462 to increase the current budgetary amounts of the Project is as follows: $7 million will be reallocated from planned future years to increase the FY 2026 budgetary amount to $9.25 million and $3.25 million will be reallocated from FY 2028 to increase the FY 2027 budgetary amount to $10.5 million.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
N/A
ALTERNATIVE ACTION
The council may delay approval of the adjustment so that the staff can address any council concerns.
COORDINATED WITH
Finance Department
STAFF CONTACT
Michael J. Hether, Assistant Public Works Director - Utilities (707) 428-7485
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution