Item Number: 12
City Council / Board of Directors
Written Communications
Meeting of: February 6, 2024
Submitted By:
Doug Mathews, Director of Public Works and Water
Subject:
Advanced Metering Infrastructure Gateway Data Collectors Procurement Recommendation:
That the Honorable City Council/Board of Directors:
1. Find that Ferguson Enterprises, LLC is the sole distributor for Neptune Technology Group’s products, the forementioned products are proprietary in nature, and a sole source is approved in accordance with VMC 2.28.100(b)(2); and
2. Authorize the City Manager to approve and execute the procurement of Advanced Metering Infrastructure (AMI) Neptune R900 System data collector equipment with Ferguson Enterprises LLC, in the amount of $594,384.00.
Fiscal Impact:
Funds for the purchase of forty (40) AMI Neptune R900 System data collectors (data collectors) were originally approved as a component of the AMI Project Budget of $2.5 Million dollars. The estimated cost for the procurement of the AMI data collectors is $600,000. This purchase will be funded from Fund 410 for the Advance Metering Infrastructure project (Account No. 4100530-55050-74379) and there are sufficient funds to cover the anticipated expense.
Strategic Plan Goal:
Strategic Plan Goal E - Invest in Infrastructure, Strategy 3 is completing the final phase of AMI to improve water efficiency and reduce costs over the long-term. The proposed AMI system not only represents a technologically advanced solution for water management but also ensures the City's commitment to financial sustainability while positioning itself as an innovator in leveraging technology for enhanced and effective public services. Smart meters play a crucial role in achieving this goal by substantially reducing meter-reading costs. Their capability to enable remote meter reading eliminates 3 4
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the need for manual readings, leading to significant savings on vehicle expenses such as fuel, insurance, and liability costs. This strategic integration aligns seamlessly with our commitment to not only advance water efficiency and dedication to water conservation but also optimize operational costs, reinforcing our position at the forefront of innovative and responsible municipal management.
Background:
A few years ago, the Victorville Water District (District) recognized an opportunity in the water metering industry to shift from once-a-month manual meter reading to an automated meter reading system with electronic collection of water usage data capable of collecting data multiple times per hour. As such, the District began planning and preparing for this change and in 2015 initiated a system wide meter replacement program through Ferguson Enterprises, LLC (Ferguson) of over 36,000 Neptune Technology Group (Neptune) meters; replacing virtually all antiquated meters with Automated Meter Reading (AMR) meters with the capability to also function as Automated Meter Infrastructure (AMI) compatible meters.
Staff embarked on a comprehensive vetting process beginning in 2014 to select a meter manufacturer best suited to meet current and future needs of the District, eventually selecting Neptune as the optimal choice (see Attachment C). Standardization of a water meter manufacturer is necessary to ensure accurate measurement and billing of water usage every month. With almost 39,000 water meters currently installed, standardization is also important to maintain efficient processes such as billing, reading, operation and maintenance, inventory control, and testing; and a familiarization of product usage, programming, software, data logging, and alert notification capabilities by meter, conservation, and billing staff.
Once all meters were replaced over a five-year period, the District was able to leverage the benefits of an AMR system which no longer required manual monthly reads of every meter in the system. AMR meters are read by driving through the neighborhoods of various routes to collect monthly meter reads via an MRX receiver mounted in the vehicle.
Data logging of customer usage on a more granular level can be accomplished through a smart phone or tablet. This requires the operator to be at the property to download the data log.
The next phase in reaching the District’s overall goal was the implementation of an AMI system. Unlike AMR, AMI doesn't require utility personnel to collect the data. Instead, the system automatically transmits the data directly to the utility at predetermined intervals through a network of towers and data collectors receiving signals from the meters in order to transmit real-time usage data to a central location. Some of the benefits of AMI include transmission of real-time data to guide customers on their use, identifying potential high consumption before the customer is billed, improved billing and customer service functions which allow customer inquiries to be resolved with real-time data, decreased non-revenue water (water loss) through earlier leak detection, and the ability to identify water losses or leaks within a particular pressure zone. 3 4
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In November 2021, the first step of the AMI implementation project was authorized to add Meter Interface Unit(s) (MIU), known as an endpoint, to all customer meters and meter boxes. The MIU is comprised of a direct meter connection and an external antenna that is affixed to a meter box lid and automatically collects data from the meter for transfer to the District’s central database. The Board awarded a contract in the amount of $288,923 to Concord Utility Services for the installation of AMI meter endpoints purchased by the District. This project was completed on April 20, 2022, at a final cost of $267,906.
The next infrastructure upgrade needed for the AMI implementation is the construction of collector sites. Collector sites are comprised of outfitting new elevated towers and existing City assets, such as traffic signal poles, with new antennas strategically placed throughout the City. The collector sites utilize proprietary software to transmit meter data over a secure network that staff has access to for review and monitoring, usage analysis, and billing. There are three components to this step, beginning with the selection of sites of where the data collectors will be placed throughout the City to ensure proper coverage with overlapping data fields for built in redundancy in the event a data collector goes down or malfunctions; meter reads will be picked up by an adjacent data collector. The second component is the acquisition of the data collectors, and the third component will be the installation of the data collectors.
E source Companies, LLC entered into a contract with the District previously to provide industry knowledge for AMI implementation. Part of their scope was providing an analysis for data collector locations identified from propagation studies furnished by Neptune which accounted for topography, terrain, line of sight, and gateway data collector signal strength. Data collectors proposed to be located at properties within the City fall under Title 16 – Wireless communication facilities (16-3.24.150) of the Victorville Municipal Code, and therefore require Planning Commission’s approval. The proposed site locations are scheduled to be heard at the March Planning Commission meeting.
Data collectors serve as a central communication hub, aggregating data from individual smart meters across the network and ensuring reliable and real-time transmission to the central data management system, similar to cell tower antennas that provide cellular signal. Their role encompasses enhancing network efficiency, optimizing data flow, and contributing to the security of the system through encryption and authentication measures.
The District currently utilizes Neptune meters, infrastructure components, and the Neptune 360-meter reading software exclusively. After review of existing system infrastructure, implementation of AMI using Neptune products through their sole vendor, Ferguson, is the only fiscally responsible approach for procurement. Ferguson serves as the exclusive sole-source vendor for Neptune products and Neptune possesses proprietary rights essential to their components and technologies. Attachment A outlines the proprietary basis for Ferguson and Neptune.
In addition to meters and endpoints, the other components required by the AMI system include elevated towers, additional data collectors, and backhaul information technology 3 4
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(IT) infrastructure. The next phase of the AMI implementation process encompasses the construction of elevated towers, the installation of gateway data collectors, and the integration of IT infrastructure.
In order to ensure the AMI project would meet the District’s expectations, a pilot project was implemented at the Southern California Logistics Airport (SCLA) in November 2023.
A data collector was affixed to an existing 140-foot elevated tank water at SCLA and activated on November 13th, 2023. Staff has been collecting and monitoring data through the SCLA pilot project and are pleased with the data collector's proficiency in data transmittal from a substantial number of meters.
Ferguson and Neptune have notified the District about the availability of data collectors currently in stock for the AMI project. Delaying procurement could result in a significant setback to the District's one-year plan to construct the AMI system, as material delays are linked to ongoing supply chain disruptions and inventory depletion across the United States due to widespread AMI system construction. Current lead times for procuring data collectors are estimated at eight to ten months.
Discussion:
The District is currently well positioned to move forward with the planned implementation of the AMI system. Procuring forty (40) data collectors was anticipated and included with the District’s capital purchases, as part of the annual budget process, in the amount not to exceed $600,000. Staff worked with Ferguson to ensure product availability. If the District purchases twenty (20) data collectors currently available in Q1 of 2024, and places the remaining data collectors on order, the District will be well positioned to begin the final phase of the AMI implementation in Q2 of 2024. If the initial purchase of available data collectors is not pursued at this time, there is an eight to ten month lead time for all forty (40) data collectors. Timely acquisition of these data collectors, while they are readily available, is crucial to ensure there are no delays for product procurement and keep the project on track.
The procurement of these data controllers is exempt from bids at the discretion of the City Council, outlined in VMC 2.28.100 – Purchases of general services or supplies and equipment with an estimated cost in excess of fifty thousand dollars, section(b)(2) sole source purchases. Sole Source purchases in excess of one hundred twenty-five thousand dollars must be presented to the City Council [Board of Directors] for approval as outlined in the VMC. Due to the proprietary nature of the Neptune water metering equipment and software that is utilized throughout the District for water management and monitoring, switching to a different provider is not a feasible option as the District would incur significant capital and operations and maintenance costs, as over $10 million dollars has been expended on meters and endpoints. The existing infrastructure (almost 39,000 meter and endpoints) is already in place and designed to work seamlessly with the proprietary system. The proposed data controllers are specifically tailored to integrate with the existing infrastructure, ensuring a smooth and efficient transition of the water management system. Additionally, Ferguson is the sole vendor for Neptune products and is the only option to acquire this equipment. Staff believes there is sufficient justification 3 4
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for the Board to approve the Sole Source of purchasing the data controllers from Ferguson.
After the data controllers are secured, the next step of the AMI implementation project will be construction of the collector sites and procurement of the Customer Engagement Portal. Staff is preparing the scope of services for the request for proposal (RFP) for construction management and procurement/installation of the remaining infrastructure needed to complete the project, including installation of the data collectors. This portion of the project is scheduled to be complete by the end of Q2, 2024 with construction beginning in Q3 and has an estimated eight to twelve month construction timeline. The contractor will begin the installation of the first twenty (20) data collectors in Q3/Q4 of 2024 and the remaining twenty (20) data collectors will be installed in Q1/Q2 in 2025.
Once the infrastructure is in place, the final component of the AMI implementation project will be curating the Customer Engagement Portal, which allows customers to view their usage in real time and have a more customer service friendly experience. AMI system implementation also includes additional system infrastructure construction, vendor coordination, billing technology integration, security protocols, user-friendly end-user and public interfaces, and thorough testing and training.
Staff is requesting the Board’s approval to find that Ferguson Enterprises, LLC is the sole distributor for Neptune Technology Group’s products, the forementioned products are proprietary in nature, and a sole source is approved in accordance with VMC
2.28.100(b)(2); and authorize the City Manager to approve and execute the procurement of Advanced Metering Infrastructure (AMI) Neptune R900 System data collector equipment with Ferguson Enterprises LLC, in the amount of $594,384.00.
Attachments: A. Sole Source
B. Quote
C. Initial 2015 staff report for Neptune meters