Item Number: {{item.number}}
City Council / Board of Directors
Written Communications
Meeting of: May 20, 2025
Submitted By:
Doug Mathews, Director of Public Works and Water
Subject:
Advanced Metering Infrastructure Project Contract Award and Amendment No. 1 to the Neptune 360 Software General Services Provider Standard Agreement Recommendation:
That the Honorable City Council/Board of Directors:
(1) Adopt Resolution No. VWD 25-009 Waiving Competitive Bidding Requirements pursuant to Victorville Municipal Code Section 2.28.230, designating Ferguson Enterprises, LLC as the sole source vendor for the Advanced Metering Infrastructure Network Installation (Project ESC25-035); (2) Award a Construction and Professional Services Provider Agreement to Ferguson Enterprises, LLC in the amount not-to-exceed $739,070 for Project No. ESC25- 035, which includes installing elevated towers, placing Gateway Data Collectors at designated locations, and integrating the necessary IT infrastructure as part of the final phase of the Advanced Metering Infrastructure (AMI) system project; and (3) Approve Amendment No. 1 to the General Services Provider Standard Agreement with Ferguson Enterprises LLC, for Neptune 360 Software Services (Project ESC24-113), increasing the total compensation amount by $184,763.78 for a total contract amount not to exceed $250,533.
Fiscal Impact:
The procurement of the AMI equipment and software has been included in the 2024-2025 Fiscal Year budget under the Advance Metering Infrastructure project account No. 4100530-55050-74379. This account has an available budget of $2,124,391; thus, there are sufficient funds to cover the anticipated expenses.
The Construction and Professional Service Agreement has a base cost of $697,770 and a 25% tariff-contingency of the tower material of $41,300 due to the uncertainty of components that are imported from overseas, for a not-to-exceed amount of $739,070.
The amendment for the software component to the General Service Provider Standard 4 1
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Agreement revises the total annual compensation to a not-to-exceed amount of $250,533.
The total fiscal impact, if the Board moves forward with staff’s recommendation, is an amount not-to-exceed $989,603.
The tariff-contingency has been included due to the federal tariffs currently under review, at the federal government level. This contingency has been derived from current vendor pricing and publicly available information regarding proposed tariff actions. Even with this potential cost escalation, the overall project remains well within the allocated budget Account Description Account Code Available Budget
Water – Meter Service - AMI 4100530-55050-74379 $2,124,391 This project has been in the works since 2014 and has been included as a capital item spread over ten years within the district’s rate study to ensure minimal rate payor impact while ensuring sufficient funds are collected to cover the expenses.
Strategic Plan Goal:
This item aligns with Strategic Goal E: Invest in Infrastructure, specifically strategy 3 – completing the final phase of AMI to enhance water efficiency and achieve long-term cost reductions. Additionally, it supports Strategic Goal A: Financial Sustainability by ensuring the City’s commitment to sound fiscal management. Together, these goals contribute to creating a healthy, livable community by maintaining the City’s assets through infrastructure investment and innovation, while providing enhanced and efficient public services.
Background:
On October 1, 2014, the District issued a Request for Proposals (RFP) for Automated Meter Reading (AMR) water meters. After a comprehensive solicitation process, a committee reviewed and ranked the proposals received and invited the top four proposers to participate in a pilot project, which included the installation of five meters in the District’s system to evaluate how each meter was installed and operated. The four vendors included: Equarius Waterworks (Neptune Meters), HD Supply (Master Meter), Aquametric (Sensus Meter) and National (Badger Meter). The pilot project concluded on January 28, 2015.
On February 17, 2015, the Board approved the award of contract to Equarius Waterworks for the purchase installation of Neptune Meters and an AMR system configuration. This was the first step in implementing an AMR system to modernize its water metering system to improve operational efficiency. The existing meters, which had been in place for nearly 20 years, were aging and in need of replacement. These new meters replaced the aging infrastructure, improving water measurement accuracy, streamlining billing, and enhancing field maintenance operations. Shortly after the award of this contract, on March 9, 2015, Ferguson Enterprises, LLC (Ferguson) acquired Equarius, becoming the sole distributor of Neptune Meters and infrastructure.
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While AMR significantly improved operational capabilities, the District’s long-term strategic goal is to transition to an AMI system. AMI will enable real-time, automated data transmission from meters directly to the central system (Data Collectors), enhancing customer service, proactive leak detection, and billing accuracy. The Data Collectors interface with Neptune360, a cloud-based software/service accessible to City staff and systems for billing and other purposes. As part of this transition, the District took a major step forward in November 2021 by installing Meter Interface Units (MIUs) on customer meters. These endpoints automatically transmit usage data to the District’s central system, with installation completed by April 2022. To further support AMI deployment, Neptune conducted a propagation study in October 2023 to determine optimal tower locations and other available District or City infrastructure for the installation of Gateway Data Collectors, ensuring reliable and overlapping coverage for real-time data transmission.
In 2023, the District launched a pilot AMI project at Southern California Logistics Airport (SCLA), successfully validating the system’s ability to transmit real-time data. Following this success, staff secured Board approval in early 2024 to procure 40 Gateway Data Collectors.
On February 6, 2024, the Board approved the purchase of forty (40) data collectors ahead of the final phase of the multi-year AMI Project, as they had an eight to ten month lead time. These data collectors will be installed on towers and various City infrastructure to pick up meter reads for approximately 39,000 Neptune meters that are broadcasted from an endpoint that has been installed with each meter. These data collectors cover a geographic area that will have overlapping boundaries to transmit the data from the meter endpoints through the data collectors to the system software.
On March 13, 2024, the Planning Commission approved the installation of these collectors on elevated towers at designated locations throughout the City. Additionally, the District received approval from the Zoning Administrator to install data collectors throughout City on various existing facilities, such as ball field lights.
The final phase of the AMI Project includes tower construction, installation of the data collectors, integrating IT infrastructure, and completing the full AMI implementation. Once complete, the District will have real-time water usage monitoring, enhanced customer engagement, and improved overall water management.
Discussion:
Staff recommends proceeding with Ferguson for the next phase of the AMI Project based on Ferguson being the sole provider of Neptune meter products, their established familiarity with the District’s infrastructure, and prior work completed to date. Ferguson has already supplied the meters, data endpoints, Gateway Data Collectors, and conducted the propagation study, providing a comprehensive understanding of the system’s communication/information transmission needs. The next phase involves the installation and integration of network devices on both existing infrastructure and newly constructed towers throughout the District. This includes mounting antennas, running 4 1
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coaxial cables, and installing power systems, such as solar panels, where needed. New 60-foot aluminum towers will be erected at approved locations to support reliable signal coverage.
Ferguson will provide all labor, materials, installation, equipment, and professional services necessary to deliver a fully functional AMI fixed network system. Their responsibilities include network design, installation of all system components, training for City staff, ongoing technical support, and warranty coverage. All components will undergo comprehensive testing to verify signal strength and ensure dependable, real-time data transmission across the District’s service area.
The anticipated timeline for completion for the construction of the towers, installation of the data collectors, and system configuration is 250 days, commencing within ten (10) calendar days after the District’s issuance of a Notice to Proceed (NTP).
Additionally, staff is requesting an amendment to the General Service Provider Standard Agreement with Ferguson for the Neptune360 software provided by Ferguson. Pricing for the Neptune360 software is variable and is determined by the type of meter. The cost per meter varies between the two systems: AMR is billed at $1.08 per meter, while AMI is billed at $2.22 per meter. Under the amended Neptune 360 Software Services agreement (Project ESC24-113), the District will be charged based on a meter distribution mix of 62% AMR and 38% AMI, resulting in meter charges of $58,533. As additional meters transition to AMI, the total cost of the software services will also increase. Once all 38,955 meters are converted to AMI, the annual cost at the AMI rate of $2.22 per meter will reach $86,480.10.
The data collectors installed on the towers will transmit essential water usage and billing data across the City’s infrastructure. To mitigate the risk of cyber threats disrupting data transmission, a Cybersecurity Warranty has been included at a cost of $4,300 per data collector, for a total of $172,000. This warranty enhances security of the system by safeguarding transmitted data, blocking unauthorized access, and monitoring for malicious activity. It also includes regular software updates to protect against emerging threats, access restrictions to authorized users, detection and prevention of data manipulation, and expert support in the event of a cyber breach. In total, the amendment to the General Services Provider Agreement with Ferguson increases the total compensation amount by $184,763.78, for a total contract amount not to exceed $250,533.
Once infrastructure construction is complete, data gateway collectors are installed, and the system is fully configured, a customer engagement portal will be developed and deployed, marking the completion of the project. As this has been a decade-long initiative, staff within the Meter Division have become highly efficient at collecting meter reads through optimized drive-by routes. This has enabled a more proactive approach to managing workload and prioritizing activities such as customer service work orders, meter maintenance, and inspections.
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While operations will become increasingly automated, staff will continue to manually read meters when necessary due to specific conditions. As part of daily operations, they will also address system errors, perform meter installations, calibrate meters, conduct routine maintenance, and complete customer service tasks such as meter turn-ons and shut-offs.
These responsibilities represent a significant portion of their daily duties.
For the above-mentioned reasons, staff is seeking approval of Resolution No. VWD 25- 009 for consideration and approval by the Board. Resolution No. VWD 25-009, proposes a bid waiver designating Ferguson Enterprises, LLC as the sole source vendor for the Advanced Metering Infrastructure Network Installation Project (ESC25-035). This designation is justified by Ferguson's exclusive distribution rights for Neptune Technology products in California, their specialized expertise in integrating these proprietary systems, and the necessity for compatibility with the District's existing infrastructure. This action is being recommended in accordance with Section 2.28.230 of the Victorville Municipal Code and requires a four-fifths vote of approval by the Board.
Staff recommends the Board’s approval to adopt Resolution No. VWD 25-009, Waiving Competitive Bidding Requirements and designating Ferguson Enterprises, LLC as the sole source vendor for the Advanced Metering Infrastructure Network Installation (Project ESC25-035); award of a Construction and Professional Services Provider Agreement to Ferguson Enterprises, LLC in the amount of $739,070 for Project No. ESC25-035; and approval of Amendment No. 1 to the General Services Provider Standard Agreement with Ferguson Enterprises LLC, for Neptune 360 Software services (Project ESC24-113), increasing the total compensation amount by $184,763.78 for a total contract amount not to exceed $250,533, for a total expense of $989,603.
Staff is available for any questions the Honorable Board may have.
Attachments: A. Resolution No. VWD 25-009
B. Construction & Professional Services Provider Agreement (ESC25-035) C. General Services Provider Agreement (ESC24-113) Amendment No. 1 D. Map with Legend
E. Photo Examples of Each Build as Exhibits