Agenda Item - 2024-03-05 - Number 10.1 - Purchase of Advanced Meter Infrastructure (AMI) System Materials 10.1
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Subject: Purchase of Advanced Meter Infrastructure (AMI) System Materials
Meeting Date: March 5, 2024 Staff Member:
Edward VanBuren, Deputy Public Works Director
Report Date: January 5, 2024 Erica Rooney, Public Works Director and City Engineer
Department: Public Works— Maintenance Operations
Action Required Advisory Board/Commission Recommendation
❑X Motion ❑ Approval
❑ Public Hearing ❑ Denial
❑ Ordinance ❑ None Forwarded
❑ Resolution ❑X Not Applicable
❑ Information Only Comments:
❑ Council Direction
❑ Consent Agenda
Staff Recommendation: Approve the Sole Source Findings and authorize the City Manager to
execute a contract with Core & Main LP for the purchase of Advanced Meter Infrastructure
(AMI) system materials
Recommended Language for Motion: Move to approve the Sole Source Findings and
authorize the City Manager to execute a contract with Core & Main LP for the purchase of
Advanced Metering Infrastructure System materials for $1,900,000.
Project/ Issue Relates To: Finish City-wide automated water meter installation project that
was approved and started in 2019.
Issue before Council (Highlight Policy Question):
❑Council Goals/Priorities ❑Adopted Master Plan(s) ❑S Not Applicable
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ISSUE BEFORE COUNCIL
Shall the Council approve Sole Source Findings as an exemption pursuant to ORS 2796.075 to
competitive bidding, and authorize the City Manager to execute a contract with Core & Main LP
for $1,900,000?
EXECUTIVE SUMMARY
In 2019, the Council approved the purchase and installation of residential advanced metering
infrastructure (AMI) meters to approximately 11,700 Lake Oswego homes (94% of the City's
water distribution system). Currently, over 7,000 AMI residential meters have been installed
throughout the City.
Larger AMI meters for commercial / large residential users (above 1") (hereafter "commercial
meters") were not included in the original 2019 staff request for AMI residential meters to the
Council because the initial focus was on residential users. Initial residential meter numbers did
not take into consideration new development and damaged meters as well. This has led to
limited availability of City-owned on-hand stock AMI residential meters for current and future
repair/replacement.
As to AMI commercial meters, the project statement was that "meters larger than 1"
(approximately 600 meters), will also be changed out, as funding and staff time allow over the
next three to five years." (Council Report, July 2, 2019, pg. 3). The Public Works Department is
now prepared to order and coordinate the installation of AMI commercial meters for
commercial accounts (which consist of larger apartment complexes and businesses). These
meters will support the commercial accounts within the City. The AMI commercial meter
installations will provide a more holistic approach to responsible water utility management.
This request is to cover the purchase of AMI materials for commercial meter installation and
additional materials to complete residential meter installation. The contract would be with Core
& Main LP, our current vendor for the supplies and the only vendor of Neptune AMI Meters in
the State of Oregon.
BACKGROUND
What is AMI?
City staff spent several years investigating the use of advanced metering infrastructure,
commonly referred to as AMI, or "Smart Meters" for the City's water distribution system. AMI
is a remote read water metering system, powered through the use of secure wireless networks.
Benefits of AMI System
The AMI system has multiple benefits for both residents and internal staff:
• Increased Monitoring and Notification, Better Customer Service.
• Remote Reads = Less Staff Time.
• Consistent Billing Periods.
• Replacement of Aging Infrastructure.
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The use of an AMI system eliminates the need to manually read meters, as they transmit meter
reads in near-real time. AMI meters also send notifications to both staff and our customers
about leak alerts, high flow alarms and backflow detection. Meter information is transmitted to
a user interface, used by staff to extract billing information, monitor the health of the water
system, and quickly determine problems to be addressed.
In addition to monitoring from staff, AMI systems have capabilities for water customers to
monitor their own water usage and alerts through an online portal. This allows water
customers to monitor water consumption, be notified of leaks or other issues quickly, and set
water conservation goals.
Current Progress
A pilot program for 400 AMI residential meters was undertaken in 2015. Based upon those
results, in July 2019, City staff requested approval for the purchase and installation of
approximately 11,700 residential meters (with associated secure wireless network), to cover all
residential water meters in Lake Oswego.
This request was approved, a competitive proposal was published, and after evaluating the six
proposals, Core & Main was awarded a contract for the purchase of the AMI residential meters
and wireless network (Neptune). Due to pandemic-caused logistical issues, the residential
meter order and installation did not progress as anticipated until 2022.
In 2022, the Public Works Department contracted with Olson LLC to complete all residential
meter installation by April 2025. Currently, approximately 7,000 meters have been installed and
are operational throughout the City.
DISCUSSION
Proposed Contract
To complete the overall goals and objectives of the initial AMI project, staff proposes to extend
the AMI project to include the commercial meters that were not part of the initial scope, as well
as purchase residential meters to have on stock and lids (approximately 4,500) for AMI meter
boxes.
The addition of water meter lids was identified during the installation process. Plastic meter lids
require less fabrication for meter and antenna installation. These will provide better reception
for wireless connection and reading. This order of lids will allow for more efficient installation
and readings accuracy moving forward.
The Public Works Department is now prepared to move forward with coordinating AMI
commercial meter installation to support our commercial accounts. The current installation
contractor (Olson LCC) is prepared to amend their contract to include the addition of these
commercial meters, with the expectation that it will be accomplished within one year from the
amendment date.
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Sole Source Findings
Staff is requesting the Council's approval of the following Sole Source Findings to contract with
Core & Main. ORS 2796.075 exempts contracts for the purchase of goods and services from
competitive bidding requirements when the selection of the goods or services is available from
only one source. Findings that support the determination of sole source include:
(2) (a) That the efficient utilization of existing goods requires acquiring compatible
goods or services;
***
(d) Other findings that support the conclusion that the goods or services are available
from only one source.
(3) To the extent reasonably practical, the contracting agency shall negotiate with the
sole source to obtain contract terms that are advantageous to the contracting agency."
City staff did a formal published solicitation for proposals in May 2019 from vendors of AMI
water meters for the initial residential AMI meter/secure wireless networks purchase. Six
proposals were received. Following evaluations of proposals, Core & Main was selected to
provide the equipment, with the "smart" part of the AMI meter provided by a Software-as-a-
Service Agreement with Neptune Technology. On July 2, 2019, the Council approved a contract
with Core & Main in the amount of$2,387,248.00. The residential portion of the AMI project
represents approximately 94% of the City's water distribution system.
• Efficient Utilization of Existing Goods
Staff proposes to enter into a sole source contract with Core & Main LP in order to replace the
remaining 6% of the water meters on commercial accounts to an AMI water meter. As noted
in this Council Report, Core & Main were competitively selected to provide AMI residential
meters for 94% of the water meters. For staff familiarity and equipment/system compatibility,
it is critical that the remaining AMI meters for our commercial accounts be of the same brand
and wireless network. Core & Main carries the specific brand and system knowledge that will
ensure seamless integration of the AMI commercial meters. Core & Main LP are the sole
provider of Neptune-branded AMI meters in the State of Oregon.
This contract will also include materials necessary to complete residential meter installation as
well (additional residential meters due to development and replacement, and meter box lids).
The design of the lids is specific to the Neptune meter system.
• Advantageous Contract Terms
Staff has reviewed the pricing of the AMI meters/secure wireless network, and meter box lids
based upon the 2019 unit prices and similar AMI-type meters, albeit of a different brand and
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wireless network, and the pricing for the meter box lids and finds that the pricing is consistent
with the market.
Core & Main has provided a cost estimate that significantly reduces prices on all meters needed
for the completion of the AMI project. Attached is a memorandum from Core & Main that
outlines the price reduction for the City of Lake Oswego to items identified below:
o 5/8" x3/4" Meter prices were reduced by approximately 15%
o 1" Meter prices were reduced by approximately 20%
o 1-1/2" Meter prices were reduced by approximately 19%
o 2" Meter prices were reduced by approximately 18%
Amendment of Installation Contract
For the Council's information, if the Core & Main contract is approved, the City Manager will
also amend the current contract with Olson LLC. to include the installation of approximately
600 AMI commercial meters. This amendment does not require Council approval because the
amendment is within the Council's previous delegation of contracting authority to the City
Manager. The amendment to include installation of the commercial meters will not change the
current residential meter installation process or the overall end date of the contract. The
proposed estimated amendment cost is $145,000.00.
ADVANTAGES AND DISADVANTAGES
The installation of AMI commercial meters to the City water system is critical for the
completion of the overall system. This will allow staff in Utility Billing to provide more accurate
information and to troubleshoot inquiries from customers. It will also allow the customers to
monitor their consumption using a dashboard tied to their AMI readings. Finally, having
residential and commercial meters all on the same system will eliminate the need for regular
manual meter reading contracts, and will be an overall more efficient and effective tool for the
City.
Plastic meter lids are included in this requested contract approval because they are superior to
metal lids, which can drastically impact the reception quality of the AMI meter. Without the
proper lid material, the wireless capabilities to read usage accurately can be hindered.
FISCAL IMPACT
The request is for approximately $1,900,000.00 to purchase the AMI commercial meters (with
secure wireless network), additional residential meters for development and replacement, and
lids for the AMI meters. As noted, an additional contract amendment would be executed for
approximately$145,000.00, for meter installation. This equates to an overall approximate fiscal
impact of$2,045,000.00 for the project.
Funding for this request will be through surplus revenues identified within the Lake Oswego
Water Fund. Spring 2023 was warmer than normal, which resulted in earlier water use,
increasing the ending fund balance beyond what was estimated for the biennium. This means
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that no rate increases are required for this work to be completed. Further, this expenditure will
not affect any planned water CIP projects. The Finance Department has adjusted the budget
accordingly at the recent February 20, 2024 Council meeting to accommodate this expenditure
should it be approved.
RECOMMENDATION
Approve the Sole Source Findings and authorize the City Manager to execute a contract with
Core and Main LP for an estimated contract amount of$1,900,000.00.
ATTACHMENTS
1. Core & Main Letter, dated January 4, 2024
2. Neptune Letter, dated December 20, 2023
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503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY
ATTACHMENT 1
CORE&MAIN
1830 Craig Park Court
St. Louis, MO 63146
January 4th, 2024
City of Lake Oswego
17601 PILKINGTON RD
LAKE OSWEGO, OR 97035
RE: Lake Oswego Pricing Justification
Dear Sir/Madam,
Core & Main is the exclusive supplier of Neptune Meters in Oregon, and we strive to offer our customers
the most competitive prices for municipal markets. City of Lake Oswego, a valued and longstanding
customer, benefits from our special pricing on all their orders.This is evident when comparing our
standard street prices for meters with the customized rates we extend to the City of Lake Oswego.
For instance,the regular street price for a 5/8"x3/4"T-10 ProCoder R900i V5 Meter with 6' External
Antenna is $405.00 each. However, our dedicated pricing for Lake Oswego is significantly reduced to
$345.00 each.Also,the standard street price for a 1" T-10 ProCoder R900i V5 Meter with 6' External
Antenna is $650.00 each, but Lake Oswego is provided a more favorable rate of$520.00 each. Similarly,
the standard price for a 1-1/2" T-10 ProCoder R900i V5 Meter with 6' External Antenna is$1,000.00
each, while Lake Oswego receives a discounted rate of$812.50 each. Additionally,the standard street
price for a 2" T-10 ProCoder R900i V5 Meter with 6' External Antenna is $1,220.00 each, but we provide
Lake Oswego with a more favorable rate of$1,000.00 each.This pattern persists across all the prices
quoted to Lake Oswego, ensuring a cost-effective and seamless deployment of their Neptune System.
Thank you for entrusting us with your municipal needs and partnering with us as your exclusive provider
of Neptune Meters in Oregon. We deeply appreciate the trust and confidence the City of Lake Oswego
has placed in our services over the years.Your continued business is invaluable to us, and we look
forward to serving you with the highest standards of quality and dedication in the future. If you have any
further requirements or inquiries, please do not hesitate to reach out.Thank you once again for your
ongoing partnership.
Sincerely,
Arsti9
Core & Main Local Representatives
Elissa Arnaud Joey Davidson Zachary Wilson
Regional Municipal Sales Manager Municipal Sales Representative Meter Specialist
Core & Main Core & Main Core& Main
Elissa.arnaud@coreandmain.com joey.davidson@coreandmain.com Zach.wilson@coreandmain.com
(503)713-9627 (865)617-7727 (971)294-0973
ATTACHMENT 2
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NepTUNe
TECHNOLOGY GROUP
December 20, 2023
Joel Kuhnke
City of Lake Oswego
5705 Jean Rd
Lake Oswego, OR 97035
Ref.: Core & Main —Sole Authorized Distributor—State of Oregon
Neptune Technology Group Inc. is pleased to affirm that Core & Main, is the sole authorized
distributor in the State of Oregon for Neptune RF meter reading equipment and software, Neptune
water meters and Neptune parts.
Core & Main is authorized by Neptune to submit an offer for Neptune water meters and related
products.
Thank you for your interest in Neptune products. If you have any questions, please contact your
local Core & Main representative, Zach Wilson at 971-294-0973, or your local Neptune
representative, Scott McCormick at 541-243-2188.
Sincerely,
Scott McCormick
Territory Manager
1600 Alabama 800-633-8754
Highway 229 neptunetg.com
Tallassee,AL 36078