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HomeMy WebLinkAboutItem 11f - Purchase of AMI Radio Read-Water MetersPurchase Order for Water Meters April 4, 2023 Page 1 of 3 DATE: April 4, 2023 TO: Honorable Mayor and City Council FROM: Paul Cranmer, Public Works Services Director By: John Corona, Utilities Superintendent SUBJECT: PURCHASE ORDER WITH CORE & MAIN FOR PAYMENT OF PURCHASED AMI RADIO-READ WATER METERS FOR THE CITY’S ANNUAL METER REPLACEMENT PROGRAM IN THE AMOUNT OF $298,390.54 CEQA: Exempt Recommendation: Approve SUMMARY As part of the Annual Meter Replacement Program, the Public Works Services Department (“PWSD”) Warehouse maintains a supply of water meters for the Utilities Section. On August 3, 2021, the City Council awarded a purchase order to Core & Main for the purchase of AMI radio-read water meters and an order was placed with Core & Main on March 9, 2022. Due to COVID-19 pandemic production delays, the complete meter order was not received until the end of 2022. This purchase order will satisfy payment of the water meters purchased on March 9, 2022. It is recommended that the City Council approve a purchase order with Core & Main for the purchase of AMI radio-read water meters for the City’s Annual Meter Replacement Program in the amount of $298,390.54. BACKGROUND The Annual Meter Replacement Program was created to replace manually read water meters with new meters that are capable of being read via radio frequency. In the Fiscal Year 2021-22 budget, the City had a formal contract with Core & Main for the purchase of AMI Master Meters for the Annual Meter Replacement Program. On March 9, 2022, City Staff placed an order for 700 AMI Master Meters and 50 Octave Meter Encoder Modules with Nicor cables. Due to manufacturing delays resulting from the COVID-19 pandemic, delivery of these meters was substantially delayed. On May 11, 2022, City staff received a letter informing all Master Meter customers that beginning June 1, 2022, Hydropro Solutions would become the exclusive distributor for Purchase Order for Water Meters April 4, 2023 Page 2 of 3 Master Meter. This necessitated a change order to the water meter purchase order to reflect this unforeseen change in distributors from Core & Main to Hydrpro Solutions. This resulted in the closure of the purchase order with Core & Main. The remaining funds which had been dedicated to Core & Main for the meter order purchase from March 9, 2022, were requested to be rolled over into the next fiscal budget year in order to pay for the meters that had been ordered, but had not yet been delivered. All future water meter purchases will be exclusively fulfilled by Hydropro Solutions. On November 17, 2022, the shipment of 700 AMI Master Meters, and 50 Octave Meter Encoder Modules with Nicor cables was delivered to the Public Works Warehouse. Payment is now due to Core & Main for these meters that had been ordered over a year ago. Due to the closure of the purchase order with Core & Main on June 1, 2022, City Staff is requesting to open a new purchase order with Core & Main to pay for the shipment of meters received on November 17, 2022. This will be a one-time payment for the backordered meters from March 9, 2022, and sufficient funds are available for this purchase. DISCUSSION Due to an excessive delay in meter production and delivery, as well as the change in distribution sources from Core & Main to Hydropro Solutions, City Staff evaluated all options as they pertained to the meter order from March 9, 2022. The evaluation is as follows: • The AMI water meters delivered on November 17, 2022, came preprogrammed to the City’s specific frequency for radio reading which means they are available and ready to be installed into the City’s water distribution system immediately. To return the water meters to Core & Main, instead of requesting a new purchase order, would cost the City a 25% restocking fee based on the original purchase price. • The 700 AMI meters and 50 Octave meters would need to be repurchased which would come at an additional cost as the price of water meters has significantly increased within the last 6 months. It has been determined from the evaluation that the issuance of a new purchase order to Core & Main for payment of the March 9, 2022, order would be the most cost-effective resolution, and prevent further delays in the Annual Meter Replacement Program. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. Purchase Order for Water Meters April 4, 2023 Page 3 of 3 FISCAL IMPACT Funds in the amount of $298,390.54 have been reserved in the Fiscal Year 2021-22 Capital Improvement Program and will be used for payment to Core & Main for the 700 AMI Master Meters and 50 Octave meters as outlined in the water meter replacement program. By issuing a new purchase order to Core & Main in order to fulfill payment for the March 9, 2022, purchase enables the City to avoid a 25% restocking fee that would result from returning the meters. Further, this purchase order enables the City to retain the meters at the original purchase price, which comes at a savings as compared to the current market rate price for these meters. RECOMMENDATION It is recommended that the City Council determine that this action does not constitute a project and is, therefore, exempt under the California Environmental Quality Act (“CEQA”); and approve a Purchase Order with Core & Main for payment of purchased AMI radio-read water meters for the City’s Annual Meter Replacement Program in the amount of $298,390.54.