Minter Challenges Monroe’s Water Meter Plan

Well-known Monroe civic activist Byrd Minter has challenged the City of Monroe’s proposed change of water meters to automatic meter readers (AMR). Minter is a retired Ford, Bacon & Davis engineer and has had extensive experience dealing with water meter issues in Monroe.

Herewith is correspondence Minter sent to The (Monroe) News-Star’s Ken Stickney on the subject.

July 8, 2010
TO: KEN STICKNEY NewsStar

This confirms our conversation Monday, May 17 regarding your editorial that day regarding the city’s water meter replacement program. I have added some specifics.

The bids for the latest AMR water meter replacement project were opened today, July 13th. The next action will to bring the lowest bid to council for acceptance !!

The city administration, Council members nor the media has given any coverage to the economic justification, or lack of economic justification of the Mayor’s AMR water meter replacement program; i.e. comparing traditional meter replacement vs. the AMR system.

In 1998 when I found my water meter not measuring consumption I immediately contacted Billy Pearson who informed me there were approximately 2,000 such meters referred to as “zero consumption meters”. Further checking with him I was told there were probably 15,000 residential meters or 3/4 inch meters. I then calculated the potential loss of revenue just based on those 2,000 “zero consumption” meters.

I presented this information to the City council in October 1998 along with handouts. Your reporter Mark Rainwater took the information – confirmed it then ran a series of articles over the next few months. You know the story.

Next I received data from the American Water Works Association regarding tables on the loss in efficiencies of water meters based on years in service. I made assessment of those losses in revenues due to loss in efficiency due to age and miles of services. The losses from “zero consumption meters” was then added to above.

These calculations were done on one legal sized sheet of paper. I reviewed this with Fred Westrom, he agreed with the engineering approach and the numbers used. He said if we were still at FB&D and I brought these figures to him FB&D would wind up with a contract to do an engineering study for which FB&D would be paid probably $50,000.

This recap was presented to council and the mayor in October 13, 1998 with a handout. The media was also given copies. Nothing happened over the next 2-3 years – 2 changes in administration – except a study by S.E. Huey involving meter proof test of 28 big meters and a recommendation for a meter replacement program. No corrective action taken.

In the spring of 2002, during budget meetings, I presented to council and mayor up dated lost revenues and cost to replace meters, requesting this be considered in the coming FY 2003 budget. No positive actions taken.

In 2003 a Citizen’s Budget Review Committee was established with a special panel to study lost revenues and a water meter replacement program. This became news worthy (NewsStar 1/26/04 and 5/18/04).

Following the release of FY 2003 audit I presented to Council and Mayor a review of lost revenues and “negative findings” listed in the audit and related lost revenues. These were broken down in four specific reports involving the main areas where the city was loosing revenue within the water/sewer department.

In August 2004 a RFP package for AMR water meter replacement program was solicited. The city Engineering Dpt’s. estimate for in house program was $3.5 million. The document was so ill-prepared it was recalled (NewsStar Jan. 31 2005 ) –conflicting and insufficient information to make a proper bid -. I represented a major water company’s technical service division and identified many of the deficiencies.

In late 2005 Mayo appointed a Water Rates Committee. My councilman, at that time Lyle Miller, took my October 1998 Engineering Study on the economics of a water meter replacement program to the meeting. Some numbers were made public by the committee. Those figures are the basic numbers still being used today. The calculations justifying meter replacement was based on just replacing water meters with state-of-the-art type meters and rates at that time.

Camp Dresser & McGee became part of the Water Rates Committee. Since that time the only area of consideration has been to replacement of meters with the AMR system. The AMR system will not result in measuring one more gallon than a conventional meter, i.e no additional revenue but adding approximately $6.0 million (current) in capital cost. ?? Why does Mayor continue pursuing the AMR system ??

Through a Jan. 9th & March 27, 2007 follow up ‘Request For Information’ I received ‘Minuets of Meeting’ of the committee. The minutes of March 16, 2006 (attached) are most revealing. CDM ‘Justin’ tells mayor they have $5,000,000 available – but does not know whether that will result in enough additional revenue to off set the expense of replacing the meters – (meaning AMR system).

After realizing the Mayor was going with the AMR system regardless of cost I followed up with economic comparison of just water meter replacement vs. the replacement with AMR system. That report dated March 11, 2005 was presented, with handouts, at City Council meeting. That report was also given to the media and has since been given to and discussed with each new council person. The report is attached with a few comments related to current figures and expected bid cost.

My short discussion with Gretchen Ezernack regarding economic justification was “would you build or buy a property for $1.0 million and lease it out for 10 years based on a capital cost of $200,000 – 250,000”? That is what the council will be doing if the authorized the soon to be received RFP low bidder is approved.

When Mr. Janway came on board I visited him. I knew him well as I did his father. The water meter replacement program came up. He stated his son was an Engineer with a company in Houston who worked with government entities. He stated his son said “don’t consider AMRs”. Apparently he is not taking his sons advice.

The March 27, 2007 “Request for Information” provided: in August 2006 CDM/Denmon was paid as stated “Addition of $104,000 for Water Meter Evaluation” for a report which included numbers on water consumptions – revenues – potential losses of revenue and a total capital cost estimate of $6,000,000. A Sample RFP for “Water Meter Replacement Program” was also included. There was no economic justification information provided.

The reported savings were five water meter readers ( $34,508 each per year) who would be reassigned, i.e. no savings. He reported the system would provide immediate reporting of meter reading malfunctioned with no monetary value assigned. (My recent experience with ATMOS Energy on my gas meter – their AMR malfunction and it took over three months for them to recognize they had a problem). He also recorded a savings – with no monetary value – they would be able to get the bills out quicker.

Note in my March 11, 2005 attached study, based on revenues from utility rates and cost estimates at the time, each economic evaluation-, ROI, UAERR – replacing the meters with standard state-of-the-art water meters versus the AMR system is approximately a 5 to 1 justification, i.e. five times the additional revenue required – five times longer to get a return on investment.

In the August 2006 Denmon study there is no consideration given to maintenance and operating expense of the AMR system. A year and a half ago I checked with ATMOS regarding problems they were having with their 55,000 AMRs. They gave me unofficial information that they were having problems such as unacceptable re-reads and malfunctioning of the transmitting system requiring replacement (just as I recently experienced). I asked my councilman Mr. Marx if he or any city people had checked with ATMOS regarding their automatic meter reading system. His response was basically “that is not our job, that’s what we expect from our engineers”. (It is obvious their engineer has not provided adequate reliable information to make a good decision on the Mayor’s AMR system).

Shortly after Mr. Marx took office the meter replacement program came before City Council. He stated he would have to see a cost study comparison of both systems before he could consider such a program. No cost has been presented for just meter replacement or comparison with using the AMR system. His position seems to have changed. He has voted at least three times to go with the AMR system without a cost study comparison.

In December 2008 “ Monroe opens bids…” NewsStar Dec. 4, 2008 then in May – NewsStar May 13, 2009 – by a 2-2-1 abstain vote the lowest proposal of $7.0 million was rejected – being a million plus over the engineer’s latest estimate.

Over the last 8 + years I have contacted two major investor owned water companies. They both report they do not use the AMR. They are under regulatory oversight and basically required to “provide a safe and dependable service at the lowest possible cost will still rendering to the investors a reasonable return on their investment”. Such capital expenditures in the regulated private sector do not meet those requirement.

Failure to proceed with a conventional water meter replacement program during the past 8 – 10 years has resulting in lost revenues over those years – enough to have more than paid for a conventional water meter replacement program several times

Twelve years back I first brought the losses in revenue to the council’s attention. With the help of the NewsStar such revenue losses, along with the need to replace the meters, became general knowledge. The NewsStar has continued to follow up as news worthy occasions came up. It is ironic that now I am the lone voice trying to stop the Mayor’s AMR water meter replacement program to hopefully prevent the waste of some $6.0 million so the Mayor can go to Louisiana Municipal Association convention and report what a great job he has done in addressing his neglected infrastructure problem. And especially pleasing the AMR equipment manufactures and continuing to make his engineering friends happy. There will be the standard engineering fee for the specifications for the pending RFP plus a large project management fee if approved.

In conclusion; hopefully you will give equal coverage — to the lack of economic justification of the AMR system versus economic justification of a conventional water meter replacement program — as you gave to your May 17 Editorial “Truth in billings?” and other Editorials and articles. The NewsStar has been the primary media making the public aware of the need to replace the water meters. Hopefully you will do the same regarding the mayor’s wasteful AMR option program.

7 Responses to “Minter Challenges Monroe’s Water Meter Plan”

  1. Jim Schmidt Says:

    Hmmmmm!!! Jonesboro has had this system installed for a few years and it would be interesting to see the economic results of this change. However, with no accounting system, no one will ever know.

  2. Karen Says:

    Given the handheld reader was supposedly broken for a few months and replacement cost $5k (I believe or it might have been $8k–according to what was stated in a council meeting) and the fact that the mayor blamed lack of training on the problems with the water bills being doubled from month to month, I doubt any savings was seen. You cannot implement technology in an environment where they cannot even master the simplest task such as balancing a checking account and expect things to go well. In my opinion, implementing this high cost automatic meter is a waste of taxpayer money considering the infractucture of the water system (pipes & all) is in such disrepair and has been allowed to basically go for many years without improvements. So, we have a fancy automatic meter with a collapsing infrastructure…kind of like having high dollar wheels on a rusted out car.

    I hope Monroe is smarter than Jonesboro.

  3. JohnMartin Says:

    Camp Dresser McKee is notorious nationally for their high fees charged to their clients and acting as if there is no limit to the client’s available funding. Best Monroe shed the company and go to one with a more practical look at municipal operations.

  4. Monroe City Council Tuesday Night « Lincoln Parish News Online Says:

    […] will the issue of the Automatic Meter Reading (AMR) water meters. (c) Introduce an Ordinance authorizing James E. Mayo, Mayor, to enter into a contract […]

  5. Water Meter Ordiance on Monroe Council Agenda « Lincoln Parish News Online Says:

    […] Minter Challenges Monroe’s Water Meter Plan […]

  6. Minter Stops AMR @ Monroe City Council « Lincoln Parish News Online Says:

    […] Minter Challenges Monroe’s Water Meter Plan […]

  7. City of Monroe’s Governmental Crisis Grows « Lincoln Parish News Online Says:

    […] Minter Challenges Monroe’s Water Meter Plan […]

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