Why is the City not using the remaining COVID money to help with the cost of fixing our water system? This would benefit all of Bartlesville, private and business.
The background: The City will receive a total of $6.3 million in federal stimulus funding over two years through the American Rescue Plan Act (ARPA), resulting from the COVID-19 pandemic. The first tranche, or payment, was received last year. The second tranche is expected by the end of this year. The funds must be spent or committed by Dec. 31, 2024.
During the budgetary process last year, about $1 million was allocated per year over the 3.5 year duration to support increased wages for the City’s essential workers as defined by the ARPA. After utilizing about $3.5 million for this purpose, the City is left with approximately $2.9 million. During a May 23 City Council workshop meeting held for council discussion on the proposed budget, possible allocation for the funds was discussed, including additional funding for the Stabilization Reserve Fund, to complete other priority capital projects and/or projects identified in the City’s strategic plan, as well as for the operation and maintenance of the First Christian Church building and a mental health co-response pilot project between the City of Bartlesville and Grand Lake Mental Health.
You’re caught up: According to City Manager Mike Bailey, the most basic reason water system infrastructure was not considered for ARPA funding is that the $2.9 million the City is expected to receive simply isn’t enough to have made a significant impact.
“While the ARPA funding we expect to receive can go a long way in funding some of the smaller projects we have coming up, it isn’t significant enough to address our larger infrastructure needs in any meaningful way,” said Bailey.
What are those costly infrastructure needs? Well, here’s a list just to start, but Water Utilities Director Terry Lauritsen points out this is based on what can be funded based on the current rate system. Ideally, $750,000 would be invested per fiscal year on each of these items, Lauritsen said.
- Renovation of the Chickasaw Waste Water Treatment Plant — $45 million
- Improvements to the Caney River Wastewater Pump Corridor — $20 million
- Improvements to the wastewater collection system — $3.7 million
- Improvements to the water distribution system — $3.3 million
- Replacement of equipment (pumps, motors, controllers) at the Water Treatment Plant — $1 million
- Water reuse system — $8.2 million (paid partially through grants)
“These capital improvements can be funded using low-interest loans from the Oklahoma Water Resources Board, so it only makes sense to utilize those funding mechanisms and save one-time money such as ARPA funds for projects we would be hard-pressed to fund any other way,” Bailey said.
Back to the future?
Since this system is millions of dollars and will need to be replaced every 10-15 years, and the Mueller system has been a near complete failure, has the City considered the alternative of hiring meter readers again?
In 2013, the City installed an automated meter infrastructure system for water meters that replaced existing, manually-read meters with meters that automatically read and reported data at predetermined intervals to the City. The cost of that system was $3.8 million. The system has experienced a 98 percent failure rate with the meter transmitters, however, resulting in the replacement of the transmitters on 16,086 of the City’s total 16,403 meters.
The good news: The cost of the replacements so far has been zero dollars because the meters were covered 100 percent by warranty, which Mueller Water Products, the manufacturer of the system, has honored.
The bad news: The City will enter the pro-rated portion of the contract within the year, meaning the cost of continuing to replace transmitter nodes on the remaining meters is about to go from zero to about $300,000.
Also problematic is, as is suggested in the question, the system is due for either an upgrade or a replacement due to changes in technology.
This means the City needs to choose: Stay with Mueller Water Products and upgrade the existing system despite its 98 percent failure rate in the past 10 years, or replace it entirely with a new system from a different manufacturer.
Option 1: Keeping the Mueller system will cost $350,000 to upgrade the backbone of the system, which conveys the information from the meter transmitters to the software.
“Until recently, Mueller stated the new system would be fully backward compatible, but they are now saying the system will not interface with earlier versions,” Lauritsen said. “This means the City will have to operate and maintain two independent systems until all of the meter transmitters are upgraded.”
The cost to upgrade all the transmitters to communicate with the upgraded system is around $2.5 million, Lauritsen said. Also, there will be additional costs to manage the data on both systems, which is not yet known.
“The final blow is that Mueller will not put into the contract several items they have communicated to staff regarding the upgrade,” he said.
Option 2: Replacing the system, which is expected to cost an estimated $7.5 million.
“At the time that we contracted with Mueller, in 2013, there weren’t many companies offering these services,” Bailey said. “There are many more options now, and with companies that have very good track records with cities our size. We have a luxury now that we didn’t have then, not only with more options but also the benefit of hindsight when it comes to contractual issues.”
These factors combined brings City staff to recommend the council consider the replacement option instead of the upgrade.
So it’s true that installing a new AMI system is a multi-million dollar investment, but upgrading that system once it’s installed would be substantially less. Reverting to a manual system not only creates a labor cost for meter readers but also for maintenance and repair staff and support staff in the billing department. Another issue is finding that staff in the first place, as the City — along with just about everyone else in the world — is experiencing a labor shortage.
Also worth remembering is there were reasons other than workforce funding that prompted the City to switch to an automated system to start with. Automation allows water usage to be monitored on an hourly basis, making it much easier to detect and verify leaks that waste water and cost water customers money. In short, when an automated system works, it’s a win-win for the City/taxpayers and utility customers.
No legal recourse
Have legal proceedings against Mueller been considered?
Legal action is not being pursued against Mueller Water Products because the company has honored everything it was contractually obligated to pay.