Item 16 - Appropriation Adjustment and Amendment to the Agreement for the Automated Metering Infrastructure Project

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Automated Metering Infrastructure Project July 16, 2024 Page 2 replace or retrofit all of the existing, manually -read water meters in the City with smart meters capable of communicating water consumption and other system information to both the utility and the customer. Additional components of the AMI Project are the installation of communications equipment to receive water system data, billing software system upgrades, and other software integrations to allow for full utilization of available water data. Due to the age and condition of the City's water system infrastructure, especially appurtenances that house or control the delivery of water to meters, the AMI Project has incurred additional expenses in order to correct related deficiencies. Although staff anticipated some supplemental work would be needed and attempted to budget appropriately with both the contingency for the AMI Project's master agreement, as well as with the use of third -party contractors, the amount of work and materials needed to make prudent repairs to the infrastructure has far exceeded initial projections. The requested amendment with Aqua -Metric (Exhibit 1) will add $6,000,000, including $1,500,000 in contingency, to cover already -determined expenditures, as well as establish a new contingency fund for future unknown costs related to the repair of the water system infrastructure. Finding cost-effective solutions to maintain and improve the City's water system infrastructure has been a priority for the Division. To date, the Division has been awarded $1,500,000 in grant funds from the Federal Bureau of Reclamation, $4,000,000 in grant funds from the California State Natural Resources Agency, and a $10,117,365 low -interest loan from the California State Water Resources Control Board for the AMI Project. However, due to the factors mentioned above, as well as rapid inflation driving up project -related material costs, additional funds are needed in order to complete the project as -intended. On June 4, 2024, the City Council approved the sale of Water Revenue Bonds to provide the capital needed to fund several Water Resources Division projects, including the AMI Project. To date, only $25,894,948 has been appropriated to the project; the approval of the recommended actions will appropriate an additional $15,000,000 to the project for a total of $40,484,948, and amend the FY 24-25 CIP Plan (Exhibit 2). The additional funds will be used to cover the previously -mentioned increased costs incurred under the agreement with Aqua -Metric Sales Company, as well as allow for needed rehabilitation on the City's water meter vaults and appurtenances. Proiect Delive The estimated total project delivery costs include work being performed under the agreement with Aqua -Metric Sales Company, project management and software integration support services, as well as supplemental work to replace or rehabilitate aged water meter infrastructure.