The agenda for the 2023-24 Hot Springs Board of Directors’ first business meeting Tuesday included an ordinance waiving competitive bidding for the purchase of 1,000 residential water meters.
The $317,769 the ordinance allocated from the water fund would pay for the first round of a wholesale meter replacement across the regional water system’s 145-square-mile service area.
City Manager Bill Burrough told the previous board last summer he estimated a $12 million cost for the replacement program. It represented about a quarter of the close to $50 million he identified in unfunded capital needs.
The water system has more than 32,000 residential meters, according to the official statement for the $50 million in new and refinanced water fund debt the board authorized in November to complete the over-budget Lake Ouachita water supply project.
The $2 base rate increase that took effect at the start of the year for residential customers inside the city is servicing the debt. The rate schedule the board adopted last year will assess another $2 increase in November. Residential customers outside the city saw their minimum monthly charge increase $3 at the start of the year. Another $3 increase will take effect in November.
The city told the board last week that many meters are at or near the end of life. At that point, they lose about 1% of their accuracy every year, the city said.
“As meters wear out you get an underreading, not an overreading,” City Attorney Brian Albright told the board. “It’s important to get an accurate reading so the city is accurately charging.”
Burrough told the board last summer the meters retained a high book value because they were expensed over too long a time frame. He said they should have been depreciated over 10 years rather than 20.
The city said the new meters will have a service life of about 15 years.
Burrough told the board last week that meter transceiver units, which use radio signals that enable the remote reading of meters, and batteries are being replaced in existing meters to extend their service life.
“We’ve got enough in the budget to continue to replace MXUs and batteries while we’re going back and replacing meters,” he said. “We think we have a pretty good plan moving forward, but probably in about five years we need to look at a substantial order.”
Core & Main Co. will provide the new meters and components from Sensus, the manufacturer the city uses for all of its meters. The ordinance authorizing the purchase stated competitive bidding wasn’t feasible, as the North Little Rock company is the state’s sole provider of Sensus products.
The purchases and contracts chapter of the state code allows cities to waive competitive bidding if it’s not “feasible or practical.”
“In order to ensure compatibility throughout the system, new meter installations must be of the same model and brand, and such meters are only available in Arkansas through a single supplier,” the recitals section of the ordinance said.
The cost would be allocated from the water fund’s meters and parts line item.