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C i t y D e p a r t m e n t

o f o f

G a i n e s v i l l e , G A W a t e r

R e s o u r c e s

Meter Asset Management 2019 Prepared for:

Prepared by:

City of Gainesville, Department of Water Resources Linda MacGregor, Director Department of Water Resources Administration Building 757 Queen City Parkway, SW Gainesville, GA 30501 Nelsnick Enterprises Inc.

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Table of Contents

Meter Asset Management

Project Understanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Project Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Scope of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

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Project Understanding Nelsnick Enterprises Inc. (NE) has been analyzing billing data for over 20 years as part of water and sewer rate setting projects. Over the years, we have noticed that there usually exists billing volume anomalies not consistent with typical customer consumption patterns. As part of a system water audit, a public utility may find they pump more water into the distribution system then they can account for through customer metering and billing (Non-Revenue Water). A portion of this non-revenue water/wastewater can be attributed to system leaks (Real Losses) and non-metered situations (e.g. municipal usage, flushing, fire protection). However, significant differences (Apparent Losses) can be attributed to slow and inoperative meters, data handling errors and unauthorized access. Additionally, billing system coding errors may result in additional revenue losses in customer billing.

A detailed audit of the billing data would be beneficial to the utility in that customer coding errors may lead to either lost revenues or inequity between customers. For the

City of Gainesville, cost differences between Commercial and Residential Customers have resulted in a slight difference in the water and sewer rate structure. These cost differences may be related to peaking issues of the class. However, if a commercial customer is coded residential, they may not be covering their full cost. Likewise, a residential customer coded as commercial may be overcharged for their services. There is a higher degree of probability that a Residential land use may convert to a Commercial land use, rather than the other way around. As such, the Utility may not be recovering true cost due to coding issues.

A detailed audit of the billing data could also divulge consumption patterns that are not typical of the customer or the customer class. The potential exist that these are from inaccurate metering. There are several reasons why a meter can fail to record the proper volume. These include the following: • • • •

Manufacturing Flaws Damage in Transit/Storage Damage in installation Improper installation

• • • •

Post installation damage By-passed Meter and/or Customer Age of Meter Total Volume Metered

The results of a 2011 study by The Water Research Foundation (formally AwwaRF) funded by a grant from the U.S. EPA, showed that some meters failed to meet American Water Works Association (AWWA) standards for accuracy even if new. In other research, AWWA Journal OpFlow, “Improve Accuracy with Proper Water Meter Installation” the authors L. Burke and C. Hannah PE discuss multiple ways meters can be installed incorrectly. In the peer reviewed article by D. Stoker, S. Barfuss and M. Johnson “Flow measurement accuracies of in-service residential meters”, the authors concluded that some meters in their study failed to meet AWWA flow accuracy standards after a short time in service or, in some cases, immediately after installation. A February 2019 article in Journal AWWA “Detecting and Resolving Apparent Loss With Data Science” provided results for the Clayton County Water Authority. The article reported that in phase one, 3% of CCWA residential meters were flagged as under-registering. The estimate of non-revenue water was more than $585,000 over a four year.

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NE, however, does not view this type of data analysis as a long-term revenue generating project. Rather, we view the goal of this analysis to result in a more equitable distribution of costs among customers. In other words, apparent losses are paid for by customers with accurate meters1. Though we agree correcting coding issues and replacing inaccurate meters would provide increase in shortterm revenues, the captured apparent loss volumes will only generate additional revenues until the next rate increase. Thus, we see this project as a means to keep future rate increases lower and more equitable. Additionally, by combining this analysis with a planned meter replacement program, a meter could have a longer useful life and lower program cost.

These research samples should emphasis the importance in monitoring customer metering on a regular basis. Meter replacement programs in general focus on age. AWWA recommends replacement every 15 to 20 years with flow testing performed every 10 years. They recommend larger meters be tested more frequently. The Georgia Department of Natural Resources recommends replacement every 10 years if not sooner. Other programs factor in total volume. Nelsnick Enterprises Inc. conducted a study in 2011 related to using land use to customer consumption patterns for the Athens-Clarke County Public Utilities Department (ACC-PUD). The study identified metering issues by examining changes in customer consumption patterns relative to other customers within the same land use. The study identified approximately 40 potential meter failures, with ACC- PUD staff selecting the highest likely candidates for meter replacement. Nelsnick analyzed twelve months of billing volumes after replacement which showed approximately 11 million gallons more than the previous 12 months of billing. This was attributed from 60% of the meters replaced, the remaining meters show no significant volume changes. However, the total cost of meter replacement and the consulting time for analysis was less than the value of the 11 million gallons added (about $75k at 2011 rates versus $35,000 for the analysis and meter replacement cost). Given the current research and the results of the ACC-PUD study, Nelsnick Enterprises Inc. (NE) believes a comprehensive meter asset management program could be most beneficial to a community if care is taken to minimize cost and maximize results. A well designed meter asset management program would help restore equity in customer billing and reduce future rate increase requirements. The study

cost and the meter replacement costs should be recovered within the first year. Such a program would consider the following items. • Meter Size • Meter Age • Meter Thoughput

• Customer Consumption Patterns • Facility/Land Use • Meter Type

By examining these items in a comprehensive way, the cost of meter testing and replacement can be focused on the higher likely meters needing attention. The key would be to design such a program that considers all the issues regarding meter failure. Damaged, worn, by-passed and improperly installed meters should be addressed as soon as possible and in the most cost effective way. After all, the meter is often described as the cash register of the utility.

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Rates are set based on billed volume, apparent water losses result in higher rates than needed otherwise.

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Project Approach The approach to this project will be to perform a comprehensive database analysis of the billing data comparing historic consumption for each customer based on actual land use classification. NE shall obtain, and the City of Gainesville Department of Water Resources shall provide the billing data records for the water/wastewater customers that will provide name, physical address of meter, rate codes and monthly consumption data for five or more years. This will allow for an analysis of historic billings compared to similarly coded customers. Accounts with unusual consumption patterns or usage below average for similarly coded customers can be identified for direct field investigation.

Project Objectives This project would have three primary objectives: 1. Identify customer’s whose billed volume is below an established threshold for customers within the same land use classification; 2. Develop policies related to the selection of meters based on a comprehensive review of customer consumption patterns and facility/land use, age of meter, type and size of meter, and total volume; 3. Develop procedures related to the steps needed to meet the above policies and ongoing maintenance of the meter asset management database.

Data Needs Billing Data - Latest 60 months electronic data containing; • account number; • physical address; • account name; • billed volume by month; • meter reading date; • any/all customer codes, and; • meter/line size codes; - The longer the period the more robust the statistical analysis; Mapping (digital format preferred) - Existing Land Use map - Service Area Boundaries - Meter locations map (if available)

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Scope of Work Phase 1 Task 1.1 – Billing Data Purpose: This task will include an analysis of the billing data for the purposes of identifying customer types. Description: Using the existing coding scheme engaged by the City of Gainesville Department of Water Resources and supplemented by the account name for non-residential customers NE will identify customer types/classes. Using the account name, further detailed can be determined for nonresidential customers.

Task 1.2 – Customer Usage Analysis Purpose: This task will provide consumption statistics for each category of customer developed as part of Task 1.1 above. This task will seek out the low hanging fruit, obvious metered volume errors based on a statistical analysis of both the individual customers consumption pattern changes over time and as a direct comparison to similar class customers. Description: An initial assessment will be made on each customer based on customer coding and historic usage patterns. This will include the following: 1. Comparison of annual, seasonal and monthly usage of each customer to other similarly coded customers and non-residential names. 2. Comparison of historic changes in consumption relative to similarly coded customers and non-residential names. 3. Identification of significant individual customer usage changes over time. NE shall identify the peak usage, and the mean, median and standard deviation for each customer category’s water and wastewater consumption by month, season and year. NE will

develop a meter asset management database that can be updated annually and used in a more efficient meter replacement program using consumption pattern changes and total volume metered.

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Task 1.3 – Assessment Reports Purpose: This task will provide the public utility with a one-page report for each likely candidate for potential meter issues. NE will provide a priority order for these and review with the appropriate staff to determine action2. Description: NE shall provide the City of Gainesville Department of Water Resources with the most likely3 candidates for non-revenue billable volumes. The report shall contain: • • • • •

candidate information (name/location); usage history (if any); customer category information; comparison to similar customers, and; description of the potential error and potential lost revenue estimate.

For meter reading and coding errors, the annual lost revenue will be determined by the difference between the last 12 months of billed data for the customer and the average for that customer’s category. For customers with only partial year data, the annual lost revenues will be determined by prorating available data based on the peaking factors developed in Task 1.2. The reports will be provided in a three-ring binder4.

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This is an important step, in that City of Gainesville Department of Water Resources staff may have knowledge of recent changes of customer operations that may have resulting in lower volume usage. In the Athens Ga study, a customer was flagged, but the Water Conservation Coordinator noted that this customer recently performed a retrofit for higher efficient water fixtures. 3 A likely candidate would be a customer having a statistically lower billable volume than his category or a non-customer property having a land use/zoning that would normally require public utility service. It is anticipated that only a percentage of these would result in finding lost revenues. 4 Other binding methods are available if requested. A three-ring binder allows for easy access to reordering and/or replacing the individual reports.

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Phase 2 Task 2.1 – Windshield Survey Purpose: This task will provide a higher level of detail of the land use and allow verification of customer coding. This task will result in reaching the higher hanging fruit. Description: NE will drive each public road within the utility service district. All land uses will be identified and recorded on a GIS map. The following land use categories will be utilized: • Single Family - Minimal/dried out landscape - Significant/lush landscape • Townhomes/Condo’s • Duplexes • Multifamily (3 or more units) • Hotels/Motels • Clinics and Medical Related Offices • • • •

Veterinary clinics Hospitals Office (Non-Medical) Restaurants - Sit Down - Fast Food - Drinking Establishments/Bars • Banks • Retail - Discount Stores - Building Supplies with Garden Centers - Building Supplies without Garden Centers - Garden Centers - Pharmacies - Hardware - Specialty Retail - Grocery Stores - Market - Apparel store

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By performing a windshield survey of the service district, additional coding errors may be found. The additional detail of a windshield survey allows for a higher degree of analysis not achievable using most utility coding systems.

• Services - Automotive - Car wash - Gasoline with car wash - Gasoline without car wash • Institutional - Schools - Churches - Day Care - Student Dorm Housing - Cemetery - Library • Other Uses

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Task 2.2 – Customer Usage Analysis Purpose: This task will provide consumption statistics for each category of customer provided as part of Task 2.1. NE will provide a priority order for these and review with the appropriate Department of Water Resources staff to determine action. Description: NE shall identify the peak usage, and the mean, median and standard deviation for each customer category’s water and sewer consumption by month and year.

Nelsnick Enterprises will use a similar statistical approach as used in Task 1.2 but with a higher level of detailed offered by the windshield survey.

Task 2.3 – Assessment Reports/Meter Asset Management Database Purpose: This task will provide the City of Gainesville Department of Water Resources with a one-page report for each likely candidate for lost revenues. It will be generated from the meter asset management database. Description: The consultant shall provide the Department with the most likely candidates for meter testing and/or replacement. The report shall contain; • • • • • •

Nelsnick Enterprises will provide an enhanced onepage report showing more land use and consumption detail.

candidate information (name/location); usage history (if any), meter type, size, age, throughput; land use information; comparison to similar customers; and description of the potential error and potential lost revenue estimate.

For meter reading and coding errors, the annual lost revenue will be determined by the difference between the last 12 months of billed data for the customer and the average for that customer’s category. For customers with only partial year data, the annual lost revenues will be determined by prorating available data based on the peaking factors developed in Task 2.2. The reports will be provided in a three-ring binder along with a map designating their locations.

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Task 2.4 – Policy and Procedures Purpose: This task will develop the policies and procedures related to the implementation of a comprehensive meter asset management program. Description: NE shall provide policies and procedures using the last research and the results of Task 1 of this project to define a program tailored to the needs of the City of Gainesville. The polices will be management statements related to the conditions needed to test and/or replace a meter. The procedures will be a detailed document related to the steps needed to identify the policy conditions and maintain the meter asset management database. The goal of the program is to have an efficient meter replacement program that balances minimizing Public Utility staff time and funding requirements and maximized the conversion of non-revenue water into billable volumes. NE shall provide both the documents and the associated meter asset management database.

Project Assumptions • Meter locations to be provided in ArcView shape file or geodatabase format or provided in a latitude/longitude or state plane x-y text file. Locations must contain account number linkable to the consumption data. • The physical address provided in the billing data will be utilized where meter locations are not available. • Historic billing data in comma delimited or other electronic format that is capable of being imported into Microsoft Excel or Access. Other formats may be available upon discussion with staff. Billing data must contain account number, physical address, and account name, meter read date, all coding fields, and all manual adjustments and billing volumes by month. • Consultant shall not enter private property as part of this project. All land use determinations will be from the road right-of-way. • Meter replacement to be done by City personal or their contractor. NE will only identify potential metering or coding issues.

Public Utility Staff Participation This project will require public utility staff time. It is anticipated that there will be time needed to process the historic electronic data before giving it to the consultant. This may be a couple of hours to several days Public utility staff time depending on the billing software used, and how far back will be needed for in history records will be retrieved. project success. Verification of the likely candidates may add time to both field and/or customer service personnel. The goal of this project is to focus these staff resources in the recovery of apparent water losses.

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Nelsnick Enterprises will make every effort to minimize this time.

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Compensation Phase 1 for desk top computer analysis only. No windshield survey or policies. This would be for a fixed fee of $14,500. The result of Phase 1 can be used to refine the scope and fee of Phase 2. It is anticipated that $50,000 in annual revenues can be recovered from apparent water losses or correcting of billing codes. This is based on current size and rate structure of the City of Gainesville.

Phase 2 will include windshield survey and development of meter asset management program/ policies. This would be for a fixed fee of $29,500. The scope and fee can be adjusted as needed based on the results of Phase 1. It is anticipated that an additional $50,000 in revenues can be recovered from apparent water losses or correcting of billing codes.

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