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BACKGROUND The Automated Water Meter Infrastructure (AMI) Upgrade project was listed on the City Council Work Plan Priorities list in 2013 and the project was subsequently integrated into the CIP and budgeted following lengthy utility technology advancement discussions which initially began in 2011. In June 2016, the City entered into an agreement with Delta Engineering, the exclusive Product Distributor for Aclara in their California territory, with an initial contract amount of$7,181,782 to install 21,700 meters and other components. The AMI project is nearly 89% complete with 19,460 meters installed and the benefits of AMI is now being realized with the automation of water meter reading, and improved water consumption data assisting customers to better understand their water usage. DISCUSSION In September 2016, Delta Engineering began installing the new metering infrastructure in the City. The initial project plan was to replace approximately 80% (17,500) of the existing meters outright and to salvage approximately 20% (4,400 meters) of older pre-existing meters that were not yet completely at the end of their useful life and were potentially compatible with the new meter reading and transmitting technology. However, during the installation, those older meters have proven to be less accurate and less compatible than initially anticipated. The final total of older meters that meet an acceptable level of accuracy and remaining useful life is only 3% (750 meters). The balance of older meters that are not acceptable should be replaced with newer meters through the current project mobilization. The cost for this additional conversion is $950,000. This will result in a system with 97% new, accurate meters. The AMI project has an initial budget of$8,275,000. After the estimated procurement total for the project of $8,130,000, there will be a credit for recycling the old meters of approximately $135,000. This will adjust the total estimated project cost to $7,995,000. Cost for procurement and installation of remainder of the AMI Metering System Meters and associated hardware (Quantity 3,650) $ 669,000 Installation $ 220,000 Sales Tax $ 61,000 Total $ 950,000 Page 2of3