Fort Smith Utility Department eyes $550,000 meter replacement program, would reduce lost revenue

by Aric Mitchell ( 70 views 

The city of Fort Smith will launch a $550,000 effort in 2017 to begin replacing its more than 35,000 water meters pending approval of next year’s budget.

Interim Utilities Director Bob Roddy of Burns & McDonnell said at the Dec. 1 budget hearing that “every 10 years you should be replacing your meters” and that “in years past, we had a period of time when we were unable to invest as we should have.”

Fort Smith Finance Director Jennifer Walker clarified at the same budget hearing the city has been taking part in some meter replacements through bond funds in previous years, but only investing “between $300,000 to $400,000” annually, causing the schedule to fall behind as Roddy indicated.

“So right now, with this amount of money, we’re on a three- to four-year cycle to getting all our meters on a rotation of 10 years or less. As we replace these meters, you’ll see a more accurate accounting,” Roddy said.

On Tuesday (Dec. 20), Fort Smith Deputy City Administrator Jeff Dingman explained further, noting a priority for the replacement program will be commercial meters, particularly those involving industrial and commercial customers.

“Bad meters are great for customers, but bad for a utility,” Dingman told Talk Business & Politics, observing that a faulty meter certainly leads to lost revenue, though it is difficult to place an exact number because “all meters are different.” However, during the changeover process, the city will spot-check meters for flow accuracy

“Typically they’ll bring in a meter they’ve changed out and test its efficiency, and may see it’s performing at only 75% of what it should be registering.”

That’s “justification” in continuing to invest in the replacement program, Dingman said, because “while the cost of the meter is born by the utility, when you put a new meter in, it pays for itself.”

“It’s not a bad investment even for a $5,000 meter because it can pay off in a matter of months,” Dingman added. “The ones that have the biggest impact are the 10- or 12-inch meters. There might be a certain level of stream going through those that aren’t even being counted. We know where all these meters are and the age of them and the particular size. So when one of these gets five years old or older, it’s time to start looking to see if we need to replace.”

Of the city’s 35,000 meters, commercial meters comprise only 8% to 10% of the total, ranging in size from 2 to 12 inches, with the 10-inch and 12-inch meters running between $4,000 and $5,000 each compared to the 3/4- to 1-inch residential meters, which total $200 to $300 apiece.

Because of the vast difference in cost per unit, Dingman said, “It doesn’t make sense to replace the small ones on as regular of a cycle.” Fort Smith City Director Tracy Pennartz expressed interest in prioritizing industrial and wholesale meters for replacement at the Dec. 1 hearing.

The move could offer some relief to the city’s revenue streams in the absence of water rate increases. The consent decree has already pushed the Board to adopt sewer rate increases that by January 2017, will see the average bill of a Fort Smith customer rise to $47.91 from $19.63. Furthermore, Roddy said at the Dec. 1 budget hearing that “at some point in the future, it is my opinion you (the Board) will have to look at water (rates) as well” to meet growing costs.