Freeport council approves Amerisco meter‑replacement contract after debate over scope and cost

The Freeport City Council on Oct. 1 approved a $33,480,210 turnkey contract with Amerisco to implement an advanced metering infrastructure (AMI) and replace the city’s water meters, voting 4–1 after an extended discussion about cost, timing and alternatives.

City staff and Amerisco told the council the project is structured as a performance contract under Texas Local Government Code 302 and includes a company guarantee that meter‑accuracy shortfalls will be covered by Amerisco either through replacement or payment. The contract, staff said, will not be validated until financing is secured and the city issues a notice to proceed.

The vote followed two earlier work sessions and an hour of questions at the council meeting. City Public Works/utility staff summarized the contractor’s scope — audit, site visits, meter testing, design, installation, software integration, training and commissioning — and the guaranteed outcomes. Staff said operational savings would be about $93,000 per year and that capturing lost or uncounted water revenue would yield about $305,000 in year one of operation.

"As you know, we've had two workshops concerning this item," City staff presenter Mister Petty told the council when introducing the contract and the performance contracting framework. He emphasized that a third‑party, licensed professional engineer in Texas had validated the calculations and guarantee.

Several council members pressed the company and staff on whether a targeted, incremental replacement would be a less‑costly alternative than replacing the whole system. One councilmember asked, "If you have a flat tire and you have four tires, do you buy a whole new car or do you just fix that tire?" expressing concern about replacing all meters when staff had previously said 75–90% of meters appeared to be working.

Amerisco representative Mister Nobles responded that tests showed the problem was not confined to a small share of meters and that "you can't just patch those because the average meter is reading, I think, 90% accurate, which means it may be failing on the low flow side, but reading a 100% on the high flow side." He said some meters read near 100% at typical flows yet miss low‑flow usage, and that older mechanical meters can under‑register consumption as they age. Amerisco reported that, of 68 sample meters tested, 29 did not meet the American Water Works Association accuracy standard used for the study.

Staff said the financing plan under discussion would be designed so payments begin after the meters are generating revenue; the city expects a roughly 5–6 month installation period once meters are on site and the financing arrangement calls for the first loan payment to begin 12 months after project completion (the first year structured as interest‑only). Staff said the city has received loan offers and would return to council with financing terms before issuing a notice to proceed.

Amerisco told the council the project is intended to be budget neutral for the city because the recovered revenue and operational savings would offset debt service; Amerisco also guaranteed compensation if performance targets are not met. Mister Nobles said he would be required to "cut a check" if the guarantees failed.

Council members who opposed or expressed reservations cited timing and the city's tight budget. One councilmember said city staffing turnover — including a recently departed chief financial officer who had also led the water department — made it prudent to delay large capital commitments until internal processes and training were stable.

The formal motion to approve the contract was made by Councilman Matamoros and seconded by Councilman Raso. The motion passed 4–1.

Next steps: staff said the contract will only be executed after the city secures financing and issues a notice to proceed; installation would begin once meters are delivered and is expected to take about five to six months.

Votes at the council meeting included this item as Agenda Item 4(c); council also recorded other votes across the same meeting on bank signatories, grants, surplus equipment donations and multiple hurricane‑damage repair contracts.