Mount Vernon outlines $2M H2 Overhaul: replace meters, install flow monitors and use internal debt to finance upgrades

Mount Vernon administration presented a multi‑year utility modernization plan — dubbed “H2 Overhaul” — to replace aging water meters, install permanent wastewater flow meters to measure inflow and infiltration (I&I), and improve metering and billing accuracy. Staff said the city found nearly 4,000 water meters at or beyond expected service life and that historical meter replacement pace (roughly 100 per year in normal cycles) is insufficient. City staff reported an estimated annual unaccounted water volume equivalent to roughly 50% of treated water—about 500,000,000 gallons per year—calculated from current meter reads and distribution data; the Environmental Protection Agency had asked the city to explain the high water‑loss metric. Key elements: the administration proposed bulk procurement of roughly 4,000 new meters and 400 SmartPoint MXU communication modules, contracting out the installation of about 3,500 units while the utilities team installs about 500 (targeting commercial accounts). Staff also recommended installing permanent wastewater flow monitoring to identify I&I sources in tributaries and manholes and to inform capital investments in the sanitary system and levee/flood mitigation. Financing: the administration proposed using up to $2,000,000 of internal, self‑supporting financing (a manuscript‑debt mechanism using the city’s Reserve Balance Account) to buy bonds and immediately repurchase them, creating a short‑term internal loan repaid quarterly over three years. Administration provided amortization schedules at assumed market rates (roughly 5–6% depending on timing) and noted the financing would be structured as utility revenue bonds that do not count against statutory general‑debt limits. Staff said water and wastewater funds would share repayment equally. Rates and impacts: with conservative modeling staff presented a scenario of three annual water rate increases of 7% and three annual wastewater increases of 11% tied to full implementation; under that conservative plan the projected average minimum monthly utility bill would be about $71.34 upon full implementation. Administration said those projections are conservative and that actual meter replacements could produce greater revenue improvements (they estimated potential revenue gains of 10–15% in some accounts), which might reduce necessary rate increases. Why it matters: staff emphasized modern metering is necessary to bill customers accurately, stop cross‑subsidization from faulty meters, and give the city data required by grantors (FEMA, state) before seeking major wastewater plant funding. Permanent I&I monitoring is also needed to justify federal/state investments in flood and sewer upgrades. Council reaction and next steps: council received the presentation and the second reading of bond authorization legislation; staff said the measures do not require immediate action and alternatives (including Ohio Market Access Program) were discussed. Staff also noted the city’s SmartPoint rollout in 2017–2020 installed communication modules but did not replace mechanical meters, which means the MXUs transmit inaccurate data more reliably and underscores the need to replace the underlying meters. Ending: Administration said it will return with firm bids and a final financing plan; the EPA and other agencies have flagged the city’s reported water loss and staff said the meter replacements and I&I monitoring will address that metric and improve the city’s eligibility for larger grants.