Consultant: Meter replacements, battery failures reduced Lake Jackson's unaccounted water from ~27% to about 22%

Jim Smith, a consultant hired to audit the city’s metering system, told the Lake Jackson City Council on Aug. 4 that analysis of more than three years of billing data shows measurable lost revenue tied to meter performance and aging equipment. The city already has replaced a large number of meters, and Smith said continued targeted replacement and expanded testing of large meters should lower the system’s unaccounted-for water and recover revenue.

Smith said his team downloaded the city’s full customer database and 41 months of usage history for roughly 9,400 active accounts, producing about 393,000 records. “Any water loss that occurs in the area of, let's say, leakage, which I call real losses today, will impact your water conservation, big time,” Smith said, adding that metering losses are distinct because they represent lost revenue rather than treated water that is physically lost.

Why it matters: Lake Jackson charges about $13 per 1,000 gallons for combined water and sewer. Smith told council that because of that rate, inaccuracies in meters or meters oversized for low flows can materially affect revenue. Using annualized figures through May 2025, the city sold an estimated 73% of the water it produced — a roughly 27% system loss. Smith said the city’s more recent quarterly totals (March–May) showed the loss down to about 22%, a change he and staff linked in part to the meter replacement work already under way.

Key findings and figures

- Database and scope: Smith said the project examined about 9,400 customer accounts and 41 months of history, producing roughly 393,000 records for analysis. He told council the team reviewed meter size, age, brand and route/cycle information to identify performance problems.

- Age and batteries: More than 3,000 meters in the system had reached or exceeded 10 years of age; Smith and staff found hundreds of meters per month that stopped recording when batteries failed. City staff had already replaced about 2,200 meters since Jan. 1, 2025, Smith said.

- Usage concentration: Smith reported that roughly 20% of accounts averaged 2,000 gallons per month or less (the city’s base-tier amount); about 3% of accounts used roughly 45% of the system’s water. He flagged a small group of accounts — roughly 70 to 100 customers — that together account for a disproportionate share of use and should be monitored closely.

- Meter sizing and performance: The audit found many oversized meters on low-use homes and some undersized meters where high flow shortened meter life. Smith recommended verifying meter sizing and testing larger meters in the field because a small number of large meters often represent a large share of usage.

- Production vs. allowable leakage: Smith and staff reviewed production and sales totals and compared them with a simplified “allowable leakage” estimate — about 4% of production for Lake Jackson under the consultant’s framing. He cautioned that allowable leakage is an expected, near-impossible-to-find baseline and that much of the city’s measured loss is associated with metering rather than discoverable physical leaks.

City actions and consultant recommendations

- The city began a meter replacement program in 2024, moving from mechanical to static (magnetic or ultrasonic) meters; Smith called that a correct direction and said newer static meters generally have longer battery life and better performance.

- Staff have inspected large (3-inch-and-larger) meters in the field and already replaced many of the oldest residential meters. Smith recommended continuing targeted replacements, establishing a formal large-meter testing program and monthly monitoring of the highest-usage accounts.

- Smith cautioned that short-term fluctuations (for example, heavy rainfall and recent water main breaks) can skew monthly/annualized figures; he said the quarterly totals are a better short-window indicator of recent change from replacements.

Quotes from the meeting

“Any water loss that occurs in the area of, let's say, leakage, which I call real losses today, will impact your water conservation, big time,” Smith said. He added: “You have a water and sewer rate of about around $13 plus per thousand gallons. And that is substantial, and that means that water loss so associated with metering is worth some money to you.”

Council reaction and next steps

Council members asked about expected payback and return on investment for meter replacements. Smith said ROI varies by account and that some replacements — particularly for low-use customers whose billed consumption remains under the minimum tier — may not produce near-term revenue increases even if they correct under-registering. He recommended aiming for a payback at or under five years where feasible and said the city’s IT and meter-reading staff already provide detailed monthly monitoring by route and cycle.

Modesto (City staff) and Smith told council the most immediate steps are to continue replacing aging/static meters, implement a formal large-meter testing program and focus monthly monitoring on the top 70–100 users. There was no formal council action recorded on the presentation; council received the report and staff will incorporate the findings into ongoing meter-replacement and monitoring work.

Ending

Smith’s presentation gave the council quantitative baselines and a short list of operational steps; staff confirmed replacement work is ongoing and will return to the council with routine procurement or budget items as required. Council members and staff agreed continued targeted replacement and regular testing of large meters are needed to sustain the downward trend in unaccounted-for water and to preserve revenue.