Pleasanton delays $10.26M AMI water-meter award after Zone 7 raises settlement compliance concerns

City staff presented a detailed proposal June 16 to replace failing residential water meters and purchase an advanced metering infrastructure (AMI) system, asking council to authorize up to $10,262,257 in capital expenditures and $2,514,096 in operating expenditures for services over time. Staff said the city is experiencing roughly 300 meter failures per month, about 4,000 total failures to date, and estimated potential lost revenue of about $1.5 million annually from failed or inaccurate meters.

Public Works staff described procurement steps, a mandatory warranty expectation (staff required 10 years full/10 years prorated; the recommended supplier offered 15 years full/5 years prorated), a 98.5% hourly system performance standard, and an “excessive failure” warranty that would obligate the vendor to cover replacement labor if more than 200 meters failed in a 60-day sample period. Sue Chin and project staff described Kamstrup meters as the recommended supplier product; staff said Kamstrup conducts 100% flow-bench testing on each meter prior to shipment.

During public comment and after vendor presentations, Valerie Prior, general manager of Zone 7 Water Agency (the city’s wholesale supplier), spoke to a separate but related legal issue: a prior settlement in which Pleasanton agreed to limit maximum continuous flow rates or install flow restrictions so that connection fees paid to Zone 7 matched installed meter capacity. Prior said the replacement meters proposed to the council “will not satisfy the city’s obligation under the settlement agreement” and urged the council to table the item until staff identifies a compliance path.

Vendors and staff responded to detailed council questions about failure modes (staff said battery failure is the primary cause of existing failures), meter sizes (roughly 78% of replacements will be 5/8-inch residential meters), warranty and labor coverage (Core & Main/Kamstrup representatives said the excessive-failure warranty would include parts and vendor-paid labor and related activities), and the city’s ongoing legal action against a prior meter manufacturer.

Given the Zone 7 statement and requests for additional coordination, councilmembers voted unanimously to continue the item to the July 7 meeting and directed staff to work with Zone 7 and other partners to identify a path for compliance prior to final action. Staff said the continuation would allow time to resolve Zone 7’s concerns without delaying necessary meter replacements beyond immediate critical needs.

What’s next: The AMI contract will return to council on July 7 with staff recommendations and outcomes of coordination with Zone 7; no award was made June 16.