Memo- 1999-2003CIPMemorandum
To: Honorable Mayor and Members of the City Council
From: Steven C. Mielke, City Manager
Date: July 10, 1998
Subject: 1999 -2003 CIP
We are approaching the final stages of adoption of the five -year Capital Improvements
Plan. A discussion of the plan was held in June, and a public hearing was conducted in
July concerning the plan. Staff currently anticipates one additional work session to
review specific projects within the plan, and to obtain any further guidance from the City
Council prior to bringing it to the Council for adoption at the last meeting in July or the
beginning of August.
At the July work session, it is my hope to focus on specific projects identified within the
plan, to acquaint the Council more with those proposed projects and to answer
questions which may arise. Additional information will be made available at the
meeting.
Mayorcc1999- 2003cip
Office of the City Manager
To:
From:
Date:
Subject:
Hopkins City Council
Don Beckering
July 9, 1998
Fire Department Storage needs
pictures showing the current off site storage needs of
Please find attached information and P of resources, I would like to study the following
the fire department. To insure best use a new storage building.
questions before a decision is made on � What storage needs and
o What are the future needs of the Fire Department? Wha 9
emergency equipment will we have in 10 years?
o if a storage building is
warranted, what should be the size and location to meet .
current and
future needs? Will it end up being a fire station in the future?
o Will the current location of the fire station be best for serving our citizens in 10
years? Will
a move be warranted because of other city departments space
needs or emergency response issues?
9
o How will the traffic
changes around the current fire station effect the response
time and safety n
of fire fighters to the station and emergency vehicles responding
out of this area?
The existing fire station was designed and built with the idea of housing full time fire
fighters with plenty of room for equipment. After 30 years it was remodeled to
accommodate some
of the changes in our business. Luckily, because of the futuristi
c
thinking of the origin designers, ners, it continues to serve as a good facility even our
trucks are 30% larger in though o o
9
h
o today. We want to be sure whatever we do today will be Y with the Fire Departme nt's needs tomorrow.
then we will have lost
We have to
solve the storage issue within the next five years. By in the year
are
2000. They
our current off site storage. The Technical Schools original 5 year
the lease is up are ready to
planning on negotiating another 2 -3 year lease before
move the fire training campus into one of their own buildings.
I would recommend a study
of the issues in 1999 with a decision for an action plan in the
year 2000. If construction is warranted it should start no later than 2001 to accommodate
our displacement in 2003.
Current State Chemical Assessment Team Storage
Memorandum
To: Steve Mielke
From: Jim Parsons
Date: July 2, 1998
Copy: Steve Stadler, Mike Lauseng
Subject: Radio Read Water Meter System
City Manager's Department
This memo provides an overview of radio read water meter systems, including
background information and a discussion of how such a system might enhance water
and sewer revenues for the City of Hopkins.
Introduction
Private and public utilities are increasing the level of automation in the area of meter
reading. Utilities are finding that automated meter reading offers a number of benefits,
including greater accuracy as more bills are based on actual readings, not estimates.
Automatic meter reading allows utilities to improve customer service and reduce
delinquencies by increasing the frequency of billings. It reduces utilities' dependence
on the Tabor- intensive work of reading meters. And, automatic meter reading often
enhances revenues significantly by ushering in large numbers of new, more accurate
meters.
Utilities such as gas, electric and water can automate meter reading in a variety of
ways. One method uses existing telephone lines to send meter data from the customer
to the utility. This method has received mixed reviews since the City of Minneapolis's
checkered attempts in the early 1990's to automate meter reading using the phone
lines. The number of cities pursuing telephone- based reading systems in this area is
limited.
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A method gaining increasing attention uses radio signals to transmit meter data from
the customer to the utility. Northern States Power, for example, is adding a small
transmitter to the customer's meter. Signals from the transmitters in a sub -area are
gathered by a sub- station receiver and sent to a central office.
Similarly, cities in the metro region are increasingly using hand -held or vehicular
receivers. These receivers pick up radio signals from water meters that have been
fitted with a small radio transmitter. Utility personnel can gather meter data in the field
without having to go onto private property. The Cities of Edina, Golden Valley, and
Arden Hills are all moving to a radio -read automatic meter reading system.
Hopkins: the Case for Automatic Water Meter Reading
The main benefits of an automatic meter reading system are:
Enhanced revenues;
Reduced variation in cash flow;
Labor savings;
Improved customer service through greater billing frequency and accuracy.
The average annual residential charge for water and sewer in Hopkins today is $672:
• Quarterly billing $168
Bi- monthly billing $112
Monthly billing $ 56
Presumably customers would appreciate the smaller bills that bi- monthly or monthly
billing would bring. Also, automatic meter reading would largely eliminate the need to
estimate bills; this would be an additional improvement to service for the customer.
For Hopkins, the question of how to pay for radio -based automatic meters hinges on
the potential for revenue enhancement. One way that revenues are enhanced would
be through more frequent billings. Greater billing frequency, i.e., monthly or bi- monthly
billing instead of the current quarterly billing, would bring money into the utility funds
sooner. It would likely also reduce the number of delinquent accounts, as the shorter
billing cycle would mean smaller bills for customers.
An important source of revenue enhancement comes from the installation of new
meters as part of the conversion to automatic meter reading. New meters are more
accurate than old ones. Old meters tend to slow down, which means smaller bills and
fewer revenues. In the industry, water meters that are more than 2.5% slow are
considered to be sub - standard. According to the Hopkins Public Works Department,
approximately 1,100 Hopkins water meters are substandard in this respect.
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Projected Revenue Enhancement in Hopkins
Replacing substandard meters would generate approximately $34,000 in additional
revenue annually. There are 800 other.meters that would also be replaced if the City
converts to automatic meter reading. These are residential and commercial meters that
are not substandard, but are not new and would be difficult to convert to automatic
reading.. Additional revenue from these accounts would bring the total revenue
enhancement from the conversion to automatic meter reading to approximately
$42,000 per year. Billed bi- monthly, the present value of this revenue at 6% interest
over 16 years beginning in the year 2003 is $414,000.
Co t Savings
The automatic meter reading system would save the City costs in the areas of labor
and through the reduction in the variation in cash flow. The present value of the labor
savings is estimated to be $93,000. The present value of the cash flow variation
reduction is estimated to be $92,500.
The gross benefit from automatic meter reading is $599,500 (estimated present value).
Cost of Radio Read Water Meter System
The draft capital improvement plan identifies a cost of $640,000 for the system, spread
over the years 1999 -2002. At an interest rate of 6 %, the present value of this cost is
$542,000. The present value of the increased billing cost due to bi- monthly billing is
$28,300.
The total present value cost of the system is estimated to be $570,300.
Summary
Assuming bi- monthly billing, a radio read water meter system would pay for itself
primarily through enhanced revenues:
Labor savings $ 93,000
Cash flow variation reduction 92,500
Revenue enhancement 414,000
Total gross benefit $599,500
less system cost - 570,300
Net system benefit $ 29,200