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Item No: 4. Meeting Date: November 7, 2011 Type of Business: Work Session Administrator Review: _____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Consider the Purchase and Installation of 820 Neptune R900 Radio Read Devices Background: The City Council authorized the purchase of Neptune R900 radio read devices in resolution 7203 and resolution 7313 to replace the failed or failing phone read devices in 2008. This replaced about two thirds of the meter readers. The remaining readers were Sensus radio read devices. Discussion: The City currently has 848 Sensus radio readers that will need to have batteries replaced every seven to eight years on average. The replacement cost of the batteries is currently $22.56 per battery. It also takes about ½ hour of staff time to complete the swap out of batteries which includes scheduling, driving to and from the service location, and installation of the new battery. The staff cost is $16.37 per battery for a total cost to swap out a battery of $38.93. Many of the existing batteries will need to be replaced in the next couple of years as they fail. The 20 year cost to maintain the Sensus meter readers assuming 2½ % inflation would include battery replacements in year 1 - $33,013, year 8 - $39,242, and year 16 - $47,813, 19 years of software interface charges of $11,546 for a total 20 year cost of $131,614. ($108,276 NPV) The Neptune radio readers have a 20 year guaranteed battery life and the City has installed 2,366 to date replacing the old phone read devices that failed or were failing. The 20 year cost to install the Neptune R900 meter readers is year 1 - $77,121 meter readers, $424 supplies for installation, and staff cost of $13,882 for a total 20 year cost of $91,427. Further Discussion: Public Works staff has obtained a quote from Northern Water Works Supply, the original bid price in 2008 was $95.14 each, which includes tax. The current quoted price is $94.05 each, which includes tax. (see attached quote) We have some readers in stock and would only need to purchase 820 readers. We also may be able to sell the Sensus readers to a city that uses them along with any supplies we have which would further off-set the cost. Recommendation: Staff recommends purchasing 820 Neptune R900 radio read devices from Northern Water Works Supply at a cost of $77,121.00 which includes tax and recommends authorizing staff to reprogram water fund account 700-4823-7050 to accommodate the purchase. We have delayed the water tower project to 2012 thus there is sufficient budget authority to reprogram. Respectfully submitted, ________________________ Mark Beer, Finance Director