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Item 4D FINAL Item 4D Page 1 of 2 M E M O R A N D U M (April 17, 2018) To: Shana Yelverton, City Manager From: Rob Cohen, Director of Public Works Subject: Approve an annual purchase agreement for BEACON Cellular Service with Badger Meter Inc. in an amount of $123,395 Action Requested: Approve an annual purchase agreement for BEACON Cellular Service with Badger Meter Inc. in an amount of $123,395. Background Information: As part of the FY 2016 roll out of the Water Smart Southlake initiative, Public Works oversaw the technology upgrade of all water metering equipment throughout the City. As part of the project, all water meters were equipped with equipment that transmits daily readings back to a central database via the cellular network. The central database, BEACON Eye on Water, stores utility customer’s water consumption readings which are used to accurately bill customers every month. Eye on Water also allows customers to set up accounts to monitor their water usage and make adjustments to conserve water and save money. The software tool allows staff to monitor and investigate leaks, identify hardware issues, and ensure cellular radio communication is maintained. The City has approximately 12,500 cellular endpoints in service including those for residential domestic and irrigation meters, as well as compound commercial meters which utilize 2 endpoints per meter. The City is responsible for paying a monthly fee for the cellular service that is used to transmit meter reading data from the field. Financial Considerations: As part of the initial agreement with Badger, Southlake was provided with fifteen (15) months of free monthly cellular service which started in May 2016. In October 2017, the City began to pay monthly cellular service on all endpoints in the field. The monthly Item 4D Page 2 of 2 cellular service is $0.89/unit/month or approximately $133,500/year for 12,500 cellular endpoints. Public Works has worked with Badger Meter to obtain a lower service unit rate if the annual fee is paid as a lump sum payment. Public Works has negotiated a reduced monthly service rate from $0.89/unit/month to $0.81/unit/month or $121,500/year for 12,500 cellular endpoints. The 9% reduction in the service rate translates to a cost savings of approximately $12,000/year for the City. Funding for this contract is budgeted in the amount of $123,395 in the FY 2018 Water Division annual operating budget. While the current cost estimate with the negotiated lower rate of $0.81/unit/month is $121,500/year for 12,500 cellular endpoints, staff is requesting City Council authorization of up to the $123,395 budgeted amount. This delta allows for the addition of a total of 195 new endpoints as the City continues to grow this fiscal year. This number will grow each year as the City continues to develop. Strategic Link: This item links to the City’s strategy map relative to the strategic focus areas Infrastructure and Performance Management & Service Delivery. The specific corporate objectives that are met by this item include: (B2) Collaborate with select partners to implement service solutions and (F2) Invest to provide & maintain high quality public assets. Citizen Input/ Board Review: N/A Legal Review: None Alternatives: The City Council may approve or deny this request. Supporting Documents: Attachment A: Badger Meter Quotation No. 378817 Staff Recommendation: Approve an annual purchase agreement for BEACON Cellular Service with Badger Meter Inc. in an amount of $123,395. Staff Contact: Rob Cohen, Director of Public Works Cristina McMurray, M.P.A, C.P.M, Deputy Director of Public Works 4545 W Brown Deer Road Milwaukee WI 53223 PO Box 245036 Milwaukee WI 53224-9536 Phone: 800-876-3837 Fax: 888-371-5982 Customer Service Rep: Lschleker@badgermeter.com March 12, 2018 TO KYLE FLANAGAN CUSTOMER ID: 00002499 CITY OF SOUTHLAKE ACCOUNTS PAYABLE1400 MAIN ST STE 440 SOUTHLAKE Texas 76092 Phone: Fax: E-mail: kflanagan@ci.southlake.tx.us EFFECTIVE DATES: 3/12/2018-9/8/2018 SALESPERSON PROPOSAL SUBJECT SHIPPING TERMS/INCO TERMS PAYMENT TERMS 007723 BEACON CELLULAR ENDPOINT SERVICE UNITS PREPAY/NO CHARGE FCA FACTORY NET 30 DAYS LINE # DESCRIPTION QTY UNIT NET PRICE USD LINE TOTALS USD 1 ORION CELLULAR LTE SERV UNIT 68886-104 75000 $0.81 $60,750.00 2 ORION CELLULAR 1XRTT SERV UNIT 68886-101 75000 $0.81 $60,750.00 Notes and Assumptions: If applicable, sales tax and freight charges will be added at time of invoice. Actual lead time to be provided at time of order. If you have any questions concerning this quotation, please contact:, , To place an order, please contact: Laura A. Schleker, 800-616-3837, Lschleker@badgermeter.com Official authorized quote of Badger Meter Inc. , QUOTATION Quotation No.378817 Page 1 of 1