Ron Morgan,
Utilities Director,
Panama City
 
May 31, 2011 - The city has purchased Sensus FlexNet fixed based radio and network equipment as part of an upgrade to the water distribution system, a project estimated to be worth $6-8 million, including the cost of installation, said Ron Morgan, the city’s utilities director. The project is expected to be put out to bid this summer, Morgan said. Last year he said about 19,000 water meters needed to be replaced.

Assistant City Manager Jeff Brown called the network equipment the City Commission agreed to purchase Tuesday “the backbone” of the system upgrade.

The new system will provide real-time information about the amount of water used, designed to alert city workers if there is a suspected leak, vandalism, tampering or backflow problem with the meter, Morgan said.

“It basically sends the city an alert and gives us the opportunity to look at it before it gets any worse,” he said.

The need for a system upgrade was made clear after a water audit was conducted based on consumption in the 2008 fiscal year. The audit, conducted by Water Systems Optimization and published in 2010, indicated water meter errors resulted in about $720,800 in lost revenue for the city in 2008, about 11 percent of the $6.3 million in water charges estimated in the 2008 fiscal year budget. The auditors recommended replacing the meters.

Morgan said he doesn’t expect the cost of the upgrade to result in large cost increases for residents.

The money to fund the upgrade will likely come from an internal reserve account or from a commercial bank load.

“It should not result in a significant change of rates, short-term,” he said.

The city adjusts water rates annually, based on the wholesale rate the county charges the city for water and other economic factors, Morgan said.

“As the operating budget changes with this additional debt service in it, there may be some impact on rates, but it shouldn’t be any more so than what customers have typically been seeing,” Morgan said.

Even without a rate increase, some customers will see higher water bills.

Since the water meters are intended to more accurately measure how much water goes to each customer, some customers will learn they are using more water than they previously thought.

Commissioner John Kady said over time the upgrade is expected to pay for itself because customers will pay for all the water they use. There will also be reduced personnel costs.

While meter readers might not be employed by the city, the people who are now meter readers are not expected to lose their employment. Morgan said they could be transferred to other positions in city government.