Water Efficiency May 2012 : Page 43
state-of-the-art water system. Since Gray became water superintendent in 2005, the city has installed new, more accurate water meters. It has replaced outdated dissolved air fl otation units and installed a temporary intake system. And because Mount Vernon and outside contractor Glendale, WI-based Johnson Controls worked together under a performance contract, the city has been able to pay for these costly improvements through the increased revenue and savings generated by those improvements. Johnson Controls employees worked with Gray and his water de-partment staff ers to design the im-provements to the city’s water system. Johnson Controls also devised the performance-contract system that allowed a city operating under budget limitations to aff ord the signifi cant changes it needed to safely and effi -ciently deliver water to its business and residential customers. Mount Vernon, though, is not an unusual case. A growing number of municipalities are working with outside consultants and engineers to complete infrastructure and conserva-tion programs. And increasingly, these municipalities are seeking performance contracts to provide them with budget relief. Under such contracts, the revenues generated from infrastructure im-provements pay for all or much of the repairs necessary to update aging water systems. Companies off ering these con-tracts guarantee a base level of savings every year. If these savings aren’t real-ized, the companies promising them make up the diff erence. Th is allows municipalities to take on improvement projects knowing ahead of time exactly how long it will take them to pay back their costs. In Mount Vernon, city offi cials know that they will generate enough ad-ditional revenue and savings every year to pay back the total cost of the water system infrastructure project in 15 years. Aft er those 15 years are up, the city will be able to invest those increased revenues back into their system or use them to cover the costs of other projects. “Performance contracts are an easier sell to municipalities,” says Troy Knight, president of Kansas City, MO-based RTS Water Solutions. “And this is important because so many municipalities are working with aging infrastructures. Th ey have a serious need to replace that infrastructure. Performance contracts allow them to do that. Th ere has been enlightenment with regard to utility directors and those who run municipal utility de-partments that they need to make these investments because of the age of their infrastructure. Signing performance contracts with outside consultants can help them do this without stretching their budgets even more than they already have.” SAVING DOLLARS IN FLORIDA Knight says that municipalities face a tremendous need today for improve-ments to their water distribution sys-tems. Many municipalities are losing a steady stream of dollars because of old pipes with large leaks. Others are rely-ing on old water meters that no longer accurately chart the amount of water that residential and commercial prop-erties are consuming. Other systems are plagued by sharp pipe bends that make pumps work harder and con-sume more energy. While others, like in Mount Vernon, are issuing regular boil orders that aggravate and incon-venience residents. At the same time, municipali-ties across the country are facing tight budgets as cities and towns strive to provide services in an economy that is still struggling. City and town councils are no longer as open to costly infra-structure projects, at least not when city departments are still facing layoff s, cutbacks, and budget shortfalls. Th is leaves the perfect environment for per-formance contracts and infrastructure work performed by outside contractors off ering these contracts. Consider automated meter reading (AMR). Th is technology can generate hundreds of thousands of dollars in new revenue for municipalities with outdated, inaccurate water meters. But Knight points to studies that show that this technology has only hit about 8% of the water-metering market. Th is means that RTS can target plenty of water districts that would make prime targets for a performance-contract-fueled AMR project. “We are seeing a signifi cant in-crease in the number of municipalities and cities pursuing AMR technology,” says Knight. “Th e tech has been around for a number of years, but it is just now gathering steam in making its way into the municipal market. Our ideal cus-tomer, really, is the municipality that has meters that have been in the ground for 10, 15, or 20 years that are read manually. Th ese municipalities know that AMR can generate more money for them. Th ey just need a way to be able to pay for installing this technology.” RTS recently fi nished a project with the city of Brooksville, FL, in which it installed 4,500 new water meters. RTS contracted with Energy Systems Group to perform the work. Energy Systems Group workers actually installed the new meters, while RTS Water Solutions evaluated the condi-tion of the city’s existing ones to deter-mine how many had to be replaced. By replacing their meters, Brooksville was guaranteed to capture $275,000 a year in revenues that the city was previously losing because of inaccurate readings from its old meters. Th e city never would have realized these savings if it hadn’t fi rst reached a performance-contract agreement with an outside consultant. The revenues generated from infrastructure improvements pay for all or much of the repairs necessary to update aging water systems. MAY 2012 WATER EFFICIENCY 43
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