Item 3.5 Water Replacement Installation Agreement4#1OtSegoF
MINNSSOTA c
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT
REQUESTOR:
MEETING DATE:
Utilities
Utility Manager Kurt Neidermeier
November 23, 2020
PRESENTER(s)
REVIEWED BY:
ITEM #:
Consent
City Administrator/Finance Director Flaherty
3.5
STRATEGIC VISION
MEETS:
THE CITY OF OTSEGO:
Is a strong organization that is committed to leading the community through innovative
communication.
X
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff recommends the City Council approve an Installation Services Agreement for water meter
replacements.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
Yes No
BACKGROUND/JUSTIFICATION:
The City is transitioning water metering to Neptune Ultrasonic meters. The change provides local
representation, with more accuracy and at a better cost within an upcoming critical lifecycle time. To fully
transition to readable meters with Neptune equipment approximately 500 meters will need to be replaced.
These meters have met useful life standards and are expected to fail electronically and mechanically over
the next two years.
Meter replacement remedies the accuracy loss caused by slowing mechanical meters particularly with the
background minerals in our water. As these meters are replaced the accuracy and revenue will be
representative of water use. Below is a table showing an average return of investment (1101) for meter
replacement to quantify accuracy and revenue loss compared with the capture of revue with a new meter.
The majority of these meters had a 15-year expectancy.
Age of Meter in years
Average R01
# of meters
18
6.87
191
19
6.44
297
20
6.06
47
Ferguson Enterprises LLC (Ferguson), Neptune manufacturer representative has a replacement team that
will complete replacement of these aged meters at a labor rate of $70/meter. Cost includes scheduling,
replacement labor and record updates. The 2021 budget will include the cost of 500 new meters and
accessory component with replacement labor totaling $157,435.
Staff recommends Ferguson replace approximately 500 aged meters spring 2021. The City Attorney has
reviewed the agreement with acceptance. The Public Works Subcommittee reviewed the project during
the October and November meetings with recommendation of consent agenda approval by the City
Council.
I SUPPORTING DOCUMENTS ATTACHED: I
• Installation Services Agreement
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to approve the Installation Services Agreement between the City of Otsego and Ferguson
Enterprises LLC.
BUDGET INFORMATION
FUNDING: BUDGETED:
Fund 601— Water Utility Yes (2021)
Installation Services Agreement
CITY OF OTSEGO, MN ("Buyer") and FERGUSON ENTERPRISES LLC ("Seller") enter into this Installation
Services Agreement ("Agreement") effective as of , 20
1. SCOPE: The terms and conditions stated herein ("Terms") shall apply to all purchases of products and services
made by or through the Buyer from the Seller on or after the effective date. No other terms and conditions or
modifications contrary to the Terms set forth herein covering the services shall be effective unless accepted in writing
and signed by a duly authorized officer of both parties. The parties acknowledge that standard business forms may be
used to facilitate processing orders including but not limited to quotations, acknowledgements, invoices, purchase
orders and delivery tickets jointly referred to as "Standard Form." However, the Terms herein shall supersede any such
terms and conditions that may appear on any such Standard Form other than scope of services, price, payment terms
and delivery schedule, as set forth on Attachment A (as may be amended by the parties from time to time).
2. LIENS: Seller shall have no mechanic's lien rights.
3. COMPLIANCE WITH LAWS/REGULATIONS: Seller shall abide by workplace safety regulations, including
OSHA regulations as applicable. MSDS, if applicable, shall be made available upon request of Buyer. Seller certifies
that it does not and will not maintain or provide for its employees any segregated facilities at any of its establishments
and that it does not permit and will not permit its employees to perform their services at any location, under its control,
where segregated facilities are maintained. Seller certifies further that its services are
4. performed in compliance with the Fair Labor Standards Act of 1938, as amended. Seller is not and shall not be
bound by or liable under or pursuant to any prime contract or similar agreement, specification or requirement between
Buyer and any third party, including, but not limited to, the owner of any property.
5. INSURANCE/BONDS: Seller shall maintain all insurance as required by law and shall not allow such coverage to
lapse. Seller agrees to maintain 1) Worker's Compensation coverage as required by applicable state law, 2) $4 million
in general liability insurance, and 3) $5 million in automobile liability coverage. At any time, Buyer may request
certificate of insurance indicating coverage in effect. Seller is not bound to pay any premium or other fee to an OCIP or
CCIP type insurance program. Unless expressly provided in Seller's quotation to Buyer, payment and performance
bonds are not to be provided by Seller.
6. INDEMNIFICATION: Seller shall indemnify Buyer from any loss, damage, claim, suit, liability, judgment or
expense to the extent caused by Seller's negligence. The obligations, indemnities and covenants contained in this
paragraph shall survive the consummation or termination of this transaction.
7. WARRANTY:
a) INSTALLATION WARRANTY: For those products installed by Seller, for a period of one (1) year from
installation or first use or occupancy by end user (whichever occurs later and in no event longer than eighteen
(18) months from date of installation), Seller warrants that services performed by Seller hereunder shall be
provided in a professional and workmanlike manner and in full compliance with local code. Upon receipt of
notice from Buyer that installation services were not performed in accordance with the limited warranty
herein, Seller shall re -perform the services. This Installation Warranty does not apply if there is evidence of
abuse, acts of God or misuse by Buyer or a third party.
b) PRODUCT WARRANTY: All manufacturers' warranties shall be made available to Buyer or end user.
Seller shall coordinate manufacturer warranty service with the end user at Buyer's request. The sole warranty
applicable to installation service provided (as applicable) is delineated as Installation Warranty (see above).
Product warranties are solely from the respective manufacturer. With respect to the underlying products,
THE BUYER'S SOLE AND EXCLUSIVE WARRANTY IS THAT PROVIDED BY THE
PRODUCT'S MANUFACTURER. SELLER HEREBY DISCLAIMS ALL EXPRESSED OR
IMPLIED WARRANTIES, WHETHER IMPLIED BY OPERATION OF LAW OR OTHERWISE,
INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS OR FITNESS FOR A PARTICULAR PURPOSE. UNDER
NO CIRCUMSTANCES, AND IN NO EVENT, WILL SELLER BE LIABLE FOR PERSONAL
INJURY OR PROPERTY DAMAGE OR ANY OTHER LOSS, DAMAGE, COST OF REPAIRS OR
INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES RELATED TO THE
UNDERLYING PRODUCTS PROVIDED. All manufacturers' warranty and service obligations shall be
for the benefit of the Buyer or end user.
8. SCHEDULE: Buyer shall provide schedule updates to Seller and Seller requests a minimum of thirty (30) days
advance notice for shipment/scheduling changes. Buyer and Seller shall coordinate the scheduling of all activities.
Seller shall perform all work during normal business hours. Buyer requests for Seller to work overtime are subject to
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Installation Services Agreement
price adjustment to be mutually agreed. Seller will make a good faith effort to meet the estimated delivery schedule set
forth in Attachment A. Local resource availability may affect the ability of Seller to deliver services in some locations.
9. BUYER'S OBLIGATIONS:
a) Buyer shall at its own expense apply for and obtain any permits and inspections required for the
installation and/or use of the products and services.
b) Buyer shall work with the private property owners to provide Seller with access to job site and facilities
deemed necessary by Seller to provide the products and services.
c)
d) Buyer must appoint a Buyer contact for the Seller consultant or project manager furnishing the products
and services. This contact, or designated alternate, must be available on site or by phone at all times that products
and services are being provided by Seller. Buyer contact must have the authority to resolve matters and coordinate
the resolution of any problems.
e) If during the performance of its obligations under the assignment, Seller or Seller's subsellers encounter
asbestos or other such hazardous substances or conditions, Seller or Seller's subsellers will promptly cease work
activities and notify Buyer. Seller or Seller's subsellers are not required to continue performance before the
removal or containment of such substances. In the event that the property owner does not provide for the removal
or containment of such substance and Seller deems in its reasonable discretion that the physical conditions are
unsafe, Seller may refuse to complete the work at the location(s) in question.
f) Buyer shall be solely responsible for verification and approval of all materials, equipment, supplies and
related products (and quantities of same) ordered relating to the products and services. Upon completion, Buyer
shall inspect the products and services within a reasonable time of delivery of the service, which time shall not to
exceed five (5) business days.
g) Buyer shall perform any test reasonably necessary to determine faulty workmanship or installation.
h) Buyer shall provide Seller notice of rejection within one billing period of the service date of any faulty
workmanship or installation. After one billing period, Buyer shall be deemed to have irrevocably accepted the
products and services, if not previously accepted. After such acceptance, Buyer shall have no right to reject the
products or services for any reason or to revoke acceptance. Buyer hereby agrees that such one billing period is a
reasonable amount of time for such inspection and rejection.
10. RETURNS: The sole and exclusive remedy for merchandise alleged to be defective in workmanship or material
will be the repair or replacement of the merchandise, subject to the manufacturer's inspection and warranty. Buyer
may return any product which Seller stocks with no restocking charge if: (i) it is in new condition, suitable for resale in
its undamaged original packaging and with all its original parts, (ii) it has not been used, installed, modified, rebuilt,
reconditioned, repaired, altered or damaged, and (iii) will not cause an overstock condition at Seller's servicing facility.
Buyer's surplus job returns, and those not meeting the above conditions, will be evaluated on an individual basis after
Buyer has contacted Seller. Special orders or non -stock items may be returned only if the manufacturer will accept the
return, subject to restock, shipping, and handling fees
11. MANUFACTURER DOCUMENTATION: Manufacturer's Product Data, Literature, Shop Drawings, and
Submittals to be provided to Buyer upon request. Owner's manuals and similar end -user documentation shall be
provided to Buyer, or placed in dwelling unit, as per request.
12. PAYMENT TO SELLER: Buyer agrees to pay for the services set forth on Attachment A according to the
Seller's payment terms. There shall be no retainage. Seller reserves the right to rescind the extension of credit to
Buyer should Buyer's account become delinquent or should there be a change in the Buyer's creditworthiness (Seller
to be the sole determiner of creditworthiness of Buyer).
13. TERMINATION: Buyer may terminate this agreement in the event of a material breach by Seller including but
not limited to breach for failure to meet the schedule; provided, however, that Seller has been provided written notice
of the breach, and has failed to cure or remedy the breach within fifteen (15) business days from receipt of such notice.
Upon termination, Buyer procure services similar to those so terminated, and Seller shall be liable to Buyer for the
reasonable, direct, and substantiated costs incurred by Buyer resulting therefrom.
14. FORCE MAJEURE: Seller shall not be responsible for non-performance caused by acts of God, war, labor
difficulties, accidents, inability to obtain materials, delays of carriers, sellers or suppliers or any other causes of any
kind whatever beyond the control of Seller. Under no circumstances shall Seller be liable for any special,
consequential, incidental or indirect damages, losses or expense (whether or not based on negligence) arising directly
or indirectly from delays or failure to give notice of delay.
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Installation Services
15. TAXES: The amount of any sales, excise or other taxes, if any, applicable to products or installation services
shall be added to the purchase price and shall be paid by Buyer unless Buyer provides Seller with an exemption
certificate acceptable to the taxing authorities.
16. SET-OFF: Buyer shall not be entitled to set-off any amounts due Buyer against any amount due Seller in
connection with this transaction.
17. SEVERABILITY: These terms and conditions of sale shall not be construed against the party preparing them,
but shall be construed as if all parties jointly prepared these terms and conditions of sale and any uncertainty or
ambiguity shall not be interpreted against any one party. If any provision hereof is held to be illegal, invalid or
unenforceable under any present or future laws, such provision shall be fully severable and the terms and conditions
herein shall be construed and enforced as if such illegal, invalid or unenforceable provision had never been made a part
hereof. The remaining provisions herein shall remain in full force and effect and shall not be affected by such illegal,
invalid or unenforceable provisions or by their severance herefrom.
18. ASSIGNMENT AND SUBCONTRACTING: Seller shall not assign this contract except to an affiliate owned
and controlled by or under common ownership and control with Seller.
19. ENTIRE AGREEMENT: This document along with Buyer's Credit Application with Seller and Seller's
Bid/Quotation and Invoice constitutes the entire, complete, and exclusive agreement between the parties with respect to
the subject matter hereof and contains all the agreements and conditions of sale. No course of dealing or usage of the
trade shall be applicable unless expressly incorporated herein. The terms and conditions contained herein may not be
added to, modified, superseded or otherwise altered except by a written modification signed by the facility manager of
the Seller's servicing location. All transactions shall be governed solely by the terms and conditions contained herein.
20. GOVERNING LAW: This transaction shall be governed in all respects by the laws of the State of Minnesota and
any lawsuit for breach of this contract shall be brought in Wright County District Court, State of Minnesota.
21. AGREED: The parties have read, understood, and agree to the terms and conditions herein as evidenced by the
signature of their authorized representatives below. This Agreement shall continue in effect unless terminated in
writing by either party.
CITY OF OTSEGO, MN FERGUSON ENTERPRISES LLC
By:
Printed Name:
Title:
Date:
By:
Printed
Title:
Date:
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Installation Services
Parse 4
Attachment A
Services/Scope of Services:
Installation Service of a new Neptune Water Meter and R900I covers a standard installation meeting the
following conditions:
Meter installation will include a standard meter installation. A standard meter installation is recognized as one
which involves the replacement of an existing meter meeting the following conditions:
1) Meters will be located inside homes or businesses with adequate access, or if access is restricted, Seller
will be able to obtain access from the property owner within one week of request during normal
business hours;
2) Meter access will not subject Seller's employees to dangerous or unsafe working conditions;
3) Seller will not be required to move customer's belongings;
4) Seller will not be required to repair or replace pipe due to corrosion, existing damage, plumbing
irregularities, substandard conditions or existing connections not in conformity to current building
codes;
5) Water meters are on setters or equipped with standard meter connections that can be reused during
meter installation;
6) Meter exchanges are like -for -like, same lay length and no plumbing is required;
7) No additional labor or groundwork will be needed to access meters, including but not limited to cutting,
removal and replacement of asphalt, tree roots;
8) Confined Space entry is not required.
9) Valves are in good working condition.
10) Seller will mail up to three (3) unique notifications to each property owner. If, after the 3`d notification,
the customer has failed to schedule a meter replacement appointment, the account will be turned back
to the Buyer, so that, within one week's time, the Buyer can perform a water shutoff for non-
compliance. If the Seller is still not able to gain access to the meter within a week of turning the
account back to the Buyer, the Seller is relieved of any further work and the Buyer assumes full
responsibility for completing the meter replacement.
11) Seller will create and deploy a website specifically for the water meter change -out customers. This
web page will incorporate a scheduling link, FAQ's, and installer pictures.
12) Seller will provide a Call Center and a Toll -Free number that customers can call to schedule
installation appointments, to ask questions concerning the project, or to report problems concerning
installations. The Call Center incorporates an automatic call distribution system capable of
receiving and queuing calls, routing calls to waiting agents, and collection and reporting of data on
call volumes, waiting times, and duration of the call. The Call Center is staffed 24/7. Seller will
also offer an online scheduling feature which is very convenient to residents.
13) Seller will use its proprietary inventory management system to provide 100% accountability of
assigned meters at all times.
14) Seller will supply an automated installation information management process, so that little or no
information has to be captured or entered manually. This will include an automatic file being
generated for upload back into the Utility Billing Software. (Note: All charges for the Utility
Billing Company to accept an automated file are the Buyers's responsibility.) All up-to-date meter
change -out information, along with live installer tracking, is available to Buyer's staff via a secure
website.
15) Seller will perform background checks for all staff that will work on the project.
16) The Seller's management team will be responsible for all work orders. Each work order will
include, at a minimum: customer address, account number, existing meter number, meter size, geo-
positioning, MIU/MXU ID number, and new meter number.
17) Seller will capture GPS positioning at the front door of the property or in close proximity to the
meter, using geo-positioning software. All collected GPS data has the ability to link to the Buyer's
GIS and be provided in a shape file. The following information will be included in the geo-coded
data:
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Installation Services
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Water meter account number
Address
New Meter MIU/MXU numbers
Other information can be discussed and negotiated.
18) Seller will take a minimum of three (3) pictures of each install - Before, Final Reading, and After.
The pictures will be labeled by account number and posted to an FTP Site for Buyer's retrieval.
19) Seller strives to leave all installation sites in a clean and neat condition, equal to or better than the
original condition of the site. An electronic customer signature is captured at each install to indicate
the resident has accepted the installation.
20) Upon initial installation of the MIU, Seller will verify the Radio reading from the street and record
it in the database for later review by Buyer's staff.
21) Should Seller receive a call or complaint from a customer or the Buyer regarding installation, Seller
will immediately log the call, including caller's name, address, account number if available, date
and time of call, nature of problem, and the action taken. All complaints will be forwarded to the
Buyer's project liaison within 12 hours from the time of the complaint.
22) The freezing of service lines will only occur when the Buyer -side valve is inoperable, only the meter is
being replaced, room permits, and the additional charge is approved by Buyer's staff.
In the event Seller determines that any potential meter/radio installation is not a standard meter/radio installation, the
Seller will immediately bring the matter to the attention of the Buyer's representative who will inspect the condition
and advise Seller on how to proceed. If additional work is requested by Buyer, such work will be completed at an
agreed upon hourly rate plus materials. In the event such additional work requires a license not required for a
standard meter installation, then the Buyer will be responsible for engaging the services of a contractor to perform
such work prior to Seller proceeding with the meter installation.
Pricingand Payment Terms:
Payment terms are net 1 Ott' Prox. See Attachment B for installation pricing.
Delivery Schedule:
Meters are onsite, and necessary customer account data has been properly loaded into the Seller's installation
software, prior to commencement of installation. A separate meter quote was provided. Typical delivery tunes are
approximately 4-6 weeks from order placement.
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Installation Services Agreement
Attaclunent B
Prinina nnii PAVment Terms -
Item Description
Project Quantity
Unit Price
Extended Price
Installation of Neptune meter with R9001
integrated MIU — Sizes 5/8" to 1"
563
$70.00
$39,410.00
Project Quantity shall be used as an estimate and the City may add/subtract at the same unit price.
Payment Terms: Net 10'" prox.
Installation Pricing is based on an approximate 2-3 month installation timeline.
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Installation Services Azi-eeinent Page 7
Attachment C
• Ferguson to work with Civic on implementation of the Neptune V4 File format which would work side
by side with the Itron system. Ferguson to bear costs all implementation costs incurred by Neptune.
City of Otsego to bear costs of Civic to create V4 File format (this has been completed with may other
customers).
• Ferguson to supply Neptune Meters, Software, and Reading equipment per May quote.
• All new meter installed in Otsego will be Neptune R900i Mach 10 (believe new buildout is roughly 300
per year).
• Ferguson to actively pursue meter/radio changeouts for all Itron radios starting with the series of 20
(count is 563).
• Ferguson to offer Meter installation at a discounted rate. The cost per meter changeout will be $70.00
per install. See atta
• Otsego will continue with Itron Maintenance radio and purchase all new meters from Ferguson.
Ferguson to offer either Meter installation or Back office at a discounted rate. love to help with either
completing the changeouts themselves or managing the Backoffice functions. This is anticipated at
$70.00 per install, retro $65.00, or $20.00 per account for back office.
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