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The Village of Tinley Park, Illinois

Water Meter Assessment Project Results


and Recommendations
BUSINESS
CONSULTANTS
DEEP
TECHNOLOGISTS

Agenda

Contents

Assessment Overview

Data Analysis Approach

Key Findings

Phase II Recommendations for Improvement

Timeline

Communication Strategy Recommendations

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Assessment Overview

This project included assessment of the metering system, billing practices


and utility customer communication
Phase I Objectives

Summary of the Statement of Work (SOW)

Meter System Assessment Activities

Recommend corrective actions, timeline, and estimated costs to


correct the water meter program based on AWWA standards,
situational analysis, client recommendations, and professional
insights

Meter Asset Management & Billing Practices Review

Assess root cause of meter degradation, inaccurate readings, and


inaccurate billings via desktop analysis, using industry best
practices, and AWWA standards as applicable

Assess people, process and technology of the meter asset


management and billing process program, through interviews and
shadowing
Review refund policy
Create recommendations for meter asset management and billing
practices that cut across people, process, and technology

Assess root causes, patterns, and


trends that are affecting accurate and
on time utility billing

Determine potential impact to


customers from metering and
recommend a framework that
appropriately adjudicates any issues

To identify next steps to address


people, process, and technology
issues found in meter to cash
processes

Identify a strategic framework for


stakeholder communication that will
begin to rebuild trust between
customers and the utility

Review stakeholder communication strategy

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Approach - Data Analysis

WMP analyzed 6 different data sets before arriving at the findings and
recommendations
1.

2.

3.

4.
5.
6.

Reviewed the ME Simpson test results from the 104 non-randomly selected meters that
were replaced due to customer concerns, suspected meter issues, and routine
maintenance
Performed analysis on all customer consumption data (~20K accounts) over the past 15
years to identify macro trends of water consumption and customer impact for each type of
account
Analyzed the meter consumption history of 93 meters that were exchanged with Sensus
meters in Q4 2014 to see if the difference in meters resulted in dramatic change in
consumption during Q1 and Q2 2015 and compared these results to ~7700 SmartMeters
(Severn Trent/Elster SM700 models) consumption data during the same periods
Analyzed 10 specific accounts that were identified as having potential billing issues
Reviewed 12 residential homes to assess quality and status of meter installations
Reviewed 15 years of documentation around meter purchases, exchanges, consumption
and rates

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Data Analysis - Key Findings

After the extensive data analysis and interviews with key employees
across the meter to cash process, there were 6 key findings
1.

2.

3.

4.
5.
6.

Operational SE/SM 700 (Severn Trent Elster SmartMeter brand meters) appear to be
mainly within the AWWA weighted flow accuracy standards as evidenced by the original
non-random sample completed by ME Simpson and engagement testing of the site
investigation of installation and subsequent testing of the account meters
Targeted observations of the performance of SmartMeter brand meters indicates meter
spinning has occurred when the meter is under non-active flow conditions and in each case
of observed spinning, accuracy testing indicated the meter under registered
Consumption across meter classes has dropped, but rates have increased driving up the
average water bill over the past 15 years
When SmartMeter brand meters were replaced with Sensus iPerl meters, no significant
consumption changes were evident in the data analyzed
Meter consumption variability for residential meters has decreased (this is a good thing)
over the past 15 years due to more accurate metering and tighter billing practices
Lack of governing policies and processes coupled with limited operational insight provided
by available data has led to less than comprehensive management of the people,
processes, and technologies involved with utility billing and as a byproduct in many cases,
placed the burden of proof on the customer to address issues

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Key Finding 1. Meter Accuracy

Based on assessed datasets, the majority of the SmartMeter brand meters currently in
service are accurate within industry standards but are experiencing a shorter than expected
life span

Based on non-random samples, the majority of the current population of SmartMeter brand
meters are accurate to industry weighted* standards utilizing the weighted average outlined in
the American Water works Association M6 manual
The meters have demonstrated a shorter than expected life span
Due to life cycle considerations (10 year expected life) the population of SmartMeters warrant
replacement
Additional considerations include an inordinate number of blank screens and the fact that the
meters are unsupported by the manufacture or by warranty
Asset Management is not systematic in its approach; there is a gap in managing the life cycle of
assets to include regular testing of meters, control of assets, and root cause tracking

From the AWWA M6 manual

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Key Finding 1. Meter Accuracy

Analysis of the recent 104 ME Simpson meter tests showed that 84% of operational meters
passed AWWA weighted standards with an average accuracy of 100.43% across the sample

West Monroe evaluated test results for 104 water meters performed by ME Simpson Co., Inc. in 2015

10 of the 104 were not operational resulting in estimated customer bills

Majority of meters pulled for testing were for routine meter changes (67%) due to suspected issues

Remaining meters were pulled for various other reasons (e.g. damaged, unable to read, recording without flow, etc.)

Test results were compared to AWWA M6 standards for both replacement/in-service (table 5-1 from the
American Water Works Association M6 manual) and new meters (table 5-3 from the M6 manual)

When compared with standards the majority of failures occurred at low flow rate, mostly due to over registration

94 of the meters were operational, with 88% meeting weighted AWWA standards and an average of accuracy of 100%.

Maximum estimated impact due to observed over registration is +$6.35 per quarter

Maximum estimated impact due to observed under registration is -$11.64 per quarter

Meters were not tested for recording without flow conditions (i.e. spinning)

Key takeaways: i) testing of a statistically significant random sample will determine accuracy of
the installed meters ii) improved meter asset management and analytics are required to more
promptly identify failed meters iii) analysis shows that THESE 104 meters are not dramatically
over registering
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Spinning is a
condition where
the flow indicator
(dial typical to
registration
displays) moves
without observed
flow being present.

Key Finding 2. Meter Spinning

Meter spinning was rarely observed and when it was observed the
meter was not in a typical operational or flow measurement state
Conditional assessments and observations of spinning

Spinning was physically observed on one meter that had been


removed from service. At room temperature and no water, the meter
registered flow at 4 gallons per minute (gpm); placing water in its
chamber made it stop spinning

Bench testing the meters flow accuracy lead to a result that


demonstrated the meter was significantly under registering flow

Three other meters were reported spinning while in service during the
engagement and were bench tested then left under pressure
overnight. Two of the three passed the measure of flow accuracy but
one registered 5.97 gallons under pressure without flow overnight.
That meter failed the accuracy test, registering only 90.95% accurate

Spinning was identified by technicians in the field as a condition when


the meter registered flow in hundredths of gallons after isolating via
gate valves

See the scroll in the upper right for an example of how unusually large
bills (spinning may have occurred) were processed through the billing
system
The effect of spinning

In reviewing customer account servicing, one


customer experienced an over read in June 2009
that hit the exception list and the over read was
attributed to spinning. The billing exception
process corrected the customer consumption
and billed the account on the 12 month average.
The meter was removed from service yet was
not tested for flow measurement accuracy.

Illustrative Measured Consumption With and


Without Spinning

In the case of observed spinning meters, all tested accurate at or

below AWWA weighted standards


The conditional circumstances that meters have been found to be
spinning include: removed from service and isolated meters on nonactive accounts
Conceptually, if spinning were to be occurring during flow, the
expectation would be an ever increasing amount of consumption. This
was not a pattern observed in any account reviewed; see graph in
bottom left
Flow testing of meter accuracy determines how much was billed
compared to used

Consumption

50
45
40
35
30
25
20
15
10
5
0

Illustrative Measured Consumption


Illustrative consumption with "spinning" @ 0.1 gpm

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

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Key Finding 3. High Bills

The primary root cause of higher bills is increased rates

Actual Average Annual Bill ($)

Overall average residential consumption has reduced by an annual rate of 3% since 1998
All stratifications of residential account types show a similar downward trend
Rates have increased during this same time

Fixed rates have increased by 0.525% annually

Variable rates have increased by 10.35% annually


The overall impact of reduced consumption and increased rates have resulted in an increase of the average water bill by 8.79%
between 2000 and 2015
Based on review of billing practices and customer account history, the use of estimating consumption and consumption based
exception reviews are adequate in capturing outliers

600
550

Actual Average Consumption


and Bill Amount Over Time

500
450

30
25

400
20

350
300

15

250
200

10
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13 14 14 15
Time

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Actual Average Consumption

Key Finding 4. Smart Meter vs. Sensus iPerl

Analysis accounts that were migrated from the SmartMeter brand to the
Sensus iPerl water meter did not vary in aggregate billed consumption

No discernable difference exists between the average consumption of recently converted Sensus iPerl meters
and SmartMeter brand meters across all single family water and waster water accounts

Approximately 1% of all single family water and waster water accounts were converted to Sensus iPerl in Q4
2014

Chart (A) shows that a reduction in average quarterly consumption following conversion

Chart (B) shows the same reduction for SmartMeter brand meters not replaced during the same time period

Analysis should be revisited once more data has been collected on the Sensus IPerl
(B)
7,700 Single Resident Home accounts that
remained with SmartMeter brand meters
during the same time period

(A)
93 Single Resident Home accounts converted
to Sensus iPerl meters in Q4 2014

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16

10

16

16

15

16

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Key Finding 5. Reduced Meter Variability

Statistically comparing billed water consumption data from mechanical meters to


SmartMeter brand indicates improved variability and reduced outliers since implementing
meter replacement program after 2001

Cases below belong to the subset of single family water and waste water accounts

Current metering system shows less variability as compared to old


Current metering system shows less outliers

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Two separate billing quarters are shown below to compare and contrast the two different metering
systems (mechanical vs SmartMeter brand meters) used by Tinley Park

The takeaway from


these two points :
improved variability
and reduced outliers
from billed
consumption
reflects an improved
overall billing system

(A)

(B)

Q2 2001 Mechanical Meter Consumption


(residential account type)

Q2 2015 SmartMeter Consumption


(residential account type)

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Key finding 6. Identified Areas of Improvement

Tinley Parks customer base began losing trust in the metering system at the point
of significant rate increases coupled with pervasive meter replacements
Late 1990s

SmartMeter brand are entering the water utility market

2000 2004 Tinley Park elects to replace its residential Rockwell mechanical meters and installs ~ 5,000 Severn Trent SmartMeter
brand meters
2005 2009 Accelerate installation for 15,000 SM700* SmartMeter brand meters over 4 years
2009

Elster Takes over Severn Trent, assumes warranty

2010

Chicago water rates begin to climb, Tinley adds tiered water rates.

2009-2011

Higher than typical SmartMeter brand meter breakdown rates become evident in the 2002 and 2006 series (installed
2003, 2007 years) Severn Trent delivers on warranty, providing over 800 meters to replace some 2006** series

2013

Tinley Park accepts warranty buy-out by Elster of $185,868 for remainder of the warranty period for the ~18,000
installed base of SmartMeter brands meters

2013 2015 SmartMeter brand meters continue higher than typical breakdowns and are replaced by in-house crews, as identified in
billing or customer complaints
2014

Tinley Park moves away from the SmartMeter brand meter completely and moves to Sensus Accustream meters
followed by Sensus iPerl meters

2015

(13) Tribune Articles and RFP for meter program assessment is issued

2015

Tinley Park takes action: Replaces Public Works Director, hires consultant, implements billing process improvements,
attends Utility Summit

* The RFP calls for SM400s to be replaced and is presumed to be a typo as the SM400 water meter product is not available in the market
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**The Eden report indicates that 2002 series were a vast majority were replaced

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Key Finding 6. Identified Areas of Improvement

Data analysis of 10 specifically chosen accounts, many of which were highlighted by the
media, lead to the following observations of customer account servicing by Tinley Park

No direct correlation was found between a meter registering without flow and the customers billed
consumption
When adjustments were applied, they were typically for one month; it was unclear of the basis for when
more than one month would be given or what or how adjustments were determined
Meter test information was not available to confirm the accuracy of flow measurement for meters
removed from service
Causal reasons for meters to be removed were not found to be reliable

Other general observations from interviews and reviews of information made available.

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Exception list parameters not reflective of true outliers


Estimated bills are processed manually
Billing follows mostly practices with little codified tools for administrators
Lack of written policies and procedures is an operational risk
Quarterly consumption data is a an operational and financial risk
There is a lack or ineffective data analysis or dashboard review of performance by the utility
These general observations represent the greatest risks to accurate billing

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Key Finding 6. Identified Areas of Improvement

Illustration of a robust asset management program and how it can be used to mitigate the
risk of inaccurately billing customers while realizing full investment in the metering system
The graphs below depict a typical analysis of causal reasons for removal taken from a targeted data subset
for illustration purposes. Assessment of the information determines blank screens and corrupt displays will
result in estimated bills and further action, but not necessarily an inaccurate bill. Yet Recording Without
Flow or spinning directly impacts registration and may result in an inaccurate bill without appropriate
quality checks

2004

Not
recording

flow

Not

2006

transmitting

Recording

Corrupt

2002

Display

without

Blank screen

flow

Corrupt

Not recording
Recording

Display

flow

without flow
Blank screen

other

Not

Blank screen
Not recording
flow
other
Corrupt

transmitting

meter replacement
programs will be
based on causal
analysis such as this
illustration

All Years
other

Recording without flow

Not transmitting
Not recording flow

Blank screen
Corrupt Display

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Display

Understanding the
causal reasons for
equipment issues
assists in decision
making

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Phase II Recommendations for Improvement

Recommended initiatives that address the assessments findings

Test Random sample of installed meter to determine meter accuracy for key meter
populations

Complete an engineering analysis of the meters that have been observed to spin
potentially determine a ratio of impact considering flow accuracy and spinning
Develop a life cycle meter replacement program that replaces meters that have reached
end of life and or may be under performing .
Establish meter read validation through advanced analytics to identify the following:

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That will inform the potential replacement program and;


To provide basis for customer billing adjustments due potential over billing

Meter Over registration due to meter failure detected after meter exchange
Meter Under registration due to meter failure
Billing Consumption exceptions: leaks, theft, visitors, pools, drought, administrative systems issue
Aggressively investigate outliers based on high registration in each customer class to flush out
extreme potential meter issues.

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Phase II Recommendations for Improvement

Recommended initiatives continued

Create a smart utility roadmap covering people, process and technology that addresses a
comprehensive meter to cash process with consideration of:

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Utility vision and mission statements


AMI/AMR analysis
Supply and demand side leak detection
Analytics / software
IT / security
Resource allocation/ training
Business process redesign and codification of policies and operating procedures
Institute a due process program for customers to dispute their bill
Smart utility business case including costs and benefits

Develop and implement an asset management program that enhances Tinley Parks ability
to manage metering system equipment and tools
Movement toward monthly reads and subsequently monthly billing
Discuss the possibility of evaluating the warranty settlement

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Phase II Recommendations Timeline

The potential timeline of the recommended initiatives

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Phase II Recommendations for Improvement


- Communications

To begin rebuilding trust with the community and utility stakeholders, it is


recommended that an aggressive communication campaign be implemented
INTERNAL COMMUNICATION CAMPAIGN MISSION TRANSPARENCY AND ACCOUNTABILITY
Initiate internal stakeholder meetings to ensure a full understanding of the plan of action
Develop expectations of leadership conducting routine communication with work force
Explore possibilities and/or uses of a shared knowledge platform
Develop a common language and understanding of the people, process, and technology
Utilize cross-training techniques to develop depth in understanding how the system
functions across work streams
EXTERNAL COMMUNICATION CAMPAIGN MISSION TRANSPARENCY AND TRUST BUILDING
Develop key messages well in advance of events and actions taking place that lead to a
better community understanding of what will be happening
Conduct both one on one sessions and a workshop with elected officials
Conduct an open house for the community on services provided
Leverage website for new change management styles(customer bill of rights)
Create a focus group from the community to assist with marketing and testing of system
changes
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