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5.2 ERMUSR 04-09-2024Ji Elk River amft . Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: ERMU Commission Mark Hanson —General Manager MEETING DATE: AGENDA ITEM NUMBER: April 9, 2024 5.2 SUBJECT: Private line repair costs for AMI project ACTION REQUESTED: • Approve funding of specific private utility line repairs through AMI project duration • Direction on commission interest for future discussion of a water service line fund BACKGROUND: ERMU's Advanced Metering Infrastructure (AMI) project will replace approximately 13,500 electric meters and 5,000 water meters. Our installation contractor, Allegiant Services, Inc., has informed us some residential properties may require repairs to private utility infrastructure before the meter can be replaced. They noted the most common electrical repair was the repair or replacement of the meter box. Similarly, the most common water repair was the installation or replacement of an in -home shut-off valve. Allegiant stated most utilities view repairing/replacing residential meter boxes and shutoff valves as the "cost of doing business" when taking on system -wide meter replacement projects. Additionally, these types of repairs typically involve older homes with owners who may have limited resources - making it difficult for them to absorb these unexpected costs. Consequently, Allegiant has observed that the utilities who choose to absorb the costs for these repairs have better scheduling response, fewer complaints, and higher overall customer satisfaction throughout the project. DISCUSSION: To affirm Allegiant's recommendations, Staff contacted two similar municipal utilities: Austin Utilities and Owatonna Public Utilities. Both utilities are undergoing AMI projects similar in size and scope to our project. Staff from both utilities confirmed they chose to absorb the reasonable repair costs related to residential water and electric meter replacements. They also confirmed absorbing these costs resulted in fewer complaints and quicker resolution of issues so the project could keep moving forward. For electric meters, Austin and Owatonna reported it was rare to replace the entire meter box. Rather, most deficiencies could be repaired by their respective staff, using stocked parts. A licensed electrical contractor was used for larger efforts. They advised that stocking a dozen or so meter box kits (parts and housing) would likely be sufficient. Page 1 of 2 If the meter box was in obvious disrepair due to neglect, property owners were required to replace the box at their cost. In all other instances, Austin and Owatonna absorbed the repair costs needed to replace the meter. For water meters, Austin and Owatonna confirmed the most common repair was the installation/replacement of the plumbing shutoff valve, located just before the meter. There must be a functioning shutoff valve so the flow of water can be shut off prior to replacing the meter. Both cities reported the use of independent water service funds to absorb necessary repair costs. In both cases, the programs contributing to these funds were established prior to their AMI projects. These programs are primarily used to fund residential service line repairs between the main and the curb stop. Austin charges $3.00/month for their program. Owatonna charges $0.99/month for their program. Information on both programs is attached. 1910T11►[a]/-19 Although impossible to predict, a reasonable estimate is 10-20 homes across our service area may require a full replacement of their electric meter box. Using an estimated $1,000 cost per replacement, this equates to $10-20K in necessary electrical repairs. These funds would come out of the project budget. If the electric budget for the project is exceeded, the excess funds would come out of electric reserves. The electric budget for the project is $3.225M. Regarding water meters, a reasonable estimate is 100-150 homes may require the installation/replacement of their water shut-off valve. Using an estimated $300 per job, this equates to $30-45K in necessary plumbing repairs. These funds would come out of the project budget. If the water budget for the project is exceeded, the excess funds would come out of water reserves. The water budget for the project is $2.870M. Note: The amounts presented are estimates only, they are not intended to cap our expenses. If we choose to go this route, we will have to treat all customers the same, even if the total costs exceed our estimates. NEXT STEPS: Staff recommend absorbing the electric and water (plumbing) repair costs needed to facilitate residential meter replacement. Absorption of these costs would be limited to the AMI project's duration. Additionally, thought should be given to implementing a similar water service line program in Elk River. Staff would like commission direction on whether there is interest in discussing policy options at a future commission meeting for implementing such a program. ATTACHMENTS: • Owatonna Public Utilities Water Service Line Protection Brochure • Austin Utilities Water Service Fund Rules Page 2 of 2 WATER SERVICE LINE PROTECTION PROGRAM 9 AA- 6 h Ffnq MV OWnlr PUBLIC UTILITIES ABOUT THE PROGRAM Owatonna Public Utilities' (OPU) Water Service Line Protection Program provides homeowners with protection from many of the unexpected costs of service line repairs. Whether it's severe damage repair or thawing a frozen water service line, OPU will cover costs and allow the customer to work directly with contractors to save customers time and money. WHY DO I NEED PROTECTION? As a homeowner, you own and are responsible for the water service line to your home. Harsh frost conditions, shifts in the ground and aging pipes are just some of the things that can damage your service line and require repair or replacement at your expense. Replacement of a service line can include digging up your yard, public sidewalk and street, costing you thousands. Worse yet, your homeowners' insurance may not cover repair costs.* The Water Service Line Protection Program can help protect you from the unexpected costs of repairing or replacing a leaking service line. *Contact your homeowners' insurance agent for specific coverage details. Q: How do I know if my service line is leaking or broken? A: You may see a puddle of water or flowing water in your yard. In some cases your sump pump may run abnormally often, or your valve and pipes near your water meter are wet or dripping. Q: What do I do if I suspect a problem with my service line? A: Call OPU's 24-Hour Hotline at 507-451-1616. We'll inspect your line. To determine if there is a problem, we will also provide you with program documents and help answer questions. Q: What are my costs for the water service line protection program? A: The water service line protection program is $0.99 per month, per customer. Q: Do OPU employees do the repair work? A: No, the customer is responsible for hiring a qualified contractor that meets program requirements. The customer will then be reimbursed for qualifying costs. Q: Will the program cover thawing a frozen water service? A: Costs for thawing a frozen water service line will be covered once per calendar year. Customers will be responsible for running a stream of water to keep their service from freezing again. For additional information, see the complete Terms and Conditions found at www.owatonnautilities.com. 208 S. Walnut Ave. P.O. Box 800 A --- Owatonna, M N 55060 OWATonnA 507-451-2480 PUBLIC UTILITIES ■ENROLLMENT PROCESS Customers who are single-family homeowners can opt in or out of the Water Service Line Protection Program. Building landlords may apply for the program. Homeowners are charged $0.99 per month, which is billed as part of their water services. Fees are subject to change and will be reviewed annually. To enroll or verify enrollment, contact the Customer Service Department or stop in at our main office. ■ELIGIBILITY Single-family homeowners and building landlords are eligible for the Water Service Line Protection Program. All homes must be served by a residential water service line with a diameter of 2 inches or smaller and must be attached to a permanent foundation. For additional eligibility requirements and limitations, see the complete Terms and Conditions found at www.owatonnautilities.com. To find property line - Customers need to contact the Steele County Recorder's Office, Land Records at: 507-444-7450 or record@co.steele.mn.us Or they can use the interactive GIS maps at this address: https ://steele-county-hub-site-steelecom n . h u b. a rcgis. com/ 77 E WHAT'S COVERED SERVICES COVERED • Thawing a frozen water service line once/year. • Repairing or replacing water service line from the OCorporation Stop to the ©Inlet Meter Valve. • Restoration of the road right-of-way, including street, curb, public sidewalk, boulevard and driveway approach. • Backfilling of trench created by maintenance work between the property line and building. For complete requirements, limitations, terms and conditions, and more, visit https://www.owatonnautilities.com/residential-customers/ residential-programs/water-service-line-protection-program/ • 1 OPU Watermain 0 2 Corporation Stop 0 3 Service Line 0 4 Curb Stop 0 5 Curb Stop Box 0 6 Inlet Meter Valve 0 7 Meter ® 8 Meter Coupling (Spud/Nut/Gasket) n 9 Outlet Meter Valve This drawing displays a typical service and is not to scale. 78 NOT COVERED • Incidental or consequential damage resulting from water service line break or leak. • Repair of customer -owned utilities, irrigation systems, dog fences, etc. • Restoration from property line to building. • Restoration inside building. • Required service line upgrades in conjunction with street projects. • Improperly installed service lines. • Pre-existing conditions. E OPT -OUT FORM To cancel your service line protection, please remove and return this completed form to Owatonna Public Utilities. Your service line protection will be canceled within 5 business days upon receipt of this completed form. First Name (as it appears on account) Last Name (as it appears on account) Address Address 2 MN City State Zip Phone Number 0- By signing below, I certify that I am the customer responsible for utilities at the above listed address. I understand that by canceling my Water Service Line Protection I will be responsible for all costs to replace and restore my water service line if any damage occurs, including but not limited to restoration of roadway, public right of way, personal property and service line replacement. I understand that OPU will perform a pre -inspection should I choose to add Water Service Line Protection in the future. Signature Date A-- OwAnTonnnn PUBLIC UTILITIES Rev 1/23 79 WATER SERVICE FUND RULES FOR REPAIR OR REPLACEMENT OF CUSTOMER SERVICE LINES 1. Property owners will retain ownership of water service lines from the corporation stop to the meter. 2. Water service lines constructed of lead or galvanized pipe shall be replaced in their entirety. 3. To qualify for reimbursement under the Water Service Fund, Customers must currently be paying for the water service fee, and all work must be pre -approved by Austin Utilities prior to repair. Repair work must also be performed by Austin Utilities approved licensed plumbers and excavators. 4. Any water service line found to be leaking due to the property owner's neglect of the service line or the building containing such service line, shall not be covered by this fund. 5. Austin Utilities will allow each property owner to select a plumber and excavator from an approved list provided by Austin Utilities. If requested, Austin Utilities will assist any property owner with the selection of any approved plumber and excavator. 6. Plumbers and excavators shall warranty all work for a period of one year. Newly installed water service lines shall not be covered by the fund for the first twelve months of active service use. Water service stub -ins are not considered active service lines, therefore, they are not covered by this fund. 7. All plumbing repairs or replacements after the water meter will remain the responsibility of the property owner. 8. Any service line extending in excess of 5 feet past the entrance wall of a building may be relocated at the discretion of the Austin Utilities. 9. Any account past due shall not be eligible for reimbursement under the Water Service Fund, and all charges for repairs will be billed to the property owner. 10. Damages to private property that are associated with a water service leak will remain the responsibility of the property owner. Examples included, but are not limited to — A) Any water damage to the building structure or to items within. B) Any landscaping or sod repair. C) Driveways, in -drives, steps, or walkways. 11. All damages to the city right-of-way will be repaired by this fund. Examples are as follows — A) City streets, sidewalks, and boulevards. 12. Water service lines within mobile home trailer parks shall not be covered by this fund. 13. Cost for repair of any water service line larger than 2" will be shared in equal amounts by the Austin Utilities and the property owner. Fire service lines with a domestic tap will be covered, and repair cost will also be shared in equal amounts, with Austin Utilities responsibilities capped at $5,000.00 limit. Cost for repair of any fire service line used exclusively for fire service, shall not be covered by this fund. 14. Customers may submit bill statements from their plumber and excavator to the Austin Utilities for review only after satisfactory completion of all repairs. It is the sole responsibility of the property owner to insure all work has been completed prior to submitting any or all bill statements to Austin Utilities. Approved 3/15/05 Water Service Fund Austin Utilities' customers currently pay a $3.00/month charge toward a water service fund. This fund covers the cost of repair of leaks or ruptures to your water line from the street or sidewalk to your house. A break in your water service line can result in expensive repair bills that are not typically covered under most basic homeowner' insurance polices. All Austin Utilities' water customers are covered under this fund. If you receive literature from companies soliciting this type of coverage, please know that as a water customer of Austin Utilities you are covered. If you have any questions regarding Austin Utilities Water Service Fund, please contact us at 433.8886.