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City agency recommends Itron for big water meter contract

Laws and LegislationItron IncorporatedWater SupplyBernard C. Young

A key city agency is recommending that a West Coast firm win a multimillion-dollar contract to overhaul Baltimore's water-meter system — an effort officials say is long overdue and could help end the persistent problem of wildly erroneous bills.

But the plan to convert the system to wireless "smart" meters is being protested by a rival firm, which says that Itron Inc.'s $83.5 million proposal has "substantial technical deficiencies," including using "unlicensed radio frequencies that may not function properly."

The city's Board of Estimates is scheduled to vote on the contract Wednesday.

Under the deal recommended by the city purchasing department, Itron would install water meters for the city system's more than 400,000 customers in Baltimore and Baltimore County by the end of 2017. For all customers, the company's wireless "smart" meters would transmit signals that continuously monitor water use and cost. But under the Itron plan, about three quarters of Baltimore County customers would get a less advanced smart-meter technology, and water system employees would still have to go to those homes to get meter readings quarterly.

A competing bid by Dynis — for nearly $185 million — would supply the more advanced meters to all customers, among other differences. Officials with both Itron and Dynis declined to comment for this article.

Baltimore City Council President Bernard C. "Jack" Young, one of five members of the Board of Estimates, said Monday he was bothered by the $100 million disparity in bids from the two finalists. Young, who did not say how he would vote, said he would make sure the city wasn't hit with additional costs later in the form of extra work orders.

"This is a contract I am going to be watching with a fine-tooth comb," Young said.

Baltimore residents have long complained about erratic water bills, but the issue gained widespread attention last year when the city auditor found the Department of Public Works overcharged thousands of customers by at least $9 million, and an investigation by The Baltimore Sun uncovered additional problems. Baltimore provides water service to about 410,000 customers, half of whom reside in Baltimore County.

Linda Stewart, a community activist who has tracked incorrect water bills in Baltimore for years, said she's glad the city is replacing the meters, but she doesn't see a quick fix for the city's long-standing water-billing problems.

The meters "need to be replaced because the ones they have now are so old," Stewart said. "But I'm really skeptical because of the problems I've read about in other states."

Both finalists hired politically connected lobbyists in Baltimore.

Itron Inc., based in Washington state, is represented by lobbyist Lisa Harris Jones — whom the mayor has described as a "lifelong friend." Itron, which operates wireless water meters in other large cities, proposed completing nearly every aspect of the job at a lower cost than Dynis.

Dynis LLC, based in Columbia, is represented by lobbyist Ryan Potter — whose law firm, Gallagher Evelius & Jones, donated about $35,000 to Rawlings-Blake during her mayoral campaign. Dynis boasts exclusive access to wireless wavelengths that avoid signal interference.

Rawlings-Blake has said she did not and cannot participate in her purchasing department's recommendations, under city rules.

In its bid, Itron placed an emphasis on its record. "Our 36 years of experience has taught us that we need to deliver solutions which have resulted in more successful [advanced metering] projects in the Industry than any other vendor," the firm wrote.

But in a Monday letter to City Solicitor George A. Nilson, Dynis attorney Paul S. Caiola raised several concerns about Itron's bid. He contended that Itron "failed" to complete a pilot project for smart meters 10 years ago in Baltimore and has been "unable to deploy a successful system" in Houston.

"The city must consider the performance history of Itron before awarding it the bid," wrote Caiola, an attorney at Gallagher Evelius & Jones.

He argued the city's request for proposals process was confusing, and caused Itron to significantly underbid on several aspects of the work, including installing copper pipes and meters. Caiola also wrote that Itron's proposal "saddles Baltimore County ratepayers with an old technological solution."

The Dynis proposal would use meters made by Sensus. Sensus and Itron are both considered global leaders in wireless water meters. Earlier this year, Itron announced it has been ranked No. 1 across multiple categories in a global water meter market analysis report. In 2010, a study of thousands of Itron meters, commissioned by the Public Utility Commission of Texas, concluded they were accurate.

But the company also has had problems. In 2011, Itron agreed to replace 68,000 transmitters in Charlotte-Mecklenburg, N.C., because of a potentially faulty part.

Baltimore officials voted in July to raise water and sewer rates by 42 percent over three years to help pay for infrastructure and other improvements. City water service is paid for through a self-contained utility that is controlled by the mayor and does not go through the budget process.

Baltimore Sun reporter Yvonne Wenger contributed to this article.

luke.broadwater@baltsun.com

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Copyright © 2014, The Baltimore Sun
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Laws and LegislationItron IncorporatedWater SupplyBernard C. Young
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