An audit of the City of Killeen Water Meter Replacement Program found that the City is on track with its planned rollout of 5,000 smart meters annually, and that the pilot project will be fully implemented in October when the automated billing component and customer portal are scheduled to go live.
City of Killeen Auditor, Matthew Grady, conducted the independent audit to determine the status of the City’s Water Meter Replacement Program, conduct benchmark analysis on water meter replacement programs implemented in other Texas cities and evaluate the relative costs and benefits of the suggested timeframes in the initial proposal.
The City Auditor highlighted several benefits of the City’s rollout plan, noting that the fiscally conservative approach relies on available funding from the Capital Improvement Program (CIP) Fund, thereby eliminating the need for debt issuance.
Additionally, the staggered approach— taking place over an 11-year period— allows for a less disruptive replacement cycle, as the water meters reach their end of life. Grady did note, however, that there is a trade-off in delaying the benefits of the program, such as early leak detection and reduced revenue loss from aging mechanical meters (estimated at $2 million annually for the 55,000+ water meter system).
Furthermore, the City’s planned rollout is notably more conservative compared to other municipalities. For example, the City of Fort Worth replaced its 275,000 water meters over a two-and-a-half-year period. Amarillo is on track to complete its 70,000-meter system replacement in just under four years, and Cedar Park replaced its entire system of 23,800 meters in about seven months.
In each of these cases, it’s important to note that the cities took on debt to fund their replacement programs, either through State Water Development Board loan programs or revenue bonds. The City Auditor acknowledged that both approaches have their costs and benefits: one is fiscally responsible but delays the program’s full benefits, while the other accelerates the program’s benefits but requires taking on debt.
Overall, smart meters provide the options of responsible water conservation with early leak detection through real-time monitoring within the customer portal, which helps empower residents and businesses to better manage their water consumption.
City staff’s original proposal, presented to City Council in August 2021, suggested a replacement program timeframe of 5 to 10 years. However, the proposal did not fully explore the relative costs and benefits of alternative timeframes.
The recent audit report recommended that Development Services work with other departments to conduct a cost-benefit analysis of alternative timeframes and research potential grant funds to supplement CIP funds designated for the program.
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