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New water meters boost revenue in Mission but don’t cover debt payments

The city of Mission collected about $232,000 in additional revenue after replacing nearly 9,600 old water meters, according to information reviewed by the City Council on Monday.

Mission began replacing old, mechanical water meters with new, electromagnetic water meters in 2021, when the City Council approved a nearly $17 million contract with Performance Services Inc.

In 2022, though, the City Council declared the contract void after documents filed in federal court revealed the project had been tainted by a bribery and kickback scheme.

Nearly 9,600 water meters — about a third of the water meters in Mission — were replaced, said Assistant City Manager L. David Flores Jr., who briefed the City Council during a workshop on Monday afternoon. According to an analysis conducted by the city, the new, more accurate water meters generated about $232,000 in additional revenue.

“So those are the revenues,” Flores said. “I know that’s probably the biggest question.”

Mission, however, must cover the cost of hosting and customer support for the new water meters.

“Which would bring us down to a net increase of $175,000 annually,” Flores said.

Mission would need roughly eight times more revenue to cover the $1.4 million annual debt payment for the Performance Services Inc. project.

In 2020, when Performance Services Inc. prepared an “Investment Grade Audit” for Mission, the company promised the project would pay for itself.

The city had about 28,800 water meters, according to the audit. Replacing every old, mechanical water meter with a new, electromagnetic water meter would result in more accurate bills — and more revenue for Mission.

Performance Services Inc. estimated that replacing every water meter in Mission would increase revenue by about $1.2 million a year.

Mission could also save money by eliminating the “need for full time meter readers,” according to the audit, because the new water meters report usage wirelessly.

Flores calculated that Mission could reduce costs by about $113,000 annually, which accounted for six meter readers and less wear-and-tear on city vehicles.

“I didn’t want to use those numbers for the total estimated revenues because we weren’t going to lay off anybody and we weren’t going to turn in those vehicles,” Flores said. “We were just going to reallocate those vehicles and those personnel to other departments because it wasn’t the right thing to do.”

Performance Services Inc. promised the reduced costs and higher revenue would pay for the new water meters. If they didn’t, the company agreed to cover the difference.

After reviewing the audit, Mission agreed to borrow nearly $17 million for the project.

Performance Services Inc. installed nearly 9,100 new water meters before the project stopped. Mission installed nearly 500 more, bringing the total number of new water meters to nearly 9,600.

The total included about 600 commercial meters and nearly 9,000 residential meters, according to information reviewed by the City Council. Revenue from the commercial accounts with new meters increased by about $32,000 year-over-year. The residential accounts generated another $200,000 in additional revenue.

The city is unlikely to install additional meters until the litigation, which remains ongoing, is resolved.

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