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FOR IMMEDIATE RELEASE: July 1, 2003
CONTACT: Colleen Newman, Water Services Department, (816) 513-0232; Pager, (816) 346-1551

Water Department makes strides toward improving efficiency

The City of Kansas City, Mo., Water Services Department is taking steps to address inefficiencies caused by aging infrastructure, equipment and facilities; and lack of adequate capital investment.

The department has completed the first year of a 10-year Competitive Business Plan agreement aimed at improving efficiency, including lost revenue caused by non-revenue water use.

“Like all water utilities, the department has historically reported a difference between water that is treated and distributed and the amount that is billed to customers. This is often referred to as non-revenue water,” said Frank Pogge, Director of the Water Services Department. Pogge said that as part of the Kansas City Government Optimization program (KC-GO), the department recommended commissioning a study to determine the extent of the problem as well as some potential solutions.

In fiscal year 2000, the Water Services Department hired the Black and Veatch Corporation to determine the amount of non-revenue water, the causes of the problem, as well as some potential solutions. Black and Veatch completed the study in 2001.

The study found that the Kansas City water system had potential for reducing the amount of non-revenue water, including:
Aging meters that may not meet AWWA accuracy standards.
A significant number of pipeline breaks (1,600 during audit period).
Parks and Recreation fountain water use was inefficient and costly.
Some pools are drained and filled daily while others leak profusely.
More than 4,000 active water accounts that showed little or no usage.
A decrease in meter testing and replacement program.
Water use at construction sites was not adequately billed (flat fee had not been updated).
The South Direct system appeared to have higher levels of non-revenue water than other areas.

Upon completion of the study, the department formed the Water Recovery Committee to implement the recommendations of the Water Audit Report.

“Since the study was completed in 2001, the committee has implemented a number of recommendations that have resulted in decreasing the amount of non-revenue water,” said Pogge.

These steps include:
Beginning a major change out of older aging large meters, that has resulted in generating an additional $600,000 per year in increased revenue to date.
Increasing the flat fee construction water charge that more accurately reflects the actual amount of water used during construction.
Purchasing and installing a new state-of-the-art automated meter test bench (for both large and small meters).
Beginning identifying and changing out small meters for active accounts that showed little or no usage.
Completing a Parks and Recreation site inspection of 180 locations to determine use patterns as well as other issues.
Reviewing and implementing a more efficient delinquent account shut off process.
Launching a new billing system in September 2003.
Purchasing and beginning to use a state-of-the art leak detection system.

“The department also has investigated, developed and is in the process of purchasing and installing an Automatic Meter Reading (AMR) solution,” said Pogge. “As part of AMR, the department will change 100,000 of the oldest, inaccurate meters in the system.”

“We expect the system to greatly enhance the department’s ability to identify, quantify and fix system leaks,” said Pogge. “The AMR system also will help address and reduce water theft and other unauthorized uses,” he added. “In addition, AMR will allow the department to reassign resources to help identify leaks, exchange meters and repair pipelines.”

In both the long and short term, the department plans to continue to expand its small and large main replacement program over the next 10 to 20 years.

“These steps will help reduce the overall age of the system which is the most important factor in reducing the amount of non-revenue water and other inefficiencies,” said City Manager Wayne Cauthen. According to Cauthen, the City also will encourage the Board of Parks and Recreation Commissioners to use recycled water in the City fountains.

The Water Services Department is in the third year of a four-year rate freeze passed by the City Council in May of 2000.

“In order to fully implement both the main replacement as well as the Automatic Meter Reading component, additional funds will be necessary,” said Cauthen. “Additional investment in the system will produce significant returns resulting in much lower rates in the long run,” Cauthen said.

Pogge said the City’s recent retirement incentive program reduced the staff in the department’s meter reading and service group by 12 positions. The department will replace six of those positions in the coming months. In addition, the department also will consider hiring a private contractor to replace old meters in areas where meters are located on the outside of residences.

The Competitive Review Committee, made up of private citizens, reviewed the Water Services Department’s 10-year Competitive Business Plan agreement before it was approved by the City Council.

“The committee did not recommend privatization of the City’s Water Services Department,” said Cauthen.

According to Public Works Financing, the leading trade journal covering the water services industry, about 94 percent of water systems in the U.S. are publicly controlled. Most are owned and operated by municipalities.

Kansas City is among hundreds of cities nationwide that are facing problems with aging water system infrastructure. Some federal estimates of the need for new spending for municipal water systems have reached as high as $1 trillion over the next 20 years.

“While we do face problems in Kansas City, I feel the majority of the issues can be alleviated by fulfilling the recommendations outlined in the study in an efficient and timely manner,” said Cauthen.

    
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