An attorney for the El Dorado Water Utilities has agreed to send a stern letter to a water metering technology company and if necessary, pursue further legal action as part of an ongoing effort by the utilities and city officials to resolve an issue regarding the warranty for the city’s water meters.
An audio recording from a December 2014 meeting with a Badger Meter representative and EWU officials seems to provide answers to questions regarding coverage that was included in a warranty for the city’s cellular-based water meter system.
Badger manufactures the water meters.
Nearly 10,000 cellular-based meters were purchased and installed in 2015 and 2016 in El Dorado at a cost of more than $2.2 million.
Utility Metering Solutions — a product-independent firm specializing in the design, build, integration and maintenance of utility programs — installed the meters.
Now, the city is facing a dilemma.
The transmitters for the water meters will become obsolete at the end of the year.
In early February, Robert Edmonds, director of public works, and John Peppers, general manager of the EWU, explained that by the first of 2021, the bandwidth for the transmitters on the Badger meters will no longer be used because wireless carriers are decommissioning the transmitters and upgrading to new ones.
Edmonds and Peppers said the Badger meters came with a 10-year warranty but while the warranty will still be good come 2022, the transmitters will not.
In addition to figuring out the best way to address the issue with the transmitters and exploring cost options, the city and EWU are challenging Badger on two questions: if the 10-year warranty that came with the cellular meters included network coverage and if Badger adequately explained whether the warranty came with network coverage.
On March 31, El Dorado City Council members, Edmonds and EWU officials met with Joe DeVito, strategic solution architect for Badger.
DeVito presented three options: upgrade to new cellular technology; replace the cellular transmitters with automated meter readers, the type of metering system the city used prior to the cellular meter project; or choose a hybrid and combine both options to tailor the city’s water- metering system to what works best for the EWU and its customers.
He recommended that the city switch back to AMR endpoints at a cost of $600,000 and a 20-year warranty.
DeVito also said the deal is front-end loaded with no monthly payments for the use of the software for 10 years.
Additionally, DeVito and Lorraine Murtha, EWU engineer, said they were digging through emails and documents that were associated with the 2015 - 2016 sale of the Badger meters and each drew different conclusions.
Murtha noted that the sales order denotes a 10-year, “100%” warranty for both options that were presented by Badger, including cellular endpoints, and calls for the city to purchase new endpoints in the 11th year of the contract.
Minutes from meetings about the matter in 2014 and 2015 also contain discussions about a full-coverage warranty, she said.
DeVito said materials that had been presented to him by the EWU and Badger and discussions with Badger’s legal team made no mention of network coverage.
He said the existing warranty covers materials and workmanship.
Murtha and DeVito both said they had been unable to track down the warranty documents that were executed with the sale.
Murtha said she would continue looking through EWU documents and recordings of meetings that were held by the former El Dorado Water and Sewer Commission, EWU and Badger.
Edmonds ended the March 31 meeting with DeVito by saying, “Until we hear from our legal counsel about what we need to do moving forward, we’re done here … We’ll produce whatever we find, sir. Thank you.”
‘Trying to pull the wool over your eyes’
On April 14, Murtha said she had found an audio recording from a December 2014 meeting that included a Badger representative, Angela Phillips, and Mark Smith, former EWU general manager who pitched the idea for the cellular-meter project.
Murtha played a segment of the recording in which Phillips can be heard explaining a warranty option that was divided into three pieces and covered 25 years for the housing of the meters; 10 years to change/replace parts on the encoder components of the cellular-based metering system; and “10-year guaranteed” for the cellular endpoints and network for the product.
Phillips said the 10-year coverage for the endpoints and wireless network were based on 3G, third generation wireless mobile telecommunications technology, the latest such technology that was available at the time.
“You’re going to have to replace that technology. I don’t know whether it’s going to be 5G or 10G in the 11th year (of the contract) but it’s going to change,” Phillips said on the recording.
During the meeting with DeVito on March 31, Edmonds and City Council Member Vance Williamson, who is also chairman of the city’s Finance Committee, said Badger offered two options with the cellular meters and the city selected the more expensive package, which included the terms that were described by Phillips in the recording.
Edmonds has also said that the city pays a subscription fee of 89 cents per month, per meter, as a part of full-coverage warranty for the cellular meters.
Murtha noted then that the sales order for the cellular meter project denotes a 10-year, “100%” warranty for both options that were presented by Badger, including cellular endpoints, and calls for the city to purchase new endpoints in the 11th year of the contract.
On April 14, Murtha reiterated that the 89-cent subscription fee was “sold to us as guaranteed warranty coverage.”
She also told city council members that Phillips had said that Badger would have to put together a warranty packet spelling out the terms and coverage.
“They did not provide a warranty packet at all and they said they would get us a contract to sign and they did not provide a contract at all,” Murtha said.
Referring to Phillips’ statements on the audio recording, EWU attorney Brian Ratcliff said,”When I heard that, I was convinced that Badger Meter was trying to pull the wool over your eyes.”
He then said he plans to send Badger a letter demanding that they make good on the full-coverage warranty.
“And if they don’t, we’ll go ahead and file litigation,” Ratcliff said.
Council Member Willie McGhee said other municipalities who have done business with Badger may be experiencing similar issues — a point that was previously raised by city officials.
“I’m concerned about the city of El Dorado,” Council Member Paul Choate said.
“My thing is if there are more folks out there going through this, it would give us more leverage for them to reimburse us,” McGhee replied.
“My greatest fear is if there are a thousand municipalities, they (Badger) may file a little thing called bankruptcy,” Choate shot back.
McGhee insisted that the city should “look at all options.”
Ratcliff said he intends to research the matter further and explore the possibility of a class-action lawsuit.