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6.3B Page 2 and consumption information that is currently provided to all irrigation and a small percentage of residential customers. Additionally, the new meter - reading technology will enable PWS to automatically alert residential customers of continuous water leaks or when they have exceeded their water budget. The benefits of this Project are two -fold; the project will not only reduce the labor costs associated with meter - reading by hundreds of thousands of dollars each year, but will also have the potential to save hundreds of acre -feet of water through better customer communication. Specifically, the Project involves the replacement of more than 20,000 meters with new Automated Metering Infrastructure that will enable water customers to detect Teaks and reduce water use, resulting in less potable water demand. On May 24, 2010 the City Council adopted a resolution committing Public Works Services to the implementation of a five -year meter replacement program that will use this new technology to help further reduce demands on the City's potable drinking water supply. The resolution was adopted in concert with an application to the Bureau of Reclamation to request grant funding for Phase I of the residential portion. The City was not awarded 2010 WaterSMART grant funding and staff recommendation is to submit a new application while adopting a resolution that will allow the City Manager to commit the City to the financial and legal obligations associated with future receipt of WaterSMART Grant financial assistance between today's date and the end of Fiscal Year 2011 -2012 as it pertains to the City's meter replacement program. The five -year, City -wide meter replacement program cost is estimated at $8 million; this year's grant proposal request is for up to $1,000,000 of funding. The grant requires that receiving agencies match at least 50% of the project cost; the remaining portions of the project will be paid for using City funds. These City funds will come from the dedicated Water Conservation CIP account and an inter -loan transfer. The inter -loan transfer will be repaid using revenues collected through the City's Water Enterprise. PWS will be returning to Council with a complete proposal; including cost breakdowns, funding mechanisms, and scheduling. ALTERNATIVES 1. Council could elect to not adopt the Resolution; the consequence is that the City would not receive the grant funding. 2. Council could elect to modify the resolution so that it limits the City Manager's authority to commit the City to the financial and legal obligations associated only with 2011 WaterSMART Grant financial assistance, as opposed to extending this authority through Fiscal Year 2011 -2012. FISCAL IMPACT PWS anticipates spending up to $8 million to replace the City's aged metering infrastructure with this new technology. These funds will be spent regardless of whether or not WaterSMART grant monies are received; the grant funds, however, will offset up to $1 million of the City expenditures on the project. The City's portion of the meter replacement project will be borne by the Water Enterprise; the City's General Fund will not be affected. The five -year Meter Replacement Project costs have been outlined in the ten -year Water Enterprise Cash Flow Projection which was updated in 2011.