Meter Project Summary
Last Updated August 17, 2024
This document was assembled by the Board of Directors of Forest Park Mutual Water Company, with review and input by long-time attorney for the Company, Jim Ciampa. This document was produced and published in response to questions raised by some of our shareholders.
Why are meters being installed?
We are installing meters to comply with state law (SB552) that, among other things requires the installation of water meters by January 1, 2032. The current Board members first learned of this requirement after joining the board nearly 3 years ago. Before that we had no intentions or desires to install meters. It is only when we learned of the legal requirement that we began studying SB552 to determine whether it applied to us or if we were somehow exempt from the metering requirement. Unfortunately, it turned out we are not exempt from any aspect of SB552.
Beyond satisfying requirements of SB552, what immediate benefits are we realizing by doing the project now?
Beyond satisfying with the metering requirement of SB552, the board recognized these significant benefits:
1. Leak detection: With all connections metered, data will be automatically collected and summarized using the particular technology we obtained, we will be notified automatically of leaks in the system. The presence of leaks in the system impacts all shareholders, as it results in lost water for which the Company incurs costs but does not realize any resulting revenue.
With the particular meters we acquired, with automatic daily readings, we will be made aware of leaks in the system within a day or so, not monthly as would be the case with manually read meters (more on our meter technology below).
2. New valves: Most of the residential connection valves throughout our aging infrastructure are corroded, broken, or otherwise inoperable. And there are inconsistencies throughout our system between valve and pipe sizes. In order to install the meters, all valves and many service lines (from main line to meter) would be replaced in order to bring the needed consistency and operability.
Please understand the new valves are not in any way connected to the meters, and therefore the meters cannot operate the valves. The particular meters we obtained do not have valves of their own. This means our meters are not capable of shutting off water service. These are not “smart meters” (more on that later in this document).
3. Valve boxes uncovered. About 3 years ago San Bernardino County paved Prospect Drive and Canyon Drive. During that project they paved right over many of our valve boxes. Since then we have uncovered only a few at our own expense. By doing the meter installation project all valve boxes were located, uncovered, and replaced, all at once, at no charge to the Company for the work performed by the contractor.
4. Valves Relocated: Over the decades as homes were built and new service connections established, some valve boxes were placed in locations that may have made sense at the time, but no longer are desirable. Therefore, for a few of our residential connections, and as part of the meter installation project, the valve boxes were moved to a better location.
5. New valve boxes: All valve boxes are being replaced as part of the meter installation project. Replacing the valve boxes ensures protection of the enclosed components, and brings consistency throughout our service area, thereby reducing maintenance costs over time.
Why not delay the project until just before the 2032 deadline?
The Board decided to comply now rather than later, but only if all three of these conditions were met:
1. Zero cost for acquisition and installation: We would move forward with the project only if the meter acquisition and installation costs would be funded entirely by a grant, and;
2. Zero or minimal recurring costs: The introduction of meters into our system would not substantially increase our recurring operating costs, and;
3. No legal or other obligations – no freedoms or rights given up for accepting the grant.
The Board decided the Company would proceed with the project only if there were no such "strings” attached to the money - specifically no requirement to change billing models to any form of volumetric pricing, no giving up of water rights, no requirement to merge with another water company, or any other requirements beyond simply funding the valve and meter project.
To be 100% clear, the Company has undertaken no continuing obligation with the state or any other government agency in exchange for the significant funding for the project.
The Board decided to move forward now rather than delaying because:
1. All of the above three conditions were met, and;
2. Funds were available now. And there was no guarantee the funds would be available later. And even if the funds would be available later there is no guarantee we would qualify to receive any. Even if we did qualify in the future, we may only qualify for a low interest loan, or a grant for only 50% of the cost paid on a reimbursement basis only, or some other such limited funding. By doing the project now we locked in zero cost to the Company and its shareholders.
Current Billing Rates Preserved: By doing the project now and locking in zero cost for installation, and minimal recurring cost (that will not be incurred for another ten years), we ensured compliance with SB552's metering requirement while realizing the additional major benefits (listed above) that we get without raising our annual billing rate.
Why did the Board act without a vote of the shareholders?
The valve and meter project is being done in order to comply with California State law SB552. Being a mutual water company that operates a public water system (i.e., a system that has 15 or more service connections) we are governed by California Corporations Code and Health and Safety Code and we are compelled to comply with government regulations and laws (for example, water quality sampling and testing requirements). We could receive substantial fines or even lose our operating permit if we do not comply with regulatory requirements. Failing to satisfy the requirements of SB552 is therefore not a realistic option. Consequently, the Board did not conduct a vote on the topic. The Board made a business decision that is within its scope of responsibility.
It should be understood our water company has always been regulated by the state and/or county (at least for the past many decades of our existence). We are already required to report usage data and satisfy laws regarding water safety and capacity. We are currently required to test water samples monthly and yearly (depending on the particular test). Complying with relevant laws and regulations is something we have already been doing for decades and is simply not optional.
Financial Considerations:
Project Costs and Billing Considerations
How much are the meters costing us (FPMWC / Shareholders)?
Zero.
Because the meters are paid by a grant (as described below) we are paying nothing now for the installation, and our recurring costs are zero for the next 10 years. After 10 years the recurring charge is $10.00 per meter per year, so well under $1,000 for per year for future data connectivity.
Who is paying for the meters, valves, valve boxes and installation?
We qualified for and received the necessary funding through a grant from the California State Department of Water Resources (DWR). The application process and subsequent project management services are being facilitated by the California Association of Mutual Water Companies (CalMutuals). CalMutuals is a non-profit association of over 400 mostly small mutual water companies located throughout California of which we (Forest Park Mutual Water Company) have been a member in good standing for many years
The grant funds were NOT disbursed directly to Forest Park Mutual Water Company. The grant funds are disbursed to CalMutuals who has entered into contracts with contractors and consultants to perform the services to implement the projects the grant pays for. CalMutuals is administering the grant on behalf of DWR. CalMutuals is now managing the project for the installation of our meters. CalMutuals conducted the vendor selection process and hired the contractor company who is installing the meters. Forest Park Mutual Water Company was included in discussions related to the application process, but did not, and will not, directly receive grant funds, and did not participate in the selection of the contractor who is installing the meters and valves.
Without the grant what would be the cost to shareholders?
The total cost of the meter and valve installation project is estimated at somewhere close to $400,000. We will not know the total until the project is completed. Given that we have about 80 connections, the total cost per connection is approximately $5,000. If we did not get the grant or other financial assistance, each shareholder would need to pay their proportional cost per connection. That approximately $5,000 amount is at today’s prices. If we were to wait for six or seven years to do the project, the prices would almost certainly increase, and increase substantially.
By doing the project now and with the grant we qualified for, we are all paying zero.
Does the introduction of meters mean the Company is switching to tiered pricing or any other form of volumetric pricing?
No.
For the foreseeable future we are keeping our current annual flat rate billing.
The law we are complying with (SB552) does not require for us to change billing models (e.g., change from annual flat rate billing to tiered/metered billing). And we have no intention of doing so.
Forest Park Mutual Water Company's board of directors is serious about not changing billing models. Accordingly, we are now (as of late August, 2024) in the process of drafting an amendment to our bylaws that would require for a majority of shareholders to approve any change to our billing model, and with at least 90 days advance notice on the intent to conduct the vote. Without such an amendment, any board (current or future) could simply decide to change the billing model without shareholder vote. We want to prevent that scenario from being possible. That's why we are amending our bylaws to prevent any change to billing our model without shareholder approval.
Significant Financial Benefit to FPMWC Shareholders: The meter installation project is being funded 100% by a grant from the California State Department of Water Resources (DWR), which covers the cost of the meters and the installation of the meters.
Beyond the installation of meters, the Company is receiving the benefit of new valves, new valve boxes, and uncovering and moving valve boxes. If we were to pay for those tasks to be performed outside of the meter installation, the cost would be several tens of thousands of dollars to the Company and its shareholders. Because those secondary tasks are being performed as part of the meter installation project, there is zero charge to the Company and its shareholders.
By deciding to do this project now, and for the specific terms we were able to obtain, the Board recognized the additional value (tens of thousands of dollars of value to shareholders) beyond merely satisfying the metering requirement of SB552.
Legal Considerations – Beyond Compliance With SB552
What “fine print” or “strings” are attached to the grant we received?
None.
There were no conditions placed on us in order to get the project paid by the DWR grant. The only requirement is that the funds would be spent on the purchase and installation of valves and meters - with all expenses paid to the relevant vendors and contractors by CalMutuals on behalf of Forest Park Mutual Water Company. CalMutuals is a trusted partner of DWR, and is responsible for administering the grant. This has included selection of the contractor, and working with FPMWC leadership to facilitate successful project completion. To be clear, FPWMC did not and will not directly receive any of the grant funds, and did not have any direct or indirect say in which contractor was selected to perform the installation project.
Did the board seek legal advice before moving on the project?
Yes, many times.
Here are some of the questions we brought to attorney James Ciampa.
1. Are we or can we in any way become exempt from the metering requirement of SB552?
The answer was no, we are not exempt, and there is no practical way to become exempt.
2. If we accept the grant funds will we owe anything to the state? For example, would we be required to pay any new taxes or fees, would we be subject to any additional oversight (beyond what is already in place), would we be required to give up any water rights, and would we be required to merge with another water company?
The answer to all of these questions was “no.” There are no such requirements attached to the funds. The only requirement is that the funds are to be spent on the intended purpose (acquisition and installation of valves and meters), and that CalMutuals would manage the grant funds and entire project (including contractor selection) on behalf of DWR.
It should be further noted that a pre-condition to any individual grant that a water supplier may receive from the state (either DWR or the State Water Resources Control Board) is a consolidation study and the likely requirement to consolidate the water company with any company or public agency. FPMWC was able to avoid that consolidation study requirement through CalMutuals’ involvement as the intermediary for the DWR grant.
During this entire process (applying for and getting funding for the meters), we consulted with CalMutuals attorney Jim Ciampa who is a career specialist in water law and works with numerous mutual water companies throughout the state. We began consulting with Jim Ciampa on the question of meters more than a year ago - before we even began the grant application process, and so we could understand the legal implications of compliance or noncompliance with SB552, and any "strings attached" to the grant money.
Attorney Ciampa has written a letter for our shareholders (link below) that describes the legal perspective of the meter installation project. I'm including the letter from Jim so you can hear from someone other than our Board on this topic - someone who has expertise on the relevant laws and how the grant we received works.
Click here to see the letter Jim Ciampa wrote to our shareholders
Meter Technology, Safety, and Privacy
Are “Smart Meters” being installed?
No.
Smart meters have advanced capabilities that ours simply do not have.
For example, smart meters have built-in valves and more advanced logic and connectivity capabilities than our meters have. A true smart meter can connect to a billing system, trigger payment reminder emails, and ultimately shut off water service automatically if payment is not received. Our meters are simply not capable of any of that.
Our Board never wanted or requested such capabilities – and that’s not what we are getting. And DWR probably would not have funded smart meters, anyway, as the total cost of ownership is much higher than that of the meters we are getting.
Instead, our meters are ordinary digital meters that collect water throughput data. The only “advanced” feature is the cellular connectivity.
Why did we get meters with cellular connectivity?
We requested meters that have the cellular connectivity in order to eliminate the recurring cost of reading meter data manually (i.e., we didn't want to pay for someone to go around our neighborhood manually collecting the exact same data).
With cellular connectivity, the meter readings are automatically transmitted to the website of the meter manufacturer (Metron-Farnier), where the data is automatically accumulated with summary data made available via charts and graphs. The Metron-Farnier data processing includes automatic alarms on usage patterns that indicate a leak is occurring.
If we were instead to have gotten meters that required manual reading, our recurring costs would increase in that we would need to pay our water operator to go around our service area reading meters. This recurring cost could be significant during winter when the valve boxes are buried under snow.
What brand and model of meter is being installed?
Brand: Metron-Farnier.
Model: Spectrum 30 D, with cellular AMI.
Click here for PDF file showing technical features and specifications of the Spectrum meters
Click here for PDF file showing meter register specifications.
What is “cellular AMI”
Simply stated, cellular AMI is the ability of the meters to send their readings data to a cloud-based location via cell tower.
The Company’s Board of Directors wanted the cellular AMI feature in order to keep our increase in recurring costs as close to zero as possible. By installing meters that automatically transmit data, we do not need to pay our water operator employee to walk around the neighborhood and read meters, dig through snow, etc. That would have presented a significant increase in recurring costs to be passed on to our shareholders that we have avoided through use of cellular AMI.
From a practical and financial perspective, cellular AMI is the technology that keeps our recurring costs low.
The “AMI” part means “advanced metering infrastructure”
Click here for PDF file showing antenna specs (we are using the Through-the-Lid Pit Antenna)
What can be done to satisfy privacy concerns?
By default the meters record data in one-minute intervals. Having this level of detail gives the Metron-Farnier system the ability to reliably infer what types of usage are occurring (e.g., dish washer vs. laundry).
For those who don’t want that level of detail being recorded, the meters can be switched to record data in 5 minute intervals. This change eliminates Metron-Farnier’s ability to infer most usage patterns. In order to make inferences about ordinary household water usage patterns, the 60 second recording interval is required. Switching to 5 minute intervals affords the consumer additional privacy (insofar as usage patterns are concerned) while preserving the water company’s ability to proactively detect leaks. The board is totally fine with the 5 minute intervals.
What about possible interaction with other electronic devices in homes?
1. It should be understood the meters are physically located in the valve boxes out by the street. The meters and antennas are not located inside any homes.
2. The meters are powered by tiny batteries (19.0Ah) that have an expected lifetime of about 20 years. Their standard warranty is 10 years, then prorated for an additional 10 years after that.
The fact that the tiny batteries are expected to last 10-20 years is relevant to privacy concerns. For a battery to last that long, everything about the meter recording and data transmission must be designed to use the least amount of battery power as possible. Accordingly, the meters are designed to do the absolute bare minimum work needed to collect meter readings, store them temporarily, then transmit that tiny amount of data via the local cell tower.
Accordingly, our meters attempt to connect to the Verizon tower and transmit meter data only once every 24 hours in order to preserve their battery power. They do not continuously transmit data.
The meters are not capable of interfering with, or interacting with, other electronic devices in homes. The power to do that is just is not there, particularly given the distance of the meters from homes.
Regarding any security risk of a “man in the middle” attack: This kind of system attack is where a bad actor intercepts data while being transmitted. Because all modern cellular communications are encrypted (“scrambled”) it is highly unlikely any bad actor would succeed in intercepting meter readings and be able to decipher them. Moreover, the meter data is transmitted in a specially encoded binary format that requires special software to decode. Therefore the risk of a successful “man in the middle” breach where a bad actor succeeds in obtaining meaningful information is extremely low.
What are the effects of EMF on human health?
Concerns have been brought to our attention about potential health risks presented by the meters with cellular connectivity that we acquired. The concerns center around electric and magnetic fields (EMF).
Electric and magnetic fields should be understood as radiating away from any electronic or magnetic source (this includes the Earth, itself, as an EMF source). The strength or effects of any EMF decreases substantially over short distances. For example if one holds a cell phone next right next to an old cathode ray TV, the cell phone’s EMF can be seen distorting the display on the TV. But when you move the cell phone just a foot or two away, the TV display becomes clear. This exemplifies that distance – even short distances – significantly reduce any effects of electric and magnetic fields.
Comparison of EMF exposure: Cell phones vs meters.
EMF is frequently measured in units called milligauss (mG). Consider ordinary residential water meter’s EMF ranges from 0.1 mG to 5 mG during transmission sessions, whereas an ordinary cell phone’s EMF ranges from 0.5 to 20 mG during a phone call. At a distance of a foot or more the EMF of cell phones and our meters drops to negligible values, close to 0 mG.
Cell phones are multifunctional devices with higher power levels, continuous or frequent data transmission, and significant user interaction.
Cellular AMI in water meters are specialized devices with low power consumption, infrequent data transmission, and minimal human interaction. They are designed for efficiency and longevity, focusing solely on monitoring and reporting water usage.
Whatever EMF concerns are raised about our meters are equally applicable to all electronic devices, including computers, cell phones, and all electronic household appliances.
The meters we acquired have a much smaller EMF “foot print” (considering signal strength and frequence of use) than most ordinary household electronic devices. The meters are not located in homes, but instead are installed in a box in the ground out by the road.
Considering that EMF strength diminishes significantly over short distances (even a foot or two), and our meters are installed in boxes at the side of the road, our meters should be recognized has having essentially zero EMF radiation to residents, whether during or between data transmission sessions.
What are the effects of EMF on Water?
Here are a few facts in consideration of potential EMF effects on the water passing through the meters:
Water is a simple molecule (H₂O) that is largely unaffected by the low to moderate levels of electromagnetic fields encountered in everyday life. Water can absorb certain frequencies of electromagnetic radiation (e.g., microwaves, which cause water molecules to vibrate and heat up), but this is a physical process rather than a chemical change to the water itself.
Power lines, household appliances, and AMI devices like water meters produce low-frequency fields (EMF) that do not have enough energy to alter the molecular structure of water. Low-frequence EMF cannot even heat water.
Higher frequencies, such as those from microwaves, can cause water molecules to vibrate and generate heat (as in a microwave oven). However, even this does not chemically alter the water; it simply raises its temperature.
Concerns about EMF exposure primarily focus on biological effects on living organisms rather than on water. These concerns often center around long-term exposure to higher levels of EMF, especially from devices like cell phones or power lines. For water, EMF exposure from common sources like wireless communication or AMI systems is generally negligible and does not pose any known risks. No scientific evidence has been found to suggest that EMF at levels typically encountered in everyday environments is harmful to water or affects its properties in a way that would make it unsafe for consumption. The American Cancer Society, which has published information on its website related to automated meters, says the possibility of such meters being connected to an elevated risk of cancer is very unlikely.
EMF References
Southern California Edison – an authority on EMF – has provided a lengthy document that summarizes decades of scientific research on EMF. A link to that document, and others by the American Cancer Society and Neptune Technology Group provide additional perspective in support of the conclusion that cell phones and ordinary household appliances pose a larger risk for health issues than do our meters - particularly given that our meters are not installed inside any homes, but rather are located in the ground out by the street.
Click here for a page by the American Cancer Society addressing EMF health risks of cell phones.
Click here for comprehensive summary of EMF research assembled by Southern California Edison.