Siemens $12.6 million Contract – 2016 Bond Issue

In August of 2016, prior to the 2016 Bonds for Better Bellaire election, the city entered into a $12.6 million dollar contract with Siemens for water meters and water and wastewater improvements.  The agreement can be viewed here:  Performance Contracting Agreement

Per the city manager and Siemens presentation on July 25, 2016:

“August 2 will largely consist of presenting information about needed water and wastewater improvements totaling approximately $12.8 million. These are in addition to the $11 million of water line replacements we have identified to be funded with new debt. The nature of the $12.8 million in improvements were described to Council on May 2, but no cost estimates were provided at that time.  You will also receive information as to how these improvements could be financed.”

All meters in the City, a total of 7,684 meters, are included in the contract at a cost of $4.6 million.  Meter replacement began in mid-summer of 2017.  Most meters have been installed.  Work is still in progress on the $8 million for water and wastewater improvements.  The contract is financed by bonded debt.

By comparison, West University Place approved the installation of 6244 radio-controlled meters in 2013 at a cost of just under $2 million. Their project was not financed over 20 years, it was paid for in cash from their Capital Reserve fund.

Siemens 8-2-16 Performance Contracting Workshop Presentation

Savings are estimated to begin in 2026.  See the cash flow projection below.  To date the City of Bellaire has not released a report regarding the savings promised by this Contract.  This entire operation was confined to dealings with Siemens, including the first inspection our systems.  Numerous water leaks from meter installations have been reported, most repaired by City of Bellaire crews but other residents have been advised to call a plumber.  A more in-depth article will be posted soon.

Siemens Cashflow Projection

Siemens Performance Contracting Agreement

Questions presented by Council Member David Montague.

Siemens Q & A Regarding No-Bid Contract

Find a 2019 update to this article here: Where Do We Stand With The Siemens Contract?