Item - 2024.IE17.2

The Infrastructure and Environment Committee recommends that: 

1. City Council authorize the General Manager, Toronto Water, to enter into negotiations with Aclara Technologies LLC, as the manufacturer and exclusive supplier of the Meter Transmission Units, for the supply and delivery of additional Meter Transmission Units, and to report back to the Infrastructure and Environment Committee on the outcome of those negotiations, and the strategies identified in Confidential Attachment 1 to the report (October 7, 2024) from the General Manager, Toronto Water, and the Chief Procurement Officer, by the end of the first quarter 2025.

2. City Council adopt the Confidential Instructions to Staff as contained in Confidential Attachment 1 to the report (October 7, 2024) from the General Manager, Toronto Water, and the Chief Procurement Officer.

3. City Council direct that Confidential Attachment 1 to the report (October 7, 2024) from the General Manager, Toronto Water, and the Chief Procurement Officer, remain confidential in its entirety as it contains information and Confidential Instructions to staff respecting a plan to be applied to any negotiations carried on or to be carried on by or on behalf of the City, and direct that the confidential instructions to staff, if adopted, be made public at the discretion of the City Solicitor.

4. City Council authorize the General Manager, Toronto Water, to negotiate, enter into and execute any agreements or amendments to agreements to procure, including by a non-competitive procurement, additional Meter Transmission Units and associated equipment from Aclara Technologies LLC, by or before June 30, 2025, to a maximum of $3,000,000, on terms acceptable to the General Manager, Toronto Water, and in a form satisfactory to the City Solicitor, in order to keep providing working meters and Meter Transmission Units for new builds and high volume users pending Council decision on a long term strategy.

The Infrastructure and Environment Committee recessed its public session to meet in closed session to consider this item as it pertains to a plan to be applied to any negotiations carried on or to be carried on by or on behalf of the City of Toronto.

The issuance of this non-competitive contract was a matter of extreme urgency. The rapidly increasing and premature failure of over 150,000 of the City’s 470,000 Meter Transmission Units, at a far greater rate than expected, has created a significant challenge for Toronto Water, requiring immediate action to support accurate, timely and efficient City water utility billing and customer service. This premature failure is expected to continue.

The purpose of this report is to advise City Council, in accordance with Chapter 195 of the Toronto Municipal Code, Procurement, Section 195-7.5, of a non-competitive emergency contract with Aclara Technologies LLC (Aclara) for the supply of initial replacement Meter Transmission Units at a total cost of $4,040,000 USD ($5,534,800 CAD), net of all applicable taxes and charges ($4,111,104 USD or $5,632,212. CAD, net of Harmonized Sales Tax recoveries) issued pursuant to Purchase Order 6055735, as amended. This cost represents an agreed pro-rata warranty replacement cost for the failed Meter Transmission Units.

The issuance of the Purchase Order was a matter of urgency as the premature failure of the Meter Transmission Units was deemed an emergency by the General Manager, Toronto Water, under Chapter 195, Procurement, Section 195-7.1(G), and reporting back to City Council is required in accordance with Section 195-7.5, where the potential value of the non-competitive contract exceeds $500,000.

This report also seeks the necessary Council authorities to continue to address this on-going emergency, enabling Toronto Water to secure the materials and services required to maintain the level of service necessary to support City water utility billing based on actual consumption and associated customer service operations.

Additionally, this report provides an overview of the steps taken to manage this issue, and provides, in Confidential Attachment 1, information for consideration by Committee and City Council, and recommended Confidential Instructions to Staff.