Toronto is on the hook for millions to replace failing water meter transmitters

Work to replace parts of 470,000 failing water meter transmitters  in homes and businesses across Toronto is underway, but the latest update shows it will cost taxpayers millions of dollars to solve the problem that's only getting worse.

In July, civil servants said thousands of radio transmitters on water meters were failing years ahead of schedule, meaning they can't relay usage from homes or businesses to the city. In a new report to councillors on the infrastructure committee, Toronto Water says over 150,000 of those units have now failed and the city will need to spend $5.6 million on the first wave of replacements. 

But getting new units has been complicated by supply chain problems and the fact that the technology is now obsolete. The general manager of Toronto Water, Lou Di Gironimo, said that means city residents are increasingly being billed by estimates based on their historic usage.

"It is a growing problem," he said. "We started to notice a significant number of the meter transmission units failing. The meters are fine, so they are registering properly. It is just about sending us the data on a wireless basis."

But that has meant some customers are receiving unexpectedly large bills because their actual water usage isn't being relayed in real time. Toronto Water receives 92 per cent of its funding from water sales, which are measured by 470,000 meters on homes and businesses. 

"We want to restore customer service back to what (residents) were used to," Di Gironimo said. "Most importantly, it is our cash register. That's how we calculate our revenues accurately."

Batteries to blame for failing units, city says

The culprit is small lithium batteries in the transmission units. Once projected to have a 20-year lifespan, they are now failing at the 11 or 12 year mark, the city says. In 2010, the city began a five-year replacement program of its old water meters to the new digital versions. 

Installation of those new units started to peak in 2011 and 2012 and those are the units failing now. 

The city estimated a unit failure rate of one per cent, or about 4,700, a year prior to this issue. But Di Gironimo said they're now failing at a rate of 5,000 to 8,000 units a month.

That means the batteries in every transmission unit in the city will be dead between three to five years. And it will take years to replace the units, he said.

"We ask residents to be patient with us, because this is going to take us several years to deal with. This is not a quick fix," he said.

City negotiated sole-sourced contract for meters: report

When the city initially went public about the problem in July, it said the meters were under warranty. But the latest report says the city negotiated a sole-sourced emergency contract with the company that makes the units, Aclara Technologies, to acquire a supply of "initial" replacement units for $5.6 million. Those units were under warranty that covered some, but not all of the costs.

Staff are now asking city councillors for permission to continue negotiations with Aclara for a supply of additional equipment. Details about those talks are part of a confidential report to councillors.

The cost to replace every unit in the city isn't yet clear because of the talks.

Coun. Brad Bradford said most people with malfunctioning meters probably wouldn't notice the issue unless they looked closely at their bill. 

"This technology failure is a huge boondoggle and it's going to be a difficult mess for city staff to sort out," he said. "But at the end of the day, this is not the residents' fault, so we have to have a customer service mentality and empathy when we're dealing with people on this issue."

City staff are expected to report back early next year with a full plan to deal with the issue. Bradford said he'd like to see a streamlined process to help city residents avoid any large, unexpected bills.

"I want to make sure that (city staff) are using common sense with this, that they're managing the budget prudently and, most importantly, minimizing the inconvenience for residents and businesses," he said.

Residents with large bills should reach out to city

Coun. Dianne Saxe is a member of the infrastructure committee and Ontario's former environmental commissioner. She's been has working with municipal water providers for years and says she's never seen anything like this.

"We know that technology is not magic and sometimes it does fail, but this one's weird," she said.

Saxe is urging residents who may have experienced a billing problem to reach out to the city.

"This is a problem that none of our residents created," Saxe said. "The city bought these devices in good faith, now they're failing and we're fixing them as best as we can. If it's caused you a problem, we'll try to help you through."

Di Gironimo said the city has set up a dedicated customer service team to address billing issues. The city will be adding additional measures to make it easier for customers to self-report meter readings next year, he said.

In the meantime, customers who receive large bills should reach out to the city to arrange payment plans, he said.

"Instead of paying it all at once, we can look at opportunities to stretch it out and make it reasonable for people," he said.