For much of the last decade, city leaders in Martinsville, VA, had been preparing themselves for a significant but inevitable capital expense: Replacing the city’s nearly 7,000 water meters. “Some of them had been in place for 20 years or more, and as older meters degrade they tend to run slower,” said Leon E. Towarnicki, City Manager. “So we knew we were losing a certain amount of revenue because we weren’t capturing the complete usage that was occurring.” And yet, like many municipalities, Martinsville leaders struggled to fund the much-needed meter upgrade.
The city issued a request for proposals and selected Johnson Controls after the company demonstrated how the project could be financed through guaranteed savings. Under an energy savings performance contract, the $7.8 million project cost would be offset by guaranteed energy and operational savings of more than $582,000 a year—for a total payback of just 13 years. “Our community certainly realizes the benefit and I’m sure they appreciate the fact that we were able to do this project without having to raise rates and fees and taxes. It’s a win for all of us,” said Leon E. Towarnicki, City Manager of Martinsville.
The 12 month project wrapped up in March 2017 and has since given the City of Martinsville significant opportunities to increase meter-reading accuracy, reduce costs, and deliver proactive customer service. Overall, 6,800 water meters were replaced along with 8,300 electric meters and 3,200 street lights.
“When you look at municipal finances, there’s just no way you have the money to do a multi-million dollar project like this when you can’t adequately fund schools or public safety or some of those other critical needs,” said Towarnicki. “But there are ways to make projects happen, and performance contracting is certainly a great option to consider.”