PORT ANGELES — The City Council is poised Tuesday to approve a $1.8 million settlement with Mueller Systems LLC that ends the company’s troubled, much-debated “smart” meter program.
The agreement includes $759,891 in cash to the city — and the city’s promise to buy 4,500 new residential water meters from Mueller for up to $502,183.
The settlement pact, already agreed to by Mueller and recommended for approval by city staff, is on the agenda for approval at the council’s regular meeting at 6 p.m. Tuesday in the City Council chambers at City Hall, 321 E. Fifth St.
City staff has been negotiating with the company since June to end Mueller’s $4.9 million contract with the city, which declared the company in breach of contract in January.
“The was a very good process and a very good outcome for the city,” City Manager Dan McKeen said Saturday.
The proposed agreement and an accompanying memo from McKeen, Public Works and Utilities Director Craig Fulton, City Attorney Bill Bloor that explains the rationale for approval are at http://tinyurl.com/PDN-Agenda.
The agreement avoids litigation, allows the city to continue replacing older, inaccurate water and electric meters with meters that do not include the controversial, electromagnetic smart meter components — and binds the city and Mueller to not “disparage the other in connection with the project,” according to the agreement.
Here are the terms of the pact:
■ Smart-meter components on installed Mueller water meters that wirelessly transmit usage data to city staff will be removed and the meters will remain, a value equal to $565,596 that figures into the settlement.
■ The city will return existing residential water meters in warehouses and will purchase its new water meters from Mueller.
■ The company will reimburse the city $759,891 for all of Mueller’s warehoused and installed electric meters, which will be shipped back to Mueller at company expense.
■ Any remaining money in the settlement account will be returned to the city.
City residents voiced repeated objections to the project at City Council meetings, citing health concerns over the electromagnetic energy employed by the wireless devices.
The city cited other concerns: software integration issues between the city’s billing software and Mueller’s software.
“It is important to understand this agreement constitutes of a compromise of disputed claims,” Fulton, Bloor and McKeen say in their memo to City Council members.
The factors in the final agreement include “the costs of an alternative to settlement,” they said in the memo.
“That is, the costs of litigation.”
Middleborough, Mass.-based Mueller spokesman John Pensec said the company would not comment on the agreement beyond a prepared statement.
“We are very pleased that we have reached a mutually agreed upon resolution with regard to the city’s metering program,” according to the statement.
“We believe the resolution is in the best interests of both parties.
“We are equally pleased that, as part of the agreement, Mueller Systems will continue to help the city upgrade its water infrastructure by supplying the city with our water meters for the next five years.”
The city has paid $1.7 million to Mueller under the contract.
In January, the city declared Mueller in default, and Mueller responded by declaring the city in default, raising the specter of litigation.
The city also has paid $130,000 to West Monroe Partners, which was hired to monitor the progress of the program earlier this year.
The company’s oversight led to the city and Mueller agreeing to end the project.
Both sides signed a standstill agreement June 5 to reach a settlement.
“Each party had substantive claims against the other,” according to the memo to the City Council.
“In the end, they both recognized that a negotiated resolution of their issues and discontinuation of the [advanced metering infrastructure] project was best for both.”
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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at pgottlieb@peninsuladailynews.com.
