City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: May 11, 2026
Report #:2602-5926
TITLE
Approval of Contract Amendment No. 4 to Contract C19174648A with VERTEXONE SOFTWARE, LLC for the WaterSmart Utilities Customer Portal, to Extend the Term for Three Additional Years ending August 12, 2029 and Increase Compensation by $140,000, for a Revised Total Not to Exceed of $677,763; CEQA Status – Exempt under CEQA Guidelines Section 15308.
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager, or their designee, to execute Amendment Number 4 to Contract C19174648A with VERTEXONE SOFTWARE, LLC (Attachment A) for the existing WaterSmart Utilities customer portal to: (1) extend the contract term by three (3) years, through August 12, 2029; and (2) increase the contract not-to-exceed (NTE) amount by $140,000 for a revised total contract not-to-exceed amount of $677,763 over the 10-year term.
EXECUTIVE SUMMARY
The current contract with the Utilities water customer portal vendor, VERTEXONE SOFTWARE, LLC (VertexOne), is set to expire on August 12, 2026. Staff is seeking Council approval to extend the City’s contract for the WaterSmart portal by three (3) additional years to allow customers to continue to access WaterSmart and to support planned improvements necessary for evolving state reporting requirements.
The WaterSmart customer portal provides customers with a convenient and secure way to access water consumption information and provides personalized water conservation recommendations, including monthly home water reports, leak alerts, and high-usage notifications supported by Advanced Metering Infrastructure (AMI) data, helping customers make informed decisions about water use in support of the City’s conservation goals.
Extending the VertexOne contract also aligns with the Smart Energy Water (SEW) extension for MyCPAU (Staff Report #2601-
58491https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=57638433-bec8- 4ca2-b8cc-6864be2c1d46), allowing both customer-facing portals that are connected through Single Sign-On (SSO) to conclude at similar times, reducing administrative complexity and supporting coordinated planning for future procurements and upgrades.
Since $169,301 remains under the current contract, staff is requesting an additional $140,000 to cover the three-year extension. The cost of this program is fully funded through the City’s cost-sharing agreement with Valley Water, Contract S23185976 (Staff Report 2304-13802).
BACKGROUND
State requirements and Council policies have resulted in aggressive water use reduction goals that are largely achieved through conservation and efficiency programs. WaterSmart fully launched for City of Palo Alto Utilities (CPAU) customers in November 2022 and is a valuable tool for customers to receive monthly home water reports with personalized water conservation recommendations and view their monthly and hourly water consumption through the online portal. WaterSmart also provides customers with timely leak alerts and high-usage notifications based on hourly AMI data, helping customers identify potential issues quickly and reduce unnecessary water loss. WaterSmart is integrated with the City’s Utility billing portal MyCPAU through a single sign-on feature; this enables customers to view both their billing and consumption data for both energy and water usage by logging in to one portal. The portal includes a utility analytics dashboard to help track water savings and engagement.
WaterSmart has been successful since its launch, with strong engagement and usage, including:
• 70% open rate for home water reports and leak alerts; • 30% of all customers have accessed the portal,
• 37% of Single-Family Residential (SFR) customers have accessed the portal; • Estimated water savings to date of 92 million gallons (MG).; and • 9,444 leak alerts sent to date.
ANALYSIS
Staff is dedicated to improving the functionality of the WaterSmart customer self-service portal as part of its goal to make water-use information readily available for customers to make informed decisions about water usage in order to meet the City’s water conservation goals and support compliance with evolving state reporting requirements. 1 Staff Report 2601-5849, March 23, 2026:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86848&dbid=0&repo=PaloAlto&searchid=fe1c8f45- 2397-4963-96b0-ceb0cfb506a6&cr=1
2 Staff Report 2304-1380, June 19, 2023:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82408&dbid=0&repo=PaloAlto&searchid=a8c392d4 -c7d5-4363-b6b2-43d3204d9e98&cr=1
Integration and Operational Considerations: The WaterSmart portal is integrated with the City’s critical business systems and workflows, including MyCPAU via Single Sign-On (SSO), and the City’s billing system. These integrations provide customers with a seamless experience and reduce operational risk associated with platform changes.
Aligning the VertexOne contract extension with the SEW extension provides cohesive benefits across the City’s technological infrastructure. Synchronizing the VertexOne and SEW contracts avoids the complexities of managing separate vendor timelines, ensuring a unified approach to enhancements and compliance efforts.
State Reporting Requirements and Planned Improvements: Staff are currently working with VertexOne on improvements to the platform to help comply with state reporting requirements.
This amendment ensures that necessary improvements can be implemented without delay.
Summary Of Proposed Contract Terms
Staff recommends extending the current VertexOne contract by three years, increasing the contract not-to-exceed amount by $140,000, and updating Exhibit C Compensation. This amendment results in a revised total contract not-to-exceed amount of $677,763. Since $169,301 remains under the current contract, only $140,000 is needed for the extension period.
The updates to compensation include proposed annual subscription costs for Years 8-10. The proposed annual subscription amounts for these additional years are higher than the Year 7 estimated annual cost ($67,633). However, the proposed Year 8 – 10 amounts remain below the annual subscription rate the City paid in Years 1-5 ($87,500). This is due to the revised compensation structure that was adopted in Amendment Number 3 (Staff Report #2407- 3199)5.
Table 1: Amendment No. 4 Exhibit C Compensation
Annual Costs NTEs
Module/Functionality Year 8 Year 9 Year 10
VertexOne Digital Base $24,750 $25,492 $26,257
VXsmart $23,100 $23,793 $24,507
Home Water Reports Base $1,200 $1,236 $1,273
Home Water Reports Variable $274 $282 $291
SSO for End Customer Base $1,800 $1,854 $1,910
SSO for End Customer Variable $1,040 $1,071 $1,103
Transactional Fees - Estimated cost of all
transactional fees, plus contingency $22,000 $23,000 $24,072 Year 8 Sub Total $74,164
Year 9 Sub Total $76,728
Year 10 Sub Total $79,412
Total Cost - Year 8 – Year 10 NTE $230,304
5 Staff Report 2407-3199, February 10, 2025:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83238&dbid=0&repo=PaloAlto&searchid=de1bfff4- 9eb3-4679-b40e-8c28315f4e96
FISCAL/RESOURCE IMPACT
Approval of this amendment would increase the contract’s NTE by $140,000 to support the three-year extension. Through the City’s cost-sharing agreement with Valley Water, Contract S23185976, Valley Water will reimburse the City up to $200,000 per year for AMI-related programs and home water reports. This reimbursement will fully fund the WaterSmart portal through the cost-sharing agreement.
Funding for the first year of the extended term is available in the proposed FY 2027 Utilities Department Water Fund budget. Funding for subsequent years is contingent upon Council appropriation and approval of funds through the annual budget process.
STAKEHOLDER ENGAGEMENT
Palo Alto markets the WaterSmart program through the City’s websites, at community events, via bill inserts, other social media, and newsletters.
ENVIRONMENTAL REVIEW
Council’s approval of the attached agreement described in this staff report does not meet the definition of a project under the California Environmental Quality Act (CEQA), pursuant to the California Public Resources Code Section 21065, because it is not an activity that will cause a direct physical change in the environment. In the alternative, Council’s approval of this agreement is exempt from review under CEQA Guidelines Section 15308, as an action taken for the protection of the environment.
ATTACHMENTS
Attachment A: Contract C19174648A Amendment Number 4 with VERTEXONE SOFTWARE, LLC.
APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Linda Grand, Sustainability Programs Administrator