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Home My WebLink AboutStaff Report 2407-3199CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, February 10, 2025 Council Chambers & Hybrid 5:30 PM Agenda Item 7.Approval of Amendment Number Three (3) to Contract Number C19174648 with WaterSmart Software, Inc. (dba WaterSmart) for the WaterSmart Utilities Customer Portal, to Extend the Contract Term for 18 Months, for the Total Not-to-Exceed Amount of $537,763 Over the Seven-Year Term; CEQA status –Exempt under CEQA Guidelines Section 15308. City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Utilities Meeting Date: February 10, 2025 Report #:2407-3199 TITLE Approval of Amendment Number Three (3) to Contract Number C19174648 with WaterSmart Software, Inc. (dba WaterSmart) for the WaterSmart Utilities Customer Portal, to Extend the Contract Term for 18 Months, for the Total Not-to-Exceed Amount of $537,763 Over the Seven- Year Term; 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 No. 3 (Attachment A) to Contract C19174648 with WaterSmart Software, Inc (dba WaterSmart) for the existing WaterSmart Utilities customer portal, to extend the contract term by an additional one year and six months to a 7-year term, and to adopt a new Exhibit C to modify the compensation structure of the contract. No additional financial authority is requested as part of this contract amendment. EXECUTIVE SUMMARY Staff is seeking approval for contract amendment No. 3 to extend the WaterSmart contract term 18 months and to modify the compensation structure of the contract. The WaterSmart customer portal provides customers with information about water consumption and personalized water conservation recommendations. Through WaterSmart, home water reports are sent to single-family customers on a monthly basis. WaterSmart helps the City achieve state and local water conservation and efficiency objectives. The 5-year contract was set to end on August 12, 2024. Amendment No. 2 extended the contract term to February 12, 2025. An additional contract extension of one year and six months will allow customers to continue to receive home water reports and access the online portal through August 12, 2026. This contract amendment will have no budget impact and will not increase the Contract NTE. There is sufficient funds to cover the 1 year and 6 months extension. BACKGROUND State requirements and Council policies have resulted in aggressive water reduction goals which 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 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. 1. Two amendments to this contract were previously approved, to adjust the payment schedule in Appendix C (March 2022) and authorized a 6-month extension. WaterSmart’s launch occurred in November 2022, delayed by staffing changes and administrative challenges resulting in two years of full use of contracted services. This Amendment No. 3 would extend the contract term to August 12, 2026allowing for the issuance of an RFP to ensure both the evaluation of tools in the market place and continuity of services similar to the WaterSmart program for CPAU customers. ANALYSIS 1 Contract Approved on August 12, 2019 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/agendas-minutes/city-council-agendas-minutes/00-archive/2019/watersmart-contract.pdf Summary of Proposed Contract Terms Staff recommends extending the term of the current WaterSmart contract by 18 months and updating Exhibit C Compensation. Amendment No. 3 tailors the compensation structure according to software functionality and transactions such as the number of print reports sent. The proposed annual not-to-exceed amount under Amendment No. 3 is $96,750 per year, this is within the total not to exceed contract amount authorized by Council of $537,763. Table 1: Amendment No. 3 Exhibit C Compensation Module/Functionality Q1 Q2 Q3 Q4 Est. Annual Cost Yrs 6-7 VertexOne Digital Base $4,500 $4,500 $4,500 $4,500 $18,000 VXsmart - $0.80 x 21,000 (total # of accounts) $4,200 $4,200 $4,200 $4,200 $16,800 Home Water Reports Base $240 $240 $240 $240 $960 Home Water Reports Variable - $0.01280 for each account receiving reports (est. 15,625) $50 $50 $50 $50 $200 SSO for End Customer Base $3,250 $3,250 $3,250 $3,250 $13,000 SSO for End Customer Variable - $0.03207 for each account (est. 21,000) $169 $169 $169 $169 $674 Transactional Fees - Estimated cost of all transactional fees, plus a buffer $11,779 $11,799 $11,799 $11,799 $47,116 FISCAL/RESOURCE IMPACT Funding for this amendment, totaling $53,000, for FY 2025 is available in the FY 2025 Utilities Department Water Funds. Funding for the following years will be evaluated during the annual budget process. Through the City’s cost-sharing agreement with Valley Water, Contract S231859762, Valley Water will reimburse the City up to $25,000/year for Water Reports. The below table is a breakdown of pricing and remaining contract budget. The City is currently in year six of the contract; the estimated total cost totaling $192,638 will cover the service needs for the remainder of the contract term (18 months). 2 Contract S23185976 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82408 Table 2: Break Down of Pricing Estimated Total Costs Total Billed during Contract Year 1 through Q2 Year 6 $345,125 Estimated Total Cost – Q3 Year 6 through Q4 Year 7 (details below)$192,638 •Year 6 Q3 and Q4 Sub Total (Estimated annual cost minus amount services billed Q1 and Q2) (Amendment No. 3) $53,000 •Year 7 Sub Total (Amendment No. 3)$96,750 •Additional Services Budget Remaining $42,888 Total Contract Not to Exceed $537,763 POLICY IMPLICATIONS WaterSmart helps the City achieve state and local water conservation and efficiency objectives. The proposed Amendment No. 3 continues offering the water conservation programs consistent with the 2020 Urban Water Management Plan (Staff Report #12025)3, the Utilities Strategic Plan, and the City’s Sustainability and Climate Action Plan (S/CAP)4. In addition, WaterSmart helps the City meet the requirements outlined in the agreement with Valley Water, Contract S23185976 (Staff Report # 2304-13805), which provides funding for AMI and water reports. STAKEHOLDER ENGAGEMENT Palo Alto markets the WaterSmart program though the City’s websites, at community events, via bill inserts, other social media, and newsletters. ENVIRONMENTAL REVIEW Council’s approval of this term agreement for subscription licensing and professional services supporting water conservation is categorically exempt from the California Environmental Quality Act (CEQA) review under CEQA Guidelines section 15308 because it is an action for the protection of the environment. ATTACHMENTS Attachment A: WaterSmart Software, Inc. Contract C19174648 Amendment No. 3 APPROVED BY: Kiely Nose, Interim Utilities Director Staff: Linda Grand, Utilities Programs Administrator 3 Staff Report #12025 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city- manager-reports-cmrs/year-archive/2021/id-12025.pdf 4 S/CAP https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/reports/2023-2025-scap-work- plan_final.pdf 5 Staff Report #2304-1380 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82408