Utility Policy Committee recommends Kalamazoo City Commission approve two‑year Stantec rate study contract

The Utility Policy Committee on April 9 recommended that the Kalamazoo City Commission approve a two‑year contract with Stantec to produce a water cost‑of‑service analysis, financial forecast and rate design.

The committee’s motion, made by Tom, a committee member, approved tasks 1–6 as the fixed fee portion of the contract and authorized any additional services identified in the proposal to be billed on a time‑and‑materials basis. Chair called for the voice vote, and the committee announced the motion carried.

Why it matters: the contract covers core work needed to set water rates, tie capital planning to rate impacts and run “what‑if” scenarios that staff and the committee will use during the next budget cycle. The consultant’s analysis will inform rate recommendations that affect municipal utility customers and the city’s capital program.

Committee discussion centered on cost structure and transparency. One committee member asked whether the cover letter’s language meant a fixed fee or a “not to exceed” arrangement for the overall proposal; staff and the consultant clarified the $97,000 figure covers the fixed fee for rate development while additional tasks are time‑and‑materials and will only be billed if used. The Director (staff lead on utility projects) said the proposal’s fee schedule breaks out those costs and recommended authorization of the full contract amount so the city would not need to return for additional authorization if optional tasks were later required.

Danica, a Stantec consultant, said interactive model sessions and the core cost‑of‑service elements are available for committee members. “We are happy to have anyone on UPC that would be interested in joining those [interactive sessions],” she said, adding that some advanced financial forecasting tools might require nondisclosure arrangements but that the primary files for cost‑of‑service can be shared.

Committee members also raised procurement and approval questions. One member asked whether the committee was approving the contract directly or recommending approval by the city commission; staff and members clarified the contract itself is held by the city and must be approved through city procurement, while the water services agreement gives the UPC the authority to select the rate consultant.

The committee’s recommendation will be forwarded to the Kalamazoo City Commission for final contract approval and execution. The UPC’s next meeting is scheduled for May 14.

Sources: Committee proceedings and staff and consultant remarks at the April 9 Utility Policy Committee meeting.