City of Kalamazoo - August 14, 2025 Utility Policy Committee Meeting

Updated about 5 hours ago

The Committee reviews a detailed analysis of water rate adjustments, focusing on cost of service and customer class impacts. The committee reviews various rate adjustment options, ultimately leaning towards a gradual adjustment strategy. Additionally, the meeting covers the city's extensive water infrastructure capital improvement plan, which includes regulatory compliance projects, system upgrades, and lead service line replacements. The committee also addresses the integration of Galesburg into the water system, requiring coordination with Comstock Township and potential updates to existing agreements. Lastly, the committee touches on compensation for UPC members and other procedural matters. The meeting is data-driven, with discussions informed by detailed financial modeling and infrastructure assessments.

Chapters

Welcome and Call to Order (00:01:05)
The meeting is called to order and the agenda is set.

The meeting was called to order and the agenda was set with no changes or corrections. A motion was made to set the agenda as presented, supported, and passed unanimously.
Approval of Agenda (00:01:17)
Motion to set the agenda as presented was made and passed.

A motion was made by Tom Wheat, seconded by John Crum, to set the agenda as presented. The motion passed with all in favor and none opposed.
Introductions and Guests (00:02:01)
Introduction of attendees and guests present at the meeting.

Introductions were made around the table, with several members and guests introducing themselves, including representatives from the city of Kalamazoo and regional commissions. Online attendees were also acknowledged.
Public Comments (00:05:51)
No public comments were made during the meeting.

The floor was opened for public comments, but no comments were made either by those present or by those attending online.
Unfinished Business: Financial Plan and Cost of Service Presentation by Stantec (00:06:05)
Stantec presented a summary of the financial plan and cost of service analysis.

Danica Katz from Stantec presented the financial plan and cost of service analysis. The presentation included assumptions used in the study, operating and capital expenses, revenue projections, and the financial model summary. The cost of service findings were discussed, showing different rate options and their impact on customer classes.
Discussion on Rate Options (00:14:16)
Discussion on different rate options and their implications.

There was a detailed discussion on different rate options (A, B, C) presented by Stantec. Members discussed the implications of each option, the flexibility in setting rates, and the potential for adjustments based on cost of service studies and data refinement. Staff recommended option B as a reasonable approach.
Questions and Answers (00:28:01)
Questions from members were addressed regarding rate setting and data refinement.

Members asked questions about the statutory expectations for rate setting, the flexibility in adjusting rates, and the impact of data refinement on cost of service calculations. Staff provided explanations and clarified the process and considerations involved in setting rates.
Discussion on Cost and Depreciation (00:34:01)
The committee discussed the impact of costs on single-family and multi-family housing, focusing on depreciation expenses and their allocation.

The committee engaged in a detailed discussion about the costs associated with single-family and multi-family housing developments. They examined how depreciation expenses factor into overall costs, the impact on revenue requirements, and how these costs are distributed across different parts of the system. The discussion included considerations for lead service line replacements and the influence of grants on depreciation calculations.
Capital Improvement Plan Overview (00:51:00)
The capital improvement plan was reviewed, highlighting key projects, regulatory compliance, and funding strategies.

The committee reviewed the capital improvement plan, which includes a range of projects aimed at infrastructure improvement and regulatory compliance. The plan covers water infrastructure, source and pumping improvements, and smart meter installations. Emphasis was placed on regulatory compliance projects, including those related to PFAS treatment and lead service line replacements. The committee discussed the plan's importance for maintaining system reliability and supporting growth, as well as funding strategies that include grant applications.
Capital Plan and Rate Recommendation (01:07:03)
Discussion on presenting the capital plan and rate recommendation to the city commission in October.

The meeting discussed the timeline for the capital plan and rate recommendation. It was proposed to take these items to the city commission during the first and second meetings in October. This gives the committee time until the September meeting to finalize recommendations.
Youth Sports Complex Introduction (01:07:28)
Introduction to the youth sports complex project and its location and planning status.

An introduction to the youth sports complex project was provided. The complex is proposed to be situated on the west end of the city and may include parcels in Oshtemo Township. Details about water main requirements and potential for a transmission loop were discussed, although no sizing requirements have been finalized yet.
EPC Forum Compensation Update (01:09:44)
Update on the implementation of EPC forum compensation for non-compensated members.

An update was given on the EPC forum compensation for members not otherwise compensated. It has not yet been placed on a commission agenda, and discussions with the city attorney are needed to determine if members can be classified as professional members for invoicing purposes.
Galesburg Franchise Agreement Update (01:12:16)
The city is moving forward with steps on the Galesburg franchise agreement with Comstock.

The meeting included an update on the Galesburg franchise agreement. The city staff was tasked with moving forward on the necessary steps. There was a motion in the last meeting to support the franchise agreement, and the city will start discussions with Comstock Township and Galesburg.
Professional Service Invoice Approvals (01:14:45)
Approval of invoices for professional services from various vendors.

The committee reviewed and approved several invoices for professional services, including those from Lidian, Capital Group, and Prime. Motions were made and seconded for each invoice, and votes were held with approvals and one abstention noted.
Committee Member and Guest Comments (01:18:32)
Comments from committee members and guests about the meeting and future collaborations.

Committee members and guests provided comments, complimenting the meeting's discussions and expressing optimism for future collaborations. Invitations to future events were extended, and mutual appreciation was expressed among members and guests.
Youth Sports Complex and Authority Planning (01:26:32)
Discussion on the planning and cooperation for the new youth sports complex and the authority.

There was a discussion about the early planning stages of the youth sports complex and the involvement of the new authority. Oshtemo has a seat at the table, and collaboration with the city is anticipated to ensure the success of the project.
Adjournment (01:31:17)
The meeting was adjourned after all agenda items were covered.

After all the agenda items were discussed and comments were made, the meeting was formally adjourned. The next meeting is scheduled to be at the same time and location.