Title
Resolution to Approve a Professional Services Agreement with Exeter Associates, Inc. for Consulting Services Related to Development of a Cost of Service Study and Rates for the Sustainable Energy Utility ($312,489.27)
Memorandum
Staff are seeking approval of a Professional Services Agreement (PSA) with Exeter Associates, Inc. in an amount not to exceed $312,489.27 for professional consulting services to develop a cost of service study and rates for the Sustainable Energy Utility (SEU).
City ordinance ORD-25-07, which established the SEU, requires “the Director [to] recommend to the City Council rates and other charges for the provision of A2SEU services.” The development of SEU rates is an essential milestone for the SEU to be able to enroll interested customers and to seek financing for the SEU’s ongoing operations.
Utility ratemaking requires specialized and technical expertise as well as strategic insight. In September 2025, the City published a Request for Proposals, RFP #25-44, seeking cost of service and rate development services. The services are requested to proceed in three phases, with the first two including specific tasks and deliverables due in March 2026 and July 2026, and the third phase including ongoing support on an as-needed basis through July 2029.
Responses to RFP #25-44 were due in October 2025, and five firms submitted proposals for consideration. Upon review by an internal steering committee including representatives from the SEU, Office of Sustainability and Innovations, Finance, and Attorney’s Office, four firms had their fee proposals opened, and three were selected for interviews. Upon consideration of the qualifications and skills, previous experience, proposed workplan, and fee proposals, the steering committee recommended moving forward with Exeter Associates, Inc.
While Staff worked carefully to identify rate-making needs in the RFP, given the novel nature of the SEU, we recognize that there is some risk that during the rate-making process, the consultant or staff will identify additional or different tasks or analyses required to complete the deliverables. As such, staff recommend approving a 10% contingency to address any necessary tasks that are outside the originally agreed upon scope of work.
Exeter Associates, Inc. is compliant with the City’s living wage and non-discrimination ordinances and is prepared to immediately begin work.
Budget/Fiscal Impact: $40,000.00 of the fee proposal is budgeted in the ICLEI-MIF grant received by the SEU and to be spent by the end of February 2026. Another $214,073.67 of expenses through October 2026 are budgeted in the State of Michigan LEO grant received by the SEU. The final $53,547.63 of expenses from November 2026-July 2026 will be accounted for in the Office of Sustainability and Innovations budget.
Staff
Prepared by: Shoshannah Lenski, Sustainable Energy Utility Executive Director
Reviewed by: Missy Stults, Sustainability and Innovations Director
Reviewed by: Valerie Jackson, Assistant City Attorney - Sustainability
Reviewed by: Kim Hoenerhoff, Financial Analyst
Reviewed by: Marti Praschan, Chief Financial Officer
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, City ordinance ORD-25-07 requires the Sustainable Energy Utility (SEU) Director to develop recommended rates and charges for SEU services;
Whereas, Utility rate development is a specialized technical skill typically performed by consulting firms with experience and expertise in this field;
Whereas, The City released a request for proposals (RFP #25-44) for a firm to develop SEU rates, received and evaluated five competitive bids, and following indicated evaluation criteria and procedures, recommended the Exeter Associates, Inc. proposal as the preferred option;
Whereas, Exeter Associates, Inc. complies with the requirements of the City’s Non-Discrimination and Living Wage ordinances;
Whereas, Two previously awarded grants supporting the SEU will cover $258,941.64 of the expense for this work through October 2026, and the remaining $53,547.63 after October 2026 will be built into the Office of Sustainability and Innovations’ future budget; and
Whereas, Given the novel nature of the SEU and the unknowns involved in ratemaking for a brand new entity, a 10% contingency will support efficiently working through any additional tasks that are identified as necessary and outside the original scope of work and fee proposal;
RESOLVED, That City Council approve a Professional Services Agreement with Exeter Associates, Inc. in the amount of $312,489.27 for professional consulting services to develop a cost of service study and rates for the City’s Sustainable Energy Utility;
RESOLVED, That City Council authorize a 10% contingency in the amount of $31,248.93 to be used at the discretion of the City Administrator;
RESOLVED, That any remaining funding in the FY26 expenditure budget related to this Professional Services Agreement with Exeter Associates, Inc. be carried forward without regard to fiscal year;
RESOLVED, That the Mayor and City Clerk are authorized to sign the Professional Services Agreement after approval as to substance by the City Administrator and approval as to form by the City Attorney; and
RESOLVED, That the City Administrator is authorized to take all appropriate actions to implement this resolution, including signing all necessary documents and sub-agreements.