MONTPELIER — The district heat project passed its next hurdle with the City Council approving the hiring of a construction firm at its meeting Wednesday.

City Manager William Fraser was instructed to sign the contract with the winning bidder, the Waitsfield company Kingsbury Construction.

The project is a collaboration between the state and Montpelier where the city will hook onto the power plant the state is building behind the Department of Motor Vehicles to supply heat and hot water to buildings in parts of the city.

The company estimated the city’s construction cost for the main distribution lines at nearly $3.44 million; the service laterals, which will be paid for by customers who hook on, at $752,518; the conversion of the Union Elementary School heating system at $737,660; and $260,480 for water system improvements.

Tom Golonka, Anne Watson, Angela Timpone and Andy Hooper all voted for the bid. Mayor John Hollar also voiced his support for the project. Alan Weiss voted against it, and Thierry Guerlain was not at the meeting.