No final action can be taken, however direction is needed. The discussion is to expand the South Billings Boulevard Urban Renewal District (SBBURD) TIF district to promote redevelopment in the Southside Triangle area and to finance the replacement of South Park Pool.  Staff also believe the creation of a new TIF district deserves consideration.  Both options have pro's and con's to accomplish the stated goals.

There has been initial discussion among some Council Members, City staff and SBBURD about the possibility of expanding the SBBURD to encompass the Southside Triangle area of Billings to enable TIF funded improvements to South Park Pool that has significantly surpassed its useful life. This Work Session discussion is intended to review the processes and pros and cons of moving forward with expansion of the SBBURD in staff's estimation based on past Downtown, SBBURD and EBURD expansion work.

The process to expand or create an Urban Renewal District (URD) is basically the same per State Statute. Attached to this memo is an outline of the steps required and some of the highlights are also discussed below in the memo.

Time Frame:
The estimated time to complete the entire process is about 6 months. This assumes that there are no major delays from things like completing the initial blight analysis for the area, having to host multiple public meetings to further clarify with the property owners in the area to be included what being in an Urban Renewal District means, any delays or other unforeseen issues. Since part of the goal of the process is to set a base year for the new area included in a URD, this work is usually started early enough in a calendar year so that there is time to provide the documented process to the MT Department of Revenue by January of the year the community wants to expand or create the District. For example in this instance, the City would provide its completed documented process to the DOR in January 2025 so that the base value year was 2024. If the City completed the process later in 2025, then 2025 would be the base year for the expanded area. Starting a process in September it is very unlikely it would be finished by the end of January 2025.

Given the many other Council priorities being worked on by staff and the challenges with launching this scale of District expansion, staff has concerns about the ability to complete this process in a timely manner. Given the area's location between the SBBURD and Downtown Districts (See area map attached to this memo) the question of creation of a new District is an area that might be further explored. However, staff is looking for input and guidance from the Council on whether it wants to prioritize this project and allocate resources to further pursue the steps required and needed to expand the SBBURD.

Finding of Blight Analysis:
This scale of expansion by statute requires an indepth analysis to determine infrastructure and property deficiencies in the Southside Triangle and verification that the characteristics of blight are consistent with State Statute. The City last commissioned such an analysis for consideration of either expansion or creation of a URD in 2019-2020 adjacent to the Downtown District (area was called the Founders District during the process) but Council ultimately decided not to move forward with the process. That analysis is attached for reference. The contract at the time was for $11,000, but only about $9,500 was spent as some travel expenses were not incurred due to the COVID Pandemic. Staff is in contact with two consultant teams to determine if they could complete a similar analysis for the Southside Triangle, a time frame and cost. That information will be shared as soon as it is available.

The conditions of blight in the study area that can help an area qualify include but are not limited to

• Functionally obsolete commercial buildings - not ADA accessible (elevators?), not wired for technology, lacking current HVAC systems
• A decline in the number of housing units and vacant housing units
• Underutilized land (parking lots, vacant lots)
• Some infrastructure improvement potential, including parks, streets, sidewalks, etc.

Ultimately, the findings of the analysis are used to update the current Urban Renewal Plan for the SBBURD to reflect the area proposed to be added and what improvements or projects might be contemplated using Tax Increment Finance Funds. To ensure legal use of TIF for bonding or for project expenses, the URD Plan must be specific in the areas of improvement or in the projects planned in the area.

Notification Requirements:
There are 1,045 parcels in the Southside Triangle, and 2,346 parcels in the SBBURD, totaling 3,391 properties that will need to be notified of an expansion of the District to comply with the statute. It might be possible to send one notice for both an initial public information meeting and the future other action meetings/hearings that Council would conduct, but that is very difficult and also presumptous if something gets delayed and then a second mailing would have to be done anyway. All notifications must have an affidavit of mailing to prove to DOR that it was done, legal notices for the hearings also must have affidavit of publications and proofs.

Council and Planning Board Meetings/Actions:
Not including at least one public information meeting, there are an estimated 7+ public meetings/public hearings that would occur to complete the process, including Council Work Sessions, meetings and hearings, and a Planning Board meeting. These would include:

• Council Work Session to discuss expansion (8/19)
• SBURA Board discusses expansion and vote to support
• Staff prepares to notify property owners of intent to expand district and hold public information meeting
• Council Work Session(s) to determine moving forward with expansion
• Council Work Session(s) to review blight analysis
• Council passes resolution to amend the District - Declares existence of blight - Sets a public hearing
• Planning Board reviews amendment of the District and must make a formal finding that amending the District conforms with the City’s Growth Policy, as per State Law. Makes recommendation to City Council on conformance.
• City Council conducts a public hearing and acts on First Reading of an Ordinance to expand the District. Modified Urban Renewal Plan is part of this action.
• Council conducts Second Reading and final Approval of Ordinance to expand the District.

State Legislative Implications:
While there is no certainty how some State Legislators would react to Billings expanding one of its URDs, and the City would follow the current State Statutes to do so, it is always good to be aware of the focus URDs and TIF have had at the Legislature for session after session. Often, Billings and other communities are put on the defensive to keep URDs and TIF as an economic development tool to improve infrastructure and encourage private investment in the community. The state is heading into the 2025 Legislative Session and already several URD/TIF bills are being drafted and considered by Interim Committees. It is important for the City Council to recognize that any local action on URDs and TIF gets the attention of the Legislature and can be received positively or negatively in terms of legislation.

Ultimately, the property owners within the existing SBBURD and those within the Southside Triangle are stakeholders in this process along with the City. Other City residents in Billings may also have interest in this process as well. There are multiple opportunities for both the property owners directly affected (they must be notified as part of the process) as well as through multiple public meetings to participate in this process through community meetings, Council Meetings, a Planning Board Meeting, likely a Board of County Commission Discussion Session and a possible Billings Public Schools Board Meeting.

Based on the discussion and direction tonight, the City Council at a future regular business meeting may:

• Approve moving forward with the process to expand the SBBURD; or,
• Not Approve moving forward with the process to expand the SBBURD at this time

Detailed fiscal effects on the City and SBBURD budgets are not known at this time. Staff is compiling consultant costs for the initial finding of blight analysis of the Southside Triangle area. Other costs, like postage, are being compiled, City staff time for Planning, Finance, Public Works, GIS, and other elements are not known at this time.  Budget amendments can be made if necessary. We are confirming that costs can be covered by the South TIF fund, as expansion of the existing district is being considered (MCA 7-15-4288 (5) & (9)).  A more costly option that may be considered is to have a consultant run the entire process to limit the amount of staff time needed.  If a consultant can be found in a timely manner, this would be less disruptive to other projects like the neighborhood plans, Skyway Drive plan, transportation master plan, and compliance with SB 382 Land Use Plan and Future Land Use Map effort that must be completed by 2026.