Staff recommends the City Council review the enclosed materials collected in response to the Council's approved initiative and provide clear direction on how you want staff to move forward.

Council Member Boyett proposed, and the full council supported, an initiative at the City Council's February 9 business meeting to issue a Request for Proposals (RFP) to consolidate the administration of the three Urban Renewal Districts (URDs) in coordination with the expiration of the three Agreements for support of the URDs on June 30, 2026. City Council requested the issue be placed on the April 6 work session agenda to discuss next steps. 

City Council last discussed how to implement the new State Statutory requirements for taxing jurisdiction representation on its three Urban Renewal District advisory boards at a Work Session in July 2025 (See attached memo from July 21, 2025 Work Session). At the time, City Administration, PCSD, Finance and Legal staff recommended the City Council consider several solutions to address the new state legal requirements and make operational changes for managing the three Districts.  The Council directed staff to implement changes that would comply with state law while retaining, as closely as possible, the status-quo regarding the management of the three URDs.  The current system is now functioning under that direction.

For the current initiative discussion, staff has identified the following questions for Council to answer:

What direction does Council want staff to go before June 30, 2026 when the agreements with the three entities expire:
       a. Leave management as it is and extend the current agreements for a time TBD?
       b. Issue an RFP for consolidated services?
                 -If an RFP is issued, would it consider responses that only administer 1 or 2 districts, or must it be all or nothing?
       c. Reduce the annual operating budgets for the three district entities, update agreements, add City FTE to support core operations?
       d. Bring all District management into City operations and add City FTE(s) to support operations?

Managing three separate advisory committees that are supported by three non-profit entities is inefficient, and the current operating costs are high.  However, the city does not have the personnel to do this work without adding additional staff.  We also do not have any staff that perform economic development functions.
 

City Council discussed how to implement the new State Statutory requirements for taxing jurisdiction representation on its three Urban Renewal District advisory boards at a Work Session in July 2025 (See attached memo from July 21, 2025 Work Session). At the time, City Administration, PCSD, Finance and Legal staff recommended the City Council consider several solutions to address the new state legal requirements and operational changes for managing the three Districts. The solutions included improving the City's staffing oversight for management of the Districts while still maintaining three outside entities to support the newly formed Advisory Committees, or bringing all operations of the three Districts into the City except for some economic development activities to be defined by the City.

Ultimately, the Council elected to make no changes to the City staff support of the Districts and to keep the arrangement as much the same as possible. The approach included having three separate entities be contracted with the City to provide Advisory Committee support, initial application solicitation and review, delivery of applications to the City staff and Council, and other duties to support District success. This is the current arrangement that has been operating since late 2025. The work supporting the three Districts is significantly handled by the Planning and Community Services Department Director. Although the Council's intention was to maintain the previous arrangement with the three nonprofits managing the districts, the change in the law requires oversight by City staff to ensure compliance with all legal requirements. Managing three separate advisory committees that are supported by three non-profit entities is inefficient, and the current operating costs are significantly higher than estimates for handling the operations internally.  We estimate the planning director spends between 20-30 hrs/month attending meetings and dealing with issues related to the three URDs. When the URD's are dealing with complex TIF grant applications, the finance director, city attorney's office and city administration also dedicate additional resources. This is exacerbated by the fact that no-one person is assigned to oversee the URDs at the ground level.

Council Member Boyett proposed an initiative at the City Council's February 9, 2026 business meeting to issue a Request for Proposals (RFP) to consolidate the administration of the three Urban Renewal Districts (URDs) in coordination with the expiration of the three Agreements for support of the URDs on June 30, 2026. City Council discussed the initiative at the February 9 meeting and voted to move it forward to a Work Session on April 6 to discuss next steps for taking action on the initiative. Consolidation of the administration would improve efficiency, but would still require oversight by City staff to make sure the URDs are compliant with state and local regulations, following processes to bring applications to City Council, and coordinating execution and follow up on projects as they are completed and seek reimbursement.
 

Estimated costs for bringing the district management into the City are $150k-$250k per year. It is assumed that the City would need to hire 1-2 FTE in order to accomplish these tasks.

Currently, the City pays a combined total of approximately $665,855 for support services to the Downtown Billings Partnership, BIRDworks, and the South Billings Urban Renewal Association. Total direct City staff support for the three Districts through cost allocation (Financial and PCSD) for FY26 is $298,940.

Currently, the City utilizes URD TIF funds annually for support and operations of the three Districts as follows:

• Downtown District - Allocated to the DBA - $326,105; PCSD Support is $36,481; Finance & Administration Department support is $66,632
• SBURA - Alocated to the SBURA - $160,000; PCSD Support 36,481; Finance & Administration Department support is $76,518
• EBURD - Alocated to BIRDworks - $179,750; PCSD support is $36,481; Finance & Administration Department support is $46,347

The fluctuation in city overhead costs is tied to time spent on projects/budgets/issues within each URD.

The community as a whole benefits from the City's effective and efficient operation of the three URDs in Billings. The activities of urban renewal, including remediation of blight, improvement of properties through redevelopment and infrastructure improvements, and improved public facilities all benefit the residents of Billings.

The Council is expected to give direction to staff at this meeting on next steps to address management of the three urban renewal districts. The only real alternative, given the expiration of the three service agreements on June 30, 2026, is for the Council to decide at this meeting how it wants to move ahead with the Council Initiative per the FY27 budget.