The South Billings Urban Renewal Association (SBURA) Board has reviewed this application for tax increment assistance and recommends the City Council approve up to a maximum of $100,000 of Tax Increment Finance (TIF) funds from the South Billings Boulevard Urban Renewal District (SBBURD) to Billings School District No. 2 (SD2). Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for the proposed solar installation project at Riverside Middle School subject to the following conditions:

1. The Applicant shall sign an agreement with the City of Billings and SBURA within 180 days of City Council’s approval.
2. This TIFD reimbursement is the maximum that can be received pending satisfactory submission of all paid invoices showing the completion of expenditures related to this project.
3. If funds are not available, reimbursement can be carried over to the next fiscal year.

The SBURA Board considered the Riverside Middle School (School District #2) application for tax increment assistance at its October meeting and made a recommendation to the City Council to provide TIF funds to the project at its November 7 meeting. School District #2 is in the process of installing solar panels on different schools in the district to reduce energy costs and provide a learning opportunity for students in the District. The School District since 2018 has installed 7 systems at two of its high schools and three of its other middle schools. The Riverside Middle School project is estimated to save about $11,000 per year in energy costs.

For the Riverside Middle School project, Northwestern Energy has agreed to contribute $60,000 to the $296,685 project. The TIF contribution from the SBBURD of $100,000 would be about 33.7% of the total project. This is considered a non-profit project since it is the public school district that is the recipient, so there is no tax return for this investment and the City Council is able to act on this application even if it does not meet the 5:1 private to public investment ratio. In this case, it is public dollars to public dollars, with a grant from NWE to encourage energy conservation.

The SBURA Board found the project aligns with its SBBURD Urban Renewal Plan in supporting school and community services. Specifically in Section 13 of the Plan, it states: "School and Community Services – Assist in funding projects and programs in the District to enhance school playgrounds and athletic fields, health and wellness programs, access to community meeting and activity spaces, and other efforts that improve access to school and community services."

Table 1 below outlines the alignment of this request with specific sections of the City's TIF Policy, SBBURD Urban Renewal Plan and Montana Code.

Table 1 Alignment of Proposed Improvements with City TIF Policy, SBBURD Urban Renewal Plan, and MT Code.

Qualified Improvements	Recommended TIF Reimbursement	City TIF Policy	Urban Renewal Plan	MT Code Annotated
School grounds infrastructure	$100,000	Section 1(b)	Section 11 Section 12 Section 13 Section 14	7-15-4288(4)

This process and action of the SBURA is under its authority per the Memorandum of Understanding between the City of Billings and the SBURA approved by the City Council on May 13, 2019.

City Council may:

· Approve the recommendation from the SBURA board for the expenditure of these tax increment finance (TIF) funds that are consistent with elements of the South Billings Boulevard Urban Renewal Plan, or;
· Modify the recommendation from the SBURA board for the expenditure of these TIF before taking action, or;
· Disapprove the recommendations from the SBURA board for these expenditures of these TIF funds.  If the Council chooses not to approve the TIF application, specific reasoning for the denial is helpful to provide further direction to the SBURA board and City Staff for future applications.

The recommendation is for a maximum of $100,000 to be reimbursed to Riverside Middle School (School District 2) for the identified work. The estimated total project cost is approximately $296,685. The funds are payable per the conditions of approval outlined in the SBURA recommendation and pending satisfactory submission of all paid invoices showing actual cost incurred for the project. Currently, the project is estimated for completion in late FY24. The FY24 budget included $1,967,641 for development projects, which included $500,000 for projects not yet identified. If this award is approved, and the project is completed in FY24, there will be sufficient budget available.