Staff recommends that City Council approve the resolution authorizing the sale and prescribing the form and terms for the Tax Increment bonds for the South Billings Boulevard Urban Renewal District. By approving this resolution, City Council is authorizing staff to proceed with a bond sale for the project, so long as it can be completed within the parameters within the resolution, and described within the fiscal effects. 

The City proposes to undertake the design, engineering, and construction of a multi-use recreation center and related improvements, including infrastructure and parking to serve the facility, an adjacent ice facility and additional recreation facilities on the site (collectively, the "Project"). 

The cost of the project will not exceed $20 million, consistent with Council direction at the adoption of the CIP. This project is moving quicker than the CIP originally planned, which was intended to be budgeted in FY26. Because the project will begin in FY25, if all contracts are approved, a budget amendment may be needed.

If this parameters' resolution is approved, staff and the City's Advisor will begin negotiating the sale of these bonds. So long as the bonds remain at or below the prescribed parameters in this Resolution, staff intend to enter into agreements on behalf of the City to issue the debt, using the authority given in this resolution to do so. After the sale of the bonds, a final bond resolution will come to the Council for approval at the meeting immediately following the sale (est. late June/early July) this year. Upon the sale of the bonds and once staff executes the agreement to issue the debt within the authority provided in this resolution, any lack of approval of the bond resolution by Council would carry lasting negative implications to the City's reputation in the bond market and possibly its ability to access capital in the future. If the City Council does not intend to proceed with the construction project or approve the final bond resolution, this parameters' resolution should not be approved.

The construction project was approved in the 2026 CIP at the regular Council meeting on 12/9/2024. The project has been moving on a little faster than originally planned in the CIP, and the first bid package for construction was approved by Council on 3/24/25 for $3.9 million. The final bid package for the remainder of the project is expected to be in front of Council for approval in June of 2025. A budget amendment to move this project into FY25 will likely be needed.

City Council may:

• Approve; or,
• Not Approve the resolution. Not approving the resolution would mean the project would not occur, as funds would not be available to complete the project. 

The parameters' resolution set limitations on the maximum aggregate principal amount, exclusive of premium or discount, not to exceed $24,000,000, with a maximum interest rate of 7.25% with final maturity of 7/1/2047. The debt service payments will be paid from the tax increment funds from the district. Financed amounts will be used to cover project construction costs, fund a debt service reserve requirement, and pay for debt issuance costs.