Staff recommends Council review the proposed agreements to replace the memoranda of understanding with the three urban renewal districts.

On May 13, 2019, Council approved MOUs with each of the three urban renewal districts. These MOUs had terms of 5 years and expired in 2024. Council approved a 1-year extension of the MOUs in April 2024 with a new expiration date of June 30, 2025. An additional extension until October 1, 2025, was approved on June 23, 2025, following legislative changes (Senate Bill 3 "SB 3") which required the City to create its own advisory committees to provide recommendations regarding TIF funding. These recommendations were previously provided by the three private entities, South Billings Urban Renewal Association, Downtown Billings Partnership, and BIRDworks. During a July 21, 2025, work session, Council directed staff to proceed with developing agreements that would keep the current processes in place as much as possible while still complying with SB 3. Based on this, staff did not conduct an RFP for these services and negotiated directly with the three entities.

City staff met with representatives of each district and have tentatively agreed on the terms contained in the attached agreements. The terms include provisions generally included in any agreement the City enters into with a private entity but also allow the entities to continue to engage in the activities they previously did when acting as the City's advisory boards for urban renewal and TIF recommendations in each District.

This is a discussion item and no action is necessary. However, Council may provide direction related to these agreements.

The City has previously used TIF funds to support these entities for the services provided to the City. Under these agreements, that will continue, but the cost of the agreements over the proposed term is spelled out within the agreement itself. In the past, the annual contribution made to each entity was part of the annual budget process, and not clearly defined for future years. The proposed cost for Fiscal Year 2026 is the same amount that was approved during the FY26 budget, for the remaining 8 months. The future years' amounts are at the request of each entity.
 

N27 Tax Increment District
Term	Total Payment for Term
November 1, 2025 - June 30, 2026	217,403.36
July 1, 2026 - June 30, 2027	335,888.00
July 1, 2027 - June 30, 2028	345,965.00
July 1, 2028 - June 30, 2029	356,344.00
East Billings Tax Increment District
Term	Total Payment for Term
November 1, 2025 - June 30, 2026	119,833.33
July 1, 2026 - June 30, 2027	179,750.00
July 1, 2027 - June 30, 2028	179,750.00
July 1, 2028 - June 30, 2029	179,750.00
South Billings Tax Increment District
Term	Total Payment for Term
November 1, 2025 - June 30, 2026	106,666.67
July 1, 2026 - June 30, 2027	144,000.00
July 1, 2027 - June 30, 2028	144,000.00
July 1, 2028 - June 30, 2029	144,000.00