Staff recommends Council approve 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 tentatively agreed on the terms contained in the draft 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.

On October 6, 2025, Council reviewed and discussed the draft agreements and provided some additional direction regarding terms of the agreement, including:

1. the term of the agreement shall be through the fiscal year and will expire on June 30, 2026;
2. an option for renewal of the agreement after the first year (and second year);
3. a 60-day notice before any termination; and
4. payments should be tied to the budget process instead of including specific dollar figures.

Staff discussed these terms with the districts and attached are the final drafts incorporating the revisions.
 

City Council may:

• Approve; or,
• Not Approve

The City has previously used TIF funds to support these entities for the services provided to the City. Under these agreements, the annual contribution made to each entity will continue to be part of the annual budget process. The proposed cost for Fiscal Year 2026 is the same amount that was approved during the FY26 budget.