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Item 2.
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| City Council Work Session | |
| Date: | 11/17/2025 |
| Title: | FY2027-FY2031 Capital Improvement Plan |
| Presented by: | Andy Zoeller, Finance Director |
| Department: | Finance |
| Presentation: | Yes |
| Legal Review: | No |
| Project Number: | N/A |
RECOMMENDATION
Staff will present the proposed FY2027 Capital Improvement Plan (CIP) for discussion, but no recommendation is provided for the work session. The proposed 5-year plan is attached, and will be presented a regular City Council meeting in December for amendment and adoption.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
The City of Billings proposed five-year Capital Improvement Plan (FY 2027-2031) encompasses 128 projects at $502.6 million. This investment will modernize infrastructure, enhance public facilities, and ensure long-term service reliability. The plan prioritizes Public Works (68%), Aviation & Transit (21%), and Parks Recreation & Community Services (6%), with $103.6M moving into the FY2027 budget development.
On 11/3/2025, the City Council discussed the proposed CIP and made recommendations to staff for adjustments. These adjustments have been made to the attached proposed CIP (Proposed 11/13/2025), for your review. Further adjustments to the proposed CIP can be made at this work session. Any adjustments to the proposed CIP made by Council will be incorporated and reflected in the proposed CIP to be consider for adoption at the regular City Council meeting on December 7, 2025.
On 11/12/2025, the City Council Budget and Finance committee met and discussed the proposed CIP, and made no further recommendations to the whole City Council. However, at that meeting additional questions were asked regarding the Metropolitan Planning funds (CMAQ, TAP, Urban Funds), in an effort to gain a better understanding of how that process occurs, and where the CIP fits into that process. Staff has provided additional information below and attached to this memo, and will provide more information regarding this process at the work session. Additional questions were asked by the committee regarding funding sources for projects. Funding source tables can be found starting on page 18. Additionally, an excel spreadsheet of all projects and funding sources is attached. This can be used to filter by project or funding source (row 1), and may be helpful in understanding the projects and multiple funding sources.
Per questions, comments and discussion at the November 3 City Council Work Session on the CIP, PCSD staff has provided further background on the process in the attached Billings MPO FY26 UPWP Development Process on what the City and County went through in 2025 to develop the Unified Planning Work Program projects to be completed. This UPWP process also helps to demonstrate where projects from the UPWP are then maintained in year after year, or included in, the current draft CIP. The information below is also meant to help Council understand why projects are shown in the Draft CIP.
CIP MPO Project Note Highlights
The question of the proposed application of different funding sources was also brought up by Council on November 3rd and at the Council Budget and Finance Committee Meeting on November 12. Funding sources like Transportation Alternatives (TA) can be used for a variety of non-motorized improvements. And projects that use TA may accomplish multiple objectives - maybe in some cases both SRTS goals and recreational or commuter trail goals for the community in one project, maybe only SRTS goals in another project. Congestion Air Quality Mitigation Funds (CMAQ) can be applied to different projects and transportation goals. CMAQ may be used in a road corridor project to fund the pedestrian facilities, or it can help build a round-about, or it can fund Transit., or pay for street sweepers. CMAQ must fund things that reduce vehicle emissions and contribute to better air quality. With any funding source, Council should be aware that these are future year estimates. While the CIP may show TA being used in 2030 for a project, we do not have any certainty that the TA funding will flow to the City or be available in 2030 at the amount that has been estimated. This uncertainty is partly why review of the CIP annually is so critical to update and adjust projects and funding sourced based on the availability of funding as we get closer to the year the project is estimated to occur in. It is also important to be aware as Council that we try and keep open to all funding sources available and we constantly work to see where they can fit in a project funding stack.
On 11/3/2025, the City Council discussed the proposed CIP and made recommendations to staff for adjustments. These adjustments have been made to the attached proposed CIP (Proposed 11/13/2025), for your review. Further adjustments to the proposed CIP can be made at this work session. Any adjustments to the proposed CIP made by Council will be incorporated and reflected in the proposed CIP to be consider for adoption at the regular City Council meeting on December 7, 2025.
On 11/12/2025, the City Council Budget and Finance committee met and discussed the proposed CIP, and made no further recommendations to the whole City Council. However, at that meeting additional questions were asked regarding the Metropolitan Planning funds (CMAQ, TAP, Urban Funds), in an effort to gain a better understanding of how that process occurs, and where the CIP fits into that process. Staff has provided additional information below and attached to this memo, and will provide more information regarding this process at the work session. Additional questions were asked by the committee regarding funding sources for projects. Funding source tables can be found starting on page 18. Additionally, an excel spreadsheet of all projects and funding sources is attached. This can be used to filter by project or funding source (row 1), and may be helpful in understanding the projects and multiple funding sources.
Per questions, comments and discussion at the November 3 City Council Work Session on the CIP, PCSD staff has provided further background on the process in the attached Billings MPO FY26 UPWP Development Process on what the City and County went through in 2025 to develop the Unified Planning Work Program projects to be completed. This UPWP process also helps to demonstrate where projects from the UPWP are then maintained in year after year, or included in, the current draft CIP. The information below is also meant to help Council understand why projects are shown in the Draft CIP.
CIP MPO Project Note Highlights
- 25th Street Bridge: Council could choose to include this in the CIP on a Future Projects List outside the 5-year time period because of the need to have a large discretionary grant to complete.
- 5th Avenue Corridor: Council could choose to include this in the CIP on a Future Projects List outside the 5-year time period because of the need to have a large discretionary grant to complete.
- Alkali Creek: This project should remain in the CIP for 2027 as we are currently undertaking the feasibility study per our approved UPWP.
- Downtown to the Heights: This project should remain in the CIP for 2027 as we are currently undertaking the feasibility study per our approved UPWP.
- Yellowjacket Trail: If Council has concerns about the funding sources for this project in the future, staff suggests we tie the project to a potentially larger project that MDT is expected to undertake to make improvements on North 27th Street. This might just make the project eligible for MDT Safety funds if we tied it all together. Trailnet also has completed an initial feasibility study of the aside path location and this information could be incorporated with MDT. Staff could modify the way this project is listed and funded in the CIP and bring that back to Council for consideration in December.
- Aronson to Annandale: This project should remain in the CIP for 2027 as we are currently undertaking the feasibility study per our approved UPWP.
The question of the proposed application of different funding sources was also brought up by Council on November 3rd and at the Council Budget and Finance Committee Meeting on November 12. Funding sources like Transportation Alternatives (TA) can be used for a variety of non-motorized improvements. And projects that use TA may accomplish multiple objectives - maybe in some cases both SRTS goals and recreational or commuter trail goals for the community in one project, maybe only SRTS goals in another project. Congestion Air Quality Mitigation Funds (CMAQ) can be applied to different projects and transportation goals. CMAQ may be used in a road corridor project to fund the pedestrian facilities, or it can help build a round-about, or it can fund Transit., or pay for street sweepers. CMAQ must fund things that reduce vehicle emissions and contribute to better air quality. With any funding source, Council should be aware that these are future year estimates. While the CIP may show TA being used in 2030 for a project, we do not have any certainty that the TA funding will flow to the City or be available in 2030 at the amount that has been estimated. This uncertainty is partly why review of the CIP annually is so critical to update and adjust projects and funding sourced based on the availability of funding as we get closer to the year the project is estimated to occur in. It is also important to be aware as Council that we try and keep open to all funding sources available and we constantly work to see where they can fit in a project funding stack.
ALTERNATIVES
No alternatives have been analyzed as no decisions are made at a work session. Staff will be available to answer questions or provide any additional information
FISCAL EFFECTS
Billings FY27-31 CIP:
Total: $502.6M - FY27 Amount: $103.6M
Estimated future rate increases necessary to fund this CIP. Failure to increase future rates would result in needed reductions in future CIP projects.
Total: $502.6M - FY27 Amount: $103.6M
| Year | Cost (in Millions) |
|---|---|
| 2027 | $103.6 |
| 2028 | $130.3 |
| 2029 | $113.8 |
| 2030 | $72.5 |
| 2031 | $82.4 |
| Total | $502.6 |
Estimated future rate increases necessary to fund this CIP. Failure to increase future rates would result in needed reductions in future CIP projects.
| Service | Estimated Increases |
|---|---|
| Water | 7.5% (28), 6.5% (29-31) |
| Wastewater | 5% (28), 3% (29-31) |
| Storm | 13% (27-30), 9% (31) |
| Solid Waste | 7% annually |
| Street Maintenance | 7% (27), 6% (28-31) |