After a staff presentation, staff recommends Council discuss the merits of expanding the water and sewer service area through annexation to provide 7 lots along McDougall Street with City water and sewer and provide staff and the applicant with direction for subsequent applications.

Paul Corcoran, owner of 7 of the 14 lots in McDougall Subdivision, has requested connection to existing City water and sewer mains located adjacent to the subdivision at Washington Street and McDougall Drive. The subdivision is immediately adjacent to City limits and located within the Zone 1 Petition Area on the City’s Limits of Annexation Map. Annexation would incorporate the seven lots and McDougall Drive into the City and may require public improvements, including water and sewer extensions and potential street upgrades, to be addressed through an annexation agreement. The property owner would fund design and construction of required infrastructure, pay applicable system development fees, and pay ongoing monthly utility charges. If annexed, the lots are estimated to generate approximately $5,300 annually in property tax revenue and $3,300 in street maintenance district fees; Council direction is requested on whether to provide service with annexation, without annexation, or to decline service.

Paul Corcoran, the owner of 7 of the 14 lots in McDougall Subdivision, has requested water and sewer service from the City. Currently, the lots in the subdivision are on wells for water service and drain fields for sewer service.  There are existing City water and sewer mains in Washington Street at the intersection of McDougall Drive that would be utilized for the water and sewer extensions.  These mains are directly adjacent to the site.

McDougall Subdivision is immediately adjacent to the City limits and is in the Zone 1 Petition Area (green area) on the City Limits of Annexation Map. McDougall Subdivision is already served by the City fire department as it is located in the Billings Urban Fire Area (BUFSA).  If the 7 lots are annexed, all of McDougall Drive, currently a 35-foot wide gravel street located in a 60-foot public right-of-way, would be annexed into the City with the lots. McDougall Drive street improvement requirements would be determined during the annexation process if the City provides water and sewer service and would be included in the annexation agreement.  Potential public improvements associated with annexation could include extending public water and sewer mains, paving and curbing the gravel street, and adding sidewalk.  Emergency services have indicated there were few calls for service to this area in 2025 (2 calls).

Staff requests direction from Council on whether the property should be provided water and sewer service, and if so, whether the property should be annexed or whether the Council desires to provide water and sewer service without annexation.

There is no significant financial impact to the City to provide water and sewer service to McDougall Subdivision.  The owner would pay for the design and construction of the water and sewer mains that will be extended to provide service to the subject lots, as well as the system development fee and ongoing monthly water and sewer charges. City staff estimates tax revenues of about $5,300 per year and street maintenance district fees of about $3,300 per year if the property were to be annexed into the City.

City Council may:

• Direct staff to move forward with providing water and sewer service to McDougall Subdivision with annexation; or,
• Direct staff to move forward with providing water and sewer service to McDougall Subdivision without annexation, waiving annexation requirements; or,
• Provide direction not to provide water and sewer service to McDougall Subdivision.  If water and sewer service is not provided, the owner may continue to experience water and sewer issues.