Staff recommends approval of the resolution authorizing the issuance and sale of the $219,000 Series 2026AB Special Sidewalk, Curb, Gutter, and Alley Approach Bonds.

The City of Billings has ordered sidewalk, curb, gutter, drive approach, and accessibility improvements as part of W.O. 24-02 Missing Sidewalk Improvements and W.O. 25-02 Missing Sidewalk Improvements. To finance these improvements, the City proposes issuing $219,000 Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds, at a private negotiated sale to Stockman Bank consisting of $164,000 Taxable Series 2026A at 6.25% interest, and $55,000 Tax Exempt Series 2026B at 5.50%. The bond proceeds will cover project construction costs, engineering, financing expenses, costs of issuance, and the required deposit into the City’s Special Improvement District Revolving Fund. Special assessments levied against benefited properties will repay the bonds over 12 years.

The City Council previously ordered improvements to the sidewalk for:
• W.O. 24-02 – 2024 Missing Sidewalk Improvements, authorized via Resolution 24-11187 (March 11, 2024)
• W.O. 25-02 – 2025 Missing Sidewalk Improvements, authorized via Resolution 25-11274 (June 23, 2025)

Total Project Costs to be Assessed
• 2024 Missing Sidewalk Improvements: $144,075.32
• 2025 Missing Sidewalk Improvements: $47,574.68
• Total: $191,650.00 

Financing & Issuance Costs
• City Financing Expense: $2,400.00
• Revolving Fund Deposit: $10,950.00
• Costs of Issuance: $14,000.00
These items bring the total bond amount to $219,000.

Repayment Structure
• Assessments levied on adjacent properties are equal to the total bond amount.
• Payments will be collected semiannually (November 30 & May 31).
• Series 2026A Taxable Bonds Interest charged to property owners = bond interest rate (6.25%) + statutorily required additional 0.50% = 6.75% annual assessment interest.
• Series 2026B Tax Exempt Bonds Interest charged to property owners = bond interest rate (5.50%) + statutorily required additional 0.50% = 6.00% annual assessment interest.
• Term of repayment: 12 years (2026–2038). 

The City’s Special Improvement District Revolving Fund provides security for the bonds. If assessment collections are insufficient, the City must levy taxes to restore the fund balance, consistent with MCA requirements and past sidewalk bond obligations.

Approve the Bond Resolution (Recommended) — Authorize issuance and sale of the Series 2026 bonds.

Delay Approval — Would delay construction reimbursement and compromise project cash flow.

Decline the Bond Issuance - Without bond financing, the City would need to fund improvements upfront from the general fund or other sources.