Staff recommends that City Council approve the resolution authorizing the sale and prescribing the form and terms for the Tax Increment bonds for the South Billings Boulevard Urban Renewal District. By approving this resolution, City Council is authorizing staff to proceed with a bond sale for the South Park Pool project, so long as it can be completed within the parameters within the resolution, and described within the fiscal effects. 

The attached parameters resolution authorizes staff to issue debt from the South Tax Increment Fund to provide funds to construct the South Park Pool project, included in the FY27 Budget and 2027 CIP.

The City proposes to undertake the design, engineering, and construction of improvements to the existing pool complex at South Park and related improvements (collectively, the "Project"). 

The project was included in the FY2027 budget and design will begin in 2026.

If this parameters' resolution is approved, staff and the City's Advisor will begin negotiating the sale of these bonds. So long as the bonds remain at or below the prescribed parameters in this Resolution, staff intend to enter into agreements on behalf of the City to issue the debt, using the authority given in this resolution to do so. After the sale of the bonds, a final bond resolution will come to the Council for approval at the meeting immediately following the sale (est. late June/early July) this year. Upon the sale of the bonds and once staff executes the agreement to issue the debt within the authority provided in this resolution, any lack of approval of the bond resolution by Council would carry lasting negative implications to the City's reputation in the bond market and possibly its ability to access capital in the future. If the City Council does not intend to proceed with the construction project or approve the final bond resolution, this parameters' resolution should not be approved.

The construction project was approved in the 2027 Budget for the amount of $10 million dollars from the South Tax Increment Fund. Parks and Recreation is expecting to receive additional funds from naming rights and other capital campaigns to enhance park amenities beyond the $10 million from South Tax Increment Fund. As such, the parameters resolution authorize the City to borrow a maximum aggregate principal amount of $15,045,000, with a maximum average interest of 8.128%. The repayment of bonds will be made by the South Tax Increment Fund, combined with any additional funds received.

The parameters' resolution set limitations on the maximum aggregate principal amount, exclusive of premium or discount, not to exceed $15,045,000, with a maximum interest rate of 8.128% with a term of 20.425 years. The debt service payments will be paid from the tax increment funds from the district. Financed amounts will be used to cover project construction costs, fund a debt service reserve requirement, and pay for debt issuance costs.

City Council may:

• Approve; or,
• Not Approve the resolution. Not approving the resolution would mean the project would not occur, as funds would not be available to complete the project