Okay, call the meeting to order.

Right?

Do I say anything in particular or is that handed Gow for the other thing?

Do you have an agenda, Natalie?

Do you have an agenda in front of you?

Do I?

I don't know.

Okay.

I'm gonna pull it up for you.

Okay.

Great.

So here's your agenda.

Okay.

Um the meat of it doesn't happen until a little bit lower down, but you can s you can read from here to go through the different items.

So you just called it to order.

Great.

So next on next thing you would do it would be let her be ask for disclosures.

All right.

Do we have any disclosures?

Okay.

Not surprising since you're no business yet.

And do we have any changes to the agenda?

No, not at the side.

Great.

And now do we have public comments or non-agenda items failing within the purview and jurisdiction of the board?

Falling, not failing.

Any public comment online?

And then I think and then I think if no one comes to the podium, then we ask if there's anyone online, and Alex tells us.

Is there anyone online?

Um remind me of your name.

My name's Natalie Van Diesen.

Van Dusan?

Yes.

Um Chair Van Dusen, there is no one online waiting to make public comment.

Great.

Mary Doug?

No.

Okay.

Okay, great.

Um, okay, so just to go down a little bit.

So Natalie, now you're here at E.

FYI discussion where most of the activity is going to take place for today's meeting.

Great.

So should we get started with E1 Tax Increment Finance Board onboarding?

That's obvious.

Yes, Chair Van Newson.

Alex Newby will appear at the diet.

So um, why don't we take a moment before I um launch into this and just starting right here, David, let's just introduce ourselves so that we all know who one another are.

Um so I'm I'm David Fine.

I'm the rural program manager for the city.

Um the past four years I've also had housing, but um but now housing is still an account development, but I'll be personally heading up with uh the affordable housing aspects.

Um that's Brian Dyer, uh who's here earlier.

Um for almost 13 years and uh here.

So I I am your principal staffer for this board.

I'm Lori Madsen.

And I'm first meeting on the board.

Well Susan Frazier, I live in the midtown district, served on midtown on the Legister.

Just a process note.

You do need to turn your mic on because otherwise there is a live stream of this meeting and no one will hear you.

Hi, I'm Natalie Van Diesen.

I sat on the Northeast neighborhood URD board.

Um it turns out I'm the chair.

And Scott McFarland, uh representing County Commission.

I've been counting commissioner for seven years.

Hi, good afternoon.

I'm Britt Fontenot, Economic Development Director, and also uh uh consider me a resource to this board.

Um so it's great to be here.

Thank you for coming.

And just for the record, this is Mary Matson.

Bateson, sorry, Mary.

Um glad to have you here too.

My name is Alex Newby.

I'm the deputy city clerk, and I'm gonna just go through norms for um boards here with the city, a lot of stuff that will seem probably familiar to you.

Um, but I gotta check that box.

So we're gonna check that box.

All right.

So norms of behavior um on a board.

We want to have productive behaviors and mindsets that support collaborative work.

Please do so.

Um the purpose of that is to build trust amongst members and and staff to ensure space and time for contributions from all and provide a framework for expected behavior.

If you have any questions, just weigh in um decorum.

Um please, whenever you're dealing with staff members and um other board members, respectfully communicate with them.

Um follow direction of the presiding officer and rules of procedure.

And by the way, I believe that um you are the vice chair, is that not right?

Yes.

This this mouse is really moving.

I just use the error on the oh, okay.

Good idea.

Thank you, yeah.

Okay.

Um board members must not direct staff, attempt to pressure or influence workloads, schedules, or departmental priorities.

Staff definitely have a lot of work to do.

Um disagreement with staff's professional judgment should be directed to the staff liaison or the city manager.

Um complain about me to me, I think.

Yeah, that's right.

Uh I'm sure you're all aware.

Chuck Wynne is our um city manager.

And um, if any of you need his contact information, um please let David or I know.

Attendance at meetings other than board meetings, board members may not attend staff meetings unless directed by the city manager.

Um conduct at public meetings should follow resolution 5323 and the code of ethics.

Um, all received a copy of resolution 5323.

And if we need to look pull that up, we can one body, one voice.

If a board votes on a recommendation to the city commission, individuals on said board may not comment in opposition to the board recommendation.

Um, opportunity to weigh in on any issue happens here at this board meeting.

Once it's been voted on, please uh abide by this and let the board chair or in case of the board chairs absent, the board board vice chair speak on behalf of the board.

And um, even if you did not agree with the uh the vote, how the vote turned out, please be supportive of the board as it moves forward that keeps extra drama from happening, and we appreciate that.

Uh so please keep the best interests of the group in mind.

Um we of course want to um create a collaborative environment here.

Um please recognize that staff and board members are striving to serve the public to the best of their abilities.

Um, but you're all here because you have experience and knowledge in this area, so please we'd love it if you share your experience and knowledge.

I guess I'm at the end of that.

Okay, advisory board.

Okay, so the makeup of the board is obviously it's pretty simple.

Uh the chair, the vice chair, voting members.

Uh other people involved with the board will be the commission liaison of we don't know who that's going to be yet.

That will be decided here pretty soon.

Uh the staff liaison liaison.

And um that's David and um support staff such as myself.

Um agendas will you were looking at an agenda earlier.

That's how they're always gonna look.

Um they're pretty simple.

Um they will follow appendix A of resolution 5323 rules of procedure.

We can look at that for a minute.

I think I'll pull it up right after this for just a hot minute to look at.

Um staff prepares the agenda with chair collaboration.

Um agendas are published at least 48 hours prior, and that's uh we have to do that legally.

So um we definitely need um that agenda to be uh prepared well ahead of 48 hours prior so that we are putting the finished agenda um up as it will appear at the meeting.

Um staff will distribute the agenda to the board.

What that means is like um the agenda will get put together.

David's gonna let me know that the agenda is ready to be published.

I'll publish the agenda and then I'll I'll I'll put it in uh a PDF form for him to send out to you.

Um and I'm not gonna show you a model agenda scene as we just looked at one.

Any quorum of a board constitutes a meeting anywhere.

If you're all in Tucson, Arizona and um and you all show up at a meeting together, you got a quorum.

So please uh do that.

Um and if there is something going on in the community where you're aware that at least another member is gonna be at, uh, please check in and uh with well with David with one another.

Um let us know if a quorum is gonna happen so that we can um just make that known to the public and let the public know that you're not gonna make any decisions at that meeting.

Yes.

How many is a quorum for this board?

We have how many we're missing how many members?

Two.

So four.

Yeah.

Uh staff will take minutes and facilitate the meeting.

Obviously, the presiding officer leads the meeting.

Roll call voting is required.

Um we just do that so that it's clear to the public who voted how.

Um, and no abstaining unless you have you have needed to be recused from that particular agenda item.

This might blow your mind, but regular attendance is expected.

Um but you know, we recognize I always like to say that we recognize that life happens, sickness happens, um, unexpected things happen.

Uh as soon as you know that something unexpected is happening, please let us know.

Uh there is an option to um attend remotely.

Um we don't like that to happen often, but if you get sick, if you're like sick but not sick enough that you're like, I can come to the meeting and just probably shouldn't be there in person.

Or if you have something like uh I had this surprise trip, but I can still make the meeting.

Um, then please let David know.

I really like, if at all possible to know 46 hours in advance.

Um so that I can send you a remote link and you can participate remotely.

Um the reason for for the hopeful 46 hours of notification is that ensures that it will actually happen.

Um this if if you if I get an email 15 minutes before the meeting, I I might not see it.

It it just probably won't happen.

So please let us know as soon as you know that something's come up that um it's gonna impact your attending the meeting, and we'll deal with it from there.

And I'll just add it's just quite a bit more complicated than like in this room than jumping on a Zoom call.

So that's that's why he needs all that time.

Yeah, and David David will have to facilitate that.

So we have a trade abon back.

The staff liaison along with the clerk's department will track your terms.

Um trainings, the us aside from this, which I guess would be kind of a quasi training, we'll have ethics.

And um there's I can't think of anything else off the top of my head that we would need to cover in training.

Ummunications is up there because uh we don't want um we don't want emails going around where everybody is included, which ends up being like a meeting outside of a meeting.

Um so uh communications need to go like you can communicate one-on-one via email, but uh group emails is uh discouraged to keep decisions being made for this board outside of this meeting.

Does that make sense?

Okay.

The staff liaison will coordinate with the clerk and other staff for anything uh agenda related or anything else that that you all need.

And uh the staff liaison prepares memos from this board that will go to the city commission at request of the board.

So um the commission is currently setting priorities right now.

So this is this is this is um generally true what we're looking at here.

Umce the commission has decided on its priorities, roughly between February and March, a work plan will be developed, and then in December um report to the commission on the progress of the board will take place.

Any questions?

Okay, as I already stressed, one body, one voice.

Um if you have any questions about should you recuse yourself from this particular agenda item.

Um the city attorney has said he's always open to answer any questions.

Um Greg Sullivan is our city attorney.

Um if you don't have his email, we'll make sure that you do have it.

We um record will we have minutes that you'll go ahead.

Just just a note on emails.

Many of you have um served on city boards in the past.

All of our email formats just changed.

So um I I will try and send you an email from from me at the new format, but if you're like think you have someone's email, um I they're the old ones are working for now, but they won't continue to work forever.

So just keep that in mind.

If you had traditional communication paths in the city, everyone's email just changed.

So I think the endings of our emails are Bozeman MT.gov.

Then the new endings.

That's right, yeah.

So for instance, my new email will be Alex.nubi at Bozeman MT.gov.

Screen because I know what you're talking about.

Um let's see, we already talked about work plans and annual reports.

Formal recommendations and resolutions.

Um, yeah, there will be times when you make formal recommendations, or at some point may need to come up with a resolution and um David's familiar with all that, so he will guide you through that.

Uh the chair should communicate with the staff liaisons on board operations and agendas, and the chair should communicate with both staff and commission liaisons on policy questions.

All right.

Let's see if I can find what I promised to pull up, which was appendix A of resolution 5323.

What do I need to do?

I've got it open somewhere four times.

Somewhere.

I don't know where.

Okay, let's see.

Sorry.

There we go.

Found it.

Okay.

So generally, um the meeting agenda will follow this flow.

Call to order, disclosures, changes to the agenda, public service announcements if you have any.

Approval of minutes.

Oh yeah, and I did want to say so.

You'll approve the minutes.

That what we say happened is what happened.

They're pretty simple, so it's not, it's not anything difficult to deal with or and they're not really long either.

Consent items.

We always have public comment after consent.

Special presentations, action items, FYI and discussion, and adjourn adjournment.

And we the latest edition of Robert's rules of order are what we strive to follow.

But you know, we're not.

I think we loosely follow it.

Not hard and fast.

So feel free to ask questions if you don't understand how procedurally we should proceed.

So in this appendix, you see the chairperson and vice chairperson powers and duties.

Take a look at that, chair and vice chair if you haven't already.

And for the whole board, this appendix just shows you the rules of procedure.

I encourage you to have a look through that.

Any questions?

I think we're in the air.

I'm done.

Is this yours?

Yeah, no problem.

All right, I'm gonna pull up my presentation here.

Um, first of all, welcome.

I'm really excited that you're all here.

Um I'm I'm used to doing these TIFF board meetings around a smaller table or for the last couple of years online, which almost doesn't even smaller table if you kind of think about the the format there.

Uh but now we're we're doing these meetings in the commission room because they are broadcast and they have the the zoom capabilities in here.

And so um we're doing this here.

Um I don't think any of you are strangers to city boards except for uh Commissioner McFarlane.

Um but uh but you know, four of you have been on TIFF boards before.

Uh Julian's been on uh the zoning commission for a number of years.

Any other boards, Julian?

Um county, city and uh or county uh planning as well.

Right.

So I we're we're not really starting from scratch, but um I don't know that any of you have served on all the boards or familiar with all the districts.

So I want to I wanted to just start for you know, if there were uh for any members of the public, but also for this board, just go through a little bit of tax increment finance 101, what we're doing, where the districts are, uh and I hope I hope you find that helpful in centering in as you get your head back into tax increment financing at the city of Bozeman.

Um so Bozeman has six tax increment districts.

This board um it plays as an advisory board for five of them.

And and this is a feature of just how the legislature set up the new tax increment board uh statute is that boards organized as urban renewal agencies have to have a board, and then ones that are organized in advisory capacity have a board.

So downtown has its own thing going on, and um and will until 2032 when that when that board sunsets.

Um but but the other the other five boards Midtown, Northeast, South Bozeman Technology District, North Park, and Poliard are the purview of this board.

Um I think a lot of you are like familiar with how tax agreement finance works, but um it it is we're usually creating one of these in in response to infrastructure deficiency and statutory conditions of blight.

Usually those things create a public policy problem for the local government bodies, which is that they have uh they have an infrastructure burden, but a stagnating or declining property value, right?

And so you you've got all the liabilities and a declining ability to continue to operate those those things.

Um and so like the the overall goal of tax increment financing is to um address these conditions and thereby grow the tax base in a productive way, so it that we have more taxable value to support overall services in the long run, which I think maybe not in the short run, but in the long run, should be and with good management should be good for the taxing jurisdictions themselves and the taxpayers of those of those jurisdictions.

Um so just to give you a sense of this, this is kind of the classic tax increment.

You've got stagnant and declining property values, you create a tax increment district.

Um I like to say TIFF is not a new tax, it is a tax diversion.

It's like um I like to call it a delayed gratification strategy for the for the taxing entities.

Um you say, you know, but for some sort of intervention, these values will continue to stagnate and decline.

And so in the year you create the TIFF district, you have base that base taxable value.

The taxpayer, so all of the taxing entities keep getting what they are getting in real dollars in the year that the district is created.

But during the life of the district, any gains in taxable value um are collected within the district and spent within the district for the goal of reversing that decline.

Um hopefully through those through those efforts, we get investment by private enterprise within the district, um, which creates new value by itself as well as raising the values of the surrounding property.

And the goal is that by the time the TIFF ends, that you've increased that value faster than you would have but for the the intervention, and then that that that final blue thing is that is the tax, the new tax value that goes back to the governing entities and and helps um helps all the taxpayers.

Um so just to give you a sense of like the downtown tax increment district, um, there was a taxable value of 1.3 million um in 1995.

By 2023, it had grown to 15 million.

Um but I think this is it this is just an important thing to remind you.

Downtown's not our district um that we're managing, but in 2011, we entered into an agreement um interlocal agreement with the county and the schools to remit the proportional share of increment that wasn't being used for debt service on the parking garage downtown parking garage bonds.

And so really in downtown, the TIFF that's increment that's remaining is just the city share of the increment.

So the city has continued to make a policy decision to keep the increment in downtown as opposed to putting it straight into its own general fund because it sees the importance of that as I as a kind of a long game.

Um the other five districts, the one you manage, we don't have any agreements like that, and I think it's largely I think because they're much newer districts, and there's also a lot more work to be done in those districts to kind of reverse reverse the decline or um to some extent.

Once a district starts to do well, the delayed gratification of getting more investment is continues to be shorter.

And so if you can keep that flywheel spinning, um that that payoff in the last few years is sometimes where you get the biggest growth in increment.

But like ultimately, that's that's a policy choice for this board and and for the commission is like are we done at some point or are we done when the when the district statutorily ends?

Um just something something to keep in the very back of your mind as you do this kind of work.

Um so uh uh this is a point I I make repeatedly is that this is not a new tax.

Now, the way um the tax bills go out in the county, it often looks like it's a new tax, particularly if the if the um district's been around for a while, you're seeing all this money, and it looks like it's all being collected, it like it is a tax by the district, but that's not really what's happening, it's just being diverted to the district.

You pay the same taxes if you're in a tax increment district, um whether whether the district exists or not.

It's just where where the funds go.

Um but with increasing values, some um if if the district's doing its job, taxpayers within district may end up paying more than they did when they started, but they also have an asset that's worth more.

And so there's there are some trade-offs there.

Uh so things we can spend tax increment finance on.

It's really dictated by state law.

There's a section 715, 4288 that dictates what kinds of things you can spend TIFF money on.

Every session, they've been kind of tweaking that a little bit.

So there are some modifications uh from the last couple sessions.

Um if you were familiar with that before, it's not dramatically different, but it is different than it used to be.

Um but but the big the big things are you've got to spend the funds within the district.

There's a small carve out that says, you know, if you're like say connecting a sewer line or a water line from outside the district to inside the district because that infrastructure is absent, you can at that edge case pay for that.

Um but that's really a more unique proposition.

Generally, you're spending the funds within the district.

Um again, those funds are focused on eliminating the statutory conditions of blight.

That's usually just infrastructure deficiency in Montana.

That that's that points to where those conditions are.

Um you can pay administrative costs.

So I am I'm funded by the TIFF district.

We have one uh Jesse D's Maso is uh is half funded by the TIFF district.

That's that's the totality of the staffing that that we're paying administrative costs uh with TIFF funds for right now.

Um then other administration.

Um I think we went through this a little bit, but but there, you know, the the city commission, citizen advisory board, and then um economic development is is doing the projects and staffing.

Um sorry, this is a map of of the districts that you can see here.

So um Midtown is our largest district.

Um the Northeast district is is our probably our smallest district by total area.

It's like five blocks by five blocks, which creates some unique challenges just because without very high levels of investment in that district, there's really not enough increment to make the major investments that happen.

Um so that they create some interesting choices within that district that aren't necessarily the kinds of things you do in another district.

Um so these districts are different, they have different characters, they have different neighborhoods they're in, and they have and they have different um plans that for the things that the city commission is adopted that we're trying to address within the districts.

Um the polyard district in here in green um is our newest district.

That's a industrial district, it comprises an active superfund site as well as a partially delisted superfund site um within that area, and and it's um industrially zoned land.

Um the North Park industrial district is over here.

These are newer districts, and um and they're just starting to see some investment.

That that takes a long time.

So there's not a lot of activity now, and it's likely just given the structure of those districts that there will be a couple of larger deals, and then we will not talk about them for for some time.

I think that's that's just kind of the structure of those districts.

Uh, but I think an important thing to think about of those districts versus those urban rural districts versus the ones that are more on existing commercial cores and in existing neighborhoods, is that the those more kind of industrially focused urban renewal districts are in in a lot of ways for us as economic developers about leveling the playing field with the surrounding area to the extent that we want a fully integrated economy within our town.

We can't be a town that only has residences and retail and um hospitality but doesn't have jobs.

Um and so like the goal is yes, it is cheaper to develop in four corners than it is here, but there are other costs associated with that associated with both hard costs, road wear and tear associated with commuting, time costs to the people who are doing that, and um and and then kind of the environmental costs of of all of that.

And so you know, we we want to make sure that we have a c an economy that at least to some extent balances within our community.

Um right now, you know, we're we're a regional trade area.

We have you know over 18,000 people coming into the community every day, and I think we have something like 15,000 going out.

So it's not completely balanced, but but we are um trying to create some infrastructure that allows some of those jobs to be within our community.

Um just talking about the the districts, um Midtown has really focused on housing a lot over the past few years.

Um almost every project that's gone vertical uh in the North Seventh Corridor area has had some participation from the district.

Um the big project that we did um in 2020, but it the last phase of in 2020, but had been working on uh since the inception of the district, maybe 2010.

Susan was there for all of it.

Um it was the lighting and sidewalk project.

And it's almost hard to envision now, but you know, when I moved here, there were sections of North Seventh Avenue that didn't have sidewalk at all.

And it was dark and it was dangerous for people to walk around in.

Um in winter, it was completely impassable because the four-foot-wide curb walks would just become covered with snow from the MDT plows.

And so we we've really worked to make it more pedestrian-friendly.

And I think you can see that like there's people out walking around now.

Um, but we we did that project and the festival street project in um in 2020, issued six and a half million dollars in bonds.

Um, and and I think the next the next project that's likely in that district is probably a public-private partnership for parking.

Um we didn't an RFP, and we're we're actively engaging a developer on that.

So we'll tell you more about that later.

Um, South Bozeman Technology District.

Um, we entered into a development agreement, I think, three years ago with the developer.

It was um this is a collaboration with MSU, MSU Alumni Foundation has a wholly owned nonprofit subsidiary um called MSU Innovation Campus, and the goal was to find places where um MSU research could be commercialized and and have kind of cross pollinization within that district.

Um so we it went from you know for over a decade we talked about this MSU innovation campus, and it was literally a field of dreams because it was a field and the only thing happening there were dreams.

Um but now uh and a really old barn that needed some serious environmental cleanup.

Um so I I think that's a good example of like how TIFF can work.

We brought in uh an outside developer, they put in all the infrastructure, turned it from a field of dreams into a shovel ready tech park, and it's been amazing since that just since the infrastructure went in and the you know a couple of buildings went in, the conversations about what can happen there have really accelerated.

And so I think that's an example.

Umce there's adequate tax increment for the from the first couple of buildings will be um per the development uh going to the city commission to issue bonds in that district um to pay back that initial infrastructure investment.

And then a lot of the work there will be done unless they get enough work done there to like do a parking garage and get a lot more density and more of a campus there than uh more of a suburban tech park.

Um and then and then Northeast, we've really focused on basic infrastructure reconstruction of Peach, reconstruction of Wallace, reconstruction of Tamarack have been the big projects in that district so far, as well as uh recently did a pedestrian bridge and brought fiber optic conduit into the district.

Um just some notable projects, just looking backwards, helped with streetscape in front of the Elm, uh, which almost became something else during the pandemic.

Um I think it's a it's an exciting anchor tenant for the midtown area.

It's part of the reason there's things there's people out walking around at night on a lot of on a lot of nights.

Um the Aspen Festival Street, um, putting in pavers and and crosswalks um on safe routes crossings on on North Seventh Avenue.

Um the innovation campus.

Um we were able to seed what eventually became Yellowstone Fiber.

Um and we actually created both what it was Bozeman fiber at the time in in this room, but part of the way we were able to contribute to that was we put in um multi-duct conduit throughout our TIFF districts, which we then leased to Yellowstone Fiber, but also other providers, Blackfoot Communications is in there, and so that's part been part of how we've encouraged um investment in technology within the districts.

Umtown parking garage was a TIFF project.

Um the downtown streetscape was a TIFF project back in the 90s.

Um another relevant recent project is we just upgraded six blocks of sewer on Mendonhall, um, which checked a lot of boxes.

There's 42 property owners along there.

It was over 100 year old clay sewer line.

Um we only have enough funding of the city to replace a couple blocks of sewer a year.

So, you know, for the for all the people who own property along there, there's a new sewer line.

It's less likely that people things will there'll be backups, but it also created an opportunity for when when uh the freestone residences came in and as well as the hotel, the infrastructure is in place for them to make those investments.

So I think that's an example of where you're fixing outdated infrastructure, but you're also creating a an opportunity for investment.

Um and what you'll see a lot of times with the way we we do these projects is we're we're a small staff, and and sometimes it makes a lot more sense just in terms of phasing and also just timing of projects to say, hey, we know your project needs this, but it's a project we wanted to do anyway.

We'll sometimes do a development agreement where the developer runs the project and we reimburse them.

And that's that will happen in addition to development agreements where there's a lot more moving pieces.

But some sometimes sometimes we do development agreements that aren't necessarily about one project, although they help one project, they're helping advance an overall infrastructure goal, and there are some where the infrastructure is a little more tied to the project.

And so you'll see those.

Um goals of the districts are different.

You know, obviously the innovation campus is different than uh than midtown and different than um you know what what's happening in North Park.

Um when we think about the projects in these districts, um there's there's the urban renewal law.

So obviously we can't do anything that's not allowed by the urban renewal law, but really within what you're allowed to do in urban renewal, the urban renewal plans further limits and guide that, right?

So there may be some things that you can do under the urban renewal law, but they're not in the plan.

And so then without some additional process, city commission ordinance, it's not content that such a project is not contemplated by the plan.

And until the city commission takes an action, you there's some outer bounds to what you can do.

Um so the plans, and it's just other resources, financial, staffing, and sometimes there's just no opportunities.

You have you'll have recalcitrant property owners, you'll have um you'll go through a recession.

Um so that there's just um I I find that the projects can be peaky in these districts.

Like they can there could be a lot going on what because you've saved money and you're you're doing projects that have been in the back burner for a while, or uh on the private side.

Development often seems to have cycles with real estate.

Um we'll often do feasibility studies, market analysis, engineering studies, and reports.

Um we're frequently putting in our work plan and budgets, designing things that we will build in the future when there's adequate money, and sometimes that's next year, sometimes that's a few years in the future.

Um, but putting together shovel ready plans.

Um and then most of the work we do, we accumulate cash.

Um, but sometimes we will issue bonds, and you can issue bonds more than more than once in a district, but there are significant costs both in time and actual money in in issuing bonds.

So we when we can cash flow projects, it's a lot more efficient to do that.

And so you'll see that that in the budgeting process.

Um we're gonna be jumping right in to the work plan and budgeting process um in these districts.

So all of you are who are on TIFF boards before familiar with that.

We need to annually adopt a TIFF work plan.

The city commission needs to annually adopt a work plan and budget.

Um this board needs to help in preparing that budget and advise the city commission that this is your budget.

Um that helps me in some ways when I talk to the commission.

Instead of saying this is my best shot as staff at coming over this budget, it really helps when we can say we drafted a budget, we talked about it with the board, it changed, it was modified, and this is the board's recommended budget.

And I that really makes the commission process of budgeted option a lot smoother.

So the next three meetings are going to be really heavy work on work plans and budgets.

A feature I'm still getting used to a little bit is that we've moved to biannual budget process of the city.

So we're we're adopting a two, we're planning for a two-year budget and the adopting a two-year budget, but we have an annual work plan.

So just something to keep in mind.

But typically there's an kind of an annual cleanup budget amendment, and so to the extent our work plans change change the two-year projected budgeting, there's an opportunity to make some make some adjustments each year.

All right.

These are some old pictures.

You've got Jeff Krause with brown hair here cutting a ribbon on some uh some midtown improvements.

Um we we've work on uh uh um one of the big changes we made in 2017, and I I think I think it is a positive change, but I think it's one that has been cloudy for some members of the public.

So I I'm happy to take your suggestions about how we can talk about this differently.

Um but in 2017, we we made a shift from um from thinking about what projects might need to be done and slowly and incrementally planning for them and doing them kind of in a board-directed manner, um, which still happens.

Like we still do those projects, but we're also uh focused more in districts, particularly like Midtown, um, Northeast, South Bozo Tech, where um there's lots of infrastructure that needs to be done and prioritization.

We could do the prioritization ourselves, but we might be wrong in terms of where the investment might go.

And so we're instead pivoted more towards finding out where the investment might go and prioritizing the infrastructure that facilitates the investment.

Um I think the infrastructure gets done either way, but that way um has a number of benefits.

The first one is to the extent we don't have cash on hand, we're usually we're we're always asking a developer to front all of the money for the eligible the TIF eligible costs, and then we're paying them back when they're done.

This has a couple of benefits.

One, it's so like if we do the project, there's no guarantee that any investment happens near it ever, right?

Um we're sometimes have interesting coordination problems when it's happening concurrently with the development, but but we are not them.

Um and then and then finally, we make sure that actual tax generation happens, um, which can help pay back um pay back these projects.

So we when we do this, we do um we have a third-party firm do a but four analysis, make sure that um you know that the project actually needs our assistance to move forward.

That's a that's an important thing.

Uh if they can afford the off-site infrastructure necessary for the project on their own, and they're making a normal standard rate of return, we don't need to participate.

And we've had a number of cases where we did that third-party butt four analysis, and we said, you we see you need some money, but not all the money you just requested.

And so that's an important part, I think, of guarding taxpayer resources and understanding um the projects.

Um there's statutorily required findings we end up making.

Uh we're looking for new taxable value.

Um, and and then just thinking about what kind of private investment we're getting for our public investment is another thing.

Um and that's part of how we write-size these.

There may be times where a project comes in and it's like, we've got all this need and we've got all this infrastructure, which you know is part of the urban renewal plan, meets the statutory definition of blight, and we say, great, you need five million dollars of infrastructure, and you're only going to create a million dollars in new taxable value in the next 20 years, right?

We can't give you five million dollars.

We can give you one, you might have a need, the project might fall apart, but like that's part of how we write size these things too, is by thinking and thinking about those ratios, thinking about how the projects are gonna pay back.

Um just as you think about the life of these districts, all the districts get up to 15 years to be around.

But you can do bonds for 25 years within that 15-year period.

Essentially the longest term of bonds you issue within the that 15 years becomes the life of the district.

So when you pay off that that last trunche bonds from the first 15 years, that's the end of the district.

So for downtown it's 2032, for midtown it's 2045.

That's that's really um what happens.

We if there's remaining funds at a district, we've we've never had a district, we've had one district um be sunset, and I think it was in debt when we when we sunset it.

Um to another city fund.

But if if um uh at the end of a district, there is a policy question opportunity about whether you'd want to take any surplus funds and keep them in the district in some sort of revolving loan fund that continues that process, or to just remit the remaining funds to the taxing entities.

And that's something this board will get to weigh in on in the occasions that a district um uh would be expiring.

Not likely during the term that you're in.

So with that, that's kind of my my broad overview of tax increment financing and and Bozeman's district.

I'd I'd be happy to take any questions that you just have generally about the districts, the work, um, where we're going, have that conversation.

Yeah.

Um you might be going over this, but is there uh you know, like in zoning you had A through J of criteria for for whether or not something's approved or not.

Um with this, when we're looking at approving these, is there a list of criteria they have to meet, like a multiplier for the taxes being recaptured and from an annual basis based on what it was and what it would be um impact on adjacent properties, stuff like that.

Sure.

So I think part of the work of this board can be um developing those criteria.

We have ones that we developed as staff.

Some of them got adopted by boards, some of them didn't, because three of the districts don't have boards.

Uh but we we set up criteria that were related to the adopted plans, right?

Kind of like operationalizing the the higher level goals of the adopted urban renewal plans as what you might be looking for in a particular development project or investment opportunity.

Um so they they all have them, but I think an opportunity for this board is to revisit those and put those those goals in place.

Um the way it's not like zoning is that um you know basically for a project to happen, it needs to be contemplated by the plan.

That's really the only criteria, statutory criteria you need to have.

And then the city commission needs to vote for it and fund it.

Right?

Um so and I and I think there's sometimes some confusion with the public on this.

When we go through these criteria, it's for helping think about the pro how the project is is engaging the plan.

You know, is it hitting hitting on five goals of a five-goal plan?

Is it hitting on one goal of a five-goal plan?

Sometimes one goal is enough and it's a great project, and people want it.

But like we also want to push projects towards meeting more goals where they can.

But like if one of the goals is building housing and it's a commercial project, you know, they're not gonna meet that goal, and that's not really a problem.

Um, but I think an important thing to think about is just because a project meets all the goals, gets all the credit, you could get a perfect score, that doesn't mean that anyone that they get funding or that they have to get funding.

Like no one, no one is entitled to TIFF.

It's a it's a discretionary act by the city commission at the end of the day.

And so you're you're helping them make those choices.

And that's that's part of the the real value you're you're giving them with with your advice.

Yeah.

David, where is there or is there any crossover relationship between the city's growth policy?

Yes.

So when so urban renewal plans are adopted by ordinance.

Um through that process, actually, the the planning boards to the community development board acting as a planning board has to make findings that the urban renewal plan is in conformance with the growth policy at the time of adoption.

Um there's no mechanism in law for being like you adopted a new growth policy, put it in conversation with the new amend the you must amend the urban renewal plan.

So that there isn't like a an obvious recheck-in structurally, but but it's it's something the city commission or or this board could work on and do if if they got really out of alignment.

State law did not provide a specific path for amending an urban renewal plan.

So really the process for amending an urban renewal plan is the same as the process for creating the urban renewal plan in the first place.

So it's pretty involved.

It probably takes about six months per per district.

So you'd want you want to have a good reason to revisit a plan.

What else?

What are our next steps for creating a plan?

How do we get the market?

Sure.

So I I think, like I said, we're um I think like it's pretty common for these boards to start thinking about what their work plan is right out of the gate.

I think we're gonna invert that a little bit.

If if you agree, we should probably have a chair discussion.

Umly just because we we have to get these work plans and budgets done for for the year.

So there's the overall board work plan, what you work on when you're not working on the budget, which is probably three to four of the 12 meetings a year, and then what you're doing from a policy perspective the rest of the time.

So I think um I think that the work plan and budget process will be an opportunity to like get under the hood and see what work is going on in the district, and you can start thinking about what that work plan is.

And then I think maybe by May, when we're we've shift our reg our recommendations off to the city commission, we can come back and say, okay, do we want to work on criteria in the Northeast District or what other kinds of things we we want to work on at the meetings?

Um and then probably be that kind of like that general overview to what what the board is working on, and then some of these things are dictated by opportunities.

So if we have a development agreement opportunity or uh an application for TIFF assistance, those things will pop up as they pop up.

Sure.

Thank you, Chair.

I just wanted to add one thing about the legislature.

We're always in education mode on urban renewal.

We're constantly educating the public, um, our own commissioners, uh, you know, our we ourselves trying to stay up to speed on what's going on at the state.

Um for the last many legislative sessions, there uh uh there have been some opponents of TIFF and they come out pretty pretty hard.

Um and we mount a robust uh defensive TIFF every session, and we will again um I just wanted you guys to know that um that that happens.

And um and so just recently we had our state legislators from this area do a tour of the Northeastern Renew of the Midtown Urban Renewal District, for example, just trying to provide them with some information about you know basic things like this is all done on a reimbursement basis once everything has been inspected and turned over, right?

So it's not just it's not just like writing checks to people and then never seeing them again.

So just very basic information like that we're constantly trying to educate on.

So to the extent you guys can help us do that, we would really appreciate it.

Um you're the best ambassadors for the program.

Um and so I just wanted to make sure that you were aware that um this program gets a lot of attention uh from this from the state of Montana.

We do it very well here, and um I think a some of the attention we get that David gets is positive attention on how to do it well, and we're really proud of that.

But statewide it gets it does get a lot of um a lot of attention.

So thank you.

Thanks, David.

I can fill some space for a moment.

I I do I do have a couple comments just about working together.

Um we've had uh in the past with with urban renewal boards, we've we've had some really good collaborative low-key conversations.

I like I'm hoping that that's kind of a norm that this board can uh return to.

Uh obviously I think there'll be times where following very rigid rules of procedure are helpful uh when we're we've got a big thing we're voting on resolution.

But to the extent that we're doing policy formation, I'm I'm hoping we can have some good collaborative discussions uh together.

Um another norm I would love for you, and I you're all working people, so I think you can probably get behind this.

I'm I'm going to endeavor to keep meetings to their scheduled time, like hour and a half.

Not over schedule meetings.

Have make sure everyone gets the opportunity to speak.

This is something I get to work on as chair, but also um but also like uh have maybe more efficient and linear and and less circular uh conversations um moving forward.

Because I think I think board service is hard, and also for the public attending, it it's hard to go to four-hour meetings regularly.

So I think the goal is we'll we'll try to be efficient with our scheduling of items at our time.

That said, from time to time, we may reach out to you for scheduling special meetings if there's opportunities or the schedule of the regular meeting is just getting too full.

And we'll look for opportunities to not have a meeting when there's nothing to talk about.

Yeah.

I think another question about the work plan.

Is there one work plan for this board, or is there a separate work plan for each district?

So there is the statutory work plan and budget that the city commission has to adopt each year.

That's for each district.

So I'm I'm happy to schedule agenda things and keep the workflow coming to you, but you are also welcome to help think about things at a policy level that you want to talk about and engage and discuss.

That's something we can work together on.

David, could you give us a little bit of a primer on how projects that are requesting TIFF funds go through the planning department and at what part of that at what point this board is made aware of those?

Sure.

So I'm gonna answer the question I wanted you to ask, and then I'll come back to the question you did ask.

So the when a project seeks TIFF assistance, I'm really thinking very hard about the but for arrangement of this and when it's useful, most useful for someone who's making an investment to know whether they have TIFF assistance or not.

Um so if to the extent I can, I think the best time for a and it's this is in the the actual um applications, but like the best time to come in for us is after they've submitted an informal or concept review to the community development plan department, and and I always work with people when they're talking to me before that or as they're developing those.

We want that because we want we don't want you to come keep cut, we don't want you to come back to the trough.

Right?

You have an opportunity to do your due diligence, understand what the what public infrastructure is necessary for your project, and then apply for that.

Um so like oftentimes when someone's submitting a site plan for one of these expensive projects that's happening, they're spending over half a million dollars on that plan set.

Whereas they're spending quite a bit less on that initial concept design.

Um we'd like them to find out what the infrastructure lift is, but then start talking to us before they get to site plan because then we have more ability to influence the overall quality of the project.

We have an actual financial tool to encourage them to do a better project that's more in line with our goals.

Um that's when I like to see them.

Um as projects have gotten more controversial, um there's increasing pressure, like so.

If they start to get into site plan and the site plan gets noticed, then I don't want to bring it to this board until after the site plan is adopted.

Because then honestly, it like it confuses the conversation about whether the project is legal uh from a zoning perspective, and what this board is doing, which is making the project feasible, which is kind of a different thing and in compliance with the urban plan.

Does that help?

Did I answer both things?

All right.

So yeah, that's it might be better politics to do it after the site plan is approved, but it's like in terms of like community outcomes.

I think it's better to do it earlier.

But at some point if a project's gotten too far and we have to wait.

Um how do you see the pipeline as far as applications or workflow coming in to the board given the current environment?

It's it's definitely slowed down.

Um I think you know the headwinds in investment are um interest rates overall, um, construction costs remain high.

So it's it's difficult to make projects um work.

And then on the residential side, um the market performed and created a lot of new residential.

And so it a lot of people are waiting to see how the existing supply of housing absorbs before they build any new housing.

Um but then on the flip side, some people are saying, well, like we think that's gonna be about two years, and it takes you know, two to three years to plan and design and build a project.

So I I think I'll be delivering new supply right about when it's necessary.

So it kind of depends how bullish people's thesis is, but it it's definitely slowed down.

And and just overall population growth has slowed down, so there's less need in general.

Um the last few years have just been really significant.

So um we do actually have one TIFF application in right now.

Um the Altos Photonics, which is in the Northeast District is moving from wants to move from their current location and build their own building on the corner of uh Tamarak and uh Rouse.

And it's it's uh it is a modest two-story office building.

It's really exciting to get to do a project that isn't your residential mixed use, but it's all actually jobs um in a TIFF district, and we're retaining and growing an existing business within the district, which I think is another um cool thing.

But we we need to do some analysis on their application, and then and then honestly, it they've kind of been waiting for this board to exist so that you could consider their application.

So it we we've moved slower with that than we normally would just while we waited to be kind of compliant with state law and showing that application to this board.

So that's that's one I definitely know will be coming your way.

Um but that that's that's the only one.

And just on those lines, right?

You see them come and you see them go.

Lattice materials just announced that they're building a new facility outside of the TIFF district.

They're currently in the Northeastern Reno District, but they're they're moving to a location where they can hire more people, where they can expand their own their own business model.

So um so sometimes you lose them, but they land in a location where they can grow and create more jobs.

And so you sort of have to uh we have to look at it on balance, you know, sort of on balance what's uh what kind of activity is is happening, what's replacing what it's it's constantly changing.

Okay.

And and I think you'll find uh and I think this is the best.

There's a lot of people who say, well, these developers are greedy.

They they these projects would happen without TIFF.

We've been through a number of cases where we've we've entered into seven figure development agreements with developers and the projects haven't happened, which I think is a pretty good sign that the projects were tenuous in terms of their performance.

Um a great example was a um for sale.

It would have would have been perfect timing.

There was um behind U-Haul, there was uh going to be a for sale affordable housing development, you know, hundred units at attainable prices, and it it I think they got through full construction drawings on the project and uh hit the the double uh headwinds of um increasing construction costs and higher interest rates, and the project didn't move forward.

And then another developer came in, submitted an application for an even bigger building on that site, and that project also has fallen apart and you know it never went to city commission, but you know it it's happened.

So there have been a number of uh another great example is the uh the is the Clover Leaf Project in the Northeast Urban Renewal District um came in, had a public hearing, two million dollars, but you know, a combination of headwinds of like the overall market headwinds I've missed before, as well as um some zoning and entitlement headwinds for that project.

Um the pro and and this is an example of of um a regulatory barrier being being part of why a project doesn't work.

That given the cost of land and the cost of construction on that particular location, they haven't been able to they've done four or five different project concepts and they haven't been able to make one work that complies with the existing zoning and um even with two million dollars in infrastructure.

And so that that that can be some of the the challenges that we're we're dealing with with projects.

All right.

Well, I don't need to keep you here any longer than that, but um hopefully we'll see we'll see you all uh at the next meeting.

We didn't scare any of off and we'll and we'll dive into uh draft budgets for for the districts.

When is the next meeting?

So the meeting is always the third Thursday of the month at this time.

So I I think I send everyone out of the recurring calendar invite.

If you accidentally deleted it, let me know and I'll I'll send it again.

I do think that March one might fall in spring break.

Okay.

I don't know if that's an issue.

So I think if it does for March, we we will we should look for a special meeting because I think I think we will use all of two meetings doing these work plans and budgets.

But but two are more intensive.