She would be the one.

So I got a new cover for my city off.

I don't know what I said.

But this was we did by my boy.

My boy was like legal.

Enter your participant ID followed by town.

You are in the meeting now.

There is one other participant in the meeting.

Yes.

I don't actually want I don't want to be there.

So I don't know if we're going to have to probably follow.

She can make it back here.

Oh, yeah.

Yeah, that's where I say what if she actually does.

So you're presentation just in case they have some.

Yeah, I don't know if it's good.

Actually, just a little bit.

Yeah, and then we'll have to actually have to do that.

Also for anyone comprehensive results.

So that's like a few minutes or not.

Yeah.

I know we get two more.

I know it's wrong.

This might be a funny one for the two.

So I'm not just and then adopted new station and then new pop is a little bit.

Of course we adopt first.

I mean so this one's like in share.

In between everything, so it's like I wrote down some things.

So here we go.

I think it's gonna be at all.

No, we just don't have a cool right in a very simple thing.

So it's not very simple.

Oh, I think numbers can change that.

We might have a lot of something that's fine.

Yeah.

Well, you can ask you.

I think it's gonna be.

Yeah.

Yeah, it's just like standing there's not just for anything.

So what do we do for that?

So we don't just think that's a sheet.

I see that for five minutes.

Are we ready to go?

Good evening and welcome everyone to this Boswell City Commission meeting of Tuesday, February 10th.

We are glad that you're here.

Um I'm gonna walk through a few ways you can engage and follow along in our meeting this evening.

Um if you are here with us in person, you're already here.

This is one way.

You'll be able to provide comments and general public comment as well on each of our various action items.

You can stream us live from your from a device at our meetings video page at Bozeman.

You can watch us on the prestigious cable channel one ninety.

And you can also video conference uh to just be able to watch the meeting, not necessarily to participate in public comment.

Similarly, you can listen as well, which I don't know if is utilized as often, but you can call in to the phone number that's on the agenda packet if you just want to be able to listen along, sort of like a you know a live listen podcast while you're going about your your evening.

If you are having any connectivity issues, we're getting we've had a few of those over the last couple meetings to just back out and try to join back in.

Um if anything keeps coming up, you can email us uh in real time, and our clerk is watching those just to make sure that you're able to participate.

Um if you're hoping to give public comment, you can give that in three different ways primarily.

Um the first two are you know, either in-person or virtual public comments and our non-agenda item section, as well as on each of our agenda items.

The third is of course written public comment.

If you sent it to us before noon today, we got we got to read them, look over them that relate to action items that we have in front of us tonight.

Um that will be true for all meetings before noon of the day that that that meeting is happening.

Um we will hear when whenever we host public comments on items, we'll do in-person in the room first.

You'll have three minutes, um then we'll do virtual second.

Um, just a little run through of what we're gonna have in front of us tonight.

We have two action items.

Um, we have our annual comprehensive financial report, and we have an annexation and zone map amendment.

That's what we we have a few other items.

We've got you know, minutes and we've got an appointment at the end, but those are the two um meaty chunks of our uh meeting this evening.

Um without further ado, um please join us in a pledge of allegiance and a moment of silence.

Uh, uh DHS as well.

Thank you.

Before moving on to changes to the agenda, I'll highlight that uh all five of us are present for the meeting, um, but Commissioner Magic is joining us remotely, um, but we'll be able to participate in all of our items as normal.

Looking at changes to the agenda.

City manager, are there any changes to our agenda this evening?

There are no changes tonight, Mayor.

Thank you.

Moving on to FYI.

Any FYI from commissioners this evening?

See no FYI from the commission.

Is there any FYI from staff?

Very briefly, Mayor.

Um, you may have heard that Montana State University is developing a new strategic plan under their new um president up there, and uh they have asked the Bozeman community and the city of Bozeman to be actively involved in that process.

Um there will be a number of opportunities.

MSU will uh have more information on that.

We're gonna get it out through our social media channels.

But the first community focused listening session is scheduled for Wednesday, February 18th from 6 to 7 uh at the Strand Union Building in ballroom D.

There's complimentary parking.

So that's good news.

If you've ever tried to attend anything in MSU, you know, parking's sometimes a challenge.

But there'll be complimentary parking and um additional sessions will be announced later on.

So that all of this is on the Montana.edu uh slash strategic plan.

And uh we're pretty excited to see where our partner MSU uh wants to go.

Thank you.

Thank you, City Manager.

I'll I'll offer just one quick FYI that's just for our frequent flyers and friends thereof.

Um we will not have a commission meeting next Tuesday for the holiday.

So our next regularly scheduled commission meeting will be February 24th.

Okay, moving on from FYI to disclosures.

Are there any disclosures from any commissioners related to items this evening?

Yeah.

Commissioner Sweeney.

I do have a disclosure, and I'm wondering if it's more appropriate to make it now or in conjunction with the item.

Yeah, both times will be fine.

Um this evening, we are going to appoint a member to the historic preservation advisory board.

And we had two applications.

The individual chosen for the position did uh donate to my campaign for this seat on the city commission and held a fundraiser.

There was never at any time a discussion of advisory board appointments.

Um, but I did just want to disclose that um the applicant that we chose has been following the landmark project and the NCOD design guidelines uh rewrite so they can hit the ground running, um, which is really important for this pretty involved work uh that we're gonna be doing.

And this applicant has also remodeled a historic home within the NCOD, the neighborhood conservation overlay district, and so they're familiar with the process and also the responsibilities of owning a historic resource.

Um just wanted to make that disclosure.

Thanks.

Thank you.

Um I will echo similar.

I was not consulted in the the interview process, but this applicant uh donated my campaigns two years ago as well, um, but feel no uh concerns about being able to be impartial in in the appointment process this evening.

Any other disclosures from commissioners this evening?

Okay, moving on to approval of our minutes.

Um Commissioner Bodie, would you be able to help us out?

Surely um I move to approve the regular meeting minutes from December 10th, 2024 as submitted.

Second.

It's been moved and seconded.

Mr.

Moss.

Commissioner Bodie.

Aye.

Commissioner Sween.

Aye.

Deputy Mayor Fisher.

Aye.

Commissioner Magic.

Aye.

Mayor Morrison.

Aye.

Our minutes are approved five to zero.

Moving on to our consent calendar.

City manager, are there any items on consent you'd like to highlight for us?

Very briefly, I'd like to uh highlight G8.

Um G8 is a task order uh for our real estate um services to acquire a piece needed for the construction of Fowler Road, not the Fowler Housing Project.

So there's no extra property uh that is included in this particular um piece that we need to construct the uh Fowler project, and just wanted to make sure the community knew this had nothing to do with the Fowler Housing Project.

G9 is a pretty cool thing too as we look at uh the human scale of our development and the walkability of our town.

We have two TIFF districts, uh midtown, and then we have the downtown, and there's a gap uh in the public infrastructure between those two, particularly sidewalks, lighting uh and the streetscape.

So we had three this was broken into three different uh projects.

This is the third one, it's gonna connect um the piece between Midtown and Down on Mendenhall uh with the new construction of the new hotel there.

So really uh happy to see uh our downtown and our midtown connected in a way that makes it walkable and beautiful and draws folks into uh our awesome city.

Thank you.

Thank you.

Uh moving on to public comment on consent.

Um this will be the opportunity for public comment just on our consent agenda.

So items G1 through G10, um, starting with public comment in the room.

Um you'll have three minutes for public comment.

Just tell us a little bit about yourself and why you are commenting and what your interest in this item is, whether you are a property owner, a resident, um, et cetera, of the city.

So opening up for public comment in the room on consent.

Second and final call for public comment in the room.

Mr.

Moss, are we seeing any public comment online for consent?

I'm showing no request for comment, Mayor.

Okay, seeing no public comment request for our consent agenda.

We'll bring it up here for a motion and vote.

Commissioner Sweeney.

I move to approve items G1 through G10 as submitted.

Second.

It has been moved and seconded.

Mr.

Moss.

Commissioner Sweeney.

Aye.

Deputy Mayor Fisher.

Aye.

Commissioner Bodie.

Aye.

Commissioner Magic.

Oh, Commissioner Magic, are you here?

You didn't hear me perhaps.

I.

Okay.

Mayor Morrison.

Aye for me as well.

So we've approved consent.

Now moving on to general public comment on non-agenda items following within the purview and jurisdiction of the city commission.

Um, so same same rules as before.

Um, step up to the podium.

Um, though there will be a light that'll turn on to tell you that you've got three minutes for your public comment.

Um, it'll change yellow when you used two of those three minutes.

Um, and just tell us a little bit about uh your relationship to the city and the city of Bozeman.

All right, good evening.

Good evening.

Uh we are trying to economize on time for the meeting, so there are two of us uh who have agreed to this comment.

My name is Mary Bateson, I'm a Bozeman resident.

I would like to speak to you about the height limit in the B3 zones in Bozeman.

I listened to the December 16th City Commission meeting video and heard Douglas Fisher say that a larger, thoughtful, deliberate discussion of this issue is needed.

I completely agree.

I would like to thank Douglas Fisher for the email of January 15th, where he stated that quote, I have suggested to my fellow commissioners that we give staff four months to work with the UDC as is.

Both 70 foot and 90 foot buildings shape the city for decades.

The question is which set of trade-offs we are prepared to accept, and how intentionally we make that choice.

End quote.

This is why I request that the thoughtful and deliberate discussion happen as soon as possible, certainly within the suggested four month window, but preferably sooner.

I thank you so much for your continued attention to this matter.

Thank you.

Any other general public comment on non-agenda items in the room this evening.

Mr.

Moss, are we seeing any requests online?

I'm showing no request for comment, Mayor.

Okay.

We will close the general public comment section and move on to our first action item, our annual comprehensive financial report.

City manager, would you like to tee us up?

Sure.

Thank you, Mayor.

Um I'm most proud of is our financial staff and the work that they do to account for every penny that is taxpayer money and every bit of revenue that's received as a fee for service or in our districts.

And they do an amazing job by themselves, and then we have checks and balances from outside uh firms that just check our work and make sure that we are doing following the law.

We're transparent, we account for what we're supposed to account for and keep track and report to the public.

So tonight is our controller, Aaron.

And Aaron's gonna talk about um the annual comprehensive financial report and audit results.

So Aaron.

All right.

Thank you, City Manager.

Good evening, Mayor, uh, commissioners.

My name is Aaron Funk.

Um, for the record, I'm the controller for the City of Bozeman Finance Department.

And tonight, along with Janine Hathcock, who is the partner in charge of the city's audit, we'll be presenting um audit results in the annual comprehensive financial report, uh, also referred to as the ACFAR.

That's probably what I'll use.

Um it's a mouthful, so uh let's go with that for now.

Um for fiscal year 25.

Um first of all, I'd like to acknowledge um that going through an audit, receiving a clean audit opinion takes the a lot of dedication and teamwork throughout the city and all the departments, all the people involved in financial responsibilities do a great job all year long, really, because the data that is displayed in the ACVAR is only as good as what goes into the trial balance, right?

So they all do a great job.

Um I want to specially thank the accounting staff, um, Shana Wold, um, Manda Genslinger, and Jamie Grabinski.

They are the people who helped me the most in preparing the ACFAR and getting through the audit.

So special thanks to them.

Why do we prepare prepare the annual financial report?

So first and foremost, it's about accountability and transparency.

The ACFAR is a complete presentation of financial standing and activities of the city.

It is a way to judge the city's financial health based on you know what we look like as of June 30 each year.

And last couple things, this is the document that is provided or available to bondholders, other investors, is used by rating agencies whenever we are going to issue debt, they will rely on this to determine our financial stability.

And then lastly, it can be used as a decision-making tool for decision makers and management.

It's a great way to evaluate how the city is performed.

It's always a look back, of course.

And it can be used for you know future decisions as well.

There are a few things that aren't displayed in the ACFAR or aren't specifically displayed in the ACFAR and one of those would be carry forward.

So because our fiscal year ends on June 30 each year, there's oftentimes a lot of projects that have started but aren't completed or maybe didn't even start.

So we have expenditures, actual expenditures in the ACFAR up through 630.

If that project goes another year, may be budgeted in FY26, but not completed till FY27.

That's not going to show in the ACFR.

The ACFR stops at 6:30.

So all revenues, expenses are as of that date, and the balance sheet is as of that date.

GASB has certain requirements that you have to meet in order to be classified as restricted or committed or assigned fund balance.

So we do not list them in the ACFAR that way, or as committed or restricted.

Or try to anticipate changes that occur after 6 30.

None of that is going to be as part of the ACFAR.

Just to give you some context and the timeline of this, because you know it's February, and I'm giving you information that was good June 30th.

So the reason for that is the first six weeks after June 30, the city is still gathering prior fiscal year financial data in the trial balance.

Departments are submitting expenditures.

And we also wait on three tax payments from the county.

The last one doesn't come until the end of September.

So until that happens, we really don't have a complete financial data to provide to the auditors.

So a lot of that's out of our control.

We're also doing around 30 adjustments that are required to the trial balance in order to present and prepare an ACFAR that according to GAP.

All of October is mostly the audit.

So Janine and her team are scheduled every year for two weeks in October to focus on the city's audit.

The other two weeks are a lot of back and forth with questions generally.

November is audit wrap-ups and reviews by the auditors.

Janine will review a lot of the audit work, she'll review the ACFAR for us.

It also has to go through a quality control review by IBailey.

So it gets reviewed, and there's a lot of back and forth of drafts, usually two or three drafts back and forth between us and I Bailey in November.

And then we do try to issue every year at the beginning of December.

I would like to present at the end of December, early January, but in FY25, the federal compliance supplement as well as the state compliance document were delayed.

Auditors could not issue opinions over compliance until those were finalized, which made this uh issuance a little later than expected, and also hard to schedule this meeting.

So that's why we're here.

That's why it's six and a half months after year end.

Um it's a big document.

It can be fairly technical in spots, and so I've just brought briefly I'm gonna hit on a few key components that uh might be of interest.

Um the first section, first major section is financials.

Um in the financials, we do what's called a management discussion analysis or MDNA.

In that we do a comparative financial statement.

Um it's the only place that we have a comparative comparative financial statement.

So the governmental activities column is going to show you 24 and 25 for the general fund, special all special revenue funds, all debt service funds, all capital project funds, and the internal service funds are all included in those two columns each year.

Um business types activities includes water, wastewater, uh solid waste, storm water, and parking.

So that's what you're looking at in those comparisons.

Um that's called they they it it is just a condensed version also of what's included in the government-wide statements on pages 19 through 22.

So it's not an original statement by any means, it's just a condensed version of that.

Um in the MDNA, we address significant year-over-year changes.

So if you're curious why capital assets went up, the MDNA would be where to find that out.

If not, then you know, a question to us.

Um it also addresses but does not present the governmental fund statements, but it does address some budget to actual variances, um, some original budget to final budget variances for the general fund and all other special major special revenue funds.

So it's a great um part to start your review of any AC for is the MDNA.

Financial section also includes the basic financial statements.

So this year the city reported five major funds, um, which were the general funds, street maintenance, um, downtown URD, SID death service, and the construction capital projects funds.

Those were all determined to be major based on a calculation that's required by GASBY.

So we don't just randomly select funds.

They are based on quantitative measure each year.

Um the fund doesn't qualify as major, then it's grouped in that last column, all governmental funds, all other governmental funds.

There's about 30 funds, individual funds included in that for FY25.

Same for the proprietary statements.

We determine the major proprietary funds.

Um there's just a couple in non-major.

There are parking and stormwater.

Uh the last column on the proprietary fund statements is the internal service funds.

We're not required to determine major funds for internal service funds, and we are required to group them all together in one column on this statement.

Um currently the city operates three internal service funds that are included there.

Last part of the financial section is the notes.

I was gonna highlight a couple notes, but honestly, uh they're all important, so I didn't want to put differentiate any boring reading, but uh yeah, if you want to know what's included in the financial statements, that's that's a good place to start.

Lastly, the supplementary information.

Um there's two sections here, required supplementary information.

This has the budget to actual schedules for the general funds and the major special revenue funds, and then the other supplementary information has the budget to actuals for any other major funds, and then that column in the financial statement says other governmental funds.

This section also lists individual fund financial statements and budget to actuals for those 30 different funds.

So if you're curious about how the housing funded, that's the section, right?

It listed individually.

Uh statistical section is um provides some financial trends.

Um this they're done at the government-wide level as well as total governmental fund level.

Um, and then some other tax revenue, debt, demographic, and operating statistics are included in the stats section.

Um one thing to keep in mind is a lot of it is internal activity that that we report that that's in our trial balance.

Some of the information and stats sections, you know, we get from the county, we get from the state of Montana Department of Revenue.

Usually it comes from a lot of various sources.

So we try to source that data on this on the on the individual statements in the stats section.

With that, I'm gonna turn it over to Janine, and she's going to present the audit and audit results and single audit.

Thanks.

All right.

Well, good evening, everyone.

Thanks for having me here tonight to present to you the 2025 audit for the city of Bozeman.

My name is Janine Hathcock, and I am the audit partner on this engagement.

So today we're going to go through the financial statement audit.

I'll take you through the single audit reporting package, and then we'll conclude with the letter to governance, which is my final communication to you.

But before I do that, I first want to thank Aaron and Melissa and their team for being such a great partner in this relationship.

They're very uh easy to work with.

They make the audit very easy.

So we just wanted to recognize them and let you all know that we appreciate everything that they do.

All right.

So I'm going to take you to our audit opinion.

Excuse me.

That can be found on page one of the PDF if you guys are following along.

Now, out of the entire financial statements, we only contribute four pages.

The rest of it is prepared by Aaron and Melissa and their team.

So to the opinion, uh, the very first page of our opinion and the first paragraph discusses what was audited.

So we have audited your uh financial statements for your governmental activities, your business type activities, uh, your aggregate discreetly presented component units, each major fund, and as Aaron mentioned, there were eight.

So you had five of the governmental and three of the business type major funds.

And uh the aggregate remaining fund information is what we call it, but it's that other governmental um funds, the non-major funds all combined into one.

So this opinion actually covers 12 opinions in one.

So they do a lot of work here.

Um the second paragraph is our opinion itself.

It is unmodified.

It is the best opinion you can get, and that is for all 12 opinion units.

Um the financial statements we say in this paragraph are presented fairly in our opinion and materially correct, and in accordance with generally accepted accounting standards or gap.

Any other CPA firm given the same set of information that we were given would come to the same conclusion.

And we can say that because of what's in paragraph three of the opinion.

That is the basis for our opinion.

Okay, so basically, here uh we say that we follow all of our applicable required auditing standards.

We were independent of the city, and we met all of our ethical requirements and responsibilities.

Now, page two of the opinion, it starts with what we call an emphasis of a matter paragraph.

Uh this paragraph highlights to the reader information that we want them to know about as your auditors.

Um, this year the paragraph discusses the city's implementation of a new accounting standard on compensated absences.

Uh the paragraph does not impact our opinion whatsoever.

It's just information only.

So page two continues to break down our responsibilities and management's responsibilities within an audit.

Uh management is responsible for the fair presentation of your financial statements.

And then our responsibilities as your auditors are to perform our audit in accordance with generally accepted auditing standards and government auditing standards.

And then we bullet out what that means on the opinion for you.

Okay.

Um, and the last couple pages discusses other matters.

Um, as Erin just mentioned, your financial statements include other information than just your basic financial statements, um, which is what our opinion covers.

So uh this page discusses required supplementary information first.

Um, those are things like your MDNA, those pension and op ed schedules, your budget to actual schedules for your general fund, and your major special revenue funds.

Uh we apply such limited procedures over that information.

We don't express an opinion over that information, but it is included in your financials.

You also have supplementary information in your financial statements.

These are your combining statements, those other budgetary schedules, the scheduled expenditures of federal awards.

Now here we do certain procedures over these schedules and statements so we can provide to you what we call an in relation to opinion.

So we can say that those schedules and statements are presented fairly in relation to those basic financial statements as a whole that we do opine on.

Finally, your financial statements include that other information.

Those are your introductory and your statistical sections.

Those are not audited, so we don't express an opinion over that.

So as Aaron mentioned, the MDNA is a great place to go look for comparative financial statement information.

That is where I pulled the schedule of net position.

It is in that summarized format.

But again, it's great to see because you can see comparative information.

But here you can see the city's total assets and deferred outflows of resources exceeded its total liabilities and deferred inflows of resources by 740 million.

Essentially, that's the equity, but here in governmental accounting we call it the net position.

This is an increase of 46.9 million from the prior year, and is primarily caused by an increase in cash and capital assets.

Represents the city's net investment in their capital assets.

And then the remaining 17 million is unrestricted to assist with the city's continuing operations.

Okay, and here's a statement of changes in net position.

So essentially the income statement.

But here you can see the city was able to grow its net position by that 49 or 46.9 million in 2025.

The change in net position is 10.3 million lower than the prior year's net income.

So a couple things here.

Revenues remained relatively consistent year over year.

You had property tax revenues that had an increase of 3.5 million due to the growth within the city because the mill levies, the mill values did uh decrease slightly, and the levies were also decreased, so it has to be the growth within your city.

The program revenues, however, did see a decrease of approximately $3.1 million, which included decrease in your charges for services, such as your city assessments and your impact fees.

And it's just important to note that those types of revenues can fluctuate significantly just based on the volume, size, timing of new development year over year.

Um from prior year was due to an increase in expenditures of 9.7 million.

A large portion of that came from the public safety of almost $4 million.

So there were two a couple of factors here.

You had negotiated wage increases for public safety across the board, and there were also 12 new firefighter positions that were added, which the SAFER grant had helped fund that.

Okay, so I'm not going to ask you to turn to the very back of your ACFER, but this is from your statistical section.

I always like to throw it up here to show the picture of growth for the city.

This slide briefly discusses the trends in your net position over the last five years, and you can see these continual improvements year over year.

So looking at this chart, you can see that steady improvement of your net position or equity, starting with uh 544 million ish to uh 740 million over this five-year period.

Okay, uh we I also like to add these uh significant note disclosures just to call out um the notes.

Um assuming you all read the act for from front to back, but if you didn't um and you only had a certain amount of time, these are the ones I would recommend reading.

Um I also have them listed in your letter to governance in case you needed um them listed out.

Um this slide is to let you know we do state of Montana compliance testing.

Um we don't have any uh findings to report to you related to um our compliance testing for the city.

Um this slide is a summary of upcoming um accounting standard implementations that are going to impact the city over the next two fiscal years.

Uh the most significant one is going to be the financial reporting model improvements coming up uh here in the next fiscal year.

You're gonna see a difference in the MDNA and your business type activity financial statements are going to change a bit.

And with that, I will pause to see if anyone has any questions on the financial statement audit.

Great.

Thank you.

Um I think we're to the deputy mayor.

I no, I have no question about the audit.

Thank you.

Okay.

Commissioner Bowdy.

Commissioner Magic, any questions on the audit so far?

Yeah, I do.

Um, it concerns the decrease in program revenues.

Um, just wondering, uh, it was stated that that decrease was 3.1 million.

Uh this might be a question for the city manager controller.

How that decrease compared to some of the fluctuations we've seen in the past, you know, with growth kind of going up and down.

Uh, do we have anything to kind of compare that to?

Is it a huge jump or kind of average as we're fluctuating year to year?

Yeah, thank you, Commissioner Match, for that question.

I'm gonna have Melissa uh respond to you directly.

Okay, thank you.

Melissa Hodnev, Finance Director.

Um, we primarily that's due to impact fees.

So the the approximately $2 million that we saw decrease is pretty standard compared to what we've seen in the past handful of years.

We're trying to do a better job of projecting that and trying to keep kind of like a base level of development activity that we expect to come in in terms of impact fees rather than budgeting for um some really large developments to occur, and that just help keeps helps keep our CIP realistic and keep our budget realistic.

But yes, that is pretty typical.

And I'll just add to that.

Great.

Thanks.

Thank you.

Um we have seen a slow in uh slowing down of growth.

And um our transportation director, Nick Ross is kind of watching the impact fees, uh, tracking them for past years, knowing what projects may or may not come, and and we are budgeting accordingly.

But yes, we have seen a significant slowdown in the growth of Bozeman at the same time that Belgrade has received a similar increase.

So we see the demographics of our community changing, and we're doing our best to make sure that we um forecast those as closely as we can and track them as closely as we can.

Excellent.

Appreciate those answers from both of you.

Um last question.

I've gone through a couple years of this process and just wondering if it ever makes sense to switch up the firm that we're having do the audit.

Um, not to say I don't have any reason to not trust I Bailey, but um do we ever just decide to work with another firm to I don't know.

Um I can I can answer that.

So I do have some clients that um want to switch back and forth.

Um the struggle with that is you lose the historical knowledge.

So what we always like to let you all know, because it can be a concern uh for everyone out there, is that our firm has the ability to switch partners.

We have the ability to switch teams so that you get that fresh perspective coming into an audit, but you don't lose that historical perspective.

So if a new partner were to come in and he or she needed um clarification or understanding of you know how you all operate, I can definitely provide that um background so it's not something that your team and your staff have to deal with with dealing with new auditors.

So that's from my perspective.

I don't know if you want to from our perspective, we are following our procurement policy with the audit like everything else.

So every five years, we would typically go out for an RFB.

This is, I believe, your third year doing the audit with the city.

So we've got a couple more years left before we would have to do that.

But we do always do that to make sure that we are getting the best services for the best price.

Okay, great.

Thanks so much.

That's all I have in the air.

Okay, thank you.

Any other questions before we continue?

Okay, I think you have the forum.

All right.

All right.

So I'm going to take you next through the single audit package.

Um, this can be found if you are following along on page 201 of the PDF.

It is a separate report that's issued over our testing of your federal expenditures as required by our uniform guidance.

So the package actually starts with two separate audit reports.

The very first report is the one I had alluded to in your opinion.

This is the report on your financial statement internal controls and can be found on page 202 of the PDF.

Um, it is important to note this is a report, it is not an opinion.

Um, but the main takeaway from this report is that we are required to consider your internal controls for planning and performing our audit, but we don't test internal controls, so we don't express an opinion over those internal controls.

However, if during the course of our audit we do come across a an internal control weakness that we consider to be a material weakness or a significant deficiency, we are required to bring that to your attention.

We do not have any of those types of deficiencies to report to you this year.

All right, so the next report is on page 204.

Um we do have this is our uniform guidance report.

It is our opinion over your compliance related to your major program that we tested.

Um, the opinion is very similar to the audit opinion.

Um the first paragraph states that we have audited uh your the city's compliance with the Office of Management and Budget or OMB's compliance supplement.

The next paragraph is our opinion, and we have an unmodified clean opinion on the program that we tested, and then we provide to you the basis for our opinion.

The second page of the report describes again both management's responsibilities as it relates to these compliance requirements, and then our responsibilities as your auditors.

And then the final page includes a report saying that we did consider your controls over compliance for determining our testing procedures, and we didn't have any deficiencies and internal controls to report to you over your major program compliance testing.

So all of your federal awards are summarized in what we call the CIFA.

It's the schedule of expenditures of federal awards.

And I just threw up on the slide here just a comparison of the um the re the past three years of spending of federal awards, and you can see uh the spend down of the COVID money is the primary reason that it's coming down to uh 3.4 million in this last year.

Um, right now we are required to test any um programs that exceed $750,000.

That's important to note because next year it increases to a million.

So hopefully it will provide some relief to everyone out there receiving federal money and not needing so much work with audits and on compliance.

So this is probably one of my favorite reports.

Um, it resides in the single audit report, um, and it's the summary of the results that I have told you about since I've been standing up here.

So everything is here on one page.

Uh, the very beginning starts with our financial statements.

You can see you have an unmodified opinion.

You have no internal control deficiencies to report to you, no noncompliance that we needed to report either.

And then it continues on with your federal awards, um, internal controls uh reporting uh of um any material weaknesses or significant deficiencies.

We didn't have any to report, and um, you also had an unmodified opinion.

All right, and that concludes our single audit package.

This last part on my agenda is the communication with governance.

It is required by my professional standards and it it concludes my requirements to you as governance.

Um it does not reside in the financial statements, it would have been a separate letter to you.

Okay.

Um, but basically this report just summarizes everything for you.

We've complied with our professional standards, including all of our ethical requirements.

We call out any significant estimates and describe those to you in the letter.

We also identify any uncorrected or corrected misstatements noted during the audit.

We did not have any corrected misstatements.

We had a few uncorrected misstatements, which were immaterial both individually and in the aggregate.

So the city just passed on booking them.

They'll go through this year.

And then we are finally, we're happy to report we didn't have any disagreements or significant difficulties with management to report to you.

So with that, that is the end of my presentation.

If you have any questions on the single audit or the letter to governance.

Great.

We'll bring it up here for.

Do we want to break it up between questions for Janine and then questions to staff, or we just should we just jump in all of them?

I think we I think we just jump in.

I think we could just if that's all right with you, Mr.

Mayor and City Manager.

Or is there more from the city to present?

Great.

Well, uh thank you.

Maybe I'll start with the audit, right?

Since you're the since you're there.

I'm just I'm glad to see we qualified as a low-risk audit.

Um is there I mean, I my only question about the audit is is there a reason why we would we would want to test, say, some of those internal controls, or do we test some of those internal controls in uh in other places?

I mean uh I I just wonder what other cities do and and how we know that our internal controls are actually working.

So um with a financial statement audit, um, we are required to get an understanding of your internal controls, and we do walkthroughs over the major audit areas.

Um, and then if there were there was anything that came about, um we would have to do some additional testing.

But for testing internal controls, what you would want to do, you would have an a separate engagement, and it's called an in internal control um engagement that is separate, and you can have um any audit firm come in and do something like that for you.

We can do that, and any firm can do that.

Um, if you had concerns over your internal controls, but what you would find is some issues with um your audit, you would have a bunch of audit findings, and that would cause an internal control because there would be issues that were found during the audit, so materially uh misstated numbers that we had to correct, but you guys don't have that issue.

We don't even have any material um audit adjustments that were proposed.

I don't even think in the last couple years.

So then just to hear it correctly.

So we you saw no red flags that would say we need to test these internally.

The internal controls appear to be working, and and so okay.

Yes.

That's the only question I have about the audit.

Oh, yeah.

I just want to add a little kind of personal experience with this.

Um I was I uh um traveled for work and I submitted a request for reimbursement.

And I got a question from uh one of Melissa's finance staff saying that it looks like on the agenda that you submitted that lunch was provided, but yet you requested lunch.

I mean, that's the detail that our staff goes to.

And I'm going, you know, I'm thinking of myself, really?

And she was right, and I had my date wrong on the request.

So I know that because um that work goes on all day, every day that that our staff is paying attention to what matters and we're challenging each other in an appropriate way.

Uh and uh as a uh internal service, there's nothing that we could lose trust quicker with the community, the taxpayers, if we didn't pay attention, close attention to every penny we spend.

So I just say that as a story because if if the person at the top of the organization gets called out for a lunch on a wrong date, I think that the rest of the organization is experiencing similar uh challenges appropriately.

Uh I I would agree 100%.

Fair enough.

That's the only question I have about the audit.

I'll maybe I'll pass it around.

I have other questions about the CAFR, but that's the ACFAR, but okay.

Well, we have Janine at the podium.

Any other questions on the audit Commissioner Sweeney?

Yes.

And this is my first time looking at a document like this.

So thank you for all of the immense work and the thorough investigation that you do.

Um, I am just wondering.

Some of the governmental activities are broken down into public safety, public service, and public welfare.

And as I was going through, I was trying to understand, you know, what goes in each of these different buckets.

Can you tell me maybe basically like I think public safety is probably police and fire, public service, water streets, things like that, public welfare, what would that qualify as?

What I'm not sure the groupings off the top of my head if you guys are.

I can guess let me look at the public welfare's parks.

Parks.

And then general government is gonna be city manager, finance, um, legal, um, a lot of different departments go into general government.

Thank you.

Yeah.

I don't think I have any other questions about the audit specifically.

Okay.

All right.

Well, if you do, you know where to find me.

So I'll be happy to answer any questions after the meeting if anything comes up.

Sounds good.

Thank you.

Um so moving on to questions for staff on the rest of the ACFER, um, Deputy Mayor.

Yeah, I think Mr.

Funk, my my one main question is you started this by saying we can use this as an as a decision making tool for, you know.

Um I'm just could you care to could you elaborate a little bit on like like because we're looking at the budget, you know, the budget will be hit this in June, is that right?

Um anything we should be aware of in this as we look backwards, you know, because this is a backward looking document.

Right.

As we start to look forward then to what you know, 2020, you know, to the next biennium budget we might want to carry forward, you know, or any lessons to take out of this.

Yeah, I guess I would suggest, I mean, the budget to actual schedules are helpful.

Um if you're significantly over budget, under budget in any one area or any fund.

Um that might be something I would note.

Um take forward.

There's likely um reasonable explanations for to be either way.

Um, but yeah, that's that's uh that's one way you could use it.

Yeah.

And to add to that, if I could, thank you, Aaron.

The uh people are departments spend their money differently.

For instance, um, some will um you know buy the the big item up front, others will wait to the end of the year.

Sometimes the purchase doesn't perfectly line up with the fiscal year, and so we have to we have carryover sometime.

Sometimes um our staff is and our finance staff is is um um always working with department heads to make sure that we can be flexible enough that we can do the right thing at the right time without violating any kind of financial policy.

Um the thing that you know the old saying if you look at somebody's checkbook, you'll find out what's important to them.

I think that's true for the city of Bozeman too.

Um we invest in our staff, we invest in in quality resources, we invest in our capital uh improvement program.

Um of the most expensive things that the city spends money on, nobody even sees, and that's the pipes under our streets and our ground and our treatment system.

So all of that adds up to what you see in a city budget and then what we did with the commission on January 12th in a priorities work session, and we're gonna bring those priorities back to the city commission for your conversation and approval.

Those priorities will go into the budget as we build it.

And so we will be able to tell you what how much progress we can make on the various initiatives and the various projects based on all of these things that come in, our expected revenue.

I'll be honest, with the commission.

Um I'm not nervous about the impacts of the um legislation passed.

Um we lost three million dollars, a hundred or one point four million dollars in our public safety staffing levies that we had to make up.

Had we not had growth in the city, we would have been in a much more direction position.

But we are very conservative with our budget, and we plan well, and all that comes together with an incredibly talented staff trying to predict what's unpredictable.

So all that goes into a very long answer to your very short question, but our budget reflects the city commission's priorities and the community's expectations, and we try to balance that in a way.

And you get to tell us how we do every time you adopt a budget.

That's really helpful.

Thank you.

That's my main question.

Commissioner Magic, any questions for staff?

Yeah, I think Chuck, just following up on your being nervous.

Is there anything else out there that the community should know?

Is there any um surprises or things that kind of caught you and our staff off guard this year?

Well, certainly certainly the assessed values in the property tax was a huge surprise to all of us.

It was a surprise to our um legislative delegation as well.

So that was that was a surprise.

Um I think we've talked about uh what the safer grant and and uh the funding cliff that we're gonna hit in um fiscal year 28.

So again, we tried to make no surprises to the community, and certainly no surprises to the commission.

So we're talking about all these things, it's reflected in our budget preparation, it's reflected in our our budget presentation, and then we have a very engaged commission that asks a lot of questions, and that's helpful as well.

Wonderful.

Thanks for that answer.

Thanks, Mayor, all I have.

Commissioner Bowdy.

Yeah, thank you, Mayor.

Um, I also just really appreciate all the work that went into this.

This is um very comprehensive.

The the only question I have is on the unrestricted um section of our net position.

I think I I heard you all say that that um increase in our our net position has a lot to do with capital investments that we've made.

So those are in physical things, um, new buildings, you know, supplies and things like that.

But I I'm just curious what what the unrestricted bucket holds and um how it's so much larger than last year.

Well, I can tell you for sure what the bucket holds.

So um, in fact, it's kind of displayed in the notes.

I think it's around note 20 in the back.

We break down fund balances on what's restricted, what's not restricted.

It's not exactly going to follow that.

Um, but the unrestricted is gonna include anything that's not externally restricted by legislation or a grant, right?

So if we receive a grant, all of the fund balance related to that grant that remains is in restricted.

Um commission can commit or assign fund balances, and then everything else is dumped into unrestricted.

So it would be a bit of a detailed analysis to break down what's all in the unrestricted because it is more or less a plug to balance the fund, right?

After you know your net investment, after you know restricted, um committed, then everything else falls to that line.

If I could just add one thing to that, Melissa Hodnet, finance director.

Um we talked about this a little bit last year, and Aaron mentioned it before that there are specific rules in GAP that are that tell you when you can restrict something.

Um, but there are other things in that unrestricted portion that the commission has not in a way that restricts money by gap, but kind of restricted money.

So an example of that is we've talked about having reserves for our safer firefighters when that grant runs out for a couple of years.

This is something we've discussed, but there's nothing that's been adopted as a resolution, so it can't show as restricted in our annual financial report.

Um so it's really important um to remember things like that and things like our carry-forwards that we've talked about.

Um that's why we kind of talk about this.

It is an important piece of data as of June 30th, but it doesn't take into consideration all of the other things we've talked about during the budget process that that money might be earmarked for, but not restricted.

Great, thank you.

That's a helpful clarification.

I I think the community as a whole kind of looks at these budgets um hoping to see that we're not overtaxing them.

Um I just worried about a bucket that looked like it had 18 million or eight million dollars that we we didn't have a plan for.

Um, but I I know there's a lot of important programs that um we'll get into a much more thorough discussion about when we're passing the budget.

So uh thanks for for digging into that, and I'll go look at note 20.

Can I add a quick note on that?

And I don't know if it meets the technical definition of restriction in the in this in this document, but um a fund that has a lot of money in it that we charge a lot of money is the building permit revenue, and we are restricted on how that money is spent.

And it used to be that that was uh cities would um take that money and just use it for other things.

So legislature got into that, and they made very clear rules that can only be used for um life safety code enforcement.

And so we we take that very seriously, and because the builders spend a lot of money on permit fees, and we use that appropriately.

The state comes in and audits us, and then it's part of our audit as well as an example.

Um other questions for staff?

Yeah, Commissioner Sweeney.

So I have kind of a very in the weeds question that someone brought to my attention, and I just wanted to maybe see if if there's a reasonable explanation or if I'm not reading this correctly.

Um page 126 and 127, the combining statement of revenues, expenditures, and changes in fund balance.

Um the question I have pertains to the Fowler Housing Project and the reimbursement of street impact fees from the community housing fund.

Um page 126 under revenues, there's an intergovernmental line item for street impact fees, and I would expect that Fowler would show up in there.

Um there's a zero or a dash.

And then on 127, um, the community housing, you know, there there is some expenditures.

Um they're not detailed.

So is this, you know, is Fowler in there?

Um did this transfer occur after June 30th?

So it's not in here.

That's correct.

That one.

That's correct.

Okay, so we should expect to see that in next year's Act First.

Correct.

Okay.

Thank you very much.

Any other questions from the commission?

Okay.

Seeing no further questions from the commission, we'll open this up for public comment.

Any public comment in the room on our annual comprehensive financial report.

One more request for public comment in the room.

Mr.

Moss, are we seeing any public comment online?

I'm showing no request for comment, Mayor.

Okay.

Seeing no public comment on this item, bring it up here for a motion discussion and vote.

Um, I believe we are to the deputy mayor.

Do you have the motion?

You need motion language.

I think I've got it.

Um I move to approve the fiscal year 2025 annual comprehensive financial report and the accompanying letter of governance.

Has been moved and seconded.

Deputy Mayor, would you like to speak to I'm just floored that there's no public comment on this?

Uh this became just a watch.

You guys can laugh, but this this is always my favorite meeting of the year.

Um it's it's um I mean, I think city manager, you said it correctly, right?

You know, you you you open up, look at it, look in someone's checkbook, and you see their values.

Look at our budget, look at look at where we spend our money, and you see the values of the city, right?

I mean, I think um, you know, we didn't touch on it during this presentation, but that that introductory letter, um, I I think there were several things that are worth pulling out, if I if I may just take a minute, you know, we Bozeman has been a number one micropolitan area for for uh both long-term for both growth and economic um um what do they say, economic uh quality for seven years running.

Um Montana's economy is projected to grow about four almost four percent uh over the next five years.

I mean, I think we're seeing uh a demand for we've seen a strong demand for investment in this town and that's strong demand for services.

Um and I think this this document shows how we're responding to that.

Uh we have been investing.

Um we've got it, we've we've we saw a five percent increase in capital investments last year, I believe.

Um we're seeing taxable values rise considerably in this in this city.

And I think that to me, this the message I take from this is that we need to be investing in our city and and be really thinking in terms of like a growth mindset for our city and for how do we meet the needs of not just the residents who live here, but the residents who who you know, the people who are coming here, the families that are that are settling here.

Um and that I this is how I'm gonna use this document as we've as we look forward into our budget.

So I think it's it's you know, and I'm also I gotta say, uh it's the growth that we have seen over the past 10 years is transformative.

None back on page, where is it, page um 190, I believe, right, where we show our the top 10 taxpayers, top 10 property taxpayers in this community is with one exception is completely changed from what it was in 2015 or 2016.

And so to me that says that this town we're changing, we need to be um nimble, we need to be investing in this community.

And um, and so I really appreciate the the work, you know that you put into making sure we're meeting that need and and to make sure that we are transparent to our taxpayers.

And I'll I'll leave it at that.

Commissioner Magic.

Yeah, thanks, Mayor.

Um I don't have much to add.

I think the deputy mayor did a good job of kind of summarizing the way I feel, although I wouldn't put this up to like my legend favorite meeting of the year, but I do feel like a certain level of pride.

Um having been involved in government um and paying taxes, you know, being a taxpayer.

Feeling pride in knowing our local government is responsibly using the precious taxpayer dollars and appreciate the city manager's example, you know, the the level of detail of checking uh city staff lunch and making sure that that is um being appropriately uh compensated and accounted for.

So love that kind of detail and am proud of our team or report.

I've I've seen it year after year.

So hats off to all of you.

Commissioner Bowdy.

Yes, thank you, Mayor.

Um I will join my colleagues and everything they've already shared.

Um I I don't need to repeat it, but um I I appreciate the the vigor with which our deputy mayor reviews this report.

Um I I've seen it twice now, and and without fail, it's got all these little sticky notes and um tags on on all the pages.

Um I I also want to appreciate that we get a print copy.

I I do think there's a lot to reference here.

Um, and I I'm sure I will be referencing it, maybe not as frequently as the deputy mayor, but um I I think that this can really help translate to a lot of the conversations that we have on our advisory boards with partners in the community um and and beyond.

And I'd also just like to appreciate uh Mr.

Funk, Ms.

Hathcock, um, Director Hadnet, and all of the other staff who labored to put this together.

Um I'm currently in the like little local government class that the extension office um of MSU teaches.

And this week's um class was on budgeting and finance.

And so I've just got like a much deeper view of how much work it is, and really appreciate that you're doing this year-round every year.

So um, with that, I'll be in support of the motion.

Commissioner Sweeney.

Yes, um, again, so much gratitude for the work that you do, and um I will admit that there is more in here I do not understand than I do understand.

So my relationship with this document is going to be ongoing, and I will probably fire questions at you continually.

Um but yeah, I'm I'm glad that the more experienced members of the commission are pleased with this document, and I will trust that we're in good hands going forward.

Um thank you to my colleagues.

I just to clarify, how many years have we had the what's the goal the standard that we've got?

How many years in the running are we?

The distinguished budget award.

41.

41.

Um, how many years has the city as the city manager read what the it does coincide with the start of city?

Just point that out.

I just thought that number seemed familiar.

Um and I'll say right out of the gate, uh, every meeting is my favorite meeting.

Um I don't I don't pick favorites.

Um I will echo just uh a brief appreciation to to staff putting this together.

There's always um, especially I think the the first 10 to 15 pages of uh an analysis and sort of narrative outside of specifically our financials of trends, demographic information, economic inputs and outputs that are occurring, and then the statistical breakdown at the end that that also does cover some of these pieces around um taxpayers in the community is as well as just trends generally.

That I think it it it does speak to the dilemma that Montana cities face that I think we hear oftentimes from members of the community saying um growth is not growth, isn't paying for itself, and growth is uh is a detriment and cities being put in an unfortunate position to grow or to perish in the ways in which Montana state law um allows budgets to operate.

That is not the case in every city in every state, the union.

Um, but it is the way in which government budgets are constrained in the state of Montana that um growth is is is quite literally baked in as an essential component to even just maintain existing services.

And that's a really ta tough and and frustrating position, um, not just for local governments, of course.

It's not just to be a woe is woe is me local governments challenging, but it it is um a part of the pattern that we see play out for constituents that are seeing the the the growing pains of growth um while also seeing uh the the sort of prerequisites to to need it to continue, and that's a tough balance.

And I think we see that year after year in in these reports and seeing that that hairline balance um that is struck each year, year in and year out.

Um I'm excited to support this uh this report and and I yeah, I hope we continue to think about pondering ways that we can inform our um budgets as we're going forward from from our end.

We know that our staff do.

Um but seeing that is a charge for us as well.

Any other comments from the commission?

Yeah, Deputy Mayor.

For those following along at home, I was wrong about the page number.

The principal property taxpayers is page 175.

He's barely read it.

This is theater.

And I gotta say, one of my favorite mementos from my time on the school board is a signed copy of the CAFR, which was Calpha Cafe, then I keep calling it's the Act for now, um, by RJ Tvoit, the the city's the school district's uh controller.

And I was wondering, Mr.

Funk, if you would care to sign my copy.

I would just be totally on it.

We will absolutely make that happen.

Yes, thank you.

It's true.

It is tonight.

Only a photocopied signature.

Thank you.

Any other comments from the commission?

Okay.

Mr.

Moss, would you poll the commission?

Deputy Mayor Fisher.

Uh Commissioner Magic.

I.

Commissioner Bodie.

Aye.

Commissioner Sweeney.

Aye.

Mayor Morrison.

Aye.

Our report is approved five to zero.

Moving on to our second and final action item before appointments for the evening.

Thank you.

Mayor, item I2 is the annexation and zone map amendment requesting annexation and the establishment of an initial zoning designation of R1 on 1.173 acres.

It's the 1071 story mill, road annexation, application 25525.

And here to present is our planner three, Mr.

Tom Rogers.

Thank you, Mr.

City Manager.

Good evening, Mr.

Mayor, Commissioners.

Um, my name's Tom Rogers with the community development department.

And before I begin, you know, we in planning are very concerned and aware that you have a lot of work to do, and we're always aware that our reports tend to be long, but I have something to learn.

So I'll keep that in mind.

But uh thank you again.

Um we have an application for uh request to annex a piece of property.

And when we do that, or when that it happens, we're required to establish initial zoning at the same time.

So they're uh two applications that are concurrent, they're tied to one another.

So as the the uh agenda says it's one existing lot, or really technically two lots in the city here, or within the city boundaries, um, and just over one acre.

It's currently zoned in the county, but with city municipal zoning and indicated by our future land use map and our community plan or land use plan, uh they're moving that zoning to a residential request in this case.

Um it's adjacent to and really kind of a part of the Bridger Creek golf course, um, as it states in the report there.

So the department and staff have prepared some findings for you.

Um if you agree with those, you're welcome to use those for your motions and discussion.

Um, but you're welcome, of course, to come to a different conclusion uh than we have with this particular report.

So first stepping back, give kind of a uh context here.

We are in the northeast part of our community, um, north or bridger drive, just off of story mill road.

You're kind of right in the Bridget Creek Golf Course subdivision area, kind of variety of uses and activities going on here from kind of suburban, lower residential to some industrial commercial activity, and of course, Bridger Drive, a pretty important state highway, story mill road, one of our collector streets, as I discuss in the report, story mill park, not too far away, but I've zoomed out a little bit here.

So you can walk there, but it is it's still, you know, it's a quarter mile away-ish.

And then our recent development in the area of bridge review redevelopment just on the south side of Bridge or Drive.

So quite a variety of things going on, of course, Canyon Gate development, some of the infrastructures installed there, uh, the rest of the homes and commercial activities have not gone vertical just yet.

This colorful map refers to what we call our future land use map.

Uh this is a uh important component of our land use plan.

It really indicates sort of general ideas and characters.

We analyze this to ensure that the city has adequate area for all types of uses that are need needed for our community to thrive.

In this case, this sort of yellowish is what we call urban neighborhood.

Across the street on Story Mill Road, you've got some community commercial, which is a commercial designated area.

Uh, all the green stuff is parks, open space, linear trails, those types of activities.

And then just to the south here, we've got some a variety of intensity of industrial.

Here, referring to our this is our existing zoning.

And I think this is a good time to uh state, at least for the record and also for the commission, that this may be the last application that we processed under our previous um zoning uh review criteria imposed by the state.

This application was submitted, they go through our DRC review, they're granted their sort of adequacy, and they were established to go through this review.

So we do analyze it to the revised annexation policy that the commission did approximately six, eight months ago.

But this really I think will be the last applications you'll see with the previous um review criteria.

I have both of them.

If you want to compare and contrast, they're different, but this is analyzed over the previous A through K stuff.

The first four need to be in the affirmative.

So I'm happy to speak more about that, but hopefully that's enough.

But you can see here it's quite a variety of uh of zoning districts.

The light yellow is R1.

That, of course, starting February 1st became RA.

Um we have B2M across the street.

We have some other medium density residential districts.

The applicant in this case, Bridger Creek Golf Course Partners did request R1, which today will be RA.

So that's our lowest density residential district.

Um I think everybody here should be aware that that allows two attached units plus ADUs by right, some other uh more increase, just depending on what's going on in kind of special cases based on our um uh kind of our our our specific codes that inform and talk to how development occurs.

So there are a couple of areas here that you can actually see through.

They're transparent.

Those are other unannexed areas within this city area.

Um one of the key policies that the commission has had for many years is the desire to fill these areas in for delivery of services, um, honestly, taxation for the services that people are using, um, streets, emergency service, and et cetera.

Um so this does achieve that goal, although it does struggle a little bit that again, one of our policies is we prefer to have zone uh annexations larger than five acres.

This one's only one, but use the commission and have some discretion there to figure out how you want to work with that.

But it certainly furthers that other one.

Um enough on that.

So here's your annexation policies.

This is uh annexation again is at the discretion of the commission.

There's very little um in form and process and review criteria from the state, although the state has given us a variety of uh of types of annexation.

We prefer Part 46, which are petitions by an applicant or by a property owner.

So they come to us requesting these services and granting that.

We'd certainly allow more development potential than you would in the county, for example.

Uh but due to that, you've got 12 of these policies here, and all uh we found staff found that they're all in the informative, and even number eight is simply neutral.

That's an option, so people can come forward and if they'd speak with the planning office and the city manager, we can do a rapid connection, but then they have to do some other stuff in the in the background.

But they're not requiring emergency services as noted in the application, and actually don't have any services on site, and they would like those.

So that's really kind of one of the overarching drivers for their annexation at this time, allows them to meet uh the needs of their uh of their community in service for the golf course and the folks in the community.

Zoning review criteria, A through K here.

Um we did provide some analysis for your consideration.

We did find in this case that uh the request of R1, RA furthers our community plan, our land use plan, uh is in conformance with all of those adopted plans.

Um in this case, and not always the case, we did find that they're all in the informative.

We did follow the required, and the city of Bozeman, of course, does exceed minimum standards for our public notice.

We have site postings on site, we do mail to adjacent property owners, we put a newspaper ad in, uh, and we go from there.

So far, um we did not have anybody at our community development board uh weigh in at the meeting.

We've received one written comment, which it's attached, well, linked in your report.

Um, just stating that uh that that the requested um zoning was seemed appropriate, not anything more than that.

So our development review committee does and review and consider all annexations and zonings.

They did not find any um impediments to to providing services that we certainly can't address with site plan review, sketch plan review, or even subdivision if they choose to do that if or sometime in the future.

Our community development board did consider the application a couple of weeks ago on January 26th.

They did forward uh unanimous recommendation that that R1 RA was appropriate for this particular site.

There was some discussion whether RA is the best.

A couple of comments came forward, like perhaps RB would be more appropriate, allow more dynamic use of the property and the land in the future.

Um they offered that to the applicant, they uh demurred and simply continued on that they think RA, R1 is most appropriate at this time.

They can always change that in the future if they wish, going through our review public process.

So I think that really brings staff's comments to a close.

Um the applicant's representative is also here.

Um they've got a couple of slides.

They don't intend to really provide anything more for you, but I'm happy to answer any questions you have, and thank you for your time.

Great.

Thank you.

Um before moving on to the applicant's presentation, are there any questions from the commission for staff?

Commissioner Magic.

I don't have any questions.

Thank you.

Any other questions?

Yep, Commissioner Bode.

Yes, um, I just want to lift up a comment that was made in the community development board in the end of the discussion.

It was about if the the applicants in the future or you know, a future owner of this site do want to move to that RB that they could just kind of submit a new application.

One of the board members said, oh, actually, I don't know, that might be spot zoning and it might not be allowed.

Um can you just provide a little bit of color to that comment and um provide your opinion on whether we would accept an application like that?

Um great question.

I appreciate that.

I don't, I'm not a lawyer and I don't play one on TV and I'm on TV, so I don't want to.

Um Ms.

Averud here could certainly elaborate.

Um what I can respond to that is there is this thing called spot zoning uh in Montana.

Uh we have uh we follow that very closely, and there's quite a bit of apologize the wrong term, like case law of how that is interpreted.

And our city attorney has weighed in and provided us guidance.

Um and this is supported by Montana law and process and judicial findings that if you, the commission have adopted a land use plan and it shows what zoning districts implement a particular future land use designation.

That patently already ends that conversation about stop spot zoning.

So you can request RA, RB, RC, or RD, and you would not run a foul uh and raise that particular concern.

Somebody can certainly try, but the law seems to support that that in itself overcomes that burden of proof and we can move forward.

Um I'll stop there if Ms.

Avery would like to elaborate more than happy to cede my time.

Thank you.

Getting a quiet front.

Okay.

I think you covered it well.

Anything within our implementing residential zones is acceptable and people can apply for a zoning change, even if it's just a a parcel or a couple parcels within that that range.

Yes and no.

Um it wouldn't raise necessarily the spot zoning.

Use the commission may find that some of the other review criteria may not be appropriate in a given situation.

Um in this case, would RD be appropriate?

We may have a harder time overcoming that burden of proof, but it wouldn't raise that spot zoning concern.

Gotcha.

Okay, thanks so much.

That's the only question I had for staff.

Yeah, Commissioner Sweeney.

Um thank you.

Um I love this stuff as much as Douglas here loves the ACFAR.

Um so thank you for your lengthy and extensive report.

Um I did try to watch the community development board meeting in about I don't know, halfway through, it had technical difficulties and I couldn't watch the rest of it.

But uh something that was interesting with so many members of that board were sort of encouraging a higher density zoning.

Um it brought to mind, you know.

If this site ever were to redevelop, I understand the applicants just want water and sewer to be able to, you know, serve their workers for the golf course.

So um, but is the new minimum density in RA?

I could not remember off the top of my head.

Minimum units per acre.

Oh boy.

Six or you know, I was reading this afternoon and I didn't reread that.

It is six or eight.

Yeah.

So and then because it was eight, I believe you may have decreased it to six because yes, I'm I'm pretty confident that it's six million units per net acre.

Yeah, so and then with no minimum lot size, like we could see some kind of density here in the future.

You know, we don't have to think that only a single family home will be built on this whole parcel.

So um yeah, thank you for that.

I just wanted to refresh.

Um that's all my questions.

Deputy Mayor, any questions?

Okay.

Seeing no more questions coming from the commission, we'll turn it over to a 10-minute presentation by the applicants.

You don't need 10 minutes.

It's a it's a 10-minute minimum.

Oh I'll have to remember what kind of song and dances I remember, but uh thank you, Commission.

I would love uh I appreciate the opportunity to speak on behalf of my clients in front of you.

Um I'm really here just to follow up with Tom's presentation for any questions you might have that might be more directed at the owners of the property.

Okay, thank you.

Um any questions for the applicant?

Commissioner Magic.

Okay.

Looks like no questions for the applicant.

Thank you.

Okay.

Well, we will uh wrap up the questions and move on to public comment um on this annexation and zone map amendment.

Any public comment in the room this evening?

Mr.

Moss, are we seeing any public comment online?

I'm showing no requests, Mayor.

Okay.

Seeing no, we will close the public comment hearing on this item and bring it up here for a motion discussion and vote.

Um we've got to do both of these motions separately.

Um Commissioner Magic, are you able to help us out here?

Yes, separately.

Good to go.

Having reviewed and considered the staff report application material, public comment and all information presented.

I hereby adopt the by means presented in the staff report for application two by five, two, five, and we've to approve the 1071 story null annexation subject to the terms of annexation and direct staff to prepare and annex annexation agreement.

Second.

It has been moved and seconded.

Commissioner Magic, would you like to speak to this motion?

Yes, I don't have much to say.

I think it makes complete sense to annex this parcel.

Uh I'd love to see these little pockets of wholly surrounded uh property uh come into the city.

It helps all sorts of things.

I agree with the staff report and staff findings.

Great, thank you.

Commissioner Bowie.

Um I have nothing to add.

I'll be in support.

Great.

Commissioner Sweeney.

Same, nothing to add.

Very happy.

Welcome to the city of Boltzmann.

Deputy Mayor.

I'm also happy to support this.

I've been in full agreement with the staff report in terms of their findings.

Is that one this gives lie to that notion that this the city commission will never bring a piece of property into the city at all or R1?

And I wish we could just grab some of those other odd low angled parcels and bring them into the city with this piece, but that's a whole nother thing.

So I'll be supporting this one.

Thank you.

I have uh nothing to add.

I'll be supporting a motion as well.

Mr.

Moss.

Commissioner Magic.

Hi.

Commissioner Modi.

Aye.

Commissioner Sweeney.

Aye.

Deputy Mayor Fisher.

Aye.

Mayor Morrison.

Aye.

Okay.

We have annexed this piece of property.

Commissioner Magic, would you like to help us out with the zoning?

Yes.

Having reviewed and considered the staff report, application materials, public comment, recommendation of the zoning commission and all the information presented.

I hereby adopt the by means presented in the staff report for application 25525 and move to approve the 1071 story mill road zone map amendment with contingencies of approval necessary to complete adoption of an implementing ordinance.

Second.

It has been moved and seconded.

Commissioner Magic.

I will be supporting this motion.

I think R1 makes sense in this area, and I agree with Commissioner Sweeney that we could see some density here.

I'd like to see more density than just one single family home.

And I would note for the record, I don't like to embarrass planner Rogers that there was a typo in the fifth bullet.

Commissioner Bowen.

I don't know how to follow that up.

Yeah, I am also in support of this motion.

I I do think that the zone of what will be RA meets all of the criteria, and I I would um adopt the staff findings for that.

I also just want to note the conversation between RA and RB, um, especially given that there's not a concern about spot zoning, just feels pretty immaterial to the situation.

And I I think if if this commission were to reject this um application for RA zoning on the grounds of wanting RB, we're just kind of passing the cost of that application on to any future landowners, and they'll have to reapply once again for that different zone.

So I don't know, it just seems like neither here nor there.

Um that's you know not even considering what is I think core and most important to this issue, um, which is what the landowner wants and how they're going to use it, which um I think we've had a number of conversations about wanting more than one family home, but I I think we've heard that actually the landowner wants to use this for for a shed and some bathrooms.

Um so I'm not anticipating seeing any um housing on this this property anytime soon, although the the option for um maybe some employee housing here exists, and um that can be a conversation for a later date if if uh the landowners so want that.

The the only minor hesitation I I will say about RA is we've just had a a pretty thorough request of our staff to look through our entire zone map um for the city and identify any situations where RA abuts a high density zone.

And I did see um B2M right next store across the street.

Um and so that that's the only place that's getting a slight a slight bit of heartburn of oh no, I hope a commission decades from now is not dealing with a um challenging transition between two zones.

But um that's not gonna prevent me from voting yes on this, and I'll I'll be in support of the motion.

Commissioner Sweeney.

Nothing to add, I'll be in support.

So here I'm just like I find the staff report works, although a shiny typo, Commissioner Magic, I need to go back and take a look at this.

Yes, I'll be supporting this as well.

I'm also just surprised, you know, Commissioner Magic often asks uh the same question of staff or applicants when annexations come in of wholly surrounded properties of hey, but what about the other what about the rest?

They come in and Commissioner Magic didn't ask that tonight.

So the applicants got off easy, um, Planet Rogers got off easy.

Um but I none of that's gonna keep me from supporting this motion.

Any other discussion?

I'm sorry I missed the opportunity to ask that question that I usually ask, but that I was thrown off by the typo.

Wow, it was it was not a it's tough tough to overlook, I suppose.

Um Mr.

Moss, would you poll the commission?

Commissioner Magic.

Aye.

Commissioner Bodie.

Aye.

Commissioner Sweeney.

Aye.

Deputy Mayor Fisher.

Aye.

Mayor Morrison.

All right.

Annexation and zone map amendment both approved five to zero.

Moving on to our final item in front of us this evening, appointments to the historic preservation advisory board.

Commissioner Sweeney, do you have everything you need?

I believe so, yes.

Um I am just gonna repeat the disclosure that I offered earlier.

Um the applicant that we're choosing to appoint this evening, did um make a donation to my campaign to run for this seat on the commission and held a fundraiser as well.

There was never any discussion of advisory board appointments at that time.

Um myself and the other individuals on the interview committee felt that this applicant um was the most qualified uh because of their staying up to date on the landmark local landmark program and the NCOD design guidelines rewrite um so they can hit the ground running when uh we meet the consultants next week.

So um yes.

I move to appoint Danielle Nicholas to an at-large position on the historic preservation advisory board for a term ending July 1st, 2027.

Second.

It has been moved and seconded.

I guess we'll quickly I don't know if we always do public comment on appointments, but any public comment?

Dan's saying no.

Mr.

Moss, we've seen any public comment online.

Okay.

It has been moved and seconded.

Um, Mr.

Moss, would you poll the commission?

Commissioner Sweeney.

Aye.

Deputy Mayor Fisher.

Aye.

Commissioner Bodie.

Aye.

Commissioner Magic.

Aye.

Mayor Morrison.

Aye.

The appointment is approved five to zero.

Any FYI from the commission.

Yeah, Commissioner Bodie.

Yeah, I as I'm you know thinking about smaller annexations, um, it just kind of occurred to me that uh I've asked that question that um Commissioner Magic normally asks.

Commissioner Magic often asks the question of, hey, did did this neighbor go around and talk to the other folks who are also not annexed in?

And I I heard the community development board ask this question.

I I think oftentimes we're up here wishing that folks would knock some doors and convince their neighbors to annex together.

And we don't really see it happening.

Um I guess I'm just kind of curious about that five-acre um suggestion.

It's not something that we really enforce.

Um I think what I've seen from my colleagues is that we're just happy at any point when somebody decides to join the city of Bozeman and I I feel you know, pay pay their way for the resources that they already have access to.

But it occurs to me that if we don't actually put our foot down at any point and say, hey, we actually want to see you go talk to your neighbors.

Um if we don't, you know, say you didn't talk to your neighbors, you're too small, so we're not considering you.

There's no incentive for the applicants to go talk to to their neighbors and try and rally some some other folks.

And so um, you know, we can't have a discussion here, but I'll I'll just say I'm I'm interested in considering if we should even have a five-acre kind of nice to have on here if we're not gonna um you know stand up for it.

And if we do want to see people go around and talk to their neighbors, then um one way that I can imagine we can incentivize people to do that is by being a little bit firmer on that um kind of recommendation.

So I will commit um I'll let me talk to Aaron and the community community development staff about this.

What I fear is that if we um pick a size that um a minimum for annexation, we're not likely to see things like this happen.

And I happen to agree with you 100% that anybody that wants to come in and we should facilitate that, welcome them with open arms because they do get on city services, they do uh contribute to our tax base, and they especially in a don't uh in a donut wholly um surrounded area, they use all of our roads and they're likely to get Bozeman fire protection in this area because we go and try to help out.

So all these things, but um Commissioner Bodie, I appreciate the comment.

Let me talk to the staff and community development seeing if there's maybe some middle ground that we can encourage that um or ask that they do without developing a firm acreage or size requirement.

Yeah, I'm I'm curious if there's that ability to um maybe have as a requirement at their application, some kind of documentation if they asked, they asked their neighbors or let their neighbors know they were annexing or something like that.

I feel like that would be actually more structural than just uh um here at the final 11th hour, the the pomp and circumstance of us going, well, did you did you ask?

Is anybody come in along with you?

Um so anyway, um thanks for uh being being amenable to my my ramble here, and um I'll follow up about that with the city manager later.

Yeah, Deputy Mayor.

I I just wanted to briefly respond to Ms.

Batesons and Mr.

Cardi's um comment, you know, about the B3 and and you know my my note to them.

I just I uh I have talked to you guys or the you know, my fellow commissioners here about how we can um follow up, I guess, to this to the to the big uh revision that we made to the to the UDC.

It is, I believe, one of our um we haven't approved our our officially approved our priorities, but it's it's on there to follow up and and and you know I do I do think we it would be worthwhile to to kind of look at a number of different things, you know, um as but uh but I also think we need to give staff time and we need to give this the ordinance time to um to let the let our planners let our builders let our let our community see how this works before we start making changes to it yet.

And so that's why I do think I would like to collect items in a basket and and then look at that basket.

But I just I think um you know, one of the things that I've I've stressed is that we we need to give some time for that ordinance to go into effect and see how it works on the ground.

Any other FYI from the commission?

Yeah, Commissioner Chair.

I actually um wanted to respond to a couple of things.

Um yeah, uh Commissioner Bodie, your um concern about a really high density zoning designation being next to a lower or the lowest density zoning designation.

Um this is exactly why we have to examine the transition regulations as part of um you know clean up on the UDC because this can absolutely succeed um when we get it right.

So future commissions will not be saying, oh my gosh, why did they put B3 next to RA?

It doesn't need to be a problem.

If we get transitions right, this doesn't have to be a source of contention for the community at all.

Um so yeah, there's just for the public's information, we haven't had another open um priority setting discussion, but there's been lots of machinations and backs and forths um behind the scenes.

So you know, I I don't know when that is coming forward um for another discussion, but I will share with my fellow commissioners.

I do hope that we do it publicly and have some sort of opportunity to comment um because there are a lot of things that I would like read into the public record about you know the interpretation of the priorities um and and just we have a lot more work to do on that.

And as far as the B3 um, we can do irreparable damage to our historic core if we do not re-examine this intentionally.

And I really hope that we can put this on the agenda soon.

That's it.

If I could just make a comment with all due respect that this is not a noticed item that the commission would discuss any of this tonight.

So if there are comments that are just comments, that's that's probably fine.

But when we start to get to a conversation amongst the commission about something that's not on the agenda by commissioners, I think we risk uh an unnoticed meeting.

Thank you, City Manager.

Um, Commissioner Magic and the FYI.

I don't think any FYI from staff.

No, just we uh I'm I'm interested in the typo.

I must have missed it.

So thank you, Commissioner Magic.

I saw Tom Rogers rush out of the room.

You know, he's he's gonna dig it up.

Um I have no FYI and seeing no further business to come before this city commission, this meeting is adjourned.