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Billings has overhauled the agreements it keeps with its three urban renewal districts, giving the city more direct oversight of the groups.

City leaders had started looking at updating these memorandums of understanding, or MOUs as they're known, last year. The Downtown Billings Partnership's MOU had expired years ago and had never been updated. The city's MOU with the East Billings Urban Renewal District expired at the end of 2018. 

But the real impetus for change was an accounting error in the South Billings Urban Renewal District that resulted in overpayments to its director, Steve Zeier.

In one instance, Zeier was overpaid $38,422, which he's required to pay back by June 30. In another, an additional $38,422 was incorrectly added to his contract, which was then subtracted from his current contract to rectify the problem.

Community activist Kevin Nelson discovered the overpayments, which prompted an investigation into the books of the South Billings Urban Renewal Association by Moultan Bellingham PC. The law firm's report confirmed what Nelson had found but made note it found no evidence that Zeier or SBURA had acted with the "intent to deceive or defraud."

The new MOUs require that the city's urban renewal districts follow the same procedures the city uses when entering contracts with companies or individuals. Those contracts will then be part of the city's annual independent audit. In the past, those contracts weren't included. 

The urban renewal districts also are now required to follow the same conflict of interest guidelines as the city and their boards are to undergo the same biannual training as some city employees. 

"These corrections minimize the chance of these errors happening again," said city administrator Chris Kukulski. 

Most notably, the MOUs now give the City Council the authority to terminate contracts between the urban renewal districts and their directors. 

Pointing specifically to the issues raised because of the accounting errors in the South Billings Urban Renewal Association, some city council members wondered why there weren't more punitive measures taken. 

"It's surprising for me to see," said council member Roy Neese. "But there's no consequences."

Council member Shaun Brown agreed. 

"I'm concerned there were no consequences," he said.  

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