Local control of urban renewal districts hit a snag Wednesday after a committee voted not to advance a draft bill to the state legislature.
The Revenue and Transportation Interim Committee held a two-hour hearing on the bill draft, LCtif1, which formally spelled out local governing bodies as the final decision-makers for administering urban renewal districts, before deciding against referring it to the full Legislature as a committee bill.
Two other tax increment financing bill drafts, LCtif2 and LCtif3, were also heard, but not moved by the committee.
Rep. Greg Hertz, R-Polson, called the bill "milquetoast," adding that "there has been, I believe, some abuse in some districts, but TIFs have done great jobs in our communities. I just want to make sure the decisions they make are the best decisions for the entire community."
"All these bills have massive loopholes," said Rep. Adam Hertz, R-Missoula. "At this point, they are a disaster."
The committee also received a draft final report of the TIF study written by the Montana Legislative Services Division, but took no action.
Kelly Lynch, deputy director and legal counsel for the Montana League of Cities and Towns, told the committee a working group that helped craft the LCtif1 bill draft wanted to “make sure there is a process in place to make sure the TIF process is not abused.”
The group saw value, she said, in the variety of ways different Montana communities oversee their TIF districts. She used the East Billings Urban Renewal District as an example.
That urban renewal district “was a deteriorating area. It was not until local business owners created it from the ground up that they were able to accomplish something. Their administrative process reflects that kind of ground-up” foundation, she said, contrasting the EBURD with Kalispell's, which administers its urban renewal district through city staff.
“All cities are different. They reflect what made (redevelopment) successful in that community,” she said.
Rep. Jeff Essmann, R-Billings, called local control of TIF districts “the gorilla in the room. If they want to get the state away from looking over their shoulder, they should remove the state as a stakeholder, and the easiest way to do that is to exclude the 95 mills” from TIF funding that’s provided to school districts.
Wyeth Friday, the Billings Planning and Community Services director, noted that as recently as Monday, the Billings City Council approved new TIF oversight regulations.
“It’s timely,” he said of the proposal. “It’s what Billings is already doing.”
East Billings Urban Renewal District coordinator Tim Goodridge, a member of the working group, said the group “has been trying to work within the legislative process to come up with a good bill that doesn’t step on the toes of those of us on the ground trying to implement the rules.”
The main factor that leveraged the current $6 million effort in East Billings to install 212 LED streetlights, reconstruct nine blocks of streets and put in new sewer and stormwater systems as well as landscaping, he said, was having $1 million in the bank to pay for the engineering work, which came to about $765,000.
“Blight takes many years of neglect to take root,” Goodridge said. “To assume blight can be remediated in 15 years ties the hands of local government from fixing these problems.”
“In the end,” he said, “it’s best to let local government drive this bus.”
Sen. Margie MacDonald, D-Billings, said over the years as a state legislator, “I feel I have grown in understanding and appreciation of the work being done by people on the front lines in our cities and towns.”
The South Billings Urban Renewal District is part of her Senate district.
“To see the transformation of that truly blighted district with good roads, sidewalks, gutters, sewers and other infrastructure where there were septic tanks in the middle of Billings, and to see a health clinic go in to one of the poorest neighborhoods in Billings — all that came about because of TIF," MacDonald said.