Is the City of Billings really interested in annexing the TEDD?

Last week, in being presented with a request from the Lockwood Water and Sewer District to allow the district to expand its boundaries, Council Members for the City of Billings quickly took the issue to the possibility of annexing the Targeted Economic Development District, rather than making it a part of the Lockwood service district.

The idea seemed to be somewhat perplexing to a group of Lockwood citizens and representatives of Big Sky Economic Development (BSED) in a discussion with Yellowstone County Commissioners on Monday.

In an update regarding the development of the TEDD, BSED Director Steve Arveschoug said that while the council seemed to be intrigued with the idea they also seemed to recognize what a “bold recommendation” it is, and ultimately asked the City Manager to explore the possibilities and come back to the council with a recommendation in 90 days.

The TEDD is a tax increment finance district that was created by the county, at the intersection of Johnson Lane and the interstate highway in Lockwood, to fund the development of an industrial park.

Arveschoug said that City Manager Chris Kukulski will attend the next TEDD advisory board meeting on April 17 to learn the history of the agreement that the Lockwood Water and Sewer District (LWSD) has with the city, and other background information, with which, as a new city administrator, he is probably unfamiliar.

It is in part because the City of Billings had no interest in annexing Lockwood, in the past, that the Lockwood Sewer District was formed as it is, explained Woody Woods, who was also present at the Commissioners’ discussion meeting. Woods was Manager of Lockwood Water and Sewer at the time that Lockwood built the first phase of the sewer, and made the agreement with the city to accept their sewer discharge.

Woods noted that the request to expand the boundaries of the sewer district would in no way impact the capacity for which LWSD has been paying to reserve for the district. He further noted that that has been a lucrative contract for the city. LWSD has paid over $1.8 million for reserve capacity to the city since the agreement’s inception.

County Commissioner John Ostlund said that Lockwood has never been on the city’s annexation plans and the TEDD is part of Lockwood’s existing businesses.

Speculating as to what the city would have to do to annex the TEDD, it was stated that LWSD could still continue to provide water service, and the city would have to negotiate a second agreement over the current agreement with LWSD to transport sewage through its system to the city’s treatment facility. Amid other discussion there were objections expressed to the city “cherry picking” areas for annexation.

Part of the impetus for the meeting to update the county commissioners regarding BSED’s administration of the TEDD was a concern by Ostlund about how BSED is marketing the TEDD. Ostlund said that given the existing businesses that have located in or near the TEDD and its position to rail, highways, and other transportation and given what the future holds with the development of the Bypass, he thinks, “you would advertise it to everyone.” There are surely industries, like those already there, that do not need 24-inch sewer lines, he said. He even suggested putting up a billboard.

Ostlund said, regarding the TEDD, “I am disappointed that we have changed focus.” He further emphasized the potential significance of the facility to the community in that it would serve industries, the jobs for which would pay more than the kind of jobs generated by a One Big Sky District.

“We haven’t changed focus,” said Arveschoug, “We are working on all areas, but it is kind of hard to do without a shovel-ready facility. It takes a lot of time.”

Arveschoug said that there are decisions that must be made regarding TEDD issues such as what approach should be used to attract a “catalyst project” – one that would significantly increase the increment – Should they use public funding to attract a project or incentivize a company by reimbursing them for infrastructure costs?

There have been and continue to be requests for information about the TEDD.

BSED staff follows up on all inquiries, but the interest is quickly lost when they realize what has yet to be done to meet their needs, said Arveschoug. He said that at this point, “we are still trying to sell raw land.” It was noted that they are in competition with two other industrial parks in the state that are far more developed – one in Butte and another in Great Falls.

Currently the TEDD is essentially waiting for the tax increment to grow to a degree that they have the funding needed to launch whatever projects determined by the property owners to be the first needed.

Most recently, BSED engaged KLJ, a Billings engineering firm, to assist in the process of gathering input from TEDD property owners and to determine potential costs and a budget to move forward in the development. County Commissioners signed off on the $17,700 contract with KLJ to conduct two three-hour workshop, facilitate 18 one-on-one interviews with landowners, develop a budget and funding matrix, for one or two projects, draft a strategic plan and submit a final plan, within the next couple of months.