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HomeMy WebLinkAbout06-25-26 Public Comment - B. Muldowney - Presentation and letterFrom:bobmul9 To:Bozeman Public Comment Subject:Re: [EXTERNAL]Presentation and letter Date:Thursday, June 25, 2026 11:47:13 AM CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Mike Thanks for the understanding on the documents limit Bob m On Jun 24, 2026, at 2:55 PM, Bozeman Public Comment <comments@bozemanmt.gov> wrote: Good afternoon, Both attachments have been received. You are correct that the form allows for asingle file attachment. Thank you, Mike -----Original Message-----From: bobmul9 <bobmuldowney@gmail.com> Sent: Wednesday, June 24, 2026 2:47 PMTo: Bozeman Public Comment <comments@bozemanmt.gov> Subject: [EXTERNAL]Presentation and letter CAUTION: This email originated from outside of the organization. Do not clicklinks or open attachments unless you recognize the sender and know the content is safe. Mike / Alex Please see attached my comments from last night as well as a follow up letter to the commissioners (apparently I can only attached a single document to thesubmission form? Please confirm) thx Bob m City of Bozeman emails are subject to the Right to Know provisions of Montana’s Constitution (Art. II, Sect. 9) and may be considered a “public record” pursuant to Title 2, Chpt. 6, Montana Code Annotated. As such, this email, its sender and receiver, and the contents may be available for public disclosure and will be retained pursuant to the City’s record retention policies. Emails that contain confidential information such as information related to individual privacy may be protected from disclosure under law. June 24, 2026 City of Bozeman 121 North Rouse Avenue Bozeman, Montana 59715 Dear Mayor Morrison, Deputy Mayor Fischer, and Commissioners Madgic, Bode, and Sweeney: Please find enclosed the presentation I delivered at last evening’s Commission meeting. I offer it in the spirit of civic partnership and in the hope that the Commission will see in these observations an opportunity for forward-looking governance that serves every resident of Bozeman. The City’s own audited financial statements confirm that the General Fund — funded primarily by property taxes — bears responsibility for police and fire protection, public welfare, and general government.¹ These are not discretionary services; they are the foundational obligations of municipal government. Yet the General Fund is being squeezed from two directions simultaneously: a rapidly growing city generating accelerating demand for those services, and a set of Tax Increment Financing districts that, by design, redirect the incremental property tax growth from the city’s most economically active areas away from the fund that pays for them. TIF districts are a legitimate and valuable economic development tool, and Bozeman has used them well. The growth of the Downtown, Midtown, Northeast, and North Park corridors speaks to their effectiveness. But there is an inherent structural imbalance in their current design: as property values within a URD appreciate — sometimes dramatically — the increment that would otherwise flow to the General Fund is instead retained by the district. The General Fund services those same properties regardless. Police patrol those streets. Fire crews respond to those addresses. The Municipal Court processes violations that occur within those boundaries.² The General Fund carries the cost; the TIF retains the revenue. The consequences are becoming visible. The Bozeman Police Department is operating well below national staffing benchmarks, and the 2024 public safety levy — which would have directly addressed this deficit — failed at the ballot. I submit that these two facts are related: when residents who live outside URD boundaries already bear a disproportionate share of the General Fund burden, their appetite for additional mill levies diminishes. Meanwhile, the Downtown URD has itself advocated for increased police presence in its area³ — a service the district does not financially support in proportion to the appreciation of its tax base. Looking ahead, the pressure will only intensify. The development of Bozeman Square, Gallatin Center, the NWX Subdivision, and the pending 5211 Baxter Lane annexation as well as building activity in the URDs will bring thousands of additional residents and substantial commercial activity to areas that will require General Fund services from day one. The officer pipeline runs eighteen to twenty-four months from hiring to deployment. If staffing decisions are deferred, the service gap will be locked in before the first resident moves in. The General Fund, as currently structured, cannot absorb this growth without either significant levy increases or reductions in service levels that residents are already experiencing. This Commission has a precedent to build on. The 1995 City Commission — the one that created the Downtown Urban Renewal District — was visionary enough to write a claw-back provision directly into the founding ordinance: once annual TIF increment reached an inflation-adjusted threshold, excess proceeds were to be returned to the taxing bodies. That provision was subsequently set aside — not by the ordinance amendment the law requires, but through a 2011 interlocal agreement — and the three URDs created after 2005 contain no equivalent protection at all. The General Fund has received zero benefit from the intended return mechanism for over fourteen years. And the term of some of these URD have been extended by bond obligations. I respectfully ask this Commission to act on its fiduciary responsibility to all of Bozeman’s residents by adopting ordinance language applicable to all current TIF URDs requiring that a defined portion of annual TIF increment — an investment offset — be returned to the General Fund. This is not a proposal to eliminate TIF financing. It is a proposal to ensure that the districts which benefit most from the city’s growth also contribute proportionally to the municipal services that make that growth possible and sustainable. Good fiscal governance means being responsive to the needs of the entire city, not only its most economically active districts. I am grateful for your time and your service to this community, and I welcome the opportunity to discuss these observations further. Respectfully submitted, Robert Muldowney Baxter Meadows Resident ¹ City of Bozeman, FY2025 Annual Comprehensive Financial Report (ACFR), audited by Eide Bailly LLP (opinion dated December 15, 2025, fiscal year ended June 30, 2025), p. 22: “Principal expenditures in the General Fund are made for police and fire protection, public welfare, and general government.” ² City of Bozeman, FY27 Recommended Annual Operating Budget, p. 31 (General Fund organizational chart) and p. 37 (Public Safety & Justice service area descriptions: Police, Fire, Municipal Court, City Prosecutor’s Office). General Fund FY27 police appropriation: $21,925,100; fire: $13,939,300 — combined 44% of total General Fund requirements of $81,497,100. Budget Summary by Department, p. 32. ³ Downtown Bozeman Partnership (DBP) FY2027 Work Plan references to public safety priorities within the Downtown URD service area; cross-referenced with FY2025 ACFR Operating Indicators showing 67 sworn officers citywide serving 46,041 calls for service (p. 197). ⁴ Ordinance No. 1409 (adopted November 20, 1995), Urban Renewal Plan for Portions of the Downtown Bozeman Area, Finance section (Exhibit A, p. 24–25, recorded Gallatin County Film 159, Page 1451–52): “tax increment payments made to the Tax Increment District after the 11th year of payments or after the annual tax increment reaches an inflation adjusted $750,000, whichever occurs first, shall be returned to the taxing bodies.” Subsequently amended by Ordinance No. 1628 (2005) to change the time trigger from “11th” to “15th” year. ⁵ Interlocal Agreement executed May 2011 (Section 2) pledged the City’s share of Remaining Funds permanently back to the Downtown TIF via consent agenda rather than ordinance amendment, as required by MCA §7-15-4221(2). Ordinance No. 1655 (Northeast URD, 2005), Finance section, p. 16: TIF “will be implemented in accordance with MCA §§ 7-15-4282–4292 and 4301– 4324” — no cap or return mechanism. Ordinance No. 1685 (Midtown/North 7th URD, 2006), Finance section, p. 15: identical construction, no cap. Ordinance No. 1979 (North Park URD, 2017): no dollar cap or return-to-taxing-bodies provision in ordinance text (Sections 8–9). Primary source review confirmed June 2026. Commission Remarks — Downtown URD — June 2026 Page 1 Commission Remarks — Downtown Urban Renewal District City of Bozeman City Commission | June 24, 2026 | Estimated delivery: 3:00 ▶ Opening — credit the 1995 Commission; state the cap timeline Robert Muldowney, Baxter Meadows Good evening, Mayor Morrison, Deputy Mayor Fischer and Commissioners Bode, Madgic, Sweeney. I want to credit the Commission that sat in 1995 for building a deliberate safeguard into Ordinance 1409: once annual tax increment — net of bond debt service — exceeded an inflation-adjusted $750k, the excess was to be returned to the taxing bodies, including the General Fund. The 15-year time trigger activating that mechanism arrived in FY2012. However, the district’s net annual increment did not actually exceed the target cap until FY2021. Since then the excess has grown each year so that in FY2025 the four-year cumulative total is about $2.4m. ▶ The process question — interlocal vs. ordinance In 2011, the City entered an interlocal agreement with Gallatin County and the School District. The County and School District do receive their proportional shares of Remaining Funds above debt service — that is appropriate and documented. But Section 2 of that agreement has the City pledge its own proportional share permanently back into the TIF fund — denying the General Fund the return that Ordinance 1409 required. ▶ Statutory authority — MCA §7-15-4221(2) MCA §7-15-4221(2) states that an urban renewal plan may be modified by ordinance — not by interlocal agreement, not by contract. An ordinance requires public notice, a public hearing, and a formal legislative vote. I have not been able to locate such an ordinance in the public record. My understanding is a contract between governments can implement an ordinance but it cannot override one. ▶ The result — three questions The result is a fund balance of $9.7 million — 4.6 times the outstanding bond. Under MCA §7-15- 4292, this URD terminates upon provision for payment of that bond. I would ask this Commission to formally examine that option and fund needed fire and police, as these funds are the mill levy tax dollars that were diverted from the General Fund. Commission Remarks — Downtown URD — June 2026 Page 2 If not dissolution, then Ordinance 1409 is clear: the inflation-adjusted overages above the cap belong in the General Fund. As previously noted, under MCA §7-15-4221(2), only an ordinance can change that. An interlocal agreement cannot. Therefore before $8 million is committed to a parking arrangement described in a single sentence with no named partner and no project detail — MCA §7-15-4288 requires TIF expenditures to be for specifically enumerated eligible costs. MCA §7-15-4202(3), amended by the Legislature just last year in 2025, states that TIF laws must be used to encourage the development or redevelopment of blighted areas. Downtown Bozeman can no longer be considered blighted. Ordinance 1409 itself requires that specific actions be proposed in detail for community review. ▶ Closing observation Bozeman now operates six TIF districts — five urban renewal districts and one technology district. In each, growth in property values above the frozen base year is captured by the TIF fund rather than any monies flowing to the General Fund. None of that appreciated property value contributes to police, to fire, or to the services ALL residents depend on. Unfairly that burden falls to those outside the TIF boundaries. Residents deserve to understand that arrangement clearly before any new mill levy request is placed before them. Thank you. Delivery Notes Sources — Section 1: Ordinance 1409 Finance section; uploaded DURD_General_Fund_Obligation_Revised.docx (14- year ACFR table, FY2012–FY2025, fund balance chain verified). Sources — Section 2: 2011 Interlocal Agreement, Section 2 (City pledge-back); Laserfiche ID 44679; May 2, 2011 Commission meeting (consent agenda). Sources — Section 3: MCA §7-15-4221(2) — confirmed in project files. Sources — Section 4: MCA §7-15-4292 (termination); MCA §7-15-4288 (eligible costs); MCA §7-15-4202(3) (blight mandate, amended Ch. 55, L. 2025); FY2027 Work Plan — parking: one sentence, no partner named; Ordinance 1409 — 'specific actions in detail for community review.' Sources — Section 5: FY2025 ACFR — TIF bonds outstanding: Downtown $2,112,000; Northeast $1,095,557; Midtown $5,575,000. Six districts confirmed: Montana DOR 2024 Master TIF List. Precision note: Six districts capture TIF increment (growth above frozen base). The frozen base value does continue to generate general fund revenue for all taxing bodies — only the incremental growth is diverted. This distinction is not raised at the podium but should be understood by the speaker. Follow-up letter: Full text: MCA §7-15-4221(2); §7-15-4292; §7-15-4288; §7-15-4202(3). Ordinance 1409 Finance section. 14-year ACFR table. Series 2020 bond terms.