By Evelyn Pyburn

The advisory board and officials who administer the TEDD in Lockwood are urging the county and city to come to an agreement soon about the terms under which to extend sewer to the TEDD (Targeted Economic Development District).

The most recent stumbling block is an unexpected proposal from the Billings City Administrator to the Yellowstone County Commissioners to “share” potential tax revenues from the TEDD. Administrator Chris Kukulski explained in a discussion session with county commissioners on Oct. 8, that property tax revenue sharing with the city is what he means with his frequent requests for better cooperation between the city and the county.

A commitment to be more “cooperative” in the future was one of the terms included in a tentative agreement between city council members and the county regarding the TEDD, discussed in a city council work session several months ago.

The City Council is scheduled to revisit the issue during their meeting on October 26.

It’s been a year-and –a- half of trying to resolve the issue of how the TEDD can become part of the Lockwood Water and Sewer District without the necessity of the property owners waiving their right to protest future annexation proposals, Woody Woods told Yellowstone County Commissioners. Woods heads the advisory board appointed by the commissioners who are the official authority of the TEDD.

“We are losing opportunities,” said Woods about the TEDD whose purpose is to attract new and growing industrial and manufacturing businesses to the community. Woods said there have been potential businesses that have come and gone because the TEDD was not ready.

Steve Arveschoug, Director of Big Sky EDA, expressed frustration that at one point they seemed to have reached an agreement among all parties, although not voted upon, which involved charging TEDD property owners a surcharge of 18 percent to have their sewage treated by the City of Billings, and that TEDD property owners would not in the future, should they need a new source for water, get it from the Heights Water District, and that the county commissioners would commit to being more cooperative with the city as new areas are developed at its borders.

In the agreement, the City abandoned its effort to require all TEDD property owners to waive any future rights to protest annexation, which the property owners unanimously refused to do. Having to be subject to such municipal costs defeats the purpose of an industrial park, which is hoped to attract manufacturing — capital –intense businesses that usually need to avoid high municipal taxes in order to be feasible.

County commissioners said they were puzzled about what was meant by being more cooperative, since they have no authority to require property owners to agree to annexation and they believed they were cooperative as much as possible.

That Kukulski was thinking of revenue sharing was a surprise to everyone. At no point during their discussions with city council members was there any mention of the county sharing tax revenue with the city, said Arveschoug.

Arveschoug said that if there is no resolve soon, he and his agency will start looking for another alternative for a turn-key ready industrial park.  He underscored that he did not mean to say that they would abandon the TEDD.

Commissioner John Ostlund asked Arveschoug what areas he was thinking about. Arveschoug said that while he didn’t know what may have changed in the interim, the study that EDA conducted of potential sites identified a promising site near Laurel.

Both Ostlund and Commissioner Don Jones voiced “major concerns” about the idea of sharing future tax revenues with the city. Commissioner Denis Pitman asked, “How would that work?”

It was noted that it could be as long as 20 or 30 years before there would be any tax revenues, and since the language proposed is so vague there would surely be problems in the future, dealing with such a stipulation. Pitman commented rather facetiously, “I guess we could say ‘yes’, and say it will be someone else’s problem.”

Also, there is a legal question about the ability of this board of county commissioners to make commitments on behalf of future boards.

Also, the unprecedented concept would have statewide ramifications, said Jones, and it “makes problems down the road.”

The agreement encountered another delay early last month when the draft document was reviewed by the board of the Lockwood Water and Sewer District (LWSD). LWSD Manager Mike Ariztia explained that they had anticipated seeing an addendum to the contract that the district has had for years with the city, but there were surprise changes in the contract. The board decided they needed to speak to legal counsel about it.  Ariztia said that the board did not want their support of the TEDD to impose any additional burdens on customers of the district.

Ariztia told commissioners on that those issues have been resolved, and the board will discuss accepting the agreement at their next meeting.

One of the surprise changes to the contract was a requirement that LWSD, too, would not be allowed to consider getting water through the Heights Water District should they need to find an additional water source. Kukulski defended his efforts saying, “I have to get six council members to say yes,” to the agreement.

Kukulski emphasized that the City of Billings requires that any entity getting water or sewer service must be annexed into the city. Since the Heights Water District gets its water from the city, that was the issue he was trying to address.

Arveschoug commented, “Kudos to Chris and his team. They were willing to take the waiver off the table.”

As an example of the county’s lack of cooperation, Kukulski cited that the county commissioners have been “resistant” to changes in an area where the city was proposing assessing service costs based on property values, “…and we have been struggling about how to pay for it.”

Ostlund asked if he was talking about the BUFSA (Billings Urban Fire Service Area), about which proposed fee increases are currently in negotiations. While the agreement for the city to provide fire service to areas just outside its borders has been mutually beneficial, Ostlund said the city’s proposed changes results in a 35 percent increase in what will be paid to the city, which would wipe out BUFSA’s reserves.

“It seems as though the city is trying to make a profit on county residents,” said Ostlund, referring to other dramatic fee increases recently being requested by the city, such as landfill fees.

Kukulski said, “We want to continue to figure out how to work through this. Neither one needs to lift our fist to get our way.”

Ostlund reminded that no matter whether an agreement is reached with the city, the TEDD will still develop, only it will develop in a less desirable manner. With a sewer system it “will be a different kind of development.”

Having a sewer system is important to assuring development happens in an environmentally sound manner. It was in fact the point made by the state’s Department of Environmental Quality, years ago, when they came to the city to implore that they iron out some kind of agreement with Lockwood, reminded Jones, who was on the city council at the time. “Septic systems are not good for the whole Yellowstone community.”

“An industrial park has enormous benefit for both the city and county,” Ostlund pointed out, “… and in fact the city will get more benefit….it’s like the refineries.” Ostlund explained that the kinds of enterprises they hope to attract could well employ “400 or 500 people” – people who will buy homes and pay taxes in Billings.