MRA approves tax remittance, General Fund transfer to buoy city’s budget
Martin Kidston
(Missoula Current) To shore up the City of Missoula's budget, the Missoula Redevelopment Agency this month officially approved a tax remittance from four of its urban renewal districts.
But Urban Renewal District III will provide more than half of the $5.3 million remittance. Of that, the city will only receive $1.3 million since the funding has to be equally distributed to other taxing jurisdictions, including the county and school district.
“The city gets about 26 cents on the dollar,” said MRA Director Ellen Buchanan. “While the city is realizing $1.3 million, the total remittance is in excess of $5.3 million.”
In each of the past two budgeting cycles, the city has faced what it has described as a revenue shortfall. To fill the gap between existing taxes and the desired level of service, it has asked MRA to fill the gap by providing a tax remittance.
To do so, Buchanan said the agency has tried to distribute the remittance as equally as possible across its urban renewal districts. It also considered a district's capacity to surrender funding, and any pending or potential project that might emerge in 2025.
To cover the city's needs, MRA took a $1 million remittance from URD II and a $3.5 million remittance from URD III, or the Midtown area. Buchanan said that providing the remittance from the more active districts doesn't currently place any projects in jeopardy – yet.
“Running government on the back of urban renewal districts isn't sustainable,” said Buchanan. “But we're fortunate as a city to have this tool available so we can provide the level of service we need to provide. Thank goodness we're here. I don't think anything will be jeopardized by this.”
MRA was also asked to partially fund General Fund dept in certain urban renewal districts, including police and fire. According to MRA, roughly 36% of the police department's calls were in an urban renewal district and 35% of the fire department's calls.
The city applied the percentage of calls to the debt service on police and fire equipment resulting in $877,000, which MRA will transfer to the city's General Fund this fiscal year.
“I'm grateful we have this resource available to be able to provide the service level we have as a community,” said Mayor Andrea Davis. “We continue to work at the statewide level to work on property tax reform. Every community across the state is dealing with this in some form or fashion.”
MRA this year didn't remove a tax remittance from the North Reserve-Scott Street Urban Renewal District or the Riverfront Triangle. Buchanan said the latter has renewed development interest.
“We are working actively with a developer to try and arrive at terms around a development agreement,” she said. “We'll need everything in that district to build the infrastructure that's necessary that meets the city's goals in how we want to see that property utilized.”