Missoula board approves resolution to pledge TIF revenue for Wye water purchase; school districts seek levy clarifications

The Missoula County Board voted to adopt a resolution finding that fulfillment of the Y‑1 Targeted Economic Development (TED) District plan requires pledging tax increment revenues toward bond payments that will extend the district’s tax increment period beyond the statutory 15 years. Flana McLarty (Community & Economic Development) presented the required public‑hearing material and said the county plans to issue bonds to finance the purchase of the Wye water system, which is intended to supply domestic water and fire suppression initially to about 19 lots and to support future industrial-zoned development in the district.

McLarty said the Y‑1 District had been created in November 2020; the board authorized roughly $5.3 million in tax-increment financing for the purchase earlier this year and staff now plans to issue bonds over a 20-year term. Estimated annual debt service on the bonds is about $447,000, McLarty said, leaving a projected positive fiscal-year balance on the district of approximately $140,000 and a cash balance near $2 million for potential follow-on projects. The project is intended to address infrastructure deficiency (a community water system) and to enable secondary value-adding industrial development in the TED district.

Representatives of local school districts and other taxing jurisdictions said the extension and bonding raise distributional issues: permissive levies (local discretionary taxes) could effectively be frozen into a TIF calculation for decades, reducing funds available to schools and other jurisdictions unless allowances are made. A school‑district representative urged the board to pause bond issuance and urged additional consultation with the Missoula Jurisdictional Advisory Committee; commissioners said discussions remain open and that they can calibrate which levies are included or excluded while the project moves forward.

The board voted to adopt the resolution, which begins the statutory process required to pledge tax‑increment revenues for the bond issue. McLarty said finance staff will present bond-issuance details at a subsequent meeting; the purchase agreement and the financing plan will return to the board for a final vote.