Error shows South Billings board overpaid director by $38K

Steve Zeier, director of the SBURD, is contracted to provide the urban renewal association with administration and project management services through his company Zeier Consulting. 

The board pays Zeier Consulting quarterly payments of $38,422.50. In 2016, Zeier Consulting received a fifth payment of $38,422.50 from the board. 

Community activist Kevin Nelson discovered the discrepancy while going over past South Billings Urban Renewal Association financial records.  

"It was a lack of internal controls on my part, on the board's part and on the city's part," Zeier said. "At the end of the day it's my responsibility to fix."

Zeier's company is working with the city's finance department to pay back the $38,422, something Zeier plans to do by the end of the year. 

The SBURD is a tax increment financing district, a special zone within Billings where some property taxes are diverted into private urban renewal projects within the boundaries of the district.

The goal of TIF districts is to attract renewal projects that will lift property values in the district, thus generating economic growth and more property taxes to renew the TIF fund.

During the past decade the SBURD has leveraged $20 million in TIF funds for infrastructure improvements across the South Side, including widened roads, new sidewalks, park improvements and sewer services.

During Monday night's city council meeting, members of the South Billings Urban Renewal Association board spoke to council members, voicing their support for Zeier and pledging to put practices in place to catch errors like these in the future. 

Scott Hanser, board president, told the council that Zeier is backed "100 percent" by the board. 

City finances are regularly audited by a third party, and the SBURD error would have been discovered either by the city's finance department or its auditors, said city administrator Chris Kukulski. 

However, contracts like the one Zeier had with the South Billings Urban Renewal Association are not generally entered into the city's financial tracking system. Kukulski said in light of the Zeier error that practice will change and those types contracts will now be added into the system. 

Nelson, who often speaks out about the shortcomings of tax increment financing districts, believes more oversight is needed. 

"What we need is an independent auditor," he said. 

Zeier said an independent audit was "a solution in search of a problem." He believes that he and the association board, working with the city, will be able to correct the problem.