The East Helena City Council discussed a novel financing proposal for infrastructure in the planned Rose Hills housing development at its January 6 meeting. If approved, East Helena would be the first Montana city to use the state’s new bond financing program, according to city officials.
Mayor Kelly Harris and City Attorney Pete Elverum, along with bond counsel Courtney Ellis of Dorsey Whitney law firm, presented the financing proposal to council members. Jacob Kuntz, executive director of Helena Area Habitat for Humanity, outlined the infrastructure needs that would be financed under the proposal.
The city would issue an up to $12 million special assessment bond to be purchased by the Montana Board of Investments. The bond would pay for infrastructure including a lift station for wastewater, a water tank and turn lanes off Highway 282. The bond would not cover streets, lighting or sidewalks within Rose Hills.
“All this land is suddenly unlocked for development, but the city has not evolved past its current footprint,” Kuntz said. “There’s a lot of infrastructure that has to be done in order to make this happen.”
The financing mechanism was created by House Bill 505, passed by the Montana Legislature during the 2025 legislative session. Under the law, the Montana Board of Investments guarantees the bond by pledging a state fund as a backstop if property owners default on their assessments. This shifts risk away from the city’s general fund and allows for a lower interest rate than conventional financing.
The bond would be repaid through a Special Improvement District (SID), a common Montana tax assessment mechanism in which property owners pay extra on their tax bills for infrastructure projects. The Rose Hills proposal differs from typical SIDs in that it would repay a bond for infrastructure already built, rather than accumulating funds for future maintenance work.
The final bond amount has yet to be determined. Figures ranging from $2.5 million to $12 million were presented at the meeting to show council members what assessments would look like at different funding levels. At the $12 million level, monthly assessments would range from $33 to $83 depending on lot size, with townhomes on smaller lots paying on the lower end and single-family homes on the largest lots at the higher end. Homeowners would repay the bond amount over a 20-year period.
Ellis explained that, in the past, small cities like East Helena typically could not pursue this type of financing because of the risk involved. Before the passage of House Bill 505, cities would have had to pledge their revolving fund as security, which would require replenishing it with general fund dollars if property owners defaulted on assessments. For East Helena, with a general fund budget of roughly $2 million, being on the hook for a potential $12 million bond was not workable.
During the meeting, council members asked whether issuing the bond would limit the city’s ability to borrow money for other projects like roads and sewers. Ellis said it would not affect the city’s borrowing capacity because this special assessment bond is backed only by the SID payments from Rose Hills homeowners, not by the city’s general fund.
Councilmember Wes Feist requested that Habitat inform future Rose Hills residents about the SID’s costs before they purchase homes.
“I think that Habitat has a unique opportunity to educate their residents on what they mean so they are fully aware of that up front,” Feist said.
Kuntz expects the council’s January 20 meeting to include an action item on whether to authorize an application to the Board of Investments. A final bond decision would come later in the spring after cost information is collected and reviewed.
However, approval of the bond does not guarantee the Rose Hills development will proceed. The city may lack adequate water rights to serve its expected population growth, following the state’s October decision to allocate the former ASARCO water rights for instream flows in Prickly Pear Creek. Yet even without that water, city and Habitat for Humanity officials are confident East Helena has adequate supply for the 1500-home Rose Hills subdivision.
“This is the first project that has gotten this far” under House Bill 505, Ellis said. “It’s a brand new tool, the state is helping small towns in Montana figure out how to accommodate growth,” Kuntz added.
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CORRECTION: The original version of this article asserted that East Helena “lacked adequate water rights for the subdivision,” which was incorrect. Even with the state’s denial of East Helena’s request for the former ASARCO water rights, the city is expected to have adequate water for the 1500 homes planned for Rose Hills.