Who Runs Urban Renewal: Agencies and Their Boards

An urban renewal agency spends property tax money, can borrow against it for 20 years, can buy and sell land, and is run by people nobody voted for. That last part is usually true, and it is the first thing most residents get wrong about who is in charge. The statute gives the city council more control than people assume, and less than many council members admit. This lesson covers how agencies are born, who sits on the board, and how they end. The money side, how increment is captured and which levies are excluded, is in Urban Renewal and Tax Increment Financing in Idaho. Read that first if the word "increment" is new to you.

Step one: the finding of necessity

No city or county can use urban renewal powers until its governing body adopts a resolution under Idaho Code 50-2005 finding that one or more deteriorated or deteriorating areas exist, that fixing them is necessary for public health, safety, morals or welfare, and that the municipality needs an urban renewal agency to do it. That language dates to 1965 and has never been amended.

The word "municipality" in this chapter means a city or a county (50-2018). Most Idaho agencies belong to cities. A city agency's "area of operation" is the city plus five miles beyond its limits, but it cannot reach into another city or into unincorporated county land unless that other government adopts a resolution saying it needs the help.

The 2011 vote requirement

Here is the rule many residents have never heard of. Under 50-2006(1)(b), an urban renewal agency created after July 1, 2011 "shall not transact any business" until a majority of qualified electors, voting in a citywide or countywide election, authorize it. Agencies whose governing body made the finding of necessity before that date are grandfathered.

The agency in the region's largest city, the Urban Renewal Agency of the City of Twin Falls, says in its audited statements that it was organized on July 19, 1965, the same year the Urban Renewal Law passed, so the vote rule does not touch it. The rule matters most in towns that never set up an agency. If a small Magic Valley city without an agency proposes one now, that proposal has to go to the ballot.

The board

An agency's powers are exercised by its commissioners. The default rules in 50-2006(2):

• Who appoints: the mayor, "by and with the advice and consent" of the city council. For a county agency, the chair of the county commission fills that role.
• How many: at least 3, no more than 9.
• Terms: set by the mayor, no longer than five years, staggered so that no more than two original terms expire in the same year.
• Residency: every commissioner must live in the county where the agency is located or does business.
• Pay: none. Commissioners get necessary expenses, including travel.
• Removal: by majority vote of the council, only for inefficiency, neglect of duty or misconduct, after a hearing with at least 10 days' written notice of the charges.
• Staff: the agency may hire an executive director, experts and its own legal counsel.

That removal rule matters. A council that dislikes a commissioner's votes cannot simply fire the person. The protection is meant to give commissioners some independence over a 20-year financing plan. It also means the agency can drift from what the current council wants.

Four board models

Even when council members sit on the board, the statute says the agency acts "as an arm of state government, entirely separate and distinct from the municipality." That separation is part of why an agency can borrow without a city bond election and why its debts are not the city's debts.

The agency's relationship to the city

On paper the agency is independent. In practice, small and midsize agencies often run on city staff. The Twin Falls agency's 2025 annual report says the city provides administrative, legal, engineering, budgeting and accounting services under a 1993 agreement, for a fee set each year; it was $208,000 for the year. The same report lists the city's economic development director as the agency's executive director.

That arrangement is legal and common. It also means the people recruiting businesses for the city are often the same people managing the agency that pays for the infrastructure those businesses want. Residents should know who wears which hat before a meeting, so they can direct questions to the right body.

Ending an agency: the 2025 dissolution process

House Bill 436, signed April 4, 2025 (Session Law chapter 300), rewrote the dissolution section, 50-2006(7). The steps now:

1. The council (or county commission) adopts a resolution of intent to dissolve and sends it to the agency.
2. From that moment the agency cannot start new urban renewal projects or take on new financial obligations, except those needed to wind down.
3. The council and the agency board hold a joint meeting to discuss dissolution.
4. If the council then finds the agency is no longer needed, it dissolves it by ordinance, effective on publication.
5. The ordinance is recorded in the county's real property records and sent to the agency, the county clerk and the State Tax Commission within 10 business days of recording. Agency property goes to the city.

The bill's sponsor, Majority Leader Jason Monks, pitched it as a way to give fire districts a share of increment and give manufacturing areas a tool to keep growing, according to BoiseDev's coverage. The Redevelopment Association of Idaho, which represents agencies, and the Twin Falls economic development director warned that the dissolution process could create uncertainty for long-term projects. The bill passed the House 57 to 13 and the Senate 28 to 7.

Dissolution does not erase debt. Bondholders and developers with reimbursement agreements still have whatever rights their contracts and the 20-year rules give them. A council that wants out quickly needs to know what the agency owes first, which is a reporting question covered in lesson 4.