Infrastructure would be funded largely by outside sources and bonding, or the alternative: ‘we pay for all of it ourselves’
By Jack Reaney SENIOR EDITOR
In August, the Resort Tax board emphasized that Big Sky’s capital improvement plan won’t result in a massive economic burden on the Big Sky community, and that the catchy dollar amount in the seven-hundred-millions might turn out to be a lot smaller.
In September, the messaging continued.
“I just wanted to put a fine point on the fact that this capital improvement plan most certainly was alarming, when you saw the total volume of projects. Three quarters of a billion dollars is a lot,” said Daniel Bierschwale, BSRAD executive director, during Wednesday’s board meeting. “It was never… the intention of Resort Tax to seek funding $750 million in projects. Rather, engage the community in a process that gets everything on the table.”
For many large infrastructure projects, the bulk of funding will come from federal and state agencies, in addition to complex public financing mechanisms. Each project will need a developed budget, or “financing stack,” in partnership with its project sponsor.
“This is not Resort Tax,” said Board Chair Kevin Germain, turning to face the small boardroom audience for emphasis. “… This is all sorts of funding sources.”
On Sept. 11, the board reviewed summaries of a few capital projects slated within a three-year window. One of them is a potential wildlife overpass and bridge retrofit to enhance wildlife connectivity, near Dudley Creek inside the northern BSRAD boundary. The Center for Large Landscape Conservation is leading the project.
Federal funding would cover at least 80% of costs for transportation-related projects like this, according to board member John Zirkle.
“This is a classic example of a project that really won’t require much from Resort Tax to get this across the finish line,” Zirkle said. “And the fact that it’s dollars coming from outside of Big Sky is great, it’s a big win.”
Germain sees this CIP process as the continued evolution of Resort Tax in the community’s best interest. Bierschwale assured that BSRAD will continue its typical grant allocations to nonprofits and government services, but BSRAD is using some different financial tools “to make sense of the big math problem.”
“They’re not going to cost the community any more money. We’re not charging an additional more 1%. We currently have a 4% sales tax on luxury items and goods, and that will stay the same.”
Daniel Bierschwale, BSRAD executive director
According to Montana law, if Resort Tax intends to use bonding as a financial tool for projects larger than $500,000, the BSRAD board must bring those capital projects to the public for a vote.
“It’s a community decision,” Zirkle said. “BSRAD, our job is to get these projects onto a ballot. And the electorate is going to decide whether or not we move forward with them.”
Bierschwale added a point of clarification about CIP efforts: “They’re not going to cost the community any more money. We’re not charging an additional more 1%. We currently have a 4% sales tax on luxury items and goods, and that will stay the same… we’re talking about how we choose to allocate our funds moving forward.”
David O’Connor, executive director of the nonprofit Big Sky Community Housing Trust, added public comment to expand on Bierschwale’s point.
Infrastructure projects are funded by property taxes in most communities, O’Connor said. If Big Sky took that approach, roughly 3,500 residents would foot the bill for infrastructure strained by many thousands more visitors. That’s why resort tax exists in Montana, in a nutshell.
“I just want to stress that this funding mechanism is a great tool that’s available to this community—that is not always available to local communities—where we can fund these infrastructure needs that are so sorely needed by every community, via a tax that is primarily paid by the visitors,” O’Connor said.
If Big Sky chooses to follow a different course than what’s outlined in the CIP, O’Connor said the alternative means higher property taxes, and “we pay for all of it ourselves.”
“It’s a community decision. BSRAD, our job is to get these projects onto a ballot. And the electorate is going to decide whether or not we move forward with them.”
John Zirkle, BSRAD board member
Whitney Montgomery, CEO of the Big Sky Community Organization, also gave public comment in support of BSRAD’s current capital improvement planning to invest in long-term infrastructure needs.
“I cannot applaud you all enough for moving this forward. Now is the time in our town, when we have access to funding through bonds and TEDD TIFs, and other ways of looking at public financing, to maximize and leverage other fundraising,” Montgomery said. “If we can get this work done prior to any incorporation conversation, we’re all the better.”
Projects discussed Wednesday included a campus expansion for Morningstar Learning Center, traffic flow and safety improvements to U.S. Highway 191, the Cold Smoke community housing project, and Gallatin Canyon sewer infrastructure to benefit Gallatin River health.
Bierschwale said this year, BSRAD will focus on evaluating and vetting near-term projects included in the CIP, “a living and breathing document.”
Already, Bierschwale said BSRAD has been “scrubbing the CIP” and reduced fiscal year 2024 projects from $628 million to $102 million. Many of those projects have been redistributed over subsequent years for the 10-year plan.
In the near-term, the fate of some larger infrastructure projects may be decided at the ballot box.
