Resort tax board talks testing with Congress

By Bella Butler EBS Contributor

BIG SKY – At the Big Sky Resort Area District board’s Aug. 12 meeting, board chair Kevin Germain said the district is now in successful communication with the offices of Montana Sens. Steve Daines and Jon Tester, as well as Rep. Greg Gianforte after sending a letter to the delegation requesting its advocacy for more testing supplies for Montana. The objective would then be to advocate for supplies to reach Big Sky and greater Gallatin County, according to Germain.

BSRAD has been a recent proponent of implementing sentinel testing, the widespread testing of selected asymptomatic portions of the workforce or other selected population segments. This approach proved challenging given testing reagent shortages and lengthy turnarounds for results stemming from a July 1 Big Sky community test. It took the state lab and subcontractor Quest Diagnostics as long as four weeks to be process results.

Germain said sentinel, or “smart” testing, has proven effective so long as results are received within a few days. While the board expressed interest in partnering with the state and with Bozeman Health, private testing companies are not off the table, according to Germain.

Matrix Medical Network has utilized private COVID-19 testing at the Montage Big Sky hotel construction site in Spanish Peaks, as well as in Moonlight and the Yellowstone Club. Matrix can turn test results around within three days, Germain said.

“I support [sentinel testing] now because I’ve seen the private efforts that have happened in Big Sky,” he said. “I am 100 percent convinced that smart or sentinel testing is well worth the financial commitment.”

In addition to working with Congress, Germain said the district is also applying pressure at the state level via the Department of Public Human Health and Services, as the state is responsible for the local distribution of testing supplies and CARES Act funding, which can be used to support testing initiatives.

“I do think [sentinel testing is] a key piece of the puzzle to keeping our community safe yet keeping businesses open during this pandemic,” Germain added. “I’m very hopeful and cautiously optimistic we’ll get the proper support from the state to do this, but if we can’t then I hope that we can pursue plan B.” Germain clarified that “plan B” would be operating sentinel-testing programs through third party private testing efforts such as those being implemented by Matrix, an approach BSRAD Executive Director Daniel Bierschwale has been researching.

“Our preference would be to have the state supply Bozeman Health with the proper testing kits and reagents for their Panther [testing] machine in Bozeman,” Germain said. “And if the state could do that, then Bozeman Health could process up to 1,000 tests a day.”

Bierschwale provided amendments to the board’s previously drafted scenario planning, a measure taken in response to the ramifications of the pandemic on the local economy. The plan had at first conservatively forecasted May and June resort tax collections to be significantly reduced. This forecast revealed itself as a lowball estimate when, at press time, May collections totaled 46 percent higher than May 2019 collections and June collections were 6 percent higher than last year.

In his executive report, Bierschwale said he wants to see numbers from July, the first month that both the additional 1 percent tax for infrastructure projects and short-term rental compliance agreement were in effect. Bierschwale said the plan will continue to adapt as more numbers come in, and BSRAD staff hopes to provide the board with a report leading up to November resort tax appropriations using preliminary booking data from both the airlines and the Big Sky Chamber of Commerce to provide insight into the fate of the upcoming winter season.

In spite of uncertain times, however, the board moved to purchase unit 203 in the RJS Tower in Town Center for $250,000 for use as additional office space. BSRAD currently owns unit 204 adjacent to unit 203, which it has been renting for more than a year. The board juxtaposed the difference in monthly cost for continuing to rent the space versus purchasing it. While the mortgage for the commercial space would result in a $208 monthly increase in spending, the board unanimously voted to purchase it, and the majority of board members stated the value in acquiring in asset.

“For an extra $280 a month to have an asset makes a lot more sense, and I would support any entity that was doing this, whether it’s COVID or not,” said Vice Chair Sarah Blechta. “It just seems like the more prudent thing to do.”

Board Treasurer Steve Johnson presented an investment proposal for the balance BSRAD currently has sitting stagnant in the bank. After conversations with the investment banking firm D.A. Davidson & Co. and the Montana Board of Investments, it became evident that when working with public funds, BSRAD’s investment opportunities were limited to mostly lower-yield options, restrictions which Johnson referred to as “criminally negligent.”

Given the limitations, Johnson and Bierschwale proposed that the board do two things: adopt an investment policy that could be used to guide future decisions, and divert a portion of BSRAD’s possessed funds to a repurchase checking account at First Security Bank, which yields $.25 and is entirely government secured. The board voted unanimously to transfer the BSRAD balance—roughly $7 million—to the repurchase checking account.

The board also moved to adopt a new structure for conducting compliance audits, which will double the number of annual audits from 10 to 20 and will select businesses using a point system that considers factors such as collection totals, years since the last audit, and leads on non-compliant issues.