Board to decide on Dec. 5 in special public meeting
By Jack Reaney SENIOR EDITOR
The Resort Tax board has been working to inform the Big Sky community about the funding sources behind its capital improvement plan, focusing on breaking down the complicated financing structures that will allow the community to invest hundreds of millions of dollars into infrastructure.
One piece of the financing puzzle, the Big Sky Resort Area District can take on debt through a voter-approved bond. If BSRAD decides to pursue debt beyond $500,000, local voters can approve or deny the bond proposal in May 2025.
However, the board has not yet decided whether to bring the issue to a community vote, and how much debt to potentially incur. That decision will be tentatively made in a special public board meeting at 8:30 a.m. on Thursday, Dec. 5.
“Please, please community, put that on your calendar,” board chair Kevin Germain said during BSRAD’s regular board meeting on Nov. 14. “This is a very hot topic, and the more public comment we have on the front end, I think, the more informed of a board decision we can make.”
Executive Director Daniel Bierschwale summarized the topic in BSRAD’s video recap of the Nov. 14 meeting.
“It’s important to note that what is being discussed is not an increase in taxes, but rather an allocation of future collections to fund a vision for a livable Big Sky today,” Bierschwale said. “This complicated topic will have significant education and outreach starting in 2025 if the board chooses to move forward.”
Five considerations
Germain and board member John Zirkle serve on a CIP-focused board subcommittee. On Nov. 14, Zirkle outlined five considerations for the board and community.
“We don’t have the cash to handle all the capital improvements in the CIP,” Zirkle began. “We saw that giant number—the amount of money that we’re bringing in cannot pay for all these improvements. Seems obvious, but important to state.”
He added that borrowing money will be necessary to accomplish the recommended infrastructure projects.
Second, Zirkle said the community can get creative about borrowing.
“We’ve done this in the past. There’s debt that BSRAD can take on by issuing its own bonds, but then there are also partnerships that we can do with other entities… Main thing here is that BSRAD should not and cannot do all of the borrowing to take on the capital improvement plan.”
Third, the more that BSRAD commits to borrowing now, the less flexible it can be in the future. Zirkle said the community must discover and implement other annual funding sources as BSRAD shifts its focus to long-term infrastructure investments.
“We’ve been working with Elevate Big Sky and a lot of our partners, on what happens when we start paying down a lot of debt, and that starts to cut into what we’re used to with our allocations each year,” Zirkle said. However, the board has previously affirmed its intention to continue funding nonprofits and government services.
Zirkle said the fourth consideration gets complicated: “The more we commit in this first round of CIP funding, the more pressure we face to issue longer-term debt.”
The problem with longer-term debt is that interest payments would be more expensive in the long run, and BSRAD is restricted by law in the amount it can spend on annual payments—no more than approximately one-third of its total collections.
BSRAD is not restricted in the total cost of projects it can commit to funding, so significant debt commitments could increase the overall long-term debt burden.
Lastly, Zirkle said BSRAD does not have the legal capacity to fund every project right now.
“We either have to prioritize, or we have to change a law,” he said. Currently, workforce housing is not included in Montana’s legal definition of infrastructure, which excludes local housing projects from receiving revenues generated by BSRAD’s 1% additional tax for infrastructure.
Zirkle expects the board will need to both prioritize projects and attempt to amend that specific article of Montana law.
Zirkle showed a chart depicting the “amazing” growth in 3% resort tax collections in the 31 years since Big Sky implemented its resort tax. Twenty-five of those years have seen year-over-year growth in collections, including growth every year since 2011—except for a small dip in 2020 due to COVID.
Even with a strong positive trend, Zirkle noted the lack of consistency and the occasional down year.
“We want to think about the long-term, we want to think about annual growth since 1993, but we have to think about the risk that years like this create,” Zirkle said, pointing to consecutive down years in 1996 and 1997, and again in 2009 and 2010 due to the Great Recession. He emphasized that even in 2024, collections grew less than 1%.
He said it’s worth making a “realistic projection” for growth as BSRAD begins considering 30-year terms on debt, to ensure the debt obligation is responsible.
Zirkle showed a model assuming 1% annual growth through 2062. He said fiscal years 2026 through 2029 are going to be tight and will likely require BSRAD to prioritize its funding.
Alternatively, Zirkle pointed out that cash is an option: BSRAD would need to tackle projects in phases over many years, but the highest-priority projects could be funded without debt.
Voters will decide
During public comment, Katie Alvin, development director for the Arts Council of Big Sky, voiced support for taking investments slow, enabling flexibility so BSRAD can jump on unexpected opportunities as they emerge.
Board member Sarah Blechta described recent years as “a period of excess” and voiced concern that Big Sky organizations have become accustomed to asking Resort Tax for large amounts of funding.
“Can we do it for less? Can we do it in phases,” Blechta asked. She said Resort Tax will need to tighten its belt with help from community partners in order to responsibly take on large debt.
“Taking on debt is a huge, huge decision,” Germain said. “… This is uncharted waters for this Resort Tax board, and we are not taking it lightly.”
Community member Barbara Rowley also gave public comment. She said she’s not afraid of debt for essential infrastructure and opportunities, but the investments do not need to be made all at once. She added that citizens, not just organizations asking for funding, should be able to weigh in on their priorities before BSRAD takes on debt.
“I think you gain a lot by letting people vote,” Rowley said.
Germain confirmed that it will be a community vote.
“We can only bond up to $500,000 without going to a vote of the community. So this will be a ballot initiative,” Germain said.
The details of the ballot initiative remain uncertain, however. The board will look to agree on potential debt commitments during the Dec. 5 meeting. If the board agrees in December to take on debt, it will look to establish a formal resolution at its regular meeting on Jan. 9.
Finally, on Feb. 13, the board will finalize ballot language before the Feb. 15 deadline to submit ballot initiatives to the county elections offices.
“So there’s three more opportunities to provide additional public comment, for the public’s awareness,” Bierschwale said.
