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Resort tax board evaluates fund applicants ahead of FY23 allocations

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At a March 9 meeting, the Big Sky Resort Area District board reviewed 22 letters of intent from sponsoring organizations for projects ahead of project applications for fiscal year 23. GRAPHIC COURTESY OF BIG SKY RESORT AREA DISTRICT

By Gabrielle Gasser ASSOCIATE EDITOR

BIG SKY – The Big Sky Resort Area District board is currently working to move the needle on the types of investments that the district is making after receiving and reviewing letters of intent from sponsoring organizations for projects.

At a March 9 meeting, the board reviewed 22 LOIs, which serve as a screening process ahead of project applications for fiscal year 23 dollars. The biggest priority identified by the board as it moves forward in the process of allocating resort tax funds is to reduce its investments in administration and raise its investments in capital. The LOIs also revealed a 28 percent variance between what the district budgeted for FY23 allocations and actual requests.

The district breaks down resort tax dollars in two ways, investment type and impact areas. The three investment types are: administration, programming and capital. The six impact areas are: health and safety; public works; recreation and conservation; economic development; arts and education; and housing.

“It was interesting to me that 44 percent was programming, but 27 percent [was] administration, which I personally would like to see decrease to 20 percent or less,” said Board Chair Sarah Blechta at the meeting.

Her desire to see administrative investments reduced was echoed by executive director of the district Daniel Bierschwale and by her fellow board members.

“We have consistently expressed a preference for making investments in the community, which is capital expenditures,” Secretary and Treasurer Steve Johnson said in the meeting.

Of the 22 LOIs received by the district, seven reported that over 25 percent of expenses in their current fiscal year budget are administrative.

Blechta referenced a common rule of thumb for nonprofits which says that administrative costs should be 25 percent or lower for the organization to be sustainable. She added that she wants to understand the long-term sustainability of these organizations heading into allocations and when she sees administrative costs over 25 percent it’s concerning.

“We want to make thoughtful investments, and in order to do that, we need to know that the group is sustainable,” she said in a March 15 interview.

The district’s scoring system for sponsors and applications awards points based on a variety of criteria in three focus areas: collaboration, efficiency and planning. The district is also shifting to a three-year budgeting strategy which relies on organizations to include their projected asks for the next three years in their application.

“As we lead into the allocation process, we’re only as good as the data that we received from our partners and we’ve really been encouraging and incentivizing long range planning that addresses high level community needs,” Bierschwale said in a March 15 interview.

He added that the district is focused on objectivity and prioritizing result-driven projects that fulfill a community need.

This year, the district saw a 28 percent variance in what it had budgeted for allocations based on projections and the actual asks in the LOIs. The district had budgeted roughly $7.4 million based off projections from FY22 applications and now expects to receive 69 project requests totaling $9.4 million.

In addition to considering these FY23 requests, the district has already committed $5.1 million in interlocal agreements with local government entities, including the additional 1 percent tax collections for infrastructure.

“This team that we have at resort tax has put so much time and effort into these LOIs and setting us all up for such great metrics,” Blechta said. “I’m excited to continue to be able to use these metrics and really, I think it’s going to be great for everybody to be able to look at these entities and to be able to look at the projects, and really have a way to come up with true metrics.”

Project applications are due on March 31 followed by an opportunity for the board to ask questions. The official application review will take place on June 6 and 9.

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