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Resort tax uses bonding for first time, takes out nearly $1M

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The Big Sky Community Organization’s community center saw robust community support from local sports teams The Big Sky Royals baseball team and the Big Sky Futbol Club girls soccer team, who both struggle for limited gym time during Big Sky’s long winters. PHOTO BY BAY STEPHENS

Scholz announces resignation


BIG SKY – At the June 10 final resort tax appropriations meeting held at the Warren Miller Performing Arts Center for the Big Sky Resort Area District, the board bonded $939,000, and doled out the $8.4 million available resort tax collections to 26 organizations operating in Big Sky. BSRAD Director Mike Scholz also announced that he will step down at the end of this summer.

Deciding how to allocate this year’s resort tax collections for the 2019-2020 fiscal year was a tall order, as 28 organizations requested $11.4 million, creating a nearly $3 million dearth, the largest resort tax has yet seen.

Bonding was put toward the Big Sky Community Organization’s over $2 million ask to help fund construction of the community center, with $1.54 million of this year’s collections allocated to the organization and the remaining $500,000 bonded.

Gallatin County 911’s request was entirely funded through a $439,000 bond to support the creation of a mission critical radio network based on Lone Mountain, which will depend on funding from Gallatin and Madison counties as well.

Although bonding has been in BSRAD’s toolbox since 2013, when Gov. Steve Bullock signed a bill that the Big Sky Chamber of Commerce and resort tax board of the time rallied to support, the board has never used it.

A majority vote of the resort tax board and voter approval is required to pass a bond in excess of $500,000, but for bonds less than that amount a 4 out of 5 majority board vote with no voter approval approves a bond.

During the meeting, the details of how soon bonded funds would be made available were not clear. In general, the process will require BSRAD taking out $939,000 in private loans to give the allocated funds for the 911 radio network improvements and the community center, while the board pays off the loan with interest using future collections for up to 10 years, depending on how many years the board chooses to spread the loans over.

Steve Johnson, the board’s vice chair, recommended bonding as an appropriate option this year considering the long-term nature of several projects the funds would be put toward, adding that it could be a mechanism to close this year’s nearly $3.3 million shortfall between requested and available resort tax funds.

Other board members were hesitant.

“I’m just worried about taking money out of next year,” said BSRAD Treasurer Sarah Blechta. “We have a huge deficit this year and, looking around the room, I don’t think anybody’s going to ask us for less money [next year].”

Despite the board’s recognition that community housing is a top priority in Big Sky, the Big Sky Community Housing Trust saw its allocation trimmed substantially from its request. Although the trust had initially requested $2.4 million, they were awarded what Program Director Laura Seyfang named the bare minimum amount, $1.65 million, in order to pursue a promising potential rental housing project that could include 48 units with rent tied to income. She said construction could begin next spring if all went well.

Early in the evening, the board agreed that the community center was an appropriate instance for bonding, allowing them to wet their feet without going too deep. However, late into the 3.5-hour-long meeting, the board found that it had over allocated $342,574 and had to either run back through the list of applicants and make cuts to break even, or consider another project to bond.

Board Chair Kevin Germain was not in favor of borrowing anymore against future collections.

“We’ve already bonded $500,000, we’ve completely depleted our sinking fund and we have big needs coming in this community and we’re just going to make this much harder on the board next year and subsequent boards,” Germain said. “Bonding is the easy button.”

“I think we’ve got to go back through and just balance the checkbook,” Germain added.

Ultimately, the board agreed to bond Gallatin 911’s request.

The meeting concluded with the announcement that BSRAD Director Mike Scholz was stepping down later this summer after eight years of service on the board. Although his term would have ended in May 2020, he said that he and his wife’s travel schedule throughout the fall would not permit him to effectively participate for the last months of his term.

“What has been accomplished with the over $50 million raised through the 3 percent resort tax has transformed Big Sky,” Scholz said in an email. “It has been an honor to work alongside so many dedicated board members, staff and community-minded leaders.”

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