By Daniel Bierschwale EBS COLUMNIST
A Capital Improvement Plan is a comprehensive strategy that details major capital investments required for a community’s long-term growth and sustainability. Updated in 2023, Big Sky’s CIP identifies essential projects designed to address key infrastructure deficiencies throughout the boundary of the Big Sky Resort Area District. These projects include upgrades to water and wastewater facilities, transportation infrastructure, workforce housing, and parks and trails to name a few.
The CIP is currently being vetted and prioritized for projects that are shovel ready and will provide public benefit. This process will begin to define firmer costs for forecasted projects, so Big Sky can plan the fiscal path ahead. While reviewing project details, Big Sky begins to understand how far along each project is. Details include the project’s construction plan, operations and maintenance plan, funds committed to the project including sources, and what finance gaps need to be filled.
The scale and complexity of the proposed projects in the CIP requires diverse financing strategies that go beyond traditional funding methods, ensuring that projects are adequately funded without placing undue strain on any single revenue source.
This next phase, which is financial stack development, is a complex one.
First, what is a financial stack? A financial stack is basically a budget, referencing a combination of different funding sources and financial tools used to finance a project. It typically includes a mix of public funds such as taxes, bonds, federal and state grants, and private contributions through public-private partnerships and philanthropic organizations. Each of these funding sources contributes a unique and essential component to the financial stack, working together to create a sustainable and flexible funding strategy for large-scale projects.
Now, let’s take a closer look at each of the key components that make up this financial stack.
Debt financing: To address the large upfront costs of CIP projects, debt financing is used to secure funds quickly. By issuing bonds or securing loans, communities can initiate construction before costs escalate, spreading repayment over time and ensuring projects proceed without delay.
Federal and state funds: Federal and state public funds are essential for supporting large-scale projects. These funds are often allocated through grants or specific infrastructure programs, providing substantial financial support for key infrastructure deficiency.
Grants and philanthropy: Additional funding can be obtained through grants from various foundations and philanthropic organizations. These funds are typically earmarked for specific projects or initiatives, adding another layer of financial support.
Public-private partnerships: Collaborations between public entities and private companies can unlock additional resources and expertise. Public-private partnerships often bring innovative solutions and shared investment, accelerating project development and enhancing overall efficiency.
Resort Tax: Big Sky benefits from a 4% resort tax, which includes a dedicated, electorate-approved 1% for infrastructure improvements. This source of funding is pivotal but is only one part of a broader financial strategy. Resort Tax helps provide immediate relief and contributes significantly to financing key projects.
By leveraging a diverse financial stack, our community can optimize the timing and scale of investments, manage debt responsibly, leverage state and federal dollars effectively, and enhance our collective ability to deliver essential infrastructure projects that support long-term community growth and resilience.
Daniel Bierschwale is the Executive Director of the Big Sky Resort Area District (BSRAD). As a dedicated public servant, he is committed to increasing civic engagement and voter education. Many ballot issues impact government services and public funding including subsequent property tax impacts. BSRAD is the local government agency that administers Resort Tax, which offsets property taxes while also funding numerous community-wide nonprofit programs.
