With plans to support more than $750M to support local infrastructure, BSRAD discusses upcoming budget strategy
By Jack Reaney ASSOCIATE EDITOR
Six months ago, the updated Big Sky capital improvement plan called for $777 million in recommended infrastructure improvements over the next decade. At a recent meeting, the Big Sky Resort Area District board discussed the importance of careful budgeting, seeing a slowing trend in resort tax collections.
BSRAD collects and allocates Big Sky’s 4% resort tax on luxury goods and services, and BSRAD also commissioned the capital improvement plan. At BSRAD’s March 13 board meeting, they discussed the current collections and budgeting strategy for upcoming years.
“We’re looking at probably closing the year a little under on collections, based upon the trend that we’re on,” Executive Director Daniel Bierschwale told the board. BSRAD forecasted fiscal year collections of about $23.6 million and is currently tracking to fall roughly $100,000 or $200,000 shy, he said.
Year-to-date, collections are still beating the past fiscal year, but losing ground—December saw a 6% shortfall, and January dipped 10% below last year’s collections for the month. Big Sky’s historic lack of snowfall through February likely dampened the trend in resort tax collections, a trend Bierschwale expects to continue through February, before leveling out in March.
On the upside, he noted that BSRAD’s operation costs are under budget for the fifth straight year.
With massive infrastructure costs ahead—including an unbudgeted $10 million expense to acquire land and improve traffic flow at Big Sky’s crucial intersection—and the current reminder that resort tax collections aren’t a sure bet for year-over-year growth, Bierschwale emphasized the importance of expanding revenue streams and bolstering cash reserves without deeply compromising BSRAD’s support of local government services and nonprofits.
“As we’re projecting out cash flow for upcoming years and the likelihood of a large investment in the capital improvement plan, [and] we explore the potential of taking on debt service, it’s important to us that we maintain programming that is currently being funded through resort tax,” Bierschwale told EBS in a phone call.
He pointed out the importance of initiatives like the wellness district, a recent effort to redirect property tax dollars paid by Big Sky’s Madison County residents from the Madison Valley Hospital District in Ennis into a newly formed hospital district in Big Sky. The effort stalled in January, but leaders have engaged legal counsel to appeal. If successful, Bierschwale said $1.4 million in annual property taxes could be deployed as capital investments into local infrastructure.
Bierschwale said that ongoing legal process is costing $75,000, and BSRAD is being careful to honor its fiduciary responsibility to the community—for example, BSRAD’s office manager Sara Huger-Carroll is leaving her position and BSRAD will not rehire in the near term, to help offset operational expenses including legal action for the wellness district.
Bierschwale also sees potential for BSRAD to transition some programmatic funding—including annual grants to local nonprofits—into funding for community-oriented capital investments.
“Annual programming operation requests we get, while they are critically important, don’t have the same long-lasting effect on needed infrastructure in our community,” he told EBS.
He said nonprofit partners will need to form accurate forecasts over the next few years so BSRAD can budget reasonably for programmatic needs.
Bierschwale pointed out another challenge: a “glitch” occurred on Madison County property tax rolls and prevented an assessment that should have raised more than $200,000 for Big Sky’s Trails, Recreation and Parks District.
That district will fund certain operational costs for the Big Sky Community Organization, serving as “another alternate source of funding,” Bierschwale said.
Local leaders with the parks and trails district had worked closely with both counties, and they thought it was across the finish line, Bierschwale told EBS. Madison County commissioners did not include the assessment on property tax bills, presenting a cash flow problem of more than $200,000 for the parks and trails district—a new resolution will allow the county to “double up” in the coming year, but until then, the error created “a gap in cash flow that the community is covering” through BSRAD.
“As a result of that, we are hoping that we have a better process moving forward through an interlocal agreement with both counties,” Bierschwale told EBS.
In the board meeting, he added, “When we move into more meaningful debt service, we will not be able to cover that kind of a gap in the future.”
BSRAD is also budgeting $500,000 for a study of local governance options, including incorporation as a municipality. Bierschwale said that’s a pretty big dollar amount, but it’s only a conservative forecast based on the highest bid received—$330,000—from vendors last year for BSRAD’s capital improvement plan.
“[The CIP] was a smaller project than this one,” Bierschwale told EBS. BSRAD will review prospective vendors in a public board meeting in April, and choose a firm in May.
