An updated Capital Improvement Plan, debt settlement, statewide health care and public listing of non-compliant businesses among topics reviewed.
By Jack Reaney STAFF WRITER
Wednesday’s Big Sky Resort Area District board meeting sparked action and a few surprises, including a set date for next October’s community week and a report from the Big Sky Chamber of Commerce that holiday lodging projections rose in the past week from a quieter-than-average outlook, likely based on recent snowfall.
At their monthly, public board meeting, BSRAD covered a packed agenda. Topics included an update on Post Office negotiations, budget adjustments for the Big Sky Community Housing Trust and Morningstar Learning Center, updated procedure regarding the public naming of non-compliant businesses, a statewide healthcare program hosted by the Big Sky Chamber of Commerce and an updated Capital Improvement Plan. BSRAD also elected to pay $659,000 of bond and mortgage debt, as Steve Johnson, board secretary and treasurer, pointed out that cash reserves aren’t earning any interest, but BSRAD is paying interest on the outstanding credits.
‘A public point’ on repeat non-compliant businesses
According to Danny Bierschwale, executive director of BSRAD, Big Sky business registrations opened on Nov. 1.
“The information compiled by business registrations is becoming more important for our community as we’re seeking to get solid data from our economic activity,” Bierschwale said. “These registrations are legally required, and we’re leaning into them.”
After the update, the board faced a related action item: repeat non-compliant businesses.
Bierschwale said numerous have remained on the non-compliant list for four or more years due to resort tax delinquency and other BSRAD policy violations.
“We are very generous with our timelines before we start triggering a legal and higher-tier compliance [penalties], which would include things like revoking a liquor license, filing a lawsuit, penalties, fines, fees, all that fun stuff. We’re just not getting any traction.”
Bierschwale confirmed that BSRAD can legally publish a list of repeat tax delinquency in local publications, and this resolution was added to the agenda “to make a public point that this is a tool in our toolkit which we may exercise.”
He added that BSRAD tries to work with businesses struggling to stay in compliance, “but [they] aren’t there yet,” he said.
Director Kevin Germain said he squirmed when he read the proposed resolution.
“Confidentially is such an incredible thing that this board and staff maintains,” he said. “This would be going public with tax information, and non-compliant businesses. I’m not taking this one lightly.”
Vice Chair Ciara Wolf responded that in many communities, this information would be public.
“The reality is, businesses are collected tax off [consumers], those people are paying those taxes and [businesses are] not transferring them over whereas almost every other business in the community is. They are breaking the law,” Wolfe said.
Director Grace Young said that BSRAD begins to file lawsuits after 120 days, making information public at the Gallatin County Courthouse before being publicly listed by BSRAD.
According to the proposed procedure, BSRAD would name non-compliant businesses if they are 210 days—seven months—late in resort tax payment. The procedure would not list specific details including deficit amounts.
“We’ve gotten approval to do it, we’re going to start doing it at a certain point,” Bierschwale said. The board unanimously approved the resolution and will return with more specific information about its timeline and procedural limits at the upcoming BSRAD meeting on Jan. 11.
Lower-cost health care for Montana businesses
Citing the 16% year-over-year increase of the cost of providing health care to employees, Big Sky Chamber of Commerce CEO Brad Niva presented a plan for the Chamber to provide affordable health care for employers statewide.
In partnership with United Healthcare, the Big Sky Chamber will offer health care to small Montana businesses—fewer than 100 employees—that partner with their local chamber of commerce and pay $150 per year for a discounted membership with the Big Sky Chamber.
Niva saw the recent success of a statewide chamber-member health plan in Bend, Oregon before taking the helm at the Big Sky Chamber in 2021. He adapted the model to fit the industrial needs of Montana, where Niva said almost 80% of employees depend on health insurance from their employer.
“This has taken me 14 or 15 months to get going, but we launched it last week,” Niva told the board. He explained that with only two health care providers in Montana, rates have climbed. By recruiting United Healthcare, Niva expects that cost to drop between 10% to 15% below the current market rate.
The Montana Big Sky Chamber Plan will include dental and vision coverage, and Niva hopes to add a 401k retirement option to improve the benefits employers can offer across the state.
The plan incentivizes businesses to join their both their local chamber and the 470 current members of the Big Sky chamber, Niva told EBS. On top of the recurring annual membership fees, the Big Sky Chamber will also earn revenue by collecting a 0.5% commission on the United Healthcare premiums of participating Montana businesses.
“This program is generating revenue that will allow me to stop asking for funds from you guys,” Niva said regarding BSRAD funding to the chamber, which totaled $168,000 in 2022. Niva told EBS that he believes the chamber should sustain itself without resort tax assistance.
The chamber is targeting 25 new businesses per quarter, with a goal of 200 new chamber members in a year and a half, Niva told EBS.
“We got very good response from other chambers and they want to get involved too,” Niva said. “It’s going to generate new members at other chambers around the state.”
An outdated capital improvement plan
Germain told the board that for challenges including housing, water and sewer, childcare and transportation, “we have a couple tools in our toolbox right now, which [includes] the 3% renewal, we have 1% [for infrastructure], we have bonding, we have [Targeted Economic Development] Districts. We have other things available to us as a community to use our dollars to accomplish big projects.”
Steve Johnson added that all tools in the toolbox require voter approval.
“If we’re going to take action on this, we need to get it in front of the voters… so we can legitimize to our voters whatever we propose and earn their approval,” Johnson said, adding that, “we need to get our act together” before going to voters.
“Every planning board and zoning district needs to have [a CIP] and state law requires that they be updated every five years,” Johnson said.
The most recent zoning board CIP was filed in 2011, which surprised board members.
“We need to update this,” Germain said. “We need this to be Big Sky wide. This is a great document, it’s a deep dive on all those big issues that I mentioned. I think it behooves us as a resort tax board and as a community to update this document and make it relevant to 2022.”
Johnson said responsibility would typically fall on the Gallatin County Big Sky zoning district, but Germain suggested the next step is to submit a request for proposals to qualified vendors to create a CIP for the Resort Area District instead.
“It’s going to be really important for our community to make sure that all of the large-scale capital investments are built into that CIP before that moves forward,” Bierschwale told EBS.
‘Tax Education 102’
Bierschwale said BSRAD wants to make sure all taxes are being handled equitably, and that the community needs to understand how the current system works.
In the past year, BSRAD created a guide which Bierschwale called “tax education 101,” explaining how much is collected, who pays, who collects, and where funds go. The guide helped explain resort tax, lodging facility sales and use tax, and property tax.
Now, Bierschwale said it’s time for “tax education 102,” intended to demystify property taxes. He believes that especially for Big Sky residents in Madison County, property taxes create confusion.
“I can’t look at [a tax bill] and understand it without some help,” he said. “And we want to help.”
BSRAD hopes to be a source of clear information for taxpayers so they can better interpret their property tax bills in May 2023, and BSRAD can help address concerns of Big Sky residents. They plan to release another document to explain tax information—similar to the “Investing in Big Sky” booklet created last year—and are exploring ways to communicate with taxpayers in the months leading up to tax season.
Post office negotiations
Al Malinowski of Gallatin Partners, the firm that recently announced it would terminate its contract with the USPS come February, gave an update at the BSRAD meeting.
“I’ve had some short dialogues with the counterpart I deal with in Denver, I’ve really had no direct communications with anyone else at USPS which is unfortunate, I hoped they would have reached out,” Malinowski said.
Despite communication with certain representatives, he said that with the bureaucracy of the postal service, by the time any discussion reaches the level of decision makers, “it seems to be a very different message and a very incomplete message.”
“What we are here is not understood,” Malinowski told the board, adding that the Big Sky post office faces more demand than an operation in the corner of a coffee shop could handle, referring to the USPS’ recent call for contract bids.
The USPS is looking to find a similar contract-based partner to host a contract postal unit, which would fail to address the needs Malinowski has seen in his two decades operating Big Sky’s mail service. Demand has grown bigger than Gallatin Gateway and West Yellowstone, he said. Both of those postal zones are serviced by a federal office, he said, pointing to the need for a similar upgrade in Big Sky.
Malinowski estimated that an ideal 5,000-7,000-square-foot facility would cost between $500,000 and $1 million annually.
“That’s critical infrastructure to the community, the money is entirely within the scope of what we can afford,” said Johnson, BSRAD board treasurer.
Malinowski said that in the current environment, operating a CPU places risk on the contractor without an associated reward.
“Just because we have a resort tax, is that the right decision for our community to continue to fund something that is otherwise federally funded in other communities?” Germain said.
Funding adjustments for Good Deeds and Morningstar
Although the amount of funding is not changing for either organization, both the Big Sky Community Housing Trust and Morningstar Learning Center received approval on modified funding structures.
According to Bierschwale, the Good Deeds program—which rewards homeowners for implementing deed-restrictions on their property to ensure affordable housing—will now receive BSRAD funding in the form of prepayment. Previously, the BSCHT received reimbursement which caused unnecessary and time-consuming collaboration with BSRAD during real estate transactions.
Since labor force challenges caused Morningstar to close child care services on Fridays, Bierschwale said the provider will have roughly $70,000 of budget surplus. The board unanimously approved a motion to reallocate that surplus into Morningstar’s general operations, to cover the increased costs of tuition assistance tied to unplanned popularity of Big Sky School District’s new 4K program.
An 11-month head start
Bierschwale said he was surprised that the board named a date for 2023 Community Week.
“We’ll try to accommodate homecoming if it falls during [the week of Oct. 2],” he told EBS.
Because Lone Peak High School chooses their homecoming week when fall athletics are scheduled in August, the board approved a decision to allow the potential that Community Week and Homecoming may overlap, as they did this fall.