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Big Sky voters will decide in May whether to increase the resort town’s 3% sales tax to 4% with the additional revenue going to upgrade and expand water and sewer services.

If voters approve the tax hike, the Big Sky County Water and Sewer District will expand its wastewater treatment plant’s capacity from 600,000 gallons per day to 910,000 gallons, allowing for 3,800 new hookups, said general manager Ron Edwards. Five hundred of the new hookups will be earmarked for workforce housing to help address Big Sky’s affordable housing shortage.

The expansion will cost $45 million with $27 million expected to come from the 1% sales tax hike and the remainder from the fees district members pay for service.

The district is nearing capacity with about 800 hookups left, Edwards said. If the upgrade finishes in 2022 as expected, there won’t be any disruption in service.

The 1% sales tax increase would also pay for construction of a pipeline system that would transport wastewater from the canyon to the treatment facility, eliminating some septic drain fields and treating water to the point that it could be discharged as groundwater.

The $12 million project is contingent upon canyon residents forming a water and sewer district.

The project is expected to be completed in 2024.

Treating canyon area wastewater in the treatment plant rather than in septic drain fields could better protect the area, which has seen a recent uptick in groundwater nitrogen, a threat to the Gallatin River.

The improvements to the wastewater treatment plant mean the district will no longer be restricted to using its treated wastewater for irrigation. Irrigation can only occur in the summer, which means the district must store treated wastewater in reservoirs through the winter. As the district has grown, there has been concern about whether existing reservoirs are large enough and whether there is adequate demand for irrigation to draw down the reservoirs in the summer.

Edwards said the water and sewer projects wouldn’t be possible without the 1% sales tax increase.

“We have a very small customer base of about 3,000 accounts, but we have all these tourists that come in who we have to provide service to,” he said. “It makes sense to have tourists help pay for this because they also benefit from it.”

Earlier this month, the Big Sky Resort Tax Board, which oversees the existing 3% sales tax, unanimously approved placing the additional 1% sales tax on the ballot.

The board chose the projects because they help meet goals outlined in Big Sky’s strategic plan including improving infrastructure, protecting the environment and promoting the development of affordable housing, said resort tax district manager Daniel Bierschwale.

The resort tax board received three other requests for projects tied to a 1% sales tax hike — equipment for the Big Sky Fire District, a bus storage facility for the Big Sky Transportation District and upgrades to a bridge near the Parkview West subdivision. Board members rejected the three proposals because they wanted to be conservative about how much money the new tax might generate, Bierschwale said. They suggested the three projects apply for money from the 3% sales tax.

Big Sky has had a 3% luxury sales tax since 1992. The tax must be renewed every 20 years and will next be on the ballot in 2032. Montana’s 10 resort areas can now ask voters for a 1% sales tax to pay for specific infrastructure projects because of a bill that passed during the 2019 legislative session.

If Big Sky voters approve the new tax in May, it will go into effect July 1. The tax would then expire once the two projects are paid for, which is likely by 2032.

In November, West Yellowstone voters approved a 1% increase to the town’s sales tax for a wastewater treatment facility, replacement of water and sewer lines, installation of a water storage tank and improvements to streets and sidewalks. Virginia City also approved the 1% increase in November. The tax will bring in about $35,000 annually for the next several years and will help Virginia City purchase the town’s central parking lot.

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Perrin Stein can be reached at pstein@dailychronicle.com or at 582-2648.

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