Planning for the Future of Our Infrastructure:
TEDD & TIF
The Gallatin Canyon County Water and Sewer District (GCCWSD) is looking at new ways to help fund the current sewer project and future infrastructure needs. One idea being explored is the use of a Targeted Economic Development District (TEDD)—a tool available that helps local governments improve roads, water, sewer, and other services in a specific area to support growth. Only cities, towns, or counties can set up a TEDD—not water or sewer districts—so Gallatin County would lead the effort.
What is a TEDD?
A TEDD is a specially designated area created by a local government (like Gallatin County) to encourage business development. It helps pay for infrastructure improvements in that area using a funding method called Tax Increment Financing (TIF).
How Does Tax Increment Financing (TIF) Work?
Once a TEDD is established, property taxes collected on new growth in the area can be used to fund public infrastructure—like sewer systems. This helps avoid raising taxes across the board.
Why This Matters for Our Community
Supports economic growth & job creation
Prepares the district for future development and growth
Helps pay for necessary sewer & infrastructure improvements
Does not require additional taxes from residents
The current opinion of probable costs for the Phase 1 canyon sewer project is approximately $55 million with the entire build-out being approximately $70 million. To date, the project has secured $23.675 million so an additional $30 million is needed to complete the first phase. Note that these are estimates and exact costs will not be determined until a public bidding process has been completed.
Significant development is anticipated in the area, so utilizing TIF could help fill the funding gap for the canyon sewer project. Other funding strategies being explored are discussed in the 2024 Financial Analysis Memorandum (linked). Note that the tax would primarily be paid by property owners developing their land and therefore increasing the taxable value of the land. This tax would be levied whether or not the TEDD exists.
What is Next?
The GCCWSD will be working closely with Gallatin County to evaluate this option. If established, the TEDD could help make our sewer project more affordable and sustainable for years to come. The proposed TEDD is shown in the figure below. It focuses on the northern part of the future GCCWSD service area, where most new development is expected. The majority of this area falls under the Phase 1 sewer project area.
KK to INSERT MAP
For more details, Montana Code Annotated 7-15-4279 outlines the legal framework for TEDDs.
Please feel free to reach out to the GCCWSD at gallatincanyonwsd@gmail.com if you have any questions.