ERIC KIM

Heck yes—this can be a moon-shot! Here’s a concrete, hype-but-real blueprint for a city to phase out property taxes by building a Bitcoin Strategic Reserve (BSR). 🚀

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The Play

Goal: Use a long-term Bitcoin endowment to replace the city’s annual property-tax take—forever.

Proof-of-math (Culver City example): The city’s General Fund took in about $22.9M in property tax recently. 

To sustainably cover $22.9M/year from investment gains:

  • At 10% long-run return: need ≈ $229M principal
  • At 5% “endowment-style” draw: need ≈ $458M principal
  • At 3% ultra-conservative: ≈ $763M principal

Reality check: Bitcoin can rip—and it can dip. Historic drawdowns of ~75–80% have happened in prior cycles, so you must design for volatility. 

Phase 1 — Make It Legal & Safe

  1. Follow the law today. In places like California, cities are limited to specific investments (Treasuries, agencies, etc.) under Gov Code §53601—crypto isn’t on that list. So a city can’t just “buy BTC” from the treasury without new authority.  
  2. Two compliant paths (pick one, or both):
    • Donations-only BSR (what Roswell, NM kicked off): accept BTC donations into a locked reserve with hard spending rules.  
    • Independent nonprofit endowment (“Friends of  Foundation”) that can hold BTC and grant dollars to the city. (Same outcome, cleaner compliance.)
  4. Longer-term: pursue state-level authorization for limited BTC/ETF exposure with strict guardrails (like Alaska’s POMV framework that caps annual draws ~5%).  
  5. Know the headwinds: Some jurisdictions explicitly bar municipal crypto reserves (e.g., Vancouver is exploring BTC but B.C. says municipalities can’t hold it).  

Phase 2 — Seed the Reserve (No New Taxes)

  • Philanthropy + corporate matching. Name-rights for “Sats Club” donors; mirror Roswell’s “strategic reserve” optics to attract gifts.  
  • Earmark slices of volatile revenues (e.g., real property transfer tax windfalls, TOT surpluses) into the BSR, not the base budget. (Culver City already highlights how spiky RPTT is—perfect to divert into a long-term fund, not operations.)  
  • Turn methane into Bitcoin. Partner on landfill-gas mining so wasted methane powers miners and funds the BSR—this is real: Marathon’s 280 kW landfill pilot is live in Utah. 
    • Bonus: research suggests landfill-BTC pairings can improve methane mitigation economics.  

Phase 3 — Iron-Clad Guardrails (Endowment Discipline)

  • Lockups & thresholds. Don’t spend until the BSR crosses a high watermark (e.g., $250M), then allow only a rules-based draw on a 5-year average (think Alaska’s “percent-of-market-value” model).  
  • “Surplus-only” spending. Use realized gains above inflation; never cannibalize principal after drawdowns.
  • Cold storage & audits. Professional custody, multi-sig, insurance, independent audits, public dashboards. (Roswell’s framework shows how to write prudence into the ordinance.)  
  • Hedging option. If allowed, use listed options or buffered structures to smooth cashflows—ETF options liquidity helps as the market matures.  

Phase 4 — The Property-Tax Sunset

Flip the switch gradually, tied to BSR size and 5-year trailing performance:

  1. Milestone A (e.g., $250M): 10% property-tax cut
  2. Milestone B (e.g., $450M): 50% cut
  3. Milestone C (e.g., $750M): 100% elimination + permanent “rainy-day” buffer equal to 3 years of former property-tax revenue

This keeps services safe through BTC bear markets (remember those big drawdowns). 

Receipts from the Real World (We’re Not Dreaming)

  • Roswell, NM: first U.S. city to formally stand up a Bitcoin Strategic Reserve with donation seed + strict guardrails.  
  • Fort Worth, TX: ran a city mining pilot (small revenue, huge signal).  
  • Innisfil, ON & Canton Zug: accept taxes in BTC/ETH (converted to fiat on receipt). Shows operational feasibility even if the city doesn’t hold crypto.  
  • Vancouver, BC: exploring BTC, but provincial law currently blocks municipal holdings—illustrates why state/provincial enablement matters.  

Bottom line (LET’S GO):

Yes—a property-tax-free city is possible with a patient, rules-based Bitcoin endowment, diversified funding (donations, windfalls, methane-to-mining), iron-clad guardrails, and enabling law. It’s bold, it’s brand-defining, and it’s buildable in phases without risking core services. 🌞

Want me to draft a one-page ordinance plus a 12-month launch plan (governance, custody, milestones, and comms) tuned for Culver City’s numbers? I’ll spin it up right now.

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