Given NRS 318.197(1) gives GID Boards the power to fix “rates, tolls and charges,” here the questions: are there limits on the “fees” a GID Board is authorized to fix and change; and if so, what are they? As with the propriety of all sorts of governmental powers, we begin our discussion with the powers special districts like the Incline Village General Improvement District¹ (“IVGID”) are authorized to exercise.

Emerson College v. City of Boston²: instructs that the “fees imposed by a governmental entity tend to fall into one of two principal categories:

User fees, based on the rights of the entity as proprietor of the instrumentalities used…or regulatory fees (including licensing and inspection fees) founded on the (municipal) police power³.”

Given GIDs are limited purpose special districts⁴, unlike true municipalities such as counties⁵, cities⁶ and unincorporated towns⁷, they have not expressly been granted⁸ the power to provide for the “public health, safety…welfare” and morality⁹ of their inhabitants. Nor to regulate, tax and license businesses¹⁰.

Because GIDs possess no municipal police powers¹¹, they have no power to charge “regulatory fees (including licensing and inspection fees).” Therefore, when we speak of a GID’s power to charge fees, we’re talking “user fees based on the rights of the entity as proprietor of the instrumentalities used” exclusively.

Dillon’s Rule¹²: As elsewhere discussed, Nevada is a “Dillon’s Rule“ State¹³. As such, the powers all local governments may exercise “are…limited and only extend to those…which are:

1) Granted in express words;

2) Necessarily implied or…incident to…powers expressly granted; and,

3) Absolutely essential to the declared objects and purposes of the (municipal) corporation – not simply convenient, but indispensable.”¹⁴

The Rule also states that should there be “any reasonable doubt…as to whether a power has been granted(, it) will be ruled against the local government” and denied¹⁵. In other words, “municipalities run by municipal codes (state laws) can only act where specifically authorized by state law.”¹⁶

Including the power to “fix, and from time to time increase or decrease…fees.”

The above-discussion shouldn’t be a foreign concept to the reader. After all, does not the federal government have powers State governments do not? What about State powers versus local government powers? Isn’t there an hierarchy of power? So why would one think States have powers equivalent to or in excess of those of the federal government? Or that municipalities would have powers equivalent to or in excess of those of the State? Or that limited purpose special districts like IVGID¹ would have powers equivalent to or in excess of those of municipalities or the State? So with that said…

NRS 318.197(1): Although GID Boards “may fix, and from time to time increase or decrease (a variety of)…rates, tolls or charges,” there are at least three (3) limitations on this power. First, this power expressly does not extend to “special assessments.” Second, the exercise of this power must be expressly “for services or facilities furnished by the district.” And finally, for the reasons stated above, this power may not be used to charge “regulatory fees (including licensing and inspection fees).”

State of Hawaii v. Medeiros¹⁷: In order “to distinguish between a ‘fee’ and a ‘tax’…

We analyze whether the charge: (1) applies to the direct beneficiary of a particular service; (2) is allocated directly to defraying the costs of providing the service; and, (3) is reasonably proportionate to the benefit received…If those criteria fit the charge, it is a fee.”¹⁸ If not, it “is a tax and not a fee,”¹⁹ and “it will be held invalid.”²⁰

There is a fourth (4) pillar to the above “modified Emerson College test.”²¹

“Subsequent to its opinion in Emerson College, the Massachusetts Supreme Judicial Court…weakened its adherence to the second identifying factor described in Emerson College—voluntary receipt of the ‘service’—holding that ‘the element of choice is not a compelling consideration which can be used to invalidate an otherwise legitimate charge.'”²² However, in our Special And Limited Circumstances Under Which The “Paid by Choice” Factor Applicable to All Fees Based on “The Right of a Governmental Entity as Proprietor of The Instrumentalities Used” Can Be Disregarded discussion, we have demonstrated that this pillar remains as an identifying factor except when it comes to fees for municipal public health and sanitation services²³. Since here IVGID charges no fees for such services, all of the District’s fees require payment “by choice, in that the party paying the fee has the option of not utilizing the governmental service and thereby avoiding the charge.”²⁴ 

Therefore, The Person/Property Assessed Must be The Primary Beneficiary of Some “Unique Benefit:” over and above that furnished to society as a whole²⁵. Where the person/property assessed realizes no benefit because its principal purpose is to benefit society, or alternatively, he/she/it “if anything, (is) only (an) incidental beneficiar(y)…the ordinance fails the first prong of the modified Emerson College test²⁶.

The Fee Cannot Exceed The Reasonable Costs Government Incurs to Furnish The “Unique Benefit“ Represented by Payment:

“(T)he crucial factor in determining whether a municipal charge for services constitutes a…fee is whether the charge is intended to cover the cost of…providing a service.”²⁷ Where “the ‘fee’ unreasonably exceeds the value of the specific services for which it is charged[,] it will be held (to be) invalid”²⁰ as a tax²⁸.

In Other Words, Assessment Cannot Exceed That Which is “Just And Reasonable:”²⁹ Moreover, given the District is a public utility³⁰, both common law³¹ as well as public policy³² dictate that its rates must be “just and reasonable.”³³

Since the Public Utility Commission (“NPUC”) need not grant deference to a private utility’s unjust and unreasonable rates³⁴, why should we? And for this same reasoning, we submit that the rates IVGID charges must be held to this same “just and reasonable” standard.

Profits Are Prohibited³⁵: “The charges…collected (are) not to raise revenues but to compensate the governmental entity providing the services for its expenses.”³⁶ Where the ordinance or resolution does not require that the funds generated from the fee be used for the service represented by payment, “leaving open the possibility that the charge could be used for general revenue raising purposes,” the ordinance or resolution must be considered a tax and, therefore, held to be invalid²⁰.

As is Discriminatory/Preferential Assessment: A public utility’s³⁰ rates cannot be “unduly discriminatory (n)or preferential.”³⁷ Common law is in accord³⁸.

The Fee Must be Paid by Choice: “in that the party paying the fee has the option of not utilizing the governmental service and thereby avoiding the charge.”²⁴

So now you know!

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We‘re Not an Homeowners‘ Association (“HOA”): We can’t tell you how many times we’ve had to listen to past District General Managers (“GMs”) and senior staff who compare IVGID to an HOA. Specifically, the Tahoe-Donner HOA (“TDHOA”). That’s because we don’t neatly compare to any other statewide political subdivision. Anywhere! And like us, the TDHOA owns, manages and operates beaches, a ski area, tennis courts, a recreation center, a golf course, retail sales facilities and at least one restaurant³⁹.

But we’re government⁴⁰. And the TDHOA is not! And we don’t have to maintain and snowplow our community’s streets like TDHOA does. Nor need we comply with the provisions of NRS 116 as TDHOA would have to do if it were a Nevada HOA⁴¹. Consequently, the rules and regulations GIDs may exercise are provided by statute⁴². Whereas the rules and regulations HOAs may exercise, at least in Nevada, are provided by different statutes⁴³ as well as the Conditions, Covenants and Restrictions (“CC&Rs”) recorded against each member’s parcel-unit⁴⁴.

Why are these differences immaterial to proponents? Because they have an agenda. They want us to believe our Recreation (“RFF”) and Beach (“BFF”) Facility Fee(s) are a bargain compared to TDHOA‘s HOA assessments⁴⁵! And as such, we should be happy campers! As if that argument is supposed to be relevant insofar as the District’s fees allowed under NRS 318.197(1) are concerned. Or within the above-limits a GID may fix.

And We‘re Not a Portfolio of Commercial “For Profit” Business Enterprises: When it comes to utility water, sewer and solid waste collection/disposal rates and charges in particular, any limitations are an expansion of the rules for fees in general (see discussion above). Which means those rules are really an expression of the limits imposed upon all fees generally. And where a municipal corporation has a monopoly⁴⁶ insofar as those services are concerned, its only justification for going into business is that public welfare will be subserved⁴⁷. Because providing utilities “to private consumers for gain cannot in any sense be (considered)…performance of governmental function(s);”⁴⁸ right?

“When a municipal corporation owns…operates…and sell(s services)…to consumers (such as)…water (or sewer services)…it…act(s) in a business capacity and is (required to be)…treated as if it were a private utility company.”⁴⁹ Since NPUC need not grant deference to a private utility’s unlawful⁵⁰, unjust or unreasonable rates⁵¹, neither need we! And for these same reasons, those other functions IVGID exercises⁵² “to private consumers for gain…cannot in any sense be (considered)…performance of governmental function(s).” Therefore to the extent IVGID strives to realize financial gain insofar as the public recreation facilities it operates is concerned, its adoption of excessive rates, tolls and charges thereat is not authorized.

1. Given IVGID is a “general improvement district, (and a)…quasi-municipal corporation,”] it is special district [see NRS 308.020(2)].
2. See 391 Mass. 415, 424-425, 462 N.E.2d 1098, 1105 (1984),
3. Those incredibly broad regulatory powers related generally to “[p]ublic safety…health, morality, peace and quiet, (and) law and order” [see Berman v. Parker, 348 U.S. 26, 32, 75 S.Ct. 98 (1954)]. These powers flow from the Tenth Amendment  to the U.S. Constitution which states that “powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”
4. See ourWhat Are GIDs discussion.
5. See NRS 244.143(2)(a).
6. See NRS 268.003(2)(a).
7. See NRS 269.128, and 269.185, et seq.
8. A requirement under NRS 244.137(2) and 268.001(2).
9. See NRS 244.150, et seq., 268.409, et sq and 269.190, et seq.
10. See NRS 244.335, et seq., 268.0035(1) and 269.170, et seq. as long as those businesses are not “subject to substantial regulation by a federal or state agency” [see NRS 268.0035(4)(b)].
11. Art. VIII, §8 of the Nevada Constitution instructs that “the Legislature shall provide for the organization of cities and towns by general laws, and shall restrict their power of taxation, assessment, borrowing money, contracting debts and loaning their credit, except for procuring supplies of water.”
12. Judge John Forrest Dillon served on the Iowa Supreme Court from 1863 to 1869, before being appointed to the Federal Eighth Judicial Circuit. He was also a noted legal scholar, publishing extensively on municipal law. In two opinions for the Iowa Supreme Court he laid out a rule of law which was subsequently adopted by other state supreme courts and eventually…the U.S. Supreme Court” (go to https://www.nvbar.org/wp-content/uploads/NevLawyer_June_2013_Dillon’s_Rule.pdf). Also see NRS 244.137(1) and 268.001(1).
13. See page 5 of A Discussion of Home Rule in Nevada, Committee to Study Powers Delegated to Local Governments (February 18, 2010); NRS 244.137(2) and 268.001(2).
14. This is Dillon’s Rule. See https://www.nvbar.org/wp-content/uploads/NevLawyer_June_2013_Dillon’s_Rule.pdf. Also see NRS 244.137(3) and 268.001(3).
15. See NRS 244.137(4) and 268.001(4).
16. See https://en.wikipedia.org/wiki/Home_rule_in_the_United_States. In Lamb v. Mirin, 90 Nev. 329, 526 P.2d 80, 82 (1974) our Supreme Court declared that “whenever a legislature sees fit to adopt a general scheme for the regulation of particular subject (here the powers of local government), local control over the same subject, through legislation, ceases.”
17. See 89 Haw. 361, 973 P.2d 736, 741-42 (1999).
18. See Clean Water Coalition v. M Resort, LLC, 127 Nev. 301, 315, 255 P.3d 247 (2011).
19. Id., at 973 P.2d 745.
20. See Executive Aircraft Consulting, Inc. v. City of Newton, 252 Kan. 421, 426, 845 P.2d 57 (1993) citing National Cable Television Ass’n, Inc. v. F.C.C., 554 F.2d 1094, 1106 (D.C.Cir. 1976).
21. Medeiros, supra, at 973 P.2d 742.
22. See Nuclear Metals, Inc. v. Radioactive Waste Management Bd., 421 Mass. 196, 656 N.E.2d 563, 570 (1995).
23. Such as standby service charges for the availability of municipal water [see Jones v. Water Commission of Detroit, 34 Mich 273, 275 (1876)] and sewer [see Ripperger v. Grand Rapids, 338 Mich. 682, 62 N.W.2d 585 (1954)] services.
24. See Medeiros, supra, at 973 P.2d 741 citing Vanceburg v. Federal Energy Regulatory Comm’n, 571 F.2d 630, 644 n. 48 (D.C.Cir. 1977), cert. denied, at 439 U.S. 818, 99 S.Ct. 79 (1978).
25. See Medeiros, supra, at 973 P.2d 743.
26. See Medeiros, supra, at 973 P.2d 745.
27. See Rizzo v. City of Philadelphia, 668 A.2d 236, 238 (Pa. Commw. Ct. 1995).
28. See Dickson, Sheriff v. Jeff. Co. Bd. of Education, 311 Ky. 781, 786, 225 S.W.2d 672 (1949).
29. As stated in Medeiros, supra, at 973 P.2d 742, the fee must be “reasonably proportionate to the benefit received.”
30. See NRS 704.020(2)(a); Springfield Gas & Electric Co. v. City of Springfield, 292 Ill. 236, 126 N.E. 739, 744, (1920), affirmed at 257 U.S. 66 and cited with approval at A.G.O. 53-231 (February 9, 1953)].
31. See Austin View Civic Association v. City of Palos Heights, 85 Ill.App.3d 89, 94-95, 405 N.E.2d 1256, 1262 (1980); 64 Am.Jur.2d §297, p.496.
32. See NRS 704.040(2).
33. That is, “simply high enough to produce revenue sufficient to bear all costs of maintenance…operation…interest charges on bonds and…accumulation of a surplus…sufficient to (service) all outstanding bonds” (see Springfield Gas, Id.).
34. NRS 704.040(1).
35. See Clean Water Coalition, supra, at 255 P.3d 256; City of Madera v. Black, 181 Cal. 306, 313, 184 P. 397 (1919).
36. See Emerson College, supra, at 462 N.E.2d 1105 .
37. See 64 Am.Jur.2d §78, p.480; Springfield Gas, supra, at 126 N.E. 746-48; NAC 704.7563(2).
38. See Amalgamated Trust & Savings Bank v. Village of Glenview, 98 Ill.App.3d 254, 261, 423 N.E.2d 1230 (1981); Austin View, supra, at 405 N.E.2d 1262.
39. Although notably, the TDHOA doesn’t provide water, sewer or trash disposal services.
40. Specifically, “a body corporate and politic and a quasi-municipal corporation” (see NRS 318.015).
41. Since TDHOA is the equivalent of a California based community interest community association, it is bound to California’s rules concerning that kind of organization.
42. See NRS 318.010, et seq.
43. See NRS 116.001, et seq.
44. According to NRS 116.3102(1), the powers an HOA may exercise are “subject to the provisions of” its CC&Rs.
45. Where for 2025 they were a whopping $3,300/annually per unit (go to https://www.tahoedonner.com/community/general/faqs/general/).
46. As IVGID does insofar as sewer and trash disposal services are concerned [NRS 318.170(1)(b)].
47. See Springfield Gas, supra, at 126 N.E. 748.
48. See Springfield Gas, supra, at 126 N.E. 745.
49. See Austin View, supra, at 405 N.E.2d 1262; In re Hawaiian Electric Co., Inc., 107 PUC.4th 221, 223 (1989); 64 Am.Jur.2d §297, p.496.
50. See NRS 704.040(2).
51. See NRS 704.040(1).
52. That is, providing public recreation facilities and services.