As we’ve demonstrated elsewhere, “each year, the District establishes…annual Recreation…and Beach Facility Fee(s)…collected from property owners within the District through a levy placed on the(ir) property tax bill(s)¹…As part of the annual budget process the Board traditionally approves a resolution which outlines the billing (‘NRS”‘ 318.197²) and collection (NRS 318.201³) process(es) set forth in (the) Nevada Revised Statutes (“NRS”)…which establish…the amount of the…RFF and…BFF to be collected.”⁴ “At (a publicly noticed) meeting the Board…t(akes) action (via resolution⁵)…which…(approves) a final report⁶ contain(ing) a description of each parcel of real property (allegedly) receiving…services and facilities (from the District, and) the (final) amount of…charge(s)…for such year.”⁷ Although that resolution and report describe the RFF/BFF, in part, as “service charges⁸…for…the (mere) availability of the use of IVGID’s beaches” and other delineated public recreation facilities⁹, since the statutory authority for these “fees” is the broader NRS 318.197 which encompasses “service charges for services or facilities,” here we answer the question what are “service charge(s)…for services or facilities furnished by the District?”

What Are “Service Charges?” Although NRS 318.197 expressly uses the words “service charges,” nowhere is the term defined. So we’re relegated to searching elsewhere. And here’s what we’ve discovered. “A service charge is a fee collected to pay for services related to (a)…product or service being purchased. The charge is usually added at the time of the transaction. Many industries collect service charges, including restaurants, banking, and travel and tourism. When collected, these charges may cover services rendered to the (customer), or they may cover administrative or processing costs. Service charges are paid directly to the (provider of services. Thus) they are different from tips, which are paid to the employee who renders the service.”¹⁰

“Service charges come with different names, depending on the industry concerned…For example, a ‘service charge’ is typically added to your bill in a (San Francisco) restaurant to pay for” employees’ health care costs¹¹. At many hotels a “resort fee” is added onto the cost of your lodging for the availability of wi-fi, a couple of bottles of water per day, access to the facility’s swimming pool and fitness facilities, etc. At financial institutions the charge can be “a monthly fee…charged…for maintaining a checking or savings account…In the airline industry(, it can be an additional charge)…to pay for services such as entertainment, baggage handling, seat selection, (a meal,) travel agent commissions, etc…In the utility industry(, it can be a charge)…in addition to the actual bill (itself) for power…used.”¹² It can be an additional fee imposed for the privilege of using a credit card to make payment. Finally, “Airbnb is an example of an online rental platform that imposes (additional) ‘service charges’ to cover company costs.”¹¹

Service Charges Do Not Pay For Access to And Use of The District‘s Facilities or Services: Don’t confuse service charges with a fee for some per se service. As expressed elsewhere, those charges are called user fees¹³!

So there you go. Service charges are additional fees associated with the costs per se assessed for access to and use of the facilities and services the District furnishes!

1. See page 102 of the packet of materials prepared by staff in anticipation of the Board of Trustee’s (“Board’s”) May 27, 2020 meeting (“the 5/27/2020 Board packet”).
2. Which allows general improvement district (“GID”) boards to “fix (in part)…recreational facilit(y)…service and standby service charges, for…the availability of” service.
3. Which allows “any (GID) board which has adopted rates pursuant to…chapter (NRS 318 to)…elect to have such charges for the forthcoming fiscal year collected on the tax roll.”
4. See page 103 of the 5/27/2020 Board packet.
5. See NRS 318.201(9). For an example of the type of resolution, see pages 185-193 of the packet of materials prepared by staff in anticipation of the Board’s May 26, 2021 meeting (“the 5/26/2021 Board packet“).
6. An example of that report (for fiscal year 2021-22) appears at pages 188-193 of the 5/26/2022 Board packet.
7. See NRS 318.201(8) and (9).
8. See ¶4 at pages 185-186 of the 5/26/2021 Board packet.
9. See ¶4(b) at page 186 as well as ¶I at page 190 of the 5/26/2021 Board packet.
10. Go to https://www.investopedia.com/terms/s/service-charge.asp.
11. Go to https://corporatefinanceinstitute.com/resources/wealth-management/service-charge/#:~:text=A%20service%20charge%2C%20also%20called,of%20a%20product%20or%20service.
12. Look at your IVGID utility bill. In addition to charges for actual water used or capital improvement costs, you will discover a separate monthly “administrative” charge. This is service charge.
13. “A user fee is a charge imposed by the government for the primary purpose of covering the cost of providing a service, directly raising funds from the people who benefit from the particular public good or service being provided” (go to https://taxfoundation.org/taxedu/glossary/user-fee/).