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Lobbying Members of Congress/Regulators to Advocate For/Against Federal Legislation

IVGID 101 Posted on by

As with the propriety of all local governmental powers, we begin our analysis with the Nevada Constitution given it “is the ‘supreme law of the state which ‘control[s] over any conflicting statutory provisions.’”1 Nev. Const. Art. 8, Sec. 8 instructs that the Legislature shall provide for/restrict the powers of general purpose governments. Since the Legislature has created the GID law2, and the Incline Village General Improvement District (“IVGID”) is a GID3, its powers are recognized/restricted by NRS 318.

As demonstrated elsewhere, general improvement districts (“GIDs”) are limited purpose special districts. Therefore their powers are to be strictly construed and limited4 to those provided by the Legislature5 as explicitly conferred by their County Boards of Commissioners (“County Boards”) in the GID’s initiating ordinance6 as supplemented, if at all, by: those “additional basic power(s expressly) granted7…pursuant to NRS 318.077;”8 “sections of this chapter (NRS 318) designated therein;”3 and, none other1.

IVGID’s Powers: The basic powers the Washoe County Board has expressly granted to IVGID (all of which have been provided by the Legislature2) consist of furnishing facilities for: streets, alleys and public highways9; curbs and gutters10; sidewalks11; storm drainage and flood control12; sanitary sewerage13; water14; lighting public streets, ways and places15; the collection and disposal of garbage and refuse16; public recreation17; and, electric light and power18. Notably, nowhere has the Washoe County Board granted to IVGID municipal police powers19 to provide for the health, safety or general welfare of any inhabitants within its geographical boundaries20 even where those inhabitants, or the GID itself, may be “interested” in proposed federal legislation/regulation. Nor has it granted to IVGID the basic power to pass laws or legislate21. Nor to lobby legislators and other elected/regulatory officials to influence federal legislation.

Moreover, look at NRS 318.116 and show us where GIDs are empowered to exercise these powers. Show us how these powers are necessarily or fairly implied in or incident to other powers expressly granted to the District. Show us how these powers are essential to accomplishment of the District’s declared objects and purposes – not merely convenient, but indispensable22. Notwithstanding the answers to these questions are a resounding nowhere and they are not, District staff think it’s perfectly permissible to spend any monies under their control, regardless of the source(s) or representation(s) giving rise to their receipt, on virtually anything of their choosing. And here the money is not only spent on lobbyists to advocate for/against legislation, but members of Congress and federal regulators to boot!

The Particulars: For more than seventeen (17) years staff have been paying Marcus Faust, registered federal lobbyist, to actively advocate for federal legislation/regulation on the District’s behalf. Initially that legislation was directed towards securing partial funding for replacement of the District’s failing effluent export pipeline. But in recent years it has apparently expanded to legislation that would: transfer excess federal lands to Washoe County so they can be transferred to the District to expand its footprint for use as a dog park, and back country Diamond Peak ski/snowboard terrain; secure federal funds for unidentified infrastructure repairs under President Biden’s $1.2 trillion Bipartisan Infrastructure Framework, Congress’ CARES Act, America Infrastructure Act, and Nevada Main Street USA Beautification, etc.23; and, who knows what else?

At the Incline Village General Improvement District (“IVGID”) Board’s January 29, 2020 meeting former Public Works Director Joseph Pomroy, presented a comprehensive history to the Board and the public of the District’s Effluent Export Pipeline Export System24. In that presentation Mr. Pomroy recounted how: between 2006-2009 the District had replaced approximately 3.4 miles (from Incline Village to Sand Harbor) of failing pipeline; the District had made a series of associated repairs to the effluent pipeline system; and, in conjunction with that project the District had received partial funding ($15,446,250) from the United States Army Corps of Engineers’ (“USACE’s”) program “595”25 (“section 595 funding”). Now looming is Phase II of the effluent export pipeline project which “will replace the remaining six (6) miles of aging pipeline within the Lake Tahoe Basin.”26

Since 2004 the District has contracted with lobbyist Marcus Faust of Washington, D.C., for federal legislative advocacy services20. Staff claim “the District’s efforts with Mr. Faust have…saved the District’s residential and commercial ratepayer(s) $2,095 (each)…in utility rates.”20 And for this reason they continue to employ Mr. Faust to “rais(e) the authorization of the section 595 program…by $100 million over the previous limit (allegedly) to allow new annual appropriations through the Federal Budget process”27 which will benefit the District. Therefore the contract with Mr. Faust gets regularly renewed, the last renewal [for another three (3) year term] being at the Board’s May 1, 2019 meeting.

The scope of services provided by Mr. Faust according to that contract28 is as follows:

1. “Developing strategies to obtain and maximize federal funding for IVGID projects and programs;”

2. “Coordinating funding, legislation and policy related activities with the United States Congress and federal agencies;”

3. “Securing authorizations and funding from the United States Congress and federal agencies to implement IVGID’s projects;”

4. “Maintaining direct and frequent contact with key United States Senators and Representatives”

5. “Advocating IVGID’s interests during the United States legislative and regulatory process(es);”

6. “Monitoring and information gathering with the Executive Branch and Congress with respect to all matters which IVGID may have interest in. Specifically…development of budgets for appropriations and such other matters of interest pertaining to IVGID;”

7. “Actively lobby(ing of) the Congress and the departments and agencies of the Executive Branch of the government on behalf of the interests of IVGID (including)…arranging meetings for personnel of IVGID with officials or staff of these federal departments as may be necessary; the preparation of legal memoranda, Congressional testimony and briefing papers; assisting in devising and implementing strategy with respect to the vital interests and objectives of IVGID; liaison work with key members of the House and Senate Committees…;”

8. “Providing regular briefings to IVGID as needed and travel to Nevada to meet with IVGID officials annually;”

9. “Providing office and administrative support services to IVGID personnel while (they are) in Washington, D.C.;” and,

10. “Travel as may be necessary…on behalf of IVGID.”

The Costs the District Incurs: Hiring a federal lobbyist like Mr. Faust isn’t inexpensive. And according to his latest contract29 the cost is $65,000 annually plus the reimbursement of reasonable expenses” (photocopy, postage, telephone, delivery, telecopy charges, and travel)30. Those charges are assigned to the District’s Utility Fund31. Like nearly everything else staff administer, this expenditure requires a financial subsidy from somewhere. And that somewhere ends up being the utility rates, tolls and charges paid/ultimately guaranteed by local parcel/dwelling unit owners32 given staff have disclosed “the full amount of the contract is a water and sewer operating expense in the Utility Fund.”33

Ultimately These Costs Are Subsidized by the Utility Rates Local Parcel/Dwelling Unit Owners Are Compelled to Pay: According to staff these expenses are budgeted each year to the District’s Utility Fund34. Which means they are involuntarily assessed against all habitable parcels/dwelling units within IVGID’s boundaries35.

Advocating For/Against Federal Legislation/Regulation is Not an Economically Sound Nor Feasible Endeavor: Apart from the fact the District has no power to engage in legislative advocacy services, NRS 318.055(4)(c)(2) instructs that before a GID can be granted a new basic power, its County Board must find “that…(the granting of this power, once exercised, will be) economically sound and feasible.”36 Given the District is required (assuming it wants to balance its budget) to involuntarily assess local parcel/dwelling unit owners water and sewer rates assigned to its Utility Fund, and payment of the subject legislative advocacy services ultimately comes from that subsidy (see discussion above), we submit that the District has no power to advocate for/against federal legislation/regulation, nor to spend public funds with someone else to do advocacy bidding on its behalf because it is economically unsound and unfeasible.

At nearly every meeting where the question of Marcus Faust’s continued services as federal lobbyist is concerned, staff comes up with an argument expressly addressing this economic , soundness and feasibility requirement. As the story goes, since Mr. Faust’s efforts were successful in receiving approximately $15½ Million of section “595” Water Resources Development Act funds, we should continue with him in his efforts to secure additional funds (even though funding has “dried up” under this Act) for our effluent export pipeline project. But Mr. Faust’s efforts were successful some twenty (20) years ago in 200437! Since then virtually nothing as a result of Mr. Faust’s efforts. For several years we’ve heard the narrative that Mr. Faust has allegedly been successful in subsequent endeavors. First it was successfully lobbying for passage of a new section “595” program38. Then it was discovering unspent funds under the original section “595” program which could allegedly be made available to the district39. And now it’s the availability of federal funds under President Biden’s Infrastructure Investment and Jobs bill which became law on November 15, 2021. As the narrative went, the State is going to receive $X.00 Billion under this bill which will be available to Nevada counties for necessary infrastructure repairs/upgrades40.

Well if the reader believes any of this, we have a couple of public bridges you might be interested in purchasing! So far the District has received nothing, and the odds are overwhelming that when everything is said and done, the District’s continued love affair with Mr. Faust over the last twelve (12) or more years has been just another complete waste of public funds. In other words, no economic soundness nor feasibility. Thus the question here is whether it is permissible for IVGID to hire lobbyists to advocate in favor/against federal legislation/regulation and to involuntarily assess local parcel/dwelling unit owners the costs associated therewith?

The District’s Justification: We believe there is none. However, if the reader would like to consider the Board’s/staff’s perceived justification and our response, you’re directed to our Staff’s/the Board’s Justification For Exceeding the Limited Powers the District May Permissibly Exercise discussion.

Conclusion: Does any of this sound like something a limited purpose special district should be doing? And not that justification can come from what any of the eighty-four (84) [as of fiscal year 2011] or more other Nevada GIDs in the State41 do, how many do you think have hired lobbyists to advocate on their behaves for/against proposed federal legislation/regulation? To our knowledge none other than IVGID! Thus we submit that the fact no other GID in the State lobbies Congress/federal regulators in favor/against proposed federal legislation/regulation is evidence neither should IVGID!

  1. See Thomas v. Nev. Yellow Cab Corp., 130 Nev. Adv. Op. 52, 327 P.3d 518, 521 (2014).
  2. See NRS 318.010.
  3. NRS 318.015(1) instructs that “each district organized pursuant to the provisions of this chapter shall be a body corporate and politic…quasi-municipal corporation” and general improvement district. 
  4. See A.G.O. No. 63-61, p. 102, at p. 103 (August 12, 1963).
  5. See NRS 318.116.
  6. See NRS 318.055(4)(b).
  7. See NRS 318.055(4)(a).
  8. NRS 318.077 allows a GID “board (to) elect to add basic powers not provided in its formation, in which event the board shall cause proceedings to be had by the board of county commissioners similar, as nearly as may be, to those provided for the formation of the district, and with like effect.”
  9. See sec. 3(a) of Ordinance 97, Bill 57, as authorized by NRS 318.116(7).
  10. See sec. 3(b) of Ordinance 97, Bill 57, as authorized by NRS 318.116(8).
  11. See sec. 3(c) of Ordinance 97, Bill 57, as authorized by NRS 318.116(9).
  12. See sec. 3(d) of Ordinance 97, Bill 57, as authorized by NRS 318.116(10).
  13. See sec. 3(e) of Ordinance 97, Bill 57, as authorized by NRS 318.116(11).
  14. See sec. 3(g) of Ordinance 97, Bill 57, as authorized by NRS 318.116(15).
  15. See sec. 3(i) of Ordinance 97, Bill 102, as authorized by NRS 318.116(16).
  16. See sec. 3(j) of Ordinance 97, Bill 102, as authorized by NRS 318.116(13).
  17. See sec. 21.5 of former NRS 318.143(1) [SB297, Chapter 413, page 1088, 1965 Statutes]. At the next legislative session this provision was amended to delete the word “public” [see sec 63 of former NRS 318.143(1) {SB408, Chapter 582, page 1714, 1967 Statutes]. At the same time sec. 24 of former NRS 318.116 was adopted [SB408, Chapter 582, page 1693, 1967 Statutes] which added the basic power of “furnishing recreation facilities.” Today this basic power appears at NRS 318.116(14).
  18. See sec. 3(l)(1) of Ordinance 97, Bill 227, as authorized by NRS 318.116(1).
  19. “Police power(s) do…not specifically refer to the right of state and local governments to create police forces…(Rather, they are) defined as the power of a governmental body to impose laws and regulations which are reasonably related to the protection or promotion of a public good…for the benefit of their communities…such as health, safety or welfare…The sovereign power of a state includes protection of safety, health, morals, prosperity, comfort, convenience and welfare of the public. In the U.S., the authority to regulate local matters concerning health, safety, and morality of state residents is reserved to states under the Tenth (10th) Amendment to the (U.S.) Constitution…Usually states delegate to their political subdivisions the power to enact measures to preserve and protect safety, health, welfare, and morals of the community” (go to https://municipal.uslegal.com/police-powers/).
  20. Do a search for municipal police powers in NRS 318. They do not exist. Now do the same thing insofar as counties [NRS 244.137(6) instructs that counties are empowered to address matters of local concern. Matters of local concern are defined at NRS 244.143(2)(a) to include public health, safety and welfare], incorporated cities [NRS 267.530 instructs that the powers set forth in “NRS 267.450 to 267.525, inclusive, (are) necessary to secure the public health, safety, convenience and welfare” of an incorporated city’s inhabitants] and unincorporated towns [NRS 269.190, et seq. address the powers unincorporated towns may exercise. Those powers are listed under the under the “public health, safety, and morals” provisions of NRS chapter 269. NRS 269.190 instructs that “boards of county commissioners may establish and maintain a board of health in any unincorporated town;” NRS 269.235(1) and 269.240(5) instruct that a “town board or board of county commissioners may appoint from the residents of an unincorporated town one chief of police and as many other peace officers as…in (their) judgment, the public safety may require;” and, NRS 269.128 instructs that the “property, public services and franchises” unincorporated towns may exercise “promote the general welfare of those inhabitants”] are concerned. As the reader can see, the exact opposite is true. The fact counties, cities and unincorporated towns have expressly been granted municipal police powers and GIDs have not, is further evidence the Legislature did not intend that GIDs provide for the health, safety and general welfare of those inhabiting their geographic boundaries. Stated differently, since Washoe County already has the power to provide for the health, safety and welfare of Incline Village/Crystal Bay inhabitants, why do the latter require IVGID to do the same thing?
  21. Although NRS 318.205 gives GID Boards “the power to adopt and amend bylaws…1. For carrying on the business, objects and affairs of the board and…the District (and) 2. Regulating the use or right of use of any project or improvement…not in conflict with the Constitution and laws of the State” of Nevada, this is a far cry from passing laws and legislating.
  22. Recall that NRS 244.137 instructs that “(1) Historically under Nevada law, the exercise of powers by a board of county commissioners has been governed by a common-law rule on local governmental power known as Dillon’s Rule, which…set(s) forth the common-law rule defining and limiting the powers of local governments…Dillon’s Rule provides that a board of (a local government)…may exercise only the following powers and no others: (a) Those powers granted in express terms by the Nevada Constitution or statute; (b) Those powers necessarily or fairly implied in or incident to the powers expressly granted; and, (c) Those powers essential to the accomplishment of the declared objects and purposes of the county and not merely convenient but indispensable. (4) Dillon’s Rule also provides that if there is any fair or reasonable doubt concerning the existence of a power, that doubt is resolved against the (governing) board…and the power is denied.” Although this statute literally applies to county governments, since it accurately instructs that Dillon’s Rule applies to all forms of local government, most legal professionals will counsel it is equally instructive insofar as GIDs are concerned.
  23. See page 127 of the packet of materials prepared by staff in anticipation of the Board’s August 10, 2021 meeting (“the 8/10/2021 Board packet“).
  24. See pages 11-64 of the packet of materials prepared by staff in anticipation of the Board’s January 29, 2020 meeting (“the 1/29/2020 Board packet“).
  25. “Section 595 of the Water Resources Development Act of 1999, as amended, provides authority for the (USACE) to provide design and construction assistance (financial)…to public entities…This assistance is to non-federal interests in rural Montana, Idaho and Nevada for water-related environmental infrastructure and resources protection and development projects (including)…wastewater treatment and related facilities…Project costs are shared 75% federal, 25% non-federal” (go to https://www.nww.usace.army.mil/Portals/28/docs/assistanceprograms/sec595.pdf).
  26. See page 13 of the packet of materials prepared by staff in anticipation of the Board’s March 30, 2016 meeting (“the 3/30/2016 Board packet”).
  27. See page 14 of the 3/30/2016 Board packet.
  28. See pages 10-11 of the packet of materials prepared by staff in anticipation of the Board’s May 1, 2019 meeting (“the 5/1/2019 Board packet”).
  29. See page 11 of the 5/1/2019 Board packet.
  30. See Schedule 31 at page 29 of the 2020-21 Budget.
  31. Go to the District’s weekly payment of bills page and look for a date range (such as July 16-22, 2021) which discloses payment to Mr. Faust. The District’s chart of account number assigned to such payment is 200-25-990-6030. If one goes to the District’s understanding of what these numbers represent page, he/she will discover that the first “200” entry corresponds to the District’s Utility Fund.
  32. Since ¶14.05 of Ordinance No. 2 (sewer), ¶9.06 of Ordinance No. 4 (water), and ¶5.9 of Ordinance No. 1 (solid waste) instruct that sewer, water garbage and refuse “charges, fees and amounts due and payable (for the services the District furnishes)…shall be billed to the owner of the premises, whether or not the owner is also the occupant,” Mr. Faust’s fees are ultimately chargeable to local parcel/dwelling unit owners.
  33. See page 9 of the 5/1/2019 Board packet.
  34. See pages 1-2 of the 3/13/2013 Board packet where staff represent that payments to Mr. Faust “have saved the average (utility) ratepayer (thousands of dollars)…in utility rates.” Accordingly, “the full amount of (Mr. Faust’s)…contract is a sewer expense in the Utility Fund.”
  35. ¶5.05 of the District’s sewer ordinance mandates that “the Owner of any building or structure to be inhabited by humans, situated within the District, is hereby required at his expense to connect said building directly with the public sewer of the District.”
  36. Although this statute technically speaks of before a GID can be created, very early on (see attorney E.A. Wilson’s August 26, 1965 letter to the Washoe County Board) the District took the position this same requisite applies whenever a GID seeks new basic powers.
  37. See page 9 of the packet of materials prepared by staff in anticipation of the Board’s March 28, 2018 meeting (“the 3/28/2018 Board packet”), and pages 121-122 of the packet of materials prepared by staff in anticipation of the Board’s August 10, 2021 meeting (“the 8/10/2021 Board packet“).
  38. See page 10 of the 3/28/2018 Board packet.
  39. See page 11 of the 3/28/2018 Board packet.
  40. See pages 120-121 of the 8/10/2021 Board packet.
  41. See Table 1 of University of Nevada Cooperative Extension Fact Sheet-13-32, Funding Economic Development in Nevada: General Improvement Districts, Frederick Steinmann (2012).

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