No Remedy to Address IVGID’s LGBFA Violations

What remedies are available assuming one or more members of the public or the Department of Taxation allege that a general improvement district (“GID”) is in violation of the LGBFA1?

Let’s start with NRS 354.626(1) which instructs that

“Any officer or employee of a local government who willfully violates NRS 354.470 to 354.626, inclusive, is guilty of a misdemeanor and upon conviction thereof ceases to hold his or her office or employment. Prosecution for any violation of this section may be conducted by the Attorney General or, in the case of incorporated cities, school districts or special districts, by the district attorney.”

That’s fine. But what remedies do ordinary residents have? Unfortunately, just like residents who complain of the District’s ultra vires acts2, the answer is none! The reason being the case of Builders Association of Northern Nevada v. City of Reno, 105 Nev. 368,  776 P.2d 1234 (1989). Given “the LGBFA does not provide an express private cause of action,” the Builders Association Court held that “if we are to find a private cause of action exists, we must imply it from the provisions of the LGBFA.” And here, the Court made no such finding. In fact to the contrary, it found that since

“The procedure by which the law (i)s to be enforced (is)…delegated…to the Department of Taxation and, if necessary, the Attorney General…the LGBFA creates no private cause of action to remedy (any of its) violations…Furthermore, the purpose of the LGBFA is to regulate the local government budgeting process [see NRS 354.472(1)]. In enacting the LGBFA, the legislative history fails to indicate that the Legislature intended to subject local governments to a potential barrage of lawsuits that, either individually or collectively, could disrupt local governments’ daily activity or cause uncertainty in local government fiscal affairs.”3

And since Builders Association tells us that “the purpose of the LGBFA is to regulate the local government budgeting process,” what exactly has the Department of Taxation done insofar as IVGID is concerned? Other than the filing of tentative4 and final5 budgets, and audits6, virtually nothing!

That leaves the District Attorney or the Attorney General. History has demonstrated over and over again that no one at either department will do anything. The District Attorney’s excuse is that they only prosecute referrals from the Sheriff’s Office. And since the Washoe County Sheriff refuses to make IVGID referrals to the District Attorney, that effectively kills enforcement by the latter. Insofar as the Attorney General is concerned, that office represents it does not have the manpower to investigate and prosecute LGBFA violations. And besides, victims can make complaint to the Washoe County District Attorney.

So you the reader see that there really are no remedies!

And now you know!

  1. “NRS 354.470 to 354.626, inclusive” (see NRS 354.470).
  2. See our Remedies to Enjoin IVGID’s Ultra Vires Acts discussion.
  3. See Builders Association, Id., at 776 P.2d 1235.
  4. See NRS 354.596.
  5. See NRS 354.598.
  6. See NRS 354.624(1).