As we have discussed elsewhere, the only basic powers a general improvement district (“GID”) may legitimately exercise (including the power to fix fees and assess taxes) are those expressly granted in its initiating¹ and supplemental² ordinance(s) “as supplemented by the sections of this chapter (NRS 318) designated therein”³, and none other⁴. And should there be “any fair, reasonable (or) substantial doubt concerning the existence of power (it) is (to be) resolved…against the (municipal) corporation (i.e., here the GID⁵, and)…all acts beyond the scope of…powers (expressly) granted are void.”⁶ Given IVGID is assessing a “fuels management” or “defensible space” fee⁷, we question whether its assessment is expressly authorized by NRS 318 and/or any other laws. And that’s the purpose of this discussion.

Again as we have discussed elsewhere, just because GIDs are political subdivisions of the State⁸ doesn’t mean they possess the general police powers⁹ true municipalities like counties¹⁰, cities¹¹ and unincorporated towns¹² possess. Therefore just because counties, cities and unincorporated towns can incorporate “fuels management” or “defensible space” charges into their utility rates, or otherwise charge the same, doesn’t mean GIDs are permitted to do the same thing.

With the foregoing as a primer, take a close look at NRS 318. Nowhere will the reader find where GIDs are given the power to pass laws or adopt legislation. The closest such powers the reader will find are that GID “board(s) shall have the power to adopt and amend bylaws, not in conflict with the Constitution and laws of the State: 1. For carrying on the business, objects and affairs of the board and of the district; (and,) 2. Regulating the use or right of use of any project or improvement.”¹³ However, assuming arguendo that in a vacuum a GID can provide “fuels management” or “defensible space” services because of NRS 318.116(17)¹⁴, because here the Washoe County Board of Commissioners (“County Board”) has never expressly granted this basic power to IVGID, as it must¹⁵, furnishing facilities for “fuels management” or “defensible space” is not a basic power IVGID is authorized to exercise. And given GIDs have not been given the power to provide for the health, safety and welfare of their inhabitants, as have counties¹⁰, cities¹¹ and unincorporated towns¹²; yet here IVGID assesses a “fuels management” or “defensible space” fee⁷; following Dillon’s Rule¹⁶ it’s our position this fee is void. Nevertheless to help answer this query, let’s examine: the kinds of exactions (i.e., fees, charges, taxes, assessments) a GID may permissibly assess, and the propriety of the subject fee’s assessment insofar as the current circumstances are concerned.

IVGID’s Label: is not controlling. Instead, “courts will determine and classify (exactions) on the basis of realities”¹⁷ looking to their “operative effect;”¹⁸ especially when as here IVGID’s “fees” were “undoubtedly drafted with [NRS 318.197(1)] firmly in mind.”¹⁹ “Were this not the rule, excessive fuels management or defensible space fees would (simply) become a vehicle for generating revenue independent of the purpose of the fees.”²⁰

Taxes: are an exaction of money for the purpose of generating revenue²¹. In contrast to a fee (see discussion below), taxes are “compulsory and…entitle…the taxpayer to receive nothing except the governmental rights enjoyed by all citizens.”²² Moreover, taxes are not paid by choice.

The only taxes a GID is expressly allowed to assess under NRS 318 are ad valorem taxes²³. For the reasons below, IVGID’s fuels management fee is not an ad valorem tax. Moreover, it does not benefit the persons ultimately paying the fee, let alone in a manner not shared by all other members of society. And those who own property have no choice in removing this fee from the water bills of the occupants of their homes on their properties²⁴. Although arguably IVGID provides some service to those paying this fee, given all of society are benefitted by the service, the fee fails the first prong of the Medeiros test²⁵. Simply stated, IVGID’s fuels management fee meets the definition of a tax.

Ad Valorem Taxes: are “a general tax levy…on real property…which applies a given (tax) rate to the assessed valuation of all taxable property within a particular taxing district.”²⁶ Although NRS 318.225 authorizes GID “board(s)…to levy and collect general (ad valorem) taxes on and against all taxable property within the district,” here IVGID’s fuels management charges are neither levied against real property, nor are they based upon assessed valuation. Simply stated, IVGID’s fuels management fee is not an ad valorem tax.

Special Assessments: are in essence “a local tax levied on property in addition to an ad valorem tax to pay for specific local infrastructure projects such as the construction or maintenance of roads or sewer lines. The (assessment) is charged only to the owners of property in (a) neighborhood that will benefit from the project.”²⁷ Stated differently, “special assessments (are)…assessed for local improvements which enhance the value of real property.”²⁸

GIDs are expressly authorized to defray the costs of making public improvements by way of special assessment²⁹. Here IVGID’s fuels management fee doesn’t pay for specific local infrastructure projects, let alone ones charged only to the owners of property allegedly specially benefited therefrom. Moreover, it is not levied against real property. Simply stated, IVGID’s fuels management fee is not a special assessment.

Rates, Tolls and Charges: are fees. “They are collected not to raise revenues but to compensate the governmental entity providing the service…for its (actual) expenses.”³⁰ Finally, “they are paid by choice, in that the party paying the fee has the option of not utilizing the governmental service and thereby avoid(ing) the charge.”³¹ True “fees are charged in exchange for a particular governmental service which benefits the party paying the fee in a manner not shared by other members of society.”³²

GIDs are expressly authorized to fix rates, tolls and charges³³. Although some of IVGID’s fees pay for access to facilities and services provided, IVGID’s fuels management fee does not. Whatever benefits are derived from IVGID’s fuels management services, they accrue primarily to the public-at-large rather than those who pay the fee. Nor is the fee paid by choice. Simply stated and regardless of label, IVGID’s fuels management fee is not a fee.

Excessive Fees: Not only is IVGID’s fuels management or defensible space fee an impermissible tax, it is an excessive one. And why is this noteworthy? Because “if the charges (assessed) exceed the reasonable cost of the activity on which they are based,”³⁴ or they “are…in substantial excess of the (value of the) benefits received,”³⁰ “the(y)…are levied for unrelated revenue purposes and are therefore taxes.“ Were this not the rule, excessive fuels management or defensible space fees would (simply) become a vehicle for generating revenue independent of the purpose of the fees²⁰. Let us explain.

Notwithstanding the fact IVGID has been assessing these fees since 1991, they haven’t always been spent on fuels management. The most egregious example can be traced back to 2011. Let us quote note 12 on page 42 from IVGID’s 2011 Comprehensive Annual Financial Report (“the 2011 CAFR”): “In the last few years there has been a cost for defensible space for the District’s properties. These costs are…allocated to the extent incurred and are budgeted to not exceed $200,000 a year. For the year ended June 30, 2011 the costs were $107,193.” Translation: Although local property owners/IVGID’s water customers were charged $200,000 in defensible space fees, only $107,193 was spent on those services. What happened to the remaining $92,807? It was simply added to the fund balance in the District’s General Fund and spent on other unrelated purposes³⁵. Ladies and gentlemen. Taking revenues collected under the guise they are required to pay for fuels management services, and using them to cover a loss of ad valorem tax revenue caused by court ordered tax refunds, is evidence the District’s fuels management fee is really a tax!

Conclusion: Given IVGID has no express power to provide fuels management services, it has no authority to charge fees for those services. Moreover, whatever benefits are derived from IVGID’s fuels management services, they accrue to society as a whole, whether or not an individual member is the one paying the fee. Therefore, “the (subject fuels management fees)…levied…(by IVGID can)not survive scrutiny under the first prong of (the)…Medeiros test²⁵ because the (services provided)…directly benefit…the public-at-large — not th(os)e…who pay the (fees)…inasmuch as the public at large is the primary beneficiary, and th(os)e (who are assessed) themselves are, if anything, only incidental beneficiaries.” Ladies and gentlemen, these facts prove that the purpose of IVGID’s fuels management fee is to raise revenue.

So now that you the reader know the facts, have we proved our point? If not, is there “any fair, reasonable (or) substantial doubt (in you the reader’s mind) concerning” IVGID’s ability to assess solid waste franchise fees? Under either analysis, and according to Dillon’s Rule, “the existence of power is (to be) resolved…against the (municipal) corporation (i.e., here IVGID).

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1. See NRS 318.055(4)(b) which instructs that a GID’s “initiating ordinance must set forth…a statement of the basic power or basic powers for which the district is proposed to be created (which)…must be one or more of those authorized in NRS 318.116.
2. See NRS 318.077 which instructs that a GID “board may elect to add basic powers not provided in its formation, in which event (it) shall cause proceedings to be had by the board of county commissioners (“County Board”) similar, as nearly as may be, to those provided for the formation of the district, and with like effect.”
3. See NRS 318.055(4)(b).
4. See A.G.O. 63-61, p. 102, at p.103 (August 12, 1963).
5. NRS 318.075(1) instructs that GIDs are “quasi-municipal corporations.”
6. See Ronnow v. City of Las Vegas, 57 Nev. 332, 343, 65 P.2d 133 (1937).
7. See https://ivgid101.com/vii-what-are-fuels-management-fees-how-are-they-collected-does-ivgid-assess-these-fees-and-if-so-how/.
8. NRS 318.075(1) instructs that GIDs are “governmental subdivision(s) of the State of Nevada.”
9. Municipal “police power(s) do…not specifically refer to the right of state and local governments to create police forces…(Rather,) 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 Amendment to the Constitution. The basic right of governments to make laws and regulations for the benefit of their communities is police powers. Police power is 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 such as health, safety or welfare[see Shreveport v. Restivo, 491 So. 2d 377, 380 (La. 1986)]. Usually states delegate to their political subdivisions the power to enact measures to preserve and protect safety, health, welfare, and morals of the community” (see https://municipal.uslegal.com/police-powers/).
10. NRS 244. 137(6) instructs that counties are empowered “to address matters of local concern for the effective operation of county government.” NRS 244.143(2)(a) defines “matters of local concern” as those “that (affect the) public health, safety and welfare” of its inhabitants.
11. NRS 268. 001(6) instructs that cities are empowered “to address matters of local concern for the effective operation of city government.” NRS 244.003(2)(a) defines “matters of local concern” as those “that (affect the) public health, safety and welfare in the city.”
12. NRS 269.190, et seq. grants unincorporated towns powers to provide for the “health, safety and morals” of its inhabitants.
13. See NRS 318.205.
14. Which instructs that GIDs may be granted the basic power to “furnish…facilities for protection from fire, as provided in NRS 318.1181.” NRS 318.1181 instructs that “in the case of a district created wholly or in part for the purpose of furnishing fire protection, the board may…3. Clear public highways and private lands of dry grass, stubble, bushes, rubbish and other inflammable material which in its judgment constitute a fire hazard.” In other words, “fuels management” or “defensible space” services.
15. See NRS 318.55(4)(b).
16. 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. (2) In Nevada’s jurisprudence, the Nevada Supreme Court has adopted and applied Dillon’s Rule to county, city and other local governments…Dillon’s Rule provides that a (local government’s governing board)…possesses and 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 (to be) resolved against the (local government)…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 believe it is equally instructive insofar as GIDs are concerned.
17. See Hukle v. City of Huntington, 134 W.Va. 249, 58 S.E.2d 780, 783 (1950).
18. Emerson College v. City of Boston, 39 Mass. 415, 462 N.E.2d 1098, 1105 (1984).
19. See Rider v. County of San Diego, 1 Cal.4th 1, 15, 820 P.2d 10 (1991).
20. See Jacks v. City of Santa Barbara, 3 Cal.5th 248, 257, 219 Cal.Rptr.3d 859 (2017).
21. See Douglas Co. Contractors v. Douglas Co., 112 Nev. 1452, 1457, 929 P.2d 253, 256 (1996); State v. Boyd, 27 Nev. 249, 256, 74 P. 654, 655 (1903); Hawaii Insurers Council v. Lingle, 120 Haw. 51, 201 P.3d 564 (2008).
22. See U.S. v. City of Huntington, W.Va., 999 F.2d 71, 74 (4th Cir. 1993).
23. See NRS 318.225
24. See ¶9.06 at page 29 of Water Ordinance #4 which states “all (water) charges, fees and amounts due and payable (including IVGID’s subject fuels management charge) shall be billed to the owner of the premises, whether or not the owner is also the occupant.”
25. See State v. Medeiros, 89 Hawaii 361, 370, 973 P.2d 736, 745 (1999).
26. See Solvang Mun. Improvement Dist. v. Board of Supervisors, 112 Cal. App. 3d 545, 552, 169 Cal.Rptr. 391 (1980).
27. See https://www.investopedia.com/terms/s/specialassessmenttax.asp.
28. See Emerson College, supra, at 391 Mass. 419.
29. See NRS 318.350(1) which instructs that “except as otherwise provided in subsection 2 (which applies to school districts rather than private persons and property owners), such part of the expenses of making any public improvement (to implement any one, all or any combination of basic powers stated in NRS 318.116 and granted to any district in proceedings for its organization or…its reorganization or as may be otherwise provided by law)…may be defrayed by special assessments upon lands and premises abutting upon that part of the street or alley so improved or proposed so to be, or the lands abutting upon the improvement and the other lands as in the opinion of the board may be specially benefited by the improvement.”
30. See Emerson College, supra, at 391 Mass. 425 (fn. 16).
31. See Vanceburg, Kentucky v. FERC, 571 F.2d 630, 644 fn. 48 (D.C. Cir 1977), cert. denied at 439 U.S. 818 (1978).
32. See National Cable Television Ass’n v. United States, 415 U.S. 336, 341, 94 S.Ct. 1146 (1974).
33. See NRS 318.197(1) which authorizes GID “board(s to)…fix, and from time to time increase or decrease, electric energy, cemetery, swimming pool, other recreational facilities, television, FM radio, sewer, water, storm drainage, flood control, snow removal, lighting, garbage or refuse rates, tolls or charges other than special assessments, including, but not limited to, service charges and standby service charges, for services or facilities furnished by the district, charges for the availability of service, annexation charges, and minimum charges.”
34. See Sinclair Paint Co. v. State Bd. of Equalization, 15 Cal.4th 866, 874, 879, 881, 64 Cal.Rptr.2d 447 (1997).
35. For instance, making up the deficiency in ad valorem tax revenue withheld by Washoe County (its collection agent) as a result of IVGID’s obligation to reimburse the County for the former’s portion of property tax refunds due as a result of court ordered reassessments. Note 14 on page 43 from the 2011 CAFR explains this deficiency in great detail: “The District is affected by an initiative by taxpayers against Washoe County, Nevada…The contention has focused on the assessed valuation used to collect ad valorem tax by Washoe County, for all units of government, since 2002. On October 6, 2009 a Washoe County District Court ordered that a refund is due these taxpayers. On July 7, 2011 the Nevada Supreme Court denied Washoe County’s Appeal and ordered a tax refund. On August 23, 2011 the Washoe County Board voted to reduce future tax settlements to other governments that received property taxes during the periods covered by the Court Ordered Refunds, to recover their proportionate share…The estimated portion of the tax and interest liability for the District is $1,000,000.”