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Are The District’s Recreation (“RFF”) And Beach (“BFF”) Facility Fees The NRS 318.197(1) The “Standby And Service Charges” Past/Current Boards Have Told/Tell Us They Are?

IVGID 101 Posted on by

In a word no!

As we’ve elsewhere discussed,

“Each year, the District establishes…annual Recreation…and Beach Facility Fee(s)…The Board traditionally approves a Resolution1 which at ¶4(b) describes these fees as “standby and service charges…(for) the availability of the use of IVGID’s (the ‘Incline Village General Improvement District’s’) beaches; boat launch ramp; Championship golf course; Mountain golf course; tennis facilities; the Chateau and Aspen Grove; Diamond Peak Ski Resort, and Recreation Center”2 (“Resolution”). At ¶6 of that Resolution, the Board approves a “Report For Collection on the County Tax Roll of Recreation Standby and Service Charges”3 (“Report”) which at ¶I describes these fees as “annual charges…for the availability of use of the recreational facilities above described.”3

Given, as we’ve elsewhere discussed, “standby service charges” represent:

1. Some sort of monetary levy against real property4;

2. Imposed for the direct benefit5 of the real property assessed6 (as opposed to something else);

3. For the mere availability to access and receive5 some public health and sanitation7 service (such as municipal water and/or sewer8);

4. Where that service is “standing by” or “immediately available” to be physically connected or capable of connection9 to the real property benefited5;

5. Whether or not those services are actually being used at the present time5; and,

6. Where the real property assessed is not currently a customer because once property becomes an actual customer of the services (or as here facilities2) furnished, by definition, it is no longer “‘standing by’ (n)or (is the service) ‘immediately available’ to be connected to the property to be benefited.”10 Because “the benefit…is in fact (actually being) provid(ed);”5

Here we examine whether the RFF/BFF are legitimate fees, let alone the standby service charges staff and past/current Boards have represented/currently represent.

The RFF/BFF Do Not Pay For Any Direct Benefit to Anyone, or Anything: As we’ve demonstrated11, essentially every financial professional who has examined the RFF/BFF, including the District itself as evidenced in its various Annual Comprehensive Financial Reports (“ACFRs”), has concluded they are the product of nonexchange transactions12. What separates exchange and exchange-like from nonexchange transactions is that insofar as the latter is concerned, nothing (as in direct benefit) is received in consideration of forced payment13.

Let Alone to Real Property: Recall that standby service charges pay for the direct benefit5 of the real property assessed6. Yet ¶4(b) of the Resolution the Board adopts each year1 states that

“Reduced rates (to persons) for season passes and reduced daily rates, are all benefits which inure to the owners of properties (i.e., people) hereunder.”

And ¶4(a) of that Resolution states that

“Ordinance No. 7 sets forth in detail the specifics of the benefits available to property owners (i.e., people) of all properties.”

¶46 of Ordinance No. 7 represents the specifics of the benefits available to property owners (i.e., people) as follows:

“Every eligible parcel (assessed the BFF and/or RFF) may receive any combination of up to five (5) IVGID Recreation Passes or Recreation Punch Cards.”

¶64 represents the benefits available to IVGID Recreation Pass holders14:

“a. Reduced season pass (aka user) rates, at District-owned ski, and tennis facilities; and b. reduced daily rates at District-owned golf, ski and tennis facilities; and,

b. Reduced (user) rates on various recreation programs and services reduced daily rates at the District-owned Recreation Center; and,

c. Reduced yearly, quarterly, monthly, or weekly membership rates at District-owned Recreation Center; and, reduced rates on various recreation programs and services;

d. Reduced daily (user) rates at the District-owned Recreation Center; and,

e. Reduced (user) rates for the rental of the Chateau, Aspen Grove Community Building, Diamond Peak Ski Lodge, Recreation Center, and District owned athletic fields; and,

f. Watercraft launching access at the District-owned watercraft ramp to Pass Holders with Beach Access…and,

g. The ability to bring Guest(s) to District-owned Beaches…when accompanying an IVGID Recreation Pass Holder with Beach Access; and,

h. Any other Recreation Privileges determined by the Board.”

¶81 represents the benefits available to IVGID Recreation Punch Card holders14:

“A face value which may be applied toward:

a. The Guest (user) rate for daily Beach Access, daily watercraft and jet ski launching; and,

b. The difference between the Pass Holder…and the non-Pass Holder (user) rate for daily access to the District-owned golf, ski, recreation center, and tennis facilities; and,

c. The difference between the Pass Holder…and the non-Pass Holder (user) rate for any other recreation use fee or rental fee as may be determined by the Board.”

Because all of the above alleged benefits extend to people rather than the stated direct beneficiaries of the District’s beach and recreation facility services15, even though parcels of real property cannot access and use any of the District’s owned recreation facilities, they’re not standby service charges.

Trustee Mick Homan‘s Disingenuous Attempt to Concoct a Benefit to Real Property in Consideration of Forced Payment: For the first time in IVGID’s history, Trustee Homan attempted to concoct some benefit to real property in consideration of forced payment of the RFF/BFF16. Obviously, mere user fee discounts to the owners of those properties only if and when they chose to frequent one of the District’s public recreation facilities, and pay the user fees assessed thereat, wasn’t sufficient. And the evidence which follows took place with the Board’s expansion of the following language in ¶4(b) of Resolution No. 1926 the Board adopted on May 27, 2026 insofar as the 2026-27 increased RFF/BFF were concerned:

“The Board…finds that the availability of and access to these recreational facilities within the Incline Village community makes the community a desirable place to live and work and thereby significantly enhances property values within the community17 (and for this reason)…such benefits are provided to said properties.”

Notably, Trustee Homan didn’t think about the need to change the language in ¶I of the Report upon which that Resolution was based18. Because he left it as it has been since the inception of Reports. Having nothing to do with “enhancement of property values.”

Moreover, for the Board to have made any finding, specifically this one (“significantly enhanc(ing) property values within the community”), there would have had to have been some evidence submitted in support. Wouldn’t there have been? Because here there wasn’t, the purported finding was arbitrary, capricious and voidable as the product of what the law describes as an abuse of discretion19. And voidable.

Moreover still, such finding is a falsehood. Although enhancement in property valuation can be a benefit supporting a monetary exaction (i.e., an assessment rather than a fee20, such as an adjacent street or sidewalk), it must “be directly derived from a public improvement and not be something the broader community also enjoys.”21 Since here the District’s public recreation facilities benefit the entire Lake Tahoe region in addition to the world’s tourists, rather than any particular Incline Village/Crystal Bay parcel, there’s no benefit to any property which is particularly assessed. Therefore “under traditional municipal law and constitutional doctrines like Proposition 218 in California, a ‘general enhancement’ of property values applies to the neighborhood or the public at large. And these types of generalized increases cannot be used to legally justify or support enhanced special fees, assessments, or taxes.”22 And Trustee Homan knows this!

Finally, compensation for the alleged enhancement in a property’s valuation is already incorporated into all Incline Village/Crystal Bay properties’ ad valorem23 taxes since IVGID assesses24 and collects its own ad valorem tax. And because any monetary exaction due to an increase in a property’s enhancement is expressly limited by statute25, further increases cannot be circumvented by the District’s increased RFF/BFF. And Trustee Homan knows this!

The RFF/BFF Do Not Pay For The Availability of Use of Anything: Let’s take the District’s public recreation facilities. Aren’t they just as “available for use” by any member of the general public as those local parcel owners who are being involuntarily assessed? After all, when the District was granted the power to acquire and furnish facilities for recreation26, that power was expressly limited to public recreation. Since the RFF pays for the availability to access and use nothing, all members of the general public have the availability to use those facilities whether or not they own property in Incline Village subject to the RFF, they pay the RFF or otherwise.

The RFF/BFF Do Not Pay For The Availability of Any Service: According to past/current Boards, the benefits actually furnished are to facilities1 rather than services. And because we’ve elsewhere demonstrated that standby service charges furnish the availability to services27, there’s no such thing as a standby service fee for the availability of use of facilities. Thus the RFF/BFF are not standby service charges.

Let Alone a Public Health And Sanitation Service: Recall that standby service charges pay for the mere availability to access and receive some public health and sanitation7 service such as municipal water and/or sewer8. Because recreation has little to do with public health and sanitation, even if it were a service IVGID furnishes, it’s not the type of service for which standby service charges can be assessed.

Moreover, The Availability of Facilities For Which The RFF/BFF Allegedly Pay Are Neither Physically Connected Nor Capable of Physical Connection to Those Real Properties Which Are Assessed: Recall that standby service charges require some physical connection or capability to connect9 the service furnished to the real property directly benefited. Thus when we think of facilities furnished to real property, we think of those physically connected to or immediately adjacent; don’t we? Like municipal water and sewer services where there are physical laterals connecting the public’s services to each parcel of real property benefited. And isn’t this because NRS 318.197(3) makes the point there must be some physical “connection?”28 Because there’s no physical connection nor capability to connect essentially any of the District’s recreation facilities to any parcel of property assessed the RFF/BFF, they are not standby service charges.

The Primary Purpose of The RFF/BFF is to Raise Revenue29: Rather than to defray the costs of providing the services30 for which they are arguably assessed. Which means they’re not reasonably proportionate to the benefit allegedly received31 Just listen to Trustee Mick Homan’s views on the RFF/BFF after elected to office in 2024, and prior to taking his oath of office32:

“The(se) fee(s) ha(ve) historically funded capital improvements and operating shortfalls at all of our recreation facilities at some point in our history…(In addition) many of our recreation facilities will not stand on their own financially and (thus)…require some level of facility ‘fee’ to survive and thrive. That facility ‘fee’ is what many refer to as a ‘subsidy’…(And for these reasons) I support the continued utilization of the(se) ‘fee(s)’ to (financially) support our venues. (Because) without (them), our facilities are simply not (financially) sustainable.”

Where the ordinance or resolution adopting a fee does not require that the funds generated therefrom be used for the service(s) represented by payment, “leaving open the possibility that the charge could be used for general revenue raising purposes,” it must be held to be invalid33.

Consequently, The RFF/BFF Don‘t Satisfy The Basic Test Articulated by The Massachusetts Supreme Judicial Court: in Emerson College34 which determines whether a monetary exaction is a fee or a tax. That is the test which analyzes 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.”

Because only where “th(e)se criteria fit the charge, (are the RFF/BFF)…fee(s).”35 And because here that’s not what the RFF/BFF pay for, they’re not standby service charges. And where they’re not, they’re taxes36.

And to Add Insult to Injury, They‘re The Product of “Enforced Contribution:” Legitimate fees “are paid by choice, in that the party paying the fee has the option of not utilizing the governmental service and thereby avoiding the charge.”37 Yet those whose Incline Village/Crystal Bay properties/dwelling units are assessed have no choice insofar as payment is concerned38. If one examines the Report the Board approves each year3, one sees that all non-exempt parcels are assessed39. As elsewhere demonstrated, because the payors of the RFF/BFF are given no choice insofar as payment is concerned40, they’re not standby service charges. 

But What About NRS 318.201(1)? Which at first blush instructs that

“Any board which has adopted rates pursuant to this chapter may, by resolution…elect to have such charges for the forthcoming fiscal year collected on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the county’s general taxes.”

As concluded in the iconic 1996 advertising campaign for “I Can’t Believe it’s Not Butter,” no difference! For at least the following three reasons upon which application of NRS 318.201(1) is expressly conditioned:

1. The “board…ha(ving actually) adopted rates pursuant to this chapter” NRS 318;

2. “With respect only to delinquent charges;” and,

3. “Each parcel of real property (to the assessed actually) receiving such services and facilities.”41

1. At the Board’s May 27, 2026 meeting the RFF/BFF for 2026-27 had not then yet been adopted. Certainly pursuant to NRS 318. That was the purpose of proposed Resolution No. 1926 at that meeting, wasn’t it? And precisely why ¶II of the Report approved at ¶6 of that Resolution instructed that

“The amount of moneys required for the fiscal year extending from July 1, 2026, to June 30, 2027, (will be)…determined by this Board to be about $11,441,485 for the Recreation Facility Fee and $1,131,290 for Beach Facility Fee.”

2. Moreover, the proposed RFF/BFF did not apply to delinquent charges42 Rather, as quoted above at ¶II of the Report, the charges the subject of proposed Resolution No. 1926 were “for the (prospective) fiscal year extending from July 1, 2026, to June 30, 2027.”

3. Finally, the properties to be assessed the RFF/BFF received no services nor facilities in consideration of their payment. As demonstrated in our The RFF/BFF Do Not Pay For Any Direct Benefit to Anyone, or Anything discussion above.

Yet the Board went on to approve Resolution No. 1926, and adopt the 2026-27 RFF/BFF. Notwithstanding its reliance upon NRS 318.201(1) to justify “enforced contribution” was ill placed.

For All of These Reasons The RFF/BFF Are Taxes: As aforesaid, “the Hawaii Supreme Court in Medeiros adopted a modified version of the test articulated by the Massachusetts Supreme Judicial Court in Emerson College which differentiates ‘fees’ from ‘taxes’…(Where) those criteria fit the charge, it is a fee.”35 Because here they don’t, the RFF/BFF are taxes43.

Conclusion: In every one of the examples above, staff and past/current Boards could have lived within the District’s financial means by eliminating overspending and a fiori, the financial subsidy we’ve demonstrated. But instead, they have perpetuated their financial irresponsibility by using the BFF/RFF as revenue sources to pay for continued overspending. Whatever one wants to call these charges, the simple fact-of-the-matter is the RFF/BFF are not standby service charges.

We can demonstrate that the RFF/BFF are neither “service charges…for” services nor facilities, nor “charges for the (mere) availability of” beach and District owned public recreation facilities as staff and past/current Boards have represented/represent44. But why? They’re clearly not standby service charges, and that’s what past/current Boards have represented/represent they are.

And now you know!

  1. For an example of the Resolution adopted for FY 2025-26 (No. 1917), the reader is referred to pages 108-111 of the packet of materials prepared by staff in anticipation of the Board’s May 30, 2025 meeting (“the 5/30/2025 Board packet“).
  2. That is, recreational facilities.
  3. For an example of the Report approved for FY 2025-26, the reader is referred to pages 112-117 of the 5/30/2025 Board packet.
  4. See Solvang Mun. Improvement Dist. v. Board of Supervisors, 112 Cal.App.3d 545, 552, 169 Cal.Rptr. 391 (1980).
  5. See Kennedy v. City of Ukiah, 69 Cal. App. 3d 545, 553, 138 Cal.Rptr. 207 (1977); San Diego Cty. Water Auth. v. Metro. Water Dist., 117 Cal.App.4th 13, 27, 11 Cal.Rptr. 446, 457 (2004).
  6. As opposed to “the general public, and (thus) not for the comfort and use of individual customers (who)…have no control over the provision or use of” public recreation [see Okeson v. City of Seattle, 150 Wn.2d 540, 78 P.3d 1279, 1285 (2003)].
  7. See McMillan v. Texas National Resources Conservation Comm’n, 983 S.W.2d 359, 365 (1998).
  8. See  State v. Medeiros, 89 Haw. 361, 367, 973 P.2d 736, 742 (1999; Chapman v. City of Albuquerque, 65 N.M. 228, 335 P.2d 558, 562 (1959); Graham v. City of Lakewood Village, 796 S.W.2d 800, 801 (1990); Lakeside Utilities Corp. v. Bernum, 5 Ohio.St.3d 99, 449 N.E.2d 430, 431 (1983)].
  9. See Chapman, supra, at 335 P. 564.
  10. See San Diego Cty. Water Auth., supra, at 117 Cal.App.4th 27.
  11. See our Admissions The RFF/BFF Aren’t The Fees Past/Current Boards Have Represented/Represent discussion.
  12. According to GASB Statement No. 33, nonexchange transactions can be identified as falling into one of four classes “based on shared characteristics that affect the timing of recognition. And here the class is “imposed nonexchange revenues, which result from assessments imposed on nongovernmental entities, including individuals, other than assessments on exchange transactions.”
  13. See our Distinction Between Exchange And Nonexchange Transactions discussion.
  14. That would be people rather than real property.
  15. That is, the real property assessed.
  16. How do we know Trustee Homan was the culprit? Just listen to him! He’s what psychologists would label High Machiavellian or “High-Mach.” To him “kings and other rulers should do whatever is necessary to seize and maintain their power.” He exhibits a personality “trait…named for Niccolò Machiavelli, a 16th-century author and political philosopher…characterized by manipulativeness, deceitfulness, high levels of self-interest, and a tendency to see other people as (a) means to an end…Machiavellianism, along with narcissism and psychopathy (he exhibits both of these traits as well), make up a collection of unpleasant and closely related personality traits known as the dark triad” (see https://www.psychologytoday.com/us/basics/machiavellianism).
  17. How is this justification any different than what any other local government which assesses ad valorem taxes tells the public its taxes pay for? Don’t all “governments use ad valorem tax revenue…to support vital community infrastructure and operations” (see https://www.investopedia.com/terms/a/advaloremtax.asp)? According to an AI search, IVGID “property tax revenues (already) fund the…District which maintains premium, restricted-access amenities like private beaches, boat launches, golf courses, and recreation centers? So why the need for the RFF/BFF?
  18. Recall that ¶I of that Report states that the RFF/BFF “are for the availability of use of the (public) recreational facilities (therein) described.” Notably, no mention is made those fees are for the alleged enhancement in property values within the community as a result of those facilities.
  19. The failure to consider some evidence in support of the exercise of discretion, can constitute an abuse of discretion as an error of law [see Mendez v. Holder, 566 F.3d 316, 323 (2nd Cir. 2009)].
  20. And recall that by definition, NRS 318.197(1) fees cannot be assessments.
  21. Go to https://dictionary.justia.com/special-benefit).
  22. See https://www.civicmic.com/benefit-assessment-districts-in-california/.
  23. Meaning a tax based upon valuation [see https://www.investopedia.com/terms/a/advaloremtax.asp.
  24. See NRS 318.225.
  25. See NRS 361.4723.
  26. See Washoe County Ordinance 97, Bill 57 passed November 15, 1965 by the Washoe County Board of Commissioners.
  27. See U.S. v. City of Huntington, W.Va., 999 F.2d 71, 74 (4th Cir. 1993); National Cable Television Ass’n v. United States, 415 U.S. 336, 341, 94 S.Ct. 1146, 1149 (1974); United States v. La Franca, 282 U.S. 568, 572, 51 S.Ct. 278 (1931); City of Gary, Ind. v. Indiana Bell Tel., 732 N.E.2d 149, 156 (Ind. 2000); Clean Water Coalition v. The M Resort, LLC., 127 Nev. 301, 315, 255 P.3d 247 (2011); Medeiros, supra, at 973 P.2d 743.
  28. Why else would “the Board be compelled to “prescribe and enforce regulations for the connection with and the disconnection from properties of the facilities of the District and the taking of its services?”
  29. As we’ve elsewhere demonstrated, the primary purpose of the RFF is to cover the financial shortfall between revenues and intentional overspending assigned to the District’s Community Services Fund. Similarly, the primary purpose of the BFF is to cover the financial shortfall between revenues and intentional overspending assigned to the District’s Beach Fund.
  30. See Rizzo v. City of Philadelphia, 668 A.2d 236, 238 (Pa. Commw. Ct. 1995).
  31. See Clean Water Coalition, supra, at 255 P.3d 256; City of Madera v. Black, 181 Cal. 306, 313, 184 P. 397 (1919).
  32. See ¶5 of Mr. Homan’s views on various topics (when he maintained a campaign web site); here, financial subsidies to the District’s public recreational facilities
  33. 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)].
  34. v. City of Boston, 39 Mass. 415, 462 N.E.2d 1098, 1105 (1984).
  35. See Medeiros, supra, at 973 P.2d 742-745.
  36. See Clean Water Coalition, supra, at 127 Nev. 315; Douglas Co. Contractors v. Douglas Co., 112 Nev. 1452, 1457, 929 P.2d 253, 256 (1996); State ex. rel. City of Reno v. Boyd, 27 Nev. 249, 256, 74 P. 654, 655 (1903); 71 Am. Jur. 2d  §13, State and Local Taxation (2001).
  37. See Emerson College, supra, at 39 Mass. 424-25; Vanceburg v. Federal Energy Regulatory Comm’n, 571 F.2d 630, 644 fn. 48 (D.C.Cir. 1977), cert. denied, 439 U.S. 818, 99 S. Ct. 79 (1978); Medeiros, supra, at 973 P.2d 741.
  38. ¶1.0 of Policy 16.1.1 instructs that the “District will charge the prescribed Recreation (according to ¶2.0.1 of Policy 16.1.1 the “Recreation Fee is the annual Recreation Standby and Service Charge assessed by the District on all real property within the District that is in one of the categories listed”)…and…Beach (according to ¶2.0.2 of Policy 16.1.1 the “Beach Fee is the annual Recreation Standby and Service Charge assessed by the District on all identified real property that was within the District on June 1, 1968, and is in one of the categories listed”) Fee(s) to all qualifying real properties (according to ¶2.0.5 of Policy 16.1.1 “Qualified Real Property is property subject to payment of a Recreation Fee”) within the boundaries of the District.”
  39. See ¶¶I(A)-1(C) at page 234 of the 5/26/2022 Board packet.
  40. See National Cable Television Ass’n v. United States, 415 U.S. 336, 341, 94 S.Ct. 1146, 1149 (1974); United States v. La Franca, 282 U.S. 568, 572, 51 S.Ct. 278 (1931); City of Gary, Ind. v. Indiana Bell Tel., 732 N.E.2d 149, 156 (Ind. 2000).
  41. “In such event, (the board) shall cause a written report to be prepared and filed with the secretary, which shall contain a description of each parcel of real property (to be assessed actually) receiving…services and facilities in consideration of payment of)…the amount of the charge for each parcel for such year.”
  42. According to our How Courts Instruct We Construe Statutes Which Impact GIDs discussion, “if possible, every word and every provision is to be given effect (verba cum effectu sunt accipienda). (And) none should be ignored” [see CANONS OF CONSTRUCTION (adapted from Scalia & Garner)].
  43. Where “revenue obtained from a particular charge is not used exclusively to meet expenses incurred in providing the service but is destined instead for a broader range of services…’while not decisive, (it) is of weight in indicating that the charge is a tax’…which has been defined as ‘an enforced contribution to provide for the support of government'” [see Medeiros, supra, at 391 Mass. 427 quoting United States v. Tax Comm’n of Miss., 421 U.S. 599, 606, 95 S.Ct. 1872 (1975); United States v. LaFranca, 282 U.S. 568, 572, 51 S.Ct. 278 (1931)].
  44. See our What Are Standby Service Charges discussion.

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