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Assuming Arguendo The District’s Recreation Facility Fee (“RFF”) is Actually a “Fee,” is it The Mere “Recreation Standby And Service Charge…For The Availability of The Use of IVGID’s” Public Recreation Facilities Staff/Its Current/Past Boards Represent/Have Represented?

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In a word, no.

There are many reasons why not. Consider the following:

What The District Tells Us The RFF Represents: As we’ve elsewhere discussed,

“Each year as part of the annual budget process the Board traditionally approves a Resolution which outlines the billing and collection process(es) set forth in Nevada Revised Statutes (“NRS”) 318.197(1)1 and 318.2012, as well as establish(es) the amount of the RFF…to be collected.”3

¶4(b) of the Resolution the Board adopts4 recites that the

RFF represents “standby and service charges for…the availability of the use of…IVGID’s…Championship golf course; Mountain golf course; tennis facilities; the Chateau and Aspen Grove; Diamond Peak Ski Resort, and Recreation Center,” and that “such benefits are provided to…each parcel assessed pursuant to th(at) Resolution and in its report for the collection on the Washoe County tax roll” (see discussion below).

¶I of the Report the Board adopts5 recites that the

“The following annual…recreation standby and service charges, herein called (‘charges’)…are for the availability of use (in part) of the recreational facilities above described…(the District’s) Golf Courses, Ski Area, Parks, Tennis and Recreation Parcels…and Facilities.”

Just Because IVGID Staff And Past Boards Have Told Us The BFF Represents “Standby And Service Charges…For The Availability of The Use of IVGID’s Beaches,” Doesn‘t Necessarily Make it So: That’s because as we’ve elsewhere stated, “the nature of a monetary exaction must be determined by its operation rather than its specially descriptive phrase.”6 So

What Other Courts Tell Us Are “Standby Service Charges:” As we’ve elsewhere demonstrated, standby service charges represent

1. Some sort of monetary levy against7 and of direct benefit7 to real property;

2. Imposed for the mere availability to access and receive some public health and sanitation8 service9;

3. Delivered10, or capable11 of delivery12, to the real property assessed13;

4. Whether or not that service is actually being used9; and,

5. Where the real property assessed is not currently a water and/or sewer service customer. Because once property becomes an actual customer of those services, by definition, they are no longer “‘standing by’ (n)or ‘immediately available’ to be connected to the property to be benefited…(Instead,) the benefit…is in fact (actually being) provid(ed).”14

Because the RFF/BFF do not satisfy the minimum requisites for a legitimate “fee,” as we’ve elsewhere demonstrated, they do not qualify as “standby service charges.” Nevertheless, let’s assume arguendo the RFF/BFF can be “fees.” Here we address whether they can be legitimate NRS 318.197(1) “standby service charges?” As we’ve elsewhere documented, according to staff and past District Boards (“Boards”), the RFF/BFF are NRS 318.197(1) “recreation standby and service charges”15…

“For the availability (to persons) of use of the recreational facilities (more particularly) described” therein at ¶I of the Report16 the Board adopts each year pursuant to NRS 318.201(9).

What NRS 318.197(1) Tells Us: In 1971 the rates, tolls and charges a GID could fix were modified slightly to include, what they include today17. That is, the power to fix “standby service charges, for…the availability of service” In other words, and for purposes of this discussion in particular, GID Boards are authorized to “fix, and from time to time increase or decrease…charges for…the availability of service(s)” rather than as here, facilities

The fact the words “availability of facilities” were omitted from the 1967 modifications to NRS 318.197(1) means that the “availability of facilities“ was expressly intended to be excluded from the fees a GID Board could fix18.

In Fact, There is No Such Thing as a Standby Service Charge Which Pays For The Availability of Facilities: Given the history of NRS 318.197(1), unsurprisingly, we’ve been unable to discover a single reported case, anywhere, which affirms the assessment of standby charges for the availability of use of public facilities (like the jails, courts, libraries, parks, police department, district attorney’s office, city hall, etc.) equally accessible to any other member of the general public19.

At Best, Standby Service Charges Pay For The Availability of Services: We’ve only been able to discover assessment of standby service charges in those jurisdictions which have defined the term20 to limited situations involving special benefit services affecting public health or sanitation21.

And Recreation Rather Than Health And Sanitation Services: As aforesaid, the services furnished in consideration of a standby service charge are limited to public health and sanitation services.

Adjacent to or Capable of Physical Connection to The Alleged Public Service Furnished: Only a very small number of local Incline Village parcels are adjacent to or capable of connection, let alone physical connection, to any of the District’s public recreation facilities. Yet according to Policy No. 16.1.1.2.1, the RFF extends to “all real property within the District that is in one of the categories listed in Section 1.0 of this documen..”

Assuming Arguendo The RFF Provides Any Benefits Whatsoever, it Arguably Benefits People Rather Than Property: Because real property has no ability to access any facilities

Where The Person is Forced to Become an Actual Customer as a Precursor to Benefitting From The Alleged Public Service Furnished:

Moreover, The District Has No Authority to Elect to Collect The RFF on The County Tax Roll: Because as elsewhere discussed, although NRS 318.201(1) 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,”

This power is limited to “each parcel of real property receiving…the services.”22 Since here each parcel of property which is assessed allegedly receives the availability of the use of facilities rather than services, we submit the RFF cannot be collected on the county tax roll.

The RFF Are Not “Service Charges:” Because they provide no services in consideration of payment; especially to the real properties forced to make payment. As elsewhere stated, here service charges are fees for “intangible, value-added activities that a (business23) provides to its customers. They…can be physical or digital. Physical services are those…you can touch, feel, or see, such as a haircut or a massage. Digital services are those that exist in the digital world, such as an app or a website…Service industries are those…that provide services to customers. These industries include…a) banking and financial services; b) professional services; healthcare; restaurants and food services; retail; transportation;”24 and as here, government. So “what recreation services does the District furnish?” We can think of “things” like recreation programming; golf, tennis, ski/snowboard lessons; etc. Which means service charges are “user fees…imposed by…government for the primary purpose of (re)covering the cost(s) of providing the service(s)” which are paid by “the people (rather than properties) who benefit from the particular public…service…provided.”25

Moreover, lest we not forget that the RFF is involuntarily assessed. Legitimate service charges, like other fees for services, cannot be involuntarily assessed because they require the element of consent26.

The Many Admissions by Past Finance Directors, Auditors, Consultants And Others That Our RFF is Not What The District Has Represented: For a more comprehensive discussion of this topic, the reader is directed to this discussion.

Conclusion: If the RFF is not a legitimate standby service charge, and the District is incapable of furnishing recreation facilities to those local real properties which are assessed, how then can it legitimately assess fees for the alleged “availability” to access and use the District’s public recreation facilities? And how can it use the collection procedures of NRS 318.201(9) to compel payment? The simple fact of the matter is that the RFF is not the “Recreation Standby And Service Charge…For The Availability of The Use of IVGID’s” public recreation facilities staff/its current/past Board(s) represent/have represented.

And now you know.

The Powers GID Boards Could Exercise Were Enlarged in 1971 to Allow For The Fixing of “Standby Service Charges…For The Availability of Service:” Initially, County Boards were not authorized to grant the GIDs they created/had created the power to fix rates, tolls and charges for the services and facilities they were authorized to furnish but for the “construct(ion), reconstruct(ion), improve(ment), exten(sion) or better(ment of) the sanitary sewer system or any part thereof.”27 However, over the years that changed. And in 1967 former NRS 318.200(1) was modified28 to allow GID Boards “to…increase or decrease…rates, tolls or charges(, in part)…for the availability of…“public recreation.”29 And at that time, the rates, tolls and charges GIDs were permitted to fix were enlarged to “includ(e)…service charges for services or facilities furnished by the district…standby service charges…for the availability of service37

Trait No. 3: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here They Do Not Pay For Special Benefits Furnished to Real Property50: Those courts which have addressed the subject of standby service charges have defined the term to mean some sort of monetary levy against and of direct benefit30 to real property31. Yet here the alleged benefits furnished in consideration of payment of the RFF/BFF are to people.

For years staff have accompanied the District’s final budgets with a letter addressed, in part, to “the…Citizens of Incline Village and Crystal Bay.”32 The letter has in part expressly answered the question of “What Privileges…Parcel Owners Get For Paying…Facility Fees.” Stated differently, the letter informs citizens what the RFF/BFF actually pay for? We quote from page 16 of the letter accompanying the 2018-19 Budget:

“Each eligible parcel that pays the RFF can have five (5) cards issued in the form of picture passes…and/or punch cards…or a combination of both. The Picture Passholder33 (“PPH”) gets preferred pricing and/or preferred access to the District’s major (recreation) venues or programming…A Punch Card Holder62 receives the opportunity, at designated (recreation) venues, to reduce their user fees from the (retail) rack rate to the (preferred) PPH rate.”

In other words, staff clearly admit the RFF pays for nothing more than up to five (5) membership cards similar to those sold by Costco and Sam’s Club (see discussion of trait no. 11 below). Given the direct beneficiaries62 of the alleged benefits furnished in consideration of payment, the RFF/BFF cannot and do not represent legitimate standby service charges.

Trait No. 4: The BFF Cannot Be a Legitimate Standby Service Charge When as Here it Does Not Pay For Access to And Use of District Beaches: According to staff and the Board, the BFF is a charge for the availability to access and use the beaches. ¶4(b) of the resolution the Board passes each year6 which adopts the RFF/BFF and orders their collection on the county tax roll9, recites that “the availability of the use of IVGID’s beaches…(is a) benefit…which inure(s) to the owners of properties62 assessed (t)hereunder.” But take a close look at the beach deed [under which the District holds bare legal title to our four (4) beaches]:

“Grantor34…specifically reserves an easement…for the benefit of all…owners of property located within…the (then) constituted boundaries of the Incline Village General Improvement District…and their respective successors and assigns in such ownership…to enter upon…and…use (the beaches)…for the recreational uses and purposes specified (t)herein.”

Therefore the owners of property assessed the BFF, and we successors and assigns, have access to and use of the beaches not because of our payment, but rather, beach deed easements!

Yes we are mindful the beach deed also recites that the District’s “Board of Trustees shall have authority to levy assessments as provided by law.” However, this power does not allow IVGID to pre-condition a parcel owner’s exercise of his/her/its deed easement rights to access and use the beaches upon payment of the BFF for at least four (4) reasons.

1. First, non-payment cannot defeat a property owner’s right to exercise a grant of easement;

2. Second, because the District contends the BFF is an assessment adopted pursuant to the authority of NRS 318.197(1)35 and the beach deed, by definition, it really cannot be an “assessment,” let alone one “provided by law;”36

3. Third, a GID’s authority to make assessments is set forth in NRS 318.350. The BFF does not fit within the statutory limitations of that assessment power; and,

4. Finally, aren’t we so oftentimes told that our beaches are “private?”37 If so, NRS 318.015(2) comes into play as it instructs “the provisions of this chapter are not intended to provide a method for financing the costs of developing private property.” Which means that where as here38 the BFF is and will be used for this prohibited purpose, its validity cannot be a charge “provided by law.”

Given staff and the former Board have represented that the BFF pays for “the availability of the use of IVGID’s beaches” which are independently available to be accessed and used by those whose real properties are assessed, no special benefit is furnished in consideration of payment and for this reason, the BFF cannot and does not represent a legitimate standby service charge.

Trait No. 5: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here They Are Not Voluntarily Assessed50: As Emerson College instructs39, standby service charges “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.”40 Although the modified version of this test41 has “weakened its adherence to th(is)” voluntariness pillar insofar as “otherwise legitimate (standby service) charge(s)”42 are concerned, here the District’s charges for the alleged availability of recreation facilities are not legitimate standby service charges. Therefore under these circumstances the required “voluntary receipt of the service” pillar requirement remains.

The Board has adopted a “Recreation Roll Policy” (see ¶1.0 of Policy No. 16.1.1) which instructs that “the Incline Village General Improvement District will charge the prescribed Recreation Fee, and if applicable…(the) Beach Fee, to all qualifying real properties!” Since ¶¶7-8 of the resolution the Board adopts each year6 which fixes the RFF/BFF and orders their collection on the county tax roll43 instructs that: “the Washoe County Treasurer shall enter the amounts of the charges (in two separate and distinct lines items identified as Recreation Facility Fee and Beach Facility Fee) against the respective lots or parcels of land as they appear on the current Washoe County tax roll,” it is evident that those who are assessed the RFF/BFF have no say in whether they consent to the assessment. Under these circumstances, the RFF/BFF cannot and do not represent legitimate standby service charges.

Trait No. 6: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here Those Real Properties Assessed Are Not Direct Beneficiaries of The Alleged Benefits Furnished50: As Medeiros instructs54, fees “are charged in exchange for a particular governmental service which benefits the party paying the fee.” In fact, this is the first pillar of the “modified version of the test…the Hawaii Supreme Court…articulated by the Massachusetts Supreme Judicial Court in Emerson College which differentiates ‘fees’ from (other types of exaction such as) ‘taxes’ (and) adopted…in” Medeiros44. In other words, “one which analyzes whether the charge: (1) applies to the direct beneficiary of a particular service.”

Yet as discussed above, the direct beneficiaries of the alleged benefits furnished in consideration of payment of the RFF/BFF62 are not the ones who directly benefited. Rather, those beneficiaries are real property45! Since ¶¶7-8 of the resolution the Board adopts each year6 which fixes the RFF/BFF and orders their collection on the county tax roll46 instructs that: “the Washoe County Treasurer shall enter the amounts of the charges (in two separate and distinct lines items identified as Recreation Facility Fee and Beach Facility Fee) against the respective lots or parcels of land as they appear on the current Washoe County tax roll,” it is clear that the direct beneficiar(ies) of (the) particular service(s)” furnished in consideration of payment are not the ones compelled to pay.

Moreover, when The Board elects to collect the RFF/BFF on the county tax roll each year, NRS 318.201(9) instructs it “prepare and file a final report…which…contain(s) a description of each parcel receiving…services (and)…the amount of the charge (therefore)…for inclusion on the (real property) assessment roll.” Since ¶4(b) of the resolution adopted pursuant to NRS 318.201(9) which incorporates that report6 “specifically finds that the availability of the use of IVGID’s (facilities; i.e.,) beaches; boat launch ramp; Championship golf course; Mountain golf course; tennis facilities; the Chateau and Aspen Grove; Diamond Peak Ski Resort, and Recreation Center…are all benefits…provided to said (real) properties,” how can parcels of real property possibly access and use any of these recreation facilities? And however one answers the question, it’s clear those assessed cannot be direct beneficiaries of the alleged benefits furnished

Finally, since the District’s public recreation facilities are just as available to be accessed and used by any member of the general public, as by the owners/occupants of those real properties which are assessed, the world’s tourists are benefited in their use notwithstanding the overwhelming majority are not the beneficiaries who pay the RFF/BFF.

For all of these reasons then, the RFF/BFF do not represent legitimate standby service charges for District owned recreation furnished to real property because the true beneficiaries are not those who make payment.

Trait No. 7: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here There is No Physical Connection or Ability to Physically Connect50 The District’s Recreation/Other Facilities And Those Real Properties Which Are Assessed: When we think of services furnished to real property, we tend to think of those physically connected to or immediately adjacent, don’t we? Like public water and sewer services where there are physical laterals connecting the public’s utility services to each parcel of real property benefited. Because NRS 318.197(3) makes the point there must be some sort of physical “connection” between “properties of the facilities of the District and the taking of its services.”47 For this reason most courts which have addressed standby service charges have declared there must be some sort of physical “connection”48/abutment or ability to connect49 between the available public service and the properties benefited therefrom. Which explains why NRS 318.197(3) goes on to mandate GIDs “prescribe and enforce regulations for (a parcel’s)…connection(s) who and…disconnection from (the)…properties of the facilities of the district and the taking of its services.” But here in Incline Village/Crystal Bay we can’t think of any privately owned parcel which is physically connected to one or more of the District’s public recreation or beach facilities. Although there are a relatively few which abut or are adjacent to the District’s public recreation or beach facilities, we can’t think of any which is capable of being physically connected to those facilities.

Given few if any of those parcels which are assessed the BFF and/or the RFF abut, are adjacent to, or are capable of being physically connected to the District’s beach or recreation facilities, the RFF/BFF cannot and do not represent legitimate standby service charges.

Trait No. 8: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here They Do Not Pay For The Availability of Any Type of Service Other Than One Which Advances Public Health And Sanitation50, And Here The District’s Recreation/Other Facilities Do Not: Putting aside differences between the availability of services versus facilities, in order to assess standby service charges which pay for a direct benefit furnished, that benefit must advance public health and sanitation51. Such as water, sewer or possibly solid waste disposal services. Unsurprisingly then, we’ve been unable to discover a single reported case, anywhere, which supports assessment of a standby service charge for the availability of use of a service which neither addresses public health and sanitation.

Notwithstanding the District’s beaches and public recreation facilities are allegedly facilities rather than services which are furnished in consideration of the RFF/BFF, none of those facilities address public health and sanitation. Therefore the RFF/BFF which allegedly pay for their “availability” cannot and do not represent legitimate standby service charges.

Trait No. 9: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here The Alleged Services For Which The RFF/BFF Are Assessed Are Not Immediately Available50: Putting aside differences between the availability of services versus facilities, in order to assess standby service charges therefore, 100% of the District’s public recreation facilities must exhibit the capacity to be used 100% of the time52 by all occupants of the 8,200+ parcels/dwelling units which are assessed. When the provider of a public service assesses a standby service charge, yet lacks the capacity to make 100% of those services represented available to be used by those assessed, those standby service charges are impermissible79.

Since here the District lacks the capacity to make access and use of 100% of the beaches and its various public recreation/other facilities available to be used by the occupants of 100% of the local parcels which are assessed the RFF/BFF, these exactions cannot and do not represent legitimate standby service charges.

Trait No. 10: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here Those Real Properties Which Are Allegedly Benefited Are Already Receiving That Service50: Once a property which is assessed a standby service charge becomes an actual customer of the service represented thereby, by definition, that service is no longer “standing by” nor “immediately available” to be delivered. Instead, it is actually being delivered and used80. But when a PPH pays user fees to access and use a District owned public recreation/other facility53 And the RFF is not eliminated/adjusted. Because these customers are already actual customers of the service represented, the RFF to them, represents a minimum use charge54. Although NRS 318.197(1) allows GID Boards to fix minimum use charges, the point here is that staff and the Board have labeled the RFF/BFF something different. And something different which arguably justifies those charges to be levied involuntarily.

Given the RFF represents a minimum use charge rather than a standby service charge, and those whose properties are assessed are already paying as actual customers, the RFF/BFF cannot and do not represent legitimate standby service charges.

Trait No. 11: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here They Allegedly Pay For Benefits to People50: As stated above, standby service charges furnish some direct benefit to real property. For this reason ¶¶4(b)-(c) of the resolution which appear at page 230 of the 5/26/2022 Board packet represent findings by the IVGID Board in support of the RFF/BFF that the alleged benefits represented in consideration of payment are not only “directly” furnished to people55, but those people are allegedly “benefited in a fair and reasonable way for the sums which they are charged” (see the discussion of trait no. 14 below insofar as “reasonably proportionate”).

Moreover, ¶4(a) of that same resolution (at page 229 of the 5/26/2022 Board packet) clarifies that “Ordinance…7 sets forth in detail the…benefits available to (those) property owners“62 whose properties are assessed. Examining Ordinance 7, ¶60 instructs that “every eligible residential Parcel may receive any combination of up to five (5) Cards56” in consideration of payment that are “IVGID Recreation Passes and/or…Punch Cards.” Given: ¶34 of Ordinance 7 defines a picture pass holder (“PPH”) as “an individual62 who has been issued an IVGID Recreation Pass;” ¶60 instructs that a PPH “may be assigned to any (property) owner’s eligible family member62…or…Tenant62 who…also qualifies under this Ordinance;” and, ¶64 instructs that a PPH “provides (people with)…reduced season pass rates at District-owned ski, and tennis facilities…reduced daily rates at District-owned golf, ski and tennis facilities…reduced yearly, quarterly, monthly, or weekly membership rates at (the) District-owned Recreation Center…reduced rates on various recreation programs and services…at the District-owned Recreation Center…reduced rates for the rental of the Chateau, Aspen Grove Community Building, Diamond Peak Ski Lodge, Recreation Center, and District owned athletic fields; and watercraft launching access at the District-owned watercraft ramp to Pass Holders62 with Beach Access, for a fee; (and,)…the ability to bring Guest(s)62 to District-owned Beaches for a fee;” all of these alleged benefits furnished in consideration of payment of the RFF/BFF represent benefits to people rather than property.

Given the RFF/BFF (at least according to the District) pay for alleged benefits to people rather than property, they cannot and do not represent legitimate standby service charges.

Trait No. 12: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here They Allegedly Pay For The Availability of Non-Special Alleged Benefits50: In other words, those available to the general public as a whole. Expanding upon Medeiros‘ instructions54, legitimate fees “are charged not only in exchange for a particular governmental service, but one which benefits the party paying…in a manner ‘not shared by other members of society.'” In other words, to “the party paying the fee in a manner not shared by other members of a society.”57 Thus where the service furnished benefits the entire general public as a whole, rather than just those whose properties are assessed, there is nothing “special”53 about it, and the charge cannot be sustained.

Given here the RFF allegedly pays for the availability of public recreation/other facilities upon the condition additional user fees38 are paid, and these alleged benefits are available to the general public as a whole aka “the world’s tourists,” rather than just those62 whose real properties are assessed, it cannot and does not represent a legitimate standby service charge.

Trait No. 13: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here They Are Not Limited to Those Sums Necessary to “Directly…Defray The Costs (Actually Incurred) in Furnishing Those Service(s)58 For Which The RFF/BFF Are Assessed59: Again, “to distinguish between a ‘fee’ and a ‘tax’ the Hawaii Supreme Court in Medeiros adopted a…test(, the second pillar of)…which analyzes whether the charge…'(2) is allocated directly to defraying the costs of providing the service‘…”54 “When it appears…that revenue is (the) main objective (of an enactment), and the amount of the tax supports that theory60, (it) is a revenue measure.”61 Here the real purpose of both the RFF/BFF is as a revenue measure which makes them both special taxes68. We come to this conclusion for at least three (3) reasons.

1. First, listen to what former IVGID Finance Director, Paul Navasio, and the Board have told us is the purpose of the RFF/BFF: “The RFF/BFF “are established based on the revenues required to (financially) support62 debt, capital expenditure and operations for the District’s various recreation and beach facilities.”63 Stated differently, “the costs of…acquisition, administration, operation, maintenance and improvement of (District owned)…recreational facilities, including the improvements thereon, and of the servicing of bonds issued or to be issued therefor.”64 When “combined with (operational) service charges collected…for facility use and program activities, (the RFF/BFF) serve to (financially) support91 the operations of the District funded by (its) Community Services…and Beach Fund(s), respectively.”65 In other words, “the costs of…acquisition, administration, operation, maintenance and improvement of (District owned)…recreational facilities, including the improvements thereon, and of the servicing of bonds issued or to be issued therefor.”93

So when staff represent that the RFF/BFF are required to (financially) support the District’s various recreation and beach facilities, please understand this is an admission these fees represent the difference between budgeted revenues (from operational “service charges collected…for facility use and program activities”) and intentional overspending [on “debt, capital expenditure(s) and operations for the District’s various recreation and beach facilities” as well as “the servicing of bonds issued or to be issued therefor“] assigned to the District’s Community Services (insofar as the RFF is concerned) and Beach (insofar as the BFF is concerned) Funds, respectively66.

2. Second, here District staff actually use the RFF/BFF as a means for collecting far more than merely the costs it incurs to make District owned recreation and beach facilities available to be used by those parcels/dwelling units which are assessed67. Given “a ‘fee’ is a payment for a special privilege or service rendered, and not a revenue measure…(i)f the ‘fee’ unreasonably exceeds the value of the specific services for which it is charged[,] it will be held (to be) invalid.”68 Although there are a number of ways to demonstrate that the RFF/BFF unreasonably exceed the value for mere “availability” to access and use the District’s public recreation/other facilities after paying individual user fees thereat, let us suggest just one.

3. Finally, massive increases in Community Services and Beach Fund balances69 over just seven (7) of the last ten (10) years! Until the brutal unsustainability of intentional overspending could no longer be hidden from the public and denied by staff, each fund balance had increased markedly.

Remember, our staff are incapable of operating, maintaining, and providing for capital at District recreation/other and beach facilities based upon the revenues they’re able to generate. That’s why we have the RFF/BFF which as aforesaid acts as a financial subsidy91. So how can there be anything left over to add to fund balance? Unless the RFF/BFF total more than the amount of the subsidy.

On July 1, 2015 the fund balance in the District’s Community Services (recreation) Fund was reported at $5,357,75570. On the same date, the fund balance in the District’s Beach Fund was reported at $1,107,78671. Seven (7) years later, on July 1, 2022, the fund balance in the District’s Community Services Fund was reported at an unbelievable $64,672,71072. On the same date, the fund balance in the District’s Beach Fund was reported at a similarly unbelievable $13,934,79473. That’s a nearly one-thousand one-hundred and seven percent (1,107%) increase in the Community Services Fund [which equates to more than a one-hundred and fifty-eight percent (158.14% to be precise) yearly increase for seven (7) consecutive years], and a nearly one-thousand one-hundred and fifty-eight percent (1,158%) increase in the Beach Fund [which equates to more than a one-hundred and sixty-five percent (165.43% to be precise) yearly increase for seven (7) consecutive years]! How could the fund balances in both of these funds increase so dramatically in so short an amount of time absent massive operational profits (which were not generated) or excessive RFF/BFF subsidies? Obviously, the RFF/BFF have totaled far, far more than the costs to directly defray the expenses the District has incurred to furnish the availability to access and use District owned recreation and beach facilities, and the represented services thereat. Where as here the fees exceed the costs the District incurs to furnish recreational or beach facilities or services, it is a tax74! The RFF/BFF are not fees! Moreover,

1. The holder of a PPH or punch card realizes no recreation benefits (alleged “preferred pricing”61) unless and until he/she elects to access and use the District’s public recreation/other facilities and pay additional user fees38. Until then these cards have no value whatsoever. Especially given ¶99 of Ordinance No. 7 “strictly forbid(s)…any IVGID Recreation Pass (or)…Punch Card Holder or other individual…(from) sell(ing) an Assignment of Recreation Privileges, or…sell(ing) individual IVGID Recreation Passes or…Punch Cards” which prevents the PPH or punch card holder from realizing their inherent value.

2. Even where a PPH or punch card holder is able to realize so called “preferred pricing” at a District public recreation/other facility, in many instances, that preference is de minimis. Two simple examples prove the point: Daily adult membership rates at the Rec Center stand at $18. But if one presents a PPH or punch card, the rate can be reduced by a whopping $4 (22.2%) to $14. Similarly, daily adult court reservation fees at the Tennis Center stand at $18. But if one presents a PPH or punch card, the rate can be reduced by a whopping $3 (16.67%) to $15. Yet the RFF is nowhere proportionate to the de minimis “preferred pricing” benefit at these two recreation facilities!

 3. Staff and past boards want local parcel owners to believe the RFF/BFF pay for the costs of capital and debt associated with the beaches and District recreation/other venues75. But staff and past boards have told the public that the RFF is a subsidy which pays for something else; the difference between revenues and operating, overhead, capital and debt service costs.

For all these reasons, the RFF/BFF are: far in excess of the reasonable and necessary costs to make the beaches and other District owned recreation facilities available to be used by those properties which are assessed; they exceed the direct costs reasonable or necessary to provide this service; the alleged benefit furnished is not reasonable; and as a consequence, they are taxes76. Stated differently, these exactions cannot and do not represent legitimate standby service charges.

Trait No. 14: The RFF/BFF Cannot Be Legitimate Standby Service Charges When as Here They Are Not “Reasonably Proportionate to The Alleged Benefit(s) Furnished:”50 Again, “to distinguish between a ‘fee’ and a ‘tax’ the Hawaii Supreme Court in Medeiros adopted a…test…(the third pillar of which) analyzes whether the charge…'(3) is reasonably proportionate to the benefit received.'”54 In other words, the RFF/BFF must be proportionate to the costs the District actually incurs to furnish the availability to access and use the recreation and beach facilities represented for which these fees are assessed77. Or stated differently, “the services for which the (RFF/BFF) are imposed (must be) sufficiently particularized as to justify distribution of the costs among a limited group (the ‘users,’ or beneficiaries of the services), rather than the general public”78 as a whole. And it is for this reason that ¶5 of the resolution the Board adopts each year which fixes the RFF/BFF and orders their collection on the county tax roll recites that the RFF/BFF6 “are reasonable in their relation to the object of the charges imposed…and that said charges have been apportioned in relation to said natural, intrinsic, fundamental and reasonable distinctions among said rates.”9

But just because staff and the Board have adopted the necessary language, doesn’t necessarily mean it is truthful. Here we’ve demonstrated that no benefits are furnished in consideration of payment of the RFF/BFF (see discussion above). And that “the (alleged) benefits of (availability to access and use District owned recreation and beach facilities)…are not limited to (just) the [parcels/dwelling units assessed (see discussion above)]…The capacity to (furnish District owned recreation and beach facilities extends to)…not only the private property interests of the owner(s), but also the(ir)…building’s occupants as well as (those of) surrounding buildings and their occupants.”79 And of course, the world’s tourists.

“If the benefits for which (the RFF/BFF) are imposed were limited to (just) the owners of (assessed parcels/dwelling units and they were)…essential to the public welfare, there would be no reason to depart from the optional character of a traditional fee.”80 But because here they are not, and the District has failed to “sufficiently particularize…the services for which the (RFF/BFF) are imposed,” there is no “reasonable proportionality” to the value of the arguable benefit(s) furnished81. And that’s what we have here.

Given the lack of reasonable proportionality insofar as the alleged benefit(s) furnished by the RFF/BFF are concerned, those exactments cannot and do not represent legitimate standby service charges.

For All of The Above Reasons, The RFF/BFF Are Neither “Service Charges;” “Standby Service Charges For…(Recreation) Facilities Furnished by The District;“ Nor “Charges For The Availability of“ Recreation Facilities: Because NRS 318.197(1) instructs GID “Board(s) may fix…service charges…for…services…furnished by the district,” wouldn’t you the reader expect the resolution the Board adopts each year pursuant to NRS 318.201(9)9 to specifically find that the RFF/BFF pay for recreation services furnished to those real properties which are assessed assuming such services were furnished? And for the same reason, wouldn’t you expect the Board to specifically find that the RFF/BFF pay for recreation facilities furnished to those real properties which are assessed assuming such facilities were furnished? So where are those findings? What recreation services do the RFF/BFF pay for which are allegedly furnished to those real properties which are assessed? What recreation facilities do the RFF/BFF pay for which are allegedly furnished to those real properties which are assessed?

Assuming the answer is “no,” and for all of the above-reasons, it seems pretty clear that the RFF/BFF do not represent NRS 318.197(1) charges for District owned recreation services and facilities allegedly furnished to real property. And they certainly don’t represent standby service charges for the availability of those real properties which are assessed to access and use District owned recreation services or facilities. And if we’re wrong, how is it that the only people assessed are those who own non-exempt real property in Incline Village/Crystal Bay and are expressly benefited? Why not every resident of Incline Village/Crystal Bay? And what is the authority for levying the RFF/BFF against real property when the benefits allegedly furnished are to people?

Conclusion: ¶4 of the resolution the Board ultimately passes each year pursuant to NRS 318.201(9)9 which declares the RFF/BFF to be recreation and beach “service” charges is false. Its declaration they are “recreation standby…charges” for the mere “availability” to access and use beach and district owned recreation facilities is false. It seems pretty clear that some creative lawyers for IVGID82, in its infancy, seized upon these artfully drafted words to justify the current, questionable funding source for essentially everything the District does. The fact of the matter is that there is no legitimate justification for the RFF/BFF, whether they be: NRS 318.197(1): “standby service charges for services…(allegedly) furnished by the district;” “standby service charges…for…facilities (allegedly) furnished by the district;” “charges for the availability of facilities;” or any other exaction given the RFF/BFF do not meet the minimum requisites for legitimate standby service charges staff/prior Boards represent/have represented. Thus, the RFF/BFF cannot be nor are they legitimate standby service charges.

  1. Which allows general improvement district (“GID”) Boards to “fix (in part)…recreational facilit(y)…standby service charges, for services or facilities furnished by the district, (as well as)…the (mere) availability of service.”
  2. 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.”
  3. See page 103 of the packet of materials prepared by staff in anticipation of the Board’s May 27, 2020 meeting (“the 5/27/2020 Board packet”).
  4. An example of such resolution would be Resolution No. 1917 adopted at the Board’s May 30, 2025 meeting.
  5. An example of such Report would be the one adopted at the Board’s May 30, 2025 meeting.
  6. See Emerson College v. City of Boston, 39 Mass. 415, 424, 462 N.E.2d 1098, 1105 (1984).
  7. See Solvang Mun. Improvement Dist. v. Board of Supervisors, 112 Cal.App.3d 545, 552, 169 Cal.Rptr. 391 (1980).
  8. See McMillan v. Texas National Resources Conservation Comm’n, 983 S.W.2d 359, 365 (1998).
  9. Primarily water and/or sewer services [see State of Hawaii 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)].
  10. See State v. City of Port Orange, 650 So.2d 1, 3 (1994); Chapman, supra, at 335 P. 561.
  11. In other words, standby service charges require services to actually be “standing by” or “immediately available” to be delivered to real property [see Kennedy v. City of Ukiah, 69 Cal.App.3d 545, 553, 138 Cal.Rptr. 207 (1977)].
  12. See Chapman, supra, at 335 P. 564.
  13. As opposed to “the benefit of the general public, and 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)].
  14. See San Diego Cty. Water Auth. v. Metro. Water Dist., 117 Cal.App.4th 13, 27, 11 Cal.Rptr. 446, 457 (2004).
  15. See page 185 of the packet of materials prepared by staff in anticipation of the Board’s May 26, 2022 meeting (“the 5/26/2022 Board packet“).
  16. See page 190 of the 5/26/2022 Board packet.
  17. See former NRS 318.200(1) and 1971 Statutes of Nevada, commencing at page 188, Sec 1.
  18. See the latin maxim expressio unius est exclusio alterius which means that “where a…statute specifies certain things, the designation of such things excludes all others” [see Local 1494 of Int’l Ass’n of Firefighters v. City of Coeur d’Alene, 99 Idaho 630, 639, 586 P.2d 1346, 1355 (1978)]. Thus, where “a statute…mentions certain things specifically, the list is exclusive.” For a more comprehensive examination of this topic, the reader is invited to read our How Courts Have Instructed We Construe The Powers a GID May Exercise discussion.
  19. For a more comprehensive discussion of this topic, see our What Are Standby Service Charges For Facilities web page.
  20. See City of Port Orange, supra, at 650 So.2d 3; Chapman, supra, at 335 P.2d 561) in NRS 318.197(1).
  21. For a more comprehensive discussion of this topic, see our Elimination of Choice Factor in Determining Whether a Monetary Exaction is a Fee web page.
  22. See NRS 318.201(9).
  23. The District’s recreation venues are operated as commercial “for profit” business enterprises.
  24. Go to https://oboloo.com/blog/what-are-services-definition/.
  25. Go to https://taxfoundation.org/taxedu/glossary/user-fee/).
  26. See our What Exactly is a Fee web page for a more comprehensive discussion of this topic.
  27. See former NRS 318.200(1); 1959 Statutes of Nevada, commencing at page 463, Sec 27(1).
  28. See former NRS 318.200(1), 1967 Statutes of Nevada, commencing at page 1700, Sec. 33.
  29. See former NRS 318.200(1), 1967 Statutes of Nevada, commencing at page 1693, Sec 24(13).
  30. See Kennedy v. City of Ukiah, 69 Cal.App.3d 545, 553, 138 Cal.Rptr. 207 (1977) and Kellerman v. Chowchilla Water Dist., 80 Cal.App.4th 1006, 1011, 96 Cal.Rptr. 246, 250-51 (2000).
  31. See Solvang Mun. Improvement Dist. v. Board of Supervisors, 112 Cal.App.3d 545, 552, 169 Cal.Rptr. 391 (1980).
  32. The last such letter staff published was dated May 23, 2018, and the reader can find it at pages 10-18 of the 2018-19 Budget. Once members of the public learned of this admission and publicized it as evidence the RFF/BFF are “taxes,” uncoincidentally, the admission ceased to exist.
  33. I.e., person or people.
  34. “Village Development Co., formerly known as Crystal Bay Development Co.”
  35. According to Mr. Navazio, “the Board is required to approve a resolution which outlines the billing and collection process set forth in Nevada Revised Statutes 318.197 (establishing standby service charges for services).”8
  36. Although NRS 318.197(1) permits GIDs to fix rates, tolls or charges for various facilities and services, those exactions are “other than special assessments.” Given the BFF cannot be an “assessment,” it is not the type of monetary exaction permitted by law or the beach deed.
  37. According to the beach deed, the only persons entitled to beach access are those owners of real property located within the physical boundaries of IVGID on the date the beaches were deeded to the District, or their successors in title, and their tenants and guests. This deed restriction makes the beaches private as to them.
  38. As it was for the Burnt Cedar Pool, and the Incline Beach restrooms, and according to staff it will be used for the Beach House, boat launch ramp, and who knows how many other projects to come.
  39. Medeiros, supra, at 973 P.2d 741.
  40. See 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.
  41. See Nuclear Metal v. Low Level Radioactive Waste Mgmt. Bd., 421 Mass. 196, 656 N.E.2d 563, 570 (1995); Clean Water Coalition, supra, at 255 Pd.3d 258.
  42. In other words, where special benefit services affecting public health and sanitation are physically connected, adjacent or capable of actual connection to those real properties which are involuntarily assessed.
  43. By way of example, see pages 230-231 of the 5/26/2022 Board packet.
  44. A test embraced by the Nevada Supreme Court, no less, in Clean Water Coalition, supra, at 127 Nev. 315.
  45. As aforesaid, the Board has adopted a “Recreation Roll Policy” (see ¶1.0 of Policy No. 16.1.1) which instructs that “the Incline Village General Improvement District will charge the prescribed Recreation Fee, and if applicable…Beach Fee, to all qualifying real properties.
  46. By way of example, see pages 230-231 of the 5/26/2022 Board packet.
  47. After all, “the Board shall 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.”
  48. See Forest Hills Util. Co. v. Pub. Util. Com’n., 31 Ohio.St.2d 46, 57, 285 N.E.2d 702, 709 (1972); Smith v. Township of Norton, 2 Mich.App. 17, 18-19, 138 N.W.2d 522, 525 (1965).
  49. See Chapman, supra, at 335 P. 564.
  50. As stated elsewhere.
  51. See McMillan v. Texas National Resources Conservation Comm’n, 983 S.W.2d 359, 365 (1998).
  52. See City of Ukiah, supra.
  53. ¶104(b) of Ordinance 7 instructs that user fees are charged at District owned recreation facilities, and PPHs receive “discounts for daily access.” ¶4(b) of the resolution the Board passes each year which adopts the RFF/BFF and orders their collection on the county tax roll instructs that PPHs receive “reduced rates for season passes and reduced daily rates” (see page 230 of the 5/26/2022 Board packet). Thus in addition to their assessed properties’ RFF/BFF, PPHs and punch card holders are required to pay additional user fees
  54. See Graham v. City of Lakewood Village, 796 S.W.2d 800, 801 (1990).
  55. “The availability of the use of IVGID’s (recreation facilities is a)…benefit…which inure(s) to the owners of properties assessed hereunder.”
  56. The equivalent of Costco or Sam’s Club membership cards.
  57. See National Cable Television Ass’n, Inc. v. F.C.C., 554 F.2d 1094, 1106 (D.C. Cir. 1976); Emerson College, supra, at 391 Mass. 424.
  58. Emerson College, supra, at 391 Mass. 424-25.
  59. As elsewhere stated.
  60. In other words it is greater than the costs of providing a service.
  61. See Douglas Co. Contractors v. Douglas Co., 112 Nev. 1452, 1457, 929 P.2d 253, 256 (1996); Clean Water Coalition, supra, at 255 P.3d 258.
  62. That is, the amount of charges necessary to subsidize.
  63. See pages 224-225 of the 5/26/2022 Board packet.
  64. See ¶3 at page 229 of the 5/26/2022 Board packet.
  65. See page 225 of the 5/26/2022 Board packet.
  66. If not the difference between budgeted revenues and intentional overspending, please explain to us exactly what other types of overspending are not encompassed within: “debt, capital expenditure(s) and operations (required) for the District’s various recreation and beach facilities;”93 and, “required for the…proper servicing of said identified bonds and…the administration, operation, maintenance and improvement of said real properties, equipment and facilities” (see ¶II at page 235 of the 5/26/2022 Board packet).
  67. I.e., a “slush fund” which can be used by staff to spend on unbudgeted, unappropriated, and unidentified “pet” endeavors.
  68. See Executive Aircraft Consulting, Inc. v. City of Newton, 252 Kan. 421, 845 P.2d 57, 62 (1993) [quoting National Cable Television Ass’n, Inc. v. F.C.C., 554 F.2d 1094, 1106 (D.C. Cir. 1976)].
  69. Fund balance represents “the residual difference between assets and other inflows and liabilities and other outflows…for budget purposes” (see the District’s “Accounting Glossary“).
  70. See page 29 of the District’s 2016 Annual Comprehensive Financial Report (“the 2016 CAFR“).
  71. See page 30 of the 2016 CAFR.
  72. See page 56 of the District’s 2022 CAFR (“the 2022 CAFR“).
  73. See page 57 of the 2022 CAFR.
  74. See Clean Water Coalition, supra, at 127 Nev. 315; Douglas Co. Contractors, supra, at 112 Nev. 1457, 929 P.2d 256; 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).
  75. See page 606 of the packet of materials prepared by staff in anticipation of the board’s March 8, 2023 meeting (“the 3/8/2023 Board packet“) – “rates charged for…Picture Pass Holders the (are less than)…the fully-loaded cost per round of golf (because)…the discounts afforded to residents and guests recognize that facility fees are assessed…specifically to cover costs of capital and debt associated with District venues.”
  76. In other words, “if those criteria (do not) fit the charge, it is a” tax (see Medeiros, supra, at 973 P.2d 742-745; Clean Water Coalition, supra, at 255 P.3d 257.
  77. See Commonwealth v. Caldwell, 25 Mass. App. Ct. 91, 94-95 (1987).
  78. See Emerson College, supra, at 39 Mass. 425.
  79. See Emerson College, supra, at 39 Mass.425-26.
  80. See Emerson College, supra, at 39 Mass. 426.
  81. See Emerson College, supra, at 39 Mass. 417-419; National Cable Television, supra, at 554 F.2d 1106-1107; Utah Office of Property Rights Ombudsman, Advisory Opinion #101, supra, at page 9 of 9.
  82. Remember, IVGID attorney Bob McDonald was a founding partner in the powerhouse McDonald Carano law firm, a principal in Crystal Bay Development Co. (“CBDC”), one of the IVGID Board’s initial trustees, and President of the homeowners association set up by CBDC to own and operate the beaches for the benefit of all local parcel owners.

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