Most Board members, as well as members of the public, don’t realize that whenever the Board approves a budget which calls for the expenditure of moneys financed in whole or in part by the District’s RFF/BFF, local parcel owners end up paying through their RFF/BFF whether or not the District actually makes a particular budgeted expenditure. That’s because as elsewhere explained, when the Board determines the amount of the RFF/BFF by adopting a resolution which approves a Report “For (the) Collection on the County Tax Roll of Recreation Standby and Service Charges,”¹ ¶II recites that the RFF/BFF allegedly represent “the amount of moneys (allegedly) required for the fiscal year.”² So what happens to those moneys when it turns out some or all are not actually required and not actually expended for the purposes budgeted? Given these sums are not refunded as unnecessary, those who have been assessed end up paying anyway! Let’s provide some examples:

The Community Dog Park: For 2022-23, the IVGID Board adopted a capital improvement project (“CIP”) budget which appropriated an initial $100,000 (see CIP project #4378LI2104) for a “Community Dog Park.”³ Then for 2023-24, the IVGID Board adopted a CIP budget which appropriated $1,572,443 for Park Capital Improvement Projects⁴. An additional $1,000,000 was expressly appropriated for the Community Dog Park CIP⁵, and notably, these appropriations were neither restricted nor encumbered to this particular CIP⁶. Given this latter expenditure contributed to $2,684,022 of overspending, the deficiency was covered by $1,956,300 of central services cost and another $727,722 of fund balance transfers⁷. Since as elsewhere explained the District’s central services cost transfers including those which contribute to excess fund balance(s) come from RFFs/BFFs and the water/sewer rates local parcel owners involuntarily pay, this subject $1,100,000 was in essence paid by local parcel owners. And they were paid based upon the Board’s express representations² they were actually required for a community dog park.

At the Board’s July 26, 2023 meeting staff advanced an agenda item labeled “review, discuss(ion) and possibl(e) approv(al of one or more)…recommendations brought forth by the General Manager’s Advisory Committee on a Dog Park.”⁸ One of the alternatives proffered⁹ was “to not build a dedicated dog park.” And at that meeting, the Board decided to take no action because of concerns over “requirements…for parking.”¹⁰ Although staff represented it would “bring back some more updates very soon,”¹⁰ it never did. And as a result, the appropriated funds were not expended in fiscal year 2023-24. And as a consequence, these appropriated funds were returned to General Fund balance¹¹ by operation of law. And when the District’s 2024-25 budget was approved on May 31, 2024¹², the community dog park CIP was not included⁷. Which meant the dog park project died. And what happened to the $1,100,000 paid by local parcel owners? It was in essence merged with the General Fund balance¹³, available to be used for future unidentified, unappropriated, and unbudgeted “pet” governmental purposes¹⁴.

The Diamond Peak Master Plan: How about another example? At the Board’s October 21, 2015 meeting it approved a Diamond Peak Master Plan (“DPMP“). The plan called for nearly $16,500,000 of CIPs to be made over a series of phases and a series of years¹⁵. According to the staff memorandum included in the Board packet in support of this agenda item, “$250,000 for this project was included in the 2014/2015 Capital Improvement Budget¹⁶ and carried forward in(to) the 2015/2016 Capital Improvement Budget,” augmented by an additional $150,000¹⁷ (CIP Project #3653BD1501) appropriation. Then for fiscal year 2016-17, an additional $350,000 was budgeted for this CIP¹⁸. And as of May 24, 2017, $690,000 of these appropriations remained unspent and were simply reported as “carry-forward.”¹⁹ When prosecution of this CIP came to a quiet end, what happened to the remaining $690,000 paid by local parcel owners? It was in essence merged with the Community Services Fund balance or more pointedly net position¹³, available to be used for future unidentified, unappropriated, and unbudgeted “pet” public recreational purposes¹⁴.

Skateboard Park Enhancements: Ready for another? As a result of the American Rescue Plan Act (“ARPA”), Washoe County received $91,587,038 in Coronavirus State and Local Fiscal Recovery Funds (‘SLFRF’) “to assist with recovery and to continue navigating the impact of the COVID-19 outbreak…(by) provid(ing) greater community resilience.”²⁰ Given the County could “subgrant funds from its allocation…in accordance with the Treasury’s Final Rule and NRS 244.1505,”²¹ staff made request for SLFRF funds to be used for its effluent pipeline and storage project. But in the summer of 2022 the District was notified its request for funds had been denied²² because it had nothing to do with COVID-19. IVGID “staff…(then) requested consideration for any other District projects that m(ight) be available for APRA funding” given the County offered a grant of $250,000 each for all “active GIDs in the County²²…to carry out (appropriate) projects that (we)re of priority in their community.”²¹ “After evaluating…(potential District) projects, staff…identified the Board approved (and existing) 2022/23 CIP skate(board) park (enhancement) improvement project.”²⁴ And the County agreed. So at the Board’s December 14, 2022 meeting, it approved entry into a written agreement with the County to this effect²⁵ which at ¶3 mandated “all…purchases and expenses hereunder shall be completed by December 31, 2024.”

Then roughly six (6) months later, staff requested a further increase in the Skateboard Park enhancement CIP funding to $500,000²⁶. Notwithstanding the Board refused staff’s request²⁷, unbelievably, staff included the requested increase in the District’s 2024 Budget. And as a result, this $500,000 was involuntarily paid by local parcel owners through their RFF/BFF and water/sewerage rates. To date, this CIP has not yet begun nor has the County made the aforesaid grant. And because the December 31, 2024 completion date has come and gone, these sums have in essence merged with the General Fund balance¹³, and are available to be used for future unidentified, unappropriated, and unbudgeted “pet” governmental purposes¹⁴.

Smoothing: Now let’s examine a variation on this theme. Which yields the same result. As we’ve elsewhere observed, for decades the District has intentionally budgeted to spend more than its legitimate revenues. Bonding and the RFF/BFF have become staff’s and past Boards’ primary “go to” insofar as covering the deficiency. Commencing in fiscal year 2009-10, the District began retiring outstanding recreation bonds. But since the servicing costs associated with these bonds was covered, in part by the RFF/BFF²⁸, rather than reducing these subsidies by like amounts²⁹, the District chose to keep the RFF/BFF excessively “level” so it could build up reserves to pay for future unidentified, unappropriated, and unbudgeted “pet” expenditures¹⁴. The so called rationale for keeping the RFF/BFF level was so that local parcel owners wouldn’t have to concern themselves with a spiking RFF/BFF. And the term created for this phenomena by former Finance Director Gerry Eick, was “smoothing.” Just listen to Mr. Eick’s explanation at page 3 of the District’s 2013 Comprehensive (Audited) Annual Financial Report (“the 2013 CAFR”):

“Fiscal year 2012-13…mark(ed) the third year for what…(has) become known as ‘smoothing.’ This is an initiative used…in a way to provide reasonably level amounts for capital expenditure(s) to support not changing…Facility Fees from year to year….(Thus) for several years, including 2012-13, the District (has) included a provision (in its budgets) to build reserves for the Community Services Fund which in turn helps (free up) working capital to support general operations. The(se) reserves were built in 2012-13 since…the combined total of the (RFF/BFF)…(has) not change(d, Therefore,)…fiscal year 2012-13 marked the third year in which the combined fee was held (level) to $830.”

These sums have in essence been merged with the Community Services and Beach Fund net positions¹³, available to be used for future unidentified, unappropriated, and unbudgeted “pet” public recreational and beach purposes¹⁴. Combined with many, many other similar examples we can provide, local parcel owners have unwittingly paid all of these expenditures. We don’t know what you the reader choose to call what we have described, but we call it embezzlement; a category of larceny or theft. And NRS 205.300(1) is the reason because when:

“Any bailee of…money, goods or property, who…defraud(s) the owner or owners thereof…or any person with whom any money…ha(s) been deposited or entrusted, (or) who uses or appropriates the money…or any part thereof…for any other purpose (other) than that for which they were deposited or entrusted,” it is unlawful.

When we pay our RFF/BFF to the County as the District’s collection agent, do we entrust those moneys with IVGID staff to pay for those purposes the Board has represented²? Because here staff have used these moneys for purposes other than those for which they were entrusted, hopefully you the reader can see that the device the subject of this discussion has been used as a creative tool to compensate for the lack of sufficient ad valorem taxes. And now you know.

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1. See that staff memorandum which is part of the packet of materials prepared by staff in anticipation of the Board’s May 31, 2024 meeting (“the 5/31/2024 Board packet“).
2. For fiscal year 2024-25, the Board determined that “the amount of moneys required…(was) $3,699,450 for the Recreation Facility Fee, and $2,561,460 for the Beach Facility Fee” (see the Report which follows the staff memorandum which is part of the 5/31/2024 Board packet).
3. See page 1 of the FY2022/2023 CIP Budget.
4. See page 8, Schedule B-10 of the 2024 Budget.
5. See page 2 of the replacement pages to agenda items G(7) and G(9) of the packet of replacement materials prepared by staff in anticipation of the Board’s May 25, 2024 meeting (“the 5/25/2024 Board packet“).
6. “A restricted fund is any cash balance that has been earmarked for specific or limited use” (see investopedia.com).
7. See page 9, Schedule B-11 of the 2024-25 Budget.
8. See pages 17-25 of the packet of materials prepared by staff in anticipation of the Board’s July 26, 2023 meeting (“the 7/26/2023 Board packet“).
9. See page 21 of the 7/26/2023 Board packet.
10. See pages 103-104 of the transcript of minutes of the Board’s July 26, 2023 meeting included in the materials prepared by staff in anticipation of the Board’s September 19, 2023 meeting (“the 9/19/2023 Board packet“).
11. NRS 354.620 instructs that “any unencumbered balance on…a cash basis remaining to the credit of any appropriation shall lapse at the end of the fiscal year and shall revert to the available balance of the fund from which appropriated.”
12. See the first page of the District’s 2024-25 budget.
13. “Fund balance and net position are measures of financial position. The sum of these accounts is a residual value, meaning it represents the difference between the assets and liabilities on an entity’s balance sheet. Fund balance is the term used for governmental funds, while net position is used when referring to Enterprise Fund net position” (go to https://cityoflaramie.org/FAQ.aspx?QID=113#:~:text=Net%20position%20is%20the%20term,the%20economic%20resources%20measurement%20focus).
14. In other words, the equivalent of a “slush fund.”
15. See page 55 of the DPMP.
16. See page 150 of the District’s 2014-15 Budget.
17. See page 122 of the District’s 2015-16 Budget.
18. See page 104 of the District’s 2016-17 Budget.
19. See page 104 of the District’s 2017-18 Budget.
20. Go to https://www.washoecounty.gov/ARPA/About%20ARPA.php.
21. Go to https://www.washoecounty.gov/ARPA/files/BCC-10-25-2022-OCM-New-ARPA-Projects.pdf.
22. See page 088 of the packet of materials prepared by staff in anticipation of the Board’s December 14, 2022 meeting (“the 12/14/2022 Board packet”).
24. As part of the District’s 2022/23 capital improvement plan (“CIP”) budget, the Board approved the appropriation of $10,000 [CIP project #4378BD2202 (see page 3 of the FY2022/2023 CIP Budget)] towards a total $190,000 estimate to be expended as follows: $10,000 in 2022/23 to hire a design consultant “to evaluate the current skate park and make recommendation(s) for future improvements;” $150,000 in 2024 to construct an additional 5,600 square foot concrete pad; $20,000 in 2025 to install bolt-in skate features; and, $10,000 in 2026 to furnish the site with personal property (see page 56 of the FY2022/2023 CIP Budget). Yet coincidentally, the budget for this project was increased to $250,000²³See page 108 of the packet of materials prepared by staff in anticipation of the Board’s December 14, 2022 meeting (“the 12/14/2022 Board packet“).
25. See pages 092-109 of the 12/14/2022 Board packet.
26. See pages 440-443 of the packet of materials prepared by staff in anticipation of the Board’s May 25, 2023 meeting (“the 5/25/2023 Board packet“).
27. See pages 423-424 of the packet of materials prepared by staff in anticipation of the Board’s June 14, 2023 meeting (“the 6/14/2023 Board packet“).
28. The “proper servicing (costs) of said identified bonds” are paid by the RFF [see page 14 of the packet of materials prepared by staff in anticipation of the Board’s May 15, 2014 Board packet (“the 5/15/2014 Board packet”)].
29. Notwithstanding that the Board that had bonded to pay for renovations to the Chateau expressly represented to the public that when these bonds were paid off, the RFF would be reduced by a like amount.