Given GID Boards have the power under NRS 318.197(1) to fix “rates, tolls and charges,”¹ the question: Are there limits on the “fees” a GID Board is authorized to adopt and change? And if so, what are they? As with the propriety of all sorts of governmental powers, we begin our discussion with the powers special districts, like the Incline Village General Improvement District² (“IVGID”) are authorized to exercise.

Dillon’s Rule³: As elsewhere discussed, Nevada is a “Dillon’s Rule“ State⁴. As such, the powers all local governments may exercise “are…limited and only extend to those…which are:

1) Granted in express words;

2) Necessarily implied or…incident to…powers expressly granted; and,

3) Absolutely essential to the declared objects and purposes of the (municipal) corporation – not simply convenient, but indispensable.”⁵

The Rule also states that should there be “any reasonable doubt…as to whether a power has been granted(, it) will be ruled against the local government” and denied⁶. In other words, “municipalities run by municipal codes (state laws) can only act where specifically authorized by state law.”⁷

The foregoing shouldn’t be a foreign concept to the reader. After all, does not the federal government have powers State governments do not? What about states versus local governments? So why would you think states have powers equivalent to or in excess of those of the federal government? And why would you think counties and municipalities have powers equivalent to or in excess of those of state governments? And why would you think limited purpose special districts like IVGID², have powers equivalent to or in excess of those of the State? Or of counties and municipalities? So with that said…

Limitation No. 1 – NRS 318.197(1) Must Expressly Authorize The Particular Rate, Toll,or Charge Assessed: As elsewhere explained, assuming a GID’s “rates, tolls and charges” are really “fees,” which is what IVGID tells us they are, we must first examine what kinds of monetary exactions the District assesses, and then determine whether they are expressly authorized or not under NRS 318.197(1). Because if not, their assessment is not authorized unless they are “necessarily implied…incident to…(or) absolutely essential to th(os)e declared objects and purposes expressly granted.

Limitation No. 2 – The Person/Property Assessed Must Realize Some “Special Benefit” Above And Beyond That Furnished to Society as a Whole: As elsewhere stated, our Supreme Court seems to have adopted⁸ “a modified version of the test (initially) articulated by the Massachusetts Supreme Judicial Court in Emerson College [v. City of Boston, 391 Mass. 415, 421, 462 N.E.2d 1098 (1984). One] 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 (for which the charge is assessed); and,

(3) Reasonably proportionate to the benefit received.”⁹

Only where “those criteria fit the charge…is…it…a fee.”¹⁰ Because if not, their assessment is not authorized.

Limitation No. 3 – Profits Are Prohibited: Profits are impermissible¹¹. Which means IVGID cannot legitimately operate any of the facilities and the services it furnishes with the intent of generating a profit. Because if profit is it’s primary motivation, the rates, tolls and charges IVGID assesses are in excess of the fee limits a GID may legitimately fix. And rather than invalidating just the excess, “the entire charge must…be declared invalid (because)…a court cannot apportion the charge or ascertain and allow such portion as it…find(s) reasonable.”¹². That’s the job of the legislature.

Limitation No. 4 – Stated Differently, Assessment Cannot Exceed The Reasonable Costs Government Incurs to Furnish The Facilities or Services Represented by Payment: Other than regulatory fees with respect to a particular business or activity is concerned¹³, recall¹⁴ that fees are charged: in exchange for use of a particular governmental service¹⁵ which “benefits“ the party paying the fee¹⁶, in a manner “not shared by other members of…society¹⁷, and which are “allocated directly to defray…the costs of furnishing the service(s)“ for which they are assessed¹⁰. In other words,

“(T)he crucial factor in determining whether a municipal charge for services constitutes a…fee is whether the charge is intended to cover the cost of…providing a service.”¹⁸ Where “the ‘fee’ unreasonably exceeds the value of th(os)e specific services for which it is charged[,] it will be held (to be) invalid”¹⁹ as a tax²⁰.

Limitation No. 5 – In Other Words, Assessment Cannot Exceed That Which is “Just And Reasonable:” Given the District is a public utility²¹, common law²² as well as public policy²³ dictate that its rates must be “just and reasonable.”²⁴ Since the Public Utility Commission (“NPUC”) need not grant deference to a private utility’s unjust and unreasonable rates²⁵, why should we? And for the same reasons, the rates IVGID charges for the recreation facilities and services it furnishes must be held to this same “just and reasonable” standard. Because if not, assessment is not authorized.

Limitation No. 6 – Thus Discriminatory/Preferential Assessments Are Prohibited: A public utility’s²¹ rates cannot be “unduly discriminatory (n)or preferential.”²⁶ And common law is in accord²⁷. Because if they are, assessment is not authorized.

Limitation No. 7 – We‘re Not An Homeowners‘Association (“HOA”): We can’t tell you how many times we’ve had to listen to past District General Managers (“GMs”) and senior staff who compare IVGID to an HOA. Specifically, the Tahoe-Donner HOA (“TDHOA”). That’s because we don’t neatly compare to any other statewide political subdivision. Anywhere! And like us, the TDHOA owns, manages and operates beaches, a ski area, tennis courts, a recreation center, a golf course, retail sales facilities and at least one restaurant²⁸. But we’re government²⁹. And the TDHOA is not! And we don’t have to maintain and snowplow our community’s streets like TDHOA does. Nor need we comply with the provisions of NRS 116 as TDHOA must³⁰. Consequently, the rules and regulations GIDs may exercise are provided by statute³¹. Whereas the rules and regulations HOAs may exercise, at least in Nevada, are provided by different statutes³² as well as the Conditions, Covenants and Restrictions (“CC&Rs”) recorded against each member’s parcel-unit.

But why are these differences immaterial to proponents? Because they have an agenda. They want us to believe our Recreation (“RFF”) and Beach (“BFF”) Facility Fee(s) are a bargain compared to TDHOA‘s HOA assessments³³! And as such, we should be happy! As if that argument is supposed to be relevant insofar as the District’s fees allowed under NRS 318.197(1) are concerned. Or within the above-limits a GID may fix.

Limitation No. 8 – And We‘re Not a Portfolio of Commercial “For Profit” Business Enterprises: When it comes to utility water, sewer and solid waste collection/disposal rates and charges in particular, any limitations are an expansion of the rules for fees in general (see discussion above). Which means that those rules are really an expression of the limits imposed upon all fees generally. And where a municipal corporation has a monopoly³⁴, its only justification for going into business is that public welfare will be subserved³⁵. Because providing utilities “to private consumers for gain cannot in any sense be (considered)…performance of governmental function(s);”³⁶ right?

“When a municipal corporation owns…operates…and sell(s services)…to consumers (such as)…water (or sewer services)…it…act(s) in a business capacity and is (required to be)…treated as if it were a private utility company.”³⁷ Since NPUC need not grant deference to a private utility’s unlawful³⁸, unjust or unreasonable rates³⁹, neither need we. And for these same reasons, those other functions IVGID exercises⁴⁰ “to private consumers for gain…cannot in any sense be (considered)…performance of governmental function(s).” Given there is no justification for government to furnish any facilities nor services for gain, to the extent IVGID strives to realize gain, its adoption of excessive rates, tolls and charges is not authorized.

And now you know!

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1. See our What Kinds of Rates, Tolls and Charges Are GID Boards Authorized to Fix discussion.
2. Given IVGID is a “general improvement district, (and a)…quasi-municipal corporation,” it is special district [see NRS 308.020(2)].
3. Judge John Forrest Dillon served on the Iowa Supreme Court from 1863 to 1869, before being appointed to the Federal Eighth Judicial Circuit. He was also a noted legal scholar, publishing extensively on municipal law. In two opinions for the Iowa Supreme Court he laid out a rule of law which was subsequently adopted by other state supreme courts and eventually…the U.S. Supreme Court” (go to https://www.nvbar.org/wp-content/uploads/NevLawyer_June_2013_Dillon’s_Rule.pdf).
4. See page 5 of A Discussion of Home Rule in Nevada, Committee to Study Powers Delegated to Local Governments (February 18, 2010).
5. This is Dillon’s Rule. See https://www.nvbar.org/wp-content/uploads/NevLawyer_June_2013_Dillon’s_Rule.pdf. Also, see NRS 244.137(3) and 268.001(3).
6. See NRS 244.137(4) and 268.001(4).
7. See https://en.wikipedia.org/wiki/Home_rule_in_the_United_States; in Lamb v. Mirin, 90 Nev. 329, 526 P.2d 80, 82 (1974) our Supreme Court declared that “whenever a legislature sees fit to adopt a general scheme for the regulation of particular subject, local control over the same subject, through legislation, ceases.”
8. See Clean Water Coalition v. The M Resort, LLC, 127 Nev. 301, 255 P.3d 247, 257 (2011).
9. See State v. Medeiros, 89 Haw. 361, 973 P.2d 736, 742 (1999).
10. Id., at 973 P.2d 742-45.
11. See Clean Water Coalition, supra, at 255 P.3d 256; City of Madera v. Black, 181 Cal. 306, 313, 184 P. 397 (1919).
12. See City of Madera, supra, at 181 Cal. 315.
13. Such as “a request that a public agency permit an applicant to practice law or medicine or construct a house or run a broadcast station” [see National Cable Television Ass’n v. United States, 415 U.S. 336, 340, 94 S.Ct. 1146 (1974)] although understand that as a limited purpose special district, IVGID has no power to charge regulatory fees, nor to license businesses, nor to charge fees in consideration thereof.
14. See our Characteristics of a “Fee“ discussion.
15. See U.S. v. City of Huntington, W.Va.,999 F.2d 71, 74 (4th Cir. 1993); National Cable Television, supra, at 415 U.S. 341, 94 S.Ct. 1149; 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, supra, at 127 Nev. 318.
16. National Cable Television, Id.
17. See Medeiros, supra, at 89 Haw. 366.
18. See Rizzo v. City of Philadelphia, 668 A.2d 236, 238 (Pa. Commw. Ct. 1995).
19. See Executive Aircraft Consulting, Inc. v. City of Newton, 252 Kan. 421, 426, 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).
20. See Dickson, Sheriff v. Jeff. Co. Bd. of Education, 311 Ky. 781, 786, 225 S.W.2d 672 (1949).
21. See NRS 704.020(2)(a); Springfield Gas & Electric Co. v. City of Springfield, 292 Ill. 236, 126 N.E. 739, 744, (1920) [aff. at 257 U.S. 66; cited with approval at A.G.O. 53-231 (February 9, 1953)].
22. See Austin View Civic Association v. City of Palos Heights, 85 Ill.App.3d 89, 94-95, 405 N.E.2d 1256, 1262 (1980); 64 Am.Jur.2d §297, p.496.
23. See NRS 704.040(2).
24. That is, “simply high enough to produce revenue sufficient to bear all costs of maintenance…operation…interest charges on bonds and…accumulation of a surplus…sufficient to (service) all outstanding bonds” (see Springfield Gas, Id.).
25. NRS 704.040(1).
26. See 64 Am.Jur.2d §78, p.480; Springfield Gas, supra, at 126 N.E. 746-48; NAC 704.7563(2).
27. See Amalgamated Trust & Savings Bank v. Village of Glenview, 98 Ill.App.3d 254, 261, 423 N.E.2d 1230 (1981); Austin View, supra, at 405 N.E.2d 1262.
28. Although notably, the TDHOA doesn’t provide water, sewer or trash disposal services.
29. Specifically, “a body corporate and politic and a quasi-municipal corporation” (see NRS 318.015).
30. Since TDHOA is the equivalent of a California based community interest community association, it is bound to California’s rules concerning that kind of organization.
31. See NRS 318.010, et seq.
32. See NRS 116.001, et seq.
33. Where for 2025 they were a whopping $3,300/annually per unit (go to https://www.tahoedonner.com/community/general/faqs/general/).
34. As IVGID does insofar as sewer and trash disposal services are concerned [NRS 318.170(1)(b)].
35. See Springfield Gas, supra, at 126 N.E. 748.
36. See Springfield Gas, supra, at 126 N.E. 745.
37. See Austin View, supra, at 405 N.E.2d 1262; In re Hawaiian Electric Co., Inc., 107 PUC.4th 221, 223 (1989); 64 Am.Jur.2d §297, p.496.
38. See NRS 704.040(2).
39. See NRS 704.040(1).
40. That is, providing recreation facilities and services.