As we’ve discussed elsewhere, according to staff the District’s “central services” transfers distribute “the cost of services (allegedly) provided by the General Fund to the District’s various enterprise funds, departments or divisions”¹ from which those monetary transfers are to be made. But are they really? And if so, under what authority?

At first blush NRS 354.613(1)(c)² would appear to be that authority given it addresses “transfer(s of) money from (a local government’s)…enterprise fund(s).” However, given the District’s non-compliance with the requirements of NAC 354.865 through NAC 354.867³ for all central services cost allocation plans (discussed below), we assert these transfers are based upon no authority whatsoever! In point of fact, just like the Recreation Facility Fee (“RFF”) is to the District’s Community Services Fund and the Beach Facility Fee (“BFF”) is to the District’s Beach Fund⁴, we believe the District’s “so called” central services cost allocation plan⁵ represents nothing more than a “plug” or “subsidy” which pays for the financial shortfall between budgeted revenues and intentional overspending assigned to the District’s General Fund. In fact as the reader will see, it pays for more! The accumulation of unrestricted reserves (i.e., a “slush fund”) available for future Boards’ unidentified, unappropriated and unbudgeted “pet projects.” Don’t believe us?

NAC 354.8668(5)(b) And NAC 354.867: Although IVGID staff matter of factly tell us that the District has adopted a Central Services Cost Allocation Plan pursuant to NAC 354.8668 which “has been developed to equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds,”⁶ they fail to share the express NAC 354.8668(5)(b) and NAC 354.867 factors upon which those allocations are permitted to be made⁷. So let us “be the one(s)”⁸ to “pull back the veil of secrecy.”⁹

As we’ve elsewhere represented, the General Fund expenses which can permissibly be incorporated into a NRS 354.613(1)(c) central services cost allocation plan⁵ must:

1. Be “reasonable;”¹⁰

2. Be “of a type generally recognized as ordinary and necessary for the operation of the…fund(s)”¹¹ from which they have been transferred; as well as

3. “Necessary…for the proper and efficient administration and performance of th(os)e…fund(s);”¹²

4. “Provide…for an equitable distribution of general, overhead, administrative and similar costs of the local government;”¹³

5. Be properly “assignable or chargeable to the cost objective(s) of th(os)e…fund(s)”¹⁴ from which transfers are proposed to be made;

6. “Be limited to indirect costs for services and property provided by the local government on a centralized basis;”¹⁵

7. Be “determined in accordance with generally accepted accounting principles”¹⁶ (“GAAP”);

8. Not exceed “market prices for comparable services or property;”¹⁷

9. Be “consistent with sound business practices;”¹⁸

10. Be an “indicia of an arm’s length transaction;”¹⁹

11. Be “documented adequately for independent verification;”²⁰ and,

12. Evidence that staff have “acted with prudence under the circumstances considering their responsibilities to each pertinent governmental unit (they have assessed)…its employees, and…(we) the general public.”²¹

Where in NRS 354.613, NAC 354.8668, or NAC 354.867 is The Public Instructed a Central Services Cost Allocation Plan‘s Methodology, Founded in Part Upon 80% of a Local Government‘s Department‘s, Division‘s or Activity‘s Budget And Accounting Services And Supplies Expense²², is Equitable? Nowhere!

Where in NRS 354.613, NAC 354.8668, or NAC 354.867 is The Public Instructed a Central Services Cost Allocation Plan‘s Methodology, Founded in Part Upon 20% of a Local Government‘s Department‘s, Division‘s or Activity‘s FTE Budget and Accounting Wage And Benefit Costs, And 100% of Its FTE Human Resources Wage, Benefit And Payroll Costs²³, is Equitable? Nowhere!

The District‘s Failure to Equitably Allocate Its Alleged Central Services Costs – FTEs: Nevertheless, recall that the District’s central services cost allocation plan⁵, in part, is based upon each Fund’s/Department’s/Division’s/Activity’s average percentage of estimated District-wide FTE positions, budgeted wages, employee benefits and payroll²⁵ costs²⁴. In other words, the District’s plan in essence “averag(es) each activity’s share of estimated full-time equivalents, budgeted wages, and employee benefits.” Given NRS 354.613(8) instructs that:

“(a) Each cost allocation (must) make…an equitable distribution of all general, overhead, administrative and similar expenses of the local government among all activities of the local government…and (b) Only the enterprise fund’s equitable share of those expenses may be treated as expenses of the enterprise fund (from which transfers are to be made) and allocated to it pursuant to paragraph (c) of subsection 1,”

And NAC 354.8668(5)(a) instructs that:

“The costs which may be allocated to an enterprise fund of a local government pursuant to paragraph (c) of subsection 1 of NRS 354.613 must be…necessary and reasonable for the proper and efficient administration and performance of the enterprise fund” to which charges are assessed,

The ultimate question then: Does the District’s updated central services cost allocation plan⁵ so heavily based upon FTEs, and their wages and benefits²⁵, rather than allowing for different bases for different types of costs incurred to better match amounts allocated with the drivers of those costs to the activities responsible for paying for them, “provide…for an equitable distribution of general, overhead, administrative and similar costs of th(is) local government?” For the reasons which follow, we answer a resounding no!

The Timing of The District‘s Adoption of Its Annual Updated Central Services Cost Allocation Plan(s): Before we address those factors actually incorporated into the District’s annual updated central services cost allocation plans⁵, let’s examine their timing. NAC 354.8668(7)(a) instructs that:

“The central service cost allocation plan of a local government….must be updated²⁵ annually…before…April 15 (of each year. In other words,)…the date on which the local government must submit its tentative budget to the Department of Taxation²⁶.

But this never happens. Typically, the District’s central services cost allocation plan⁵ gets submitted to the Board for approval at the same time its final budget is submitted for approval. Thus for 2024-25, the District’s updated central services cost allocation plan was approved by the Board on May 31, 2024²⁷. So why the delay?

If your intent is to use the artifice of a “plan” to plug the financial shortfall between budgeted revenues and intentional overspending, don’t you have to know the amount of the shortfall beforehand? Stated differently, if you come up with a central services cost transfer amount before coming up with a budget for revenues and expenditures, don’t you run the risk your allocated central services cost transfers won’t be sufficient? Thus we believe the timing of the District’s annual update to its central services cost allocation is evidence that its real purpose is to cover the financial shortfall between budgeted revenues and intentional overspending. Just as we have represented.

The Factors Actually Incorporated Into The District‘s Updated Central Services Cost Allocation Plan(s): Okay. So now that we know what factors are required to be included in a public agency’s upgraded central services cost allocation plan⁵, which ones, if any, are actually included in the District’s plans?

Until Fiscal Year 2022-23: According to District Staff²⁸,

“Eligible costs…(we)re based on the final General Fund budgets for Accounting…and Human Resources…These costs (we)re then, in turn, allocated to all District Funds/Departments/Divisions as follows:

Eighty percent (80%) of the eligible costs of the Accounting budget (were) allocated based on each Fund’s/Department’s/Division’s/Activity’s percentage of District-wide budgeted non-personnel costs exclusive of capital, debt and transfers….

One-hundred percent (100%) of (the) costs of the Human Resources budget plus (the remaining) twenty percent (20%) of the eligible costs of the Accounting budget…(were) allocated based on each Fund’s/Department’s/Division’s/Activity’s average percentage of District-wide full-time equivalent (FTE) positions, wages and benefits.

The combined amounts of Central Services Overhead costs…represent(ed) the amounts budgeted as Central Services Overhead costs within each Fund’s/Department’s budget…

(And) the total of the amount of Central Services Overhead charged to all applicable budgetary units for the accounting period w(ere) also…recorded in the General Fund as a credit to expenditures within the Accounting…and Human Resources…budgets, reflective of each activities’ share of recovered costs.”

So how did the application of this formula translate into actual central services cost allocations in the years which followed? The summary spreadsheet depicted below reports yearly General Fund revenues, expenses, deficiencies, central services cost allocations, and their effect on fund balance:

Year	Revenues	Expenses	Deficiency	Central Services Cost Transfers	Excess (Deficient) Transfers	Fund Balance
201118						$ 615,775
201229	$ 2,458,945	$ 3,164,826	$    705,880	$ 1,074,000	$ 368,120	$ 983,893
201330	$ 2,547,137	$ 3,648,330	$ 1,101,193	$ 1,000,200	($ 100,99331)	$ 886,664
201432	$ 2,618,192	$ 3,196,367	$  578,175	$ 1,068,996	$ 490,821	$ 1,391,021
201533	$ 2,793,122	$ 3,783,856	$ 990,734	$ 1,101,000	$ 110,266	$ 1,501,287
201634	$ 3,035,284	$ 3,589,578	$ 554,294	$ 1,123,020	$ 568,70635	$ 1,819,993
201736	$ 3,017,165	$ 3,752,192	$ 735,027	$ 1,177,200	$ 442,17337	$ 1,862,249
201838	$ 3,266,537	$ 3,700,016	$ 433,479	$ 1,094,000	$ 660,52139	$ 2,522,786
201940	$ 3,653,450	$ 4,054,406	$ 400,956	$ 1,169,400	$ 768,44441	$ 3,765,586
202042	$ 3,876,422	$ 4,079,259	$ 202,837	$ 1,367,400	$ 1,164,56343	$ 4,630,149
202144	$ 3,779,698	$ 4,258,547	$ 478,849	$ 1,335,748	$ 1,100,41145	$ 5,730,56046
202247	$ 3,929,652	$ 5,279,955	$ 1,350,303	$ 1,538,80748	$282,70149	$ 6,013,261

General Fund Balance Creep: As the reader can see from the above-summary, “at the end of the (2010-11) fiscal year the District’s General Fund balance remained unchanged (as it had since 2006-07 and pretty much before then.⁵⁰) at $615,774.”⁵¹ Yet the “unassigned fund balance of ($6,013,261)…as of June 30, 2022…serve(s) as a useful measure of (this) government’s (increased) net resources available for spending at the end of the fiscal year.”⁵² In other words, a $5,397,487 increase over eleven (11) years, or an average increase of nearly $500,000 ($490,681 to be exact) per year for each and every one of those eleven (11) years! And as the reader will discover, this increase was on top of:

1. A 2023 $1,000,000 deduction in order to transfer “to the Utility Fund to aid in the cost of construction on the Effluent Pipeline,”⁵³;

2. A 2023 suspension of the District’s Utility Fund central services cost transfer revenue⁵⁴ for unexplained reasons⁵⁵; and

3. A minimum deduction of $778,130 of impermissible loans⁵⁶ to the District’s Internal Services Fund⁵⁷.

A phenomena we have labeled “fund balance creep” in violation of:

1. ¶2.0 of Policy No. 7.1.0 which instructs that “the policy of the District shall be to maintain a target fund balance within the General Fund equal to 15% of annual budgeted expenditures (less transfers and debt), to provide for economic uncertainty, fluctuations in General Fund revenues and unforeseen events that may require of unbudgeted expenditures;” and,

2. Note 1(S) on page 34 of the District’s 2022-23 CAFR which instructs that “while (central services) charges are estimated based on budgeted expenses, actual charges are based on actual expenditures throughout the year, a year-end adjustment may be required to ensure costs charged do not exceed costs incurred for the fiscal year.”

Given 15% of 2021-22 budgeted General Fund expenditures ($4,135,303⁵⁸) totaled $620,295, as an example, the General Fund balance stood at a whopping $6,013,261⁵⁹; 9.69 times the maximum permissible fund balance! How could this happen given the foregoing? It seems pretty evident that starting in 2011-12 and continuing for the next decade, the District intentionally used these transfers to increase the fund balance in the General Fund (rather than keeping it “static”) so deposits could accumulate as a “slush fund” for future Boards’ unidentified, unbudgeted, unappropriated pet projects. In our opinion this is further evidence the true purpose of the District’s annual update to its central services cost allocation plans is not “to equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds”⁶ as staff and past Boards have represented.

Look What Happened in 2023: For fiscal year 2023-24 the methodology for determining central services cost allocations had to be adjusted because: the Board decided to transfer financial reporting of “Parks’” meager revenues and out-of-control expenses⁶⁰ to the District’s General Fund⁶¹; and, according to us the District’s central services cost allocation plan really doesn’t reflect what staff and the Board represent. The justification being that the District’s parks are “public” facilities available to the general public as a whole without the assessment of user fees as a pre-condition for their use⁶². But this transfer meant there would be an additional annual shortage of approximately $1.2 million⁶³ or more⁶⁶ in the District’s General Fund which would have to be made up somehow. Thus staff informed the Board and the public that the:

“Preferred means (for covering the shortfall wa)s to (create) budget capacity in (the) General Fund” by increasing the amount of central services cost transfers. The disingenuous justification being to “add…(the costs of) Information Technology to (the District’s) Central Services Overhead Allocation Plan”⁶⁴

In other words, “the ends justify(ing) the means.” Notwithstanding this change in formula was and is in violation of section 2.0.2 of Policy No. 18.1.0 which states:

“The proportion of the (central services cost) allocation will be based on budget data in the form of (the following) statistics or amounts:

2.0.2.1 –Eighty percent (80%) of Budget and Accounting central overhead costs, net of credit for interest earnings…allocated on the basis of Services and Supplies expenses, by fund; (and,)

2.0.2.2 – Human Resources, Payroll and twenty percent (20%) of Budget and Accounting costs…allocated on the basis of a blended rate of budget full-time equivalent (‘FTE’) positions, wages and benefits.”

General Fund Balance Plunge: We see (below) that starting in 2022-23 the District systematically invaded fund balance in the General Fund to the tune of $1,330,735. In other words, the very same methodology existing prior to passage of NRS 354.613⁶⁵! That being, using transfers such as these from one or more of the District’s enterprise funds to cover the financial shortfall between budgeted revenues and intentional overspending⁶⁶ in order to balance the budget⁶⁷. And although this change in methodology wasn’t so glaring in 2023, it reared its ugly head in 2024 and beyond. The reader can see from the summary spreadsheet below how overspending increased by a whopping $2,391,309 (compared to 2023), central services cost transfers nearly doubled (from/to $1,331,154 to $2,245,015), and still this adjustment wasn’t sufficient to cover out-of-control overspending, requiring another $1,663,751 reduction in fund balance (a phenomena we have labeled “fund balance plunge”):

Year	Revenues	Expenses	Deficiency	Central Services Cost Transfers	Excess (Deficient) Transfers	Fund Balance
202244						$ 6,013,261
202368	$ 4,269,727	$ 5,931,616	$ 1,661,889	$ 1,331,154	($ 1,330,73569)	$ 4,682,526
202470	$ 4,414,159	$ 8,322,925	$ 3,908,766	$ 2,245,015	($ 1,663,751)	$ 3,018,77571
202572	$ 4,730,729	$ 8,110,716	$ 3,379,987	$ 3,742,043	($ 362,056)	$ 2,656,71968
202673	$ 4,464,000	$ 8,492,064	$ 4,028,064	$ 3,100,000	($ 928,064)	$ 1,728,65568

Faced with an ever plunging fund balance, staff had to do something more. And their answer was to return financial reporting of “Parks’” revenues and out-of-control expenses out of the General Fund, and back into the Community Services Fund. So at the Board’s April 9, 2025 meeting it adopted Resolution No. 1912 which formally transferred financial reporting of Parks operations back to the District’s Community Services Fund effective July 1, 2025⁷⁴. And notwithstanding, this still isn’t enough! Because for 2025-26 fund balance is projected to fall dangerously close to the Policy No. 7.1.0‘s minimum of 15% of annual budgeted expenditures.  Meaning only one remaining alternative exists to cover the growing financial shortfall between budgeted revenues and intentional overspending. We believe these ever increasing alleged central services cost allocation transfers are further evidence the true purpose of the District’s annual update to its central services cost allocation plan is not “to equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds.”⁶ As staff and past Boards have represented.

Additional Evidence – The Timing of The District‘s Adoption of Its Annual Updated Central Services Cost Allocation Plan(s): Before we address those factors actually incorporated into the District’s annual updated central services cost allocation plans⁵, let’s examine their timing. NAC 354.8668(7)(a) instructs that:

“The central service cost allocation plan of a local government….must be updated⁷⁵ annually…before…April 15 (of each year. In other words,)…the date on which the local government must submit its tentative budget to the Department of Taxation⁷⁶.

But this never happens. Typically, the District’s central services cost allocation plan⁵ gets submitted to the Board for approval at the same time its final budget is submitted for approval. Thus for 2024-25, the District’s updated central services cost allocation plan was approved by the Board on May 31, 2024⁷⁷. So why the delay?

If your intent is to use the artifice of a “plan” to plug the financial shortfall between budgeted revenues and intentional overspending, don’t you have to know the amount of the shortfall beforehand? Stated differently, if you come up with a central services cost transfer amount before coming up with a budget for revenues and expenditures, don’t you run the risk your allocated central services cost transfers won’t be sufficient? Thus we believe the timing of the District’s annual update to its central services cost allocation is evidence that its real purpose is to cover the financial shortfall between budgeted revenues and intentional overspending. Just as we have represented.

Additional Evidence – The District‘s Failure to Equitably Allocate Its Alleged Central Services Costs – FTEs: Recall that the District’s central services cost allocation plan⁵, in part, is based upon each Fund’s/Department’s/Division’s/Activity’s average percentage of estimated District-wide FTE positions, budgeted wages, employee benefits and payroll²⁵ costs⁷⁸. In other words, the District’s plan in essence “averag(es) each activity’s share of estimated full-time equivalents, budgeted wages, and employee benefits.” Given NRS 354.613(8) instructs that:

“(a) Each cost allocation (must) make…an equitable distribution of all general, overhead, administrative and similar expenses of the local government among all activities of the local government…and (b) Only the enterprise fund’s equitable share of those expenses may be treated as expenses of the enterprise fund (from which transfers are to be made) and allocated to it pursuant to paragraph (c) of subsection 1,”

And NAC 354.8668(5)(a) instructs that:

“The costs which may be allocated to an enterprise fund of a local government pursuant to paragraph (c) of subsection 1 of NRS 354.613 must be…necessary and reasonable for the proper and efficient administration and performance of the enterprise fund” to which charges are assessed,

The ultimate question: Does the District’s updated central services cost allocation plan⁵ so heavily based upon FTEs, and their wages and benefits²⁵, rather than allowing for different bases for different types of costs incurred to better match amounts allocated with the drivers of those costs to the activities responsible for paying for them, “provide…for an equitable distribution of general, overhead, administrative and similar costs of th(is) local government?” For the reasons which follow, we answer a resounding no!

What Are General Improvement Districts (“GIDs”)? The first thing the reader needs to understand before answering this query, is that IVGID is government⁷⁹. Not a lesser percentage, nor merely a “quasi” government⁸⁰. 100% government!

What Are The Purposes of GIDs? The next thing the reader needs to understand before answering this query are the purposes for GIDs. Not the many activities IVGID is engaged in, but rather, those based upon its raison d’être. As we’ve elsewhere documented⁸¹, GIDs exist⁸² “to provide various urban type services (to real property) in…areas where such services were not available and could not or would not be provided by (their) general-purpose government(s).”⁸³

What Powers May GIDs Legitimately Exercise? The next thing the reader needs to understand before answering this query, are the limited powers GIDs may expressly⁸⁴ exercise⁸⁵. For purposes of this discussion, it’s our position they have no power to engage in purely commercial “for profit” business enterprises marketed to the world’s tourists⁸⁶ rather than to “the inhabitants…of (Incline Village, Crystal Bay) and of the State of Nevada.”⁸⁷

IVGID Employs Nearly 1,000 Employees: The next thing the reader needs to understand before answering this query, is that IVGID employs far, far more than 283 employees! For some number of years Transparent Nevada used to track the number and particulars of employees hired by all Nevada local governments. And for some number of years IVGID was averaging close to 1,000! In 2019, for instance, the number was 1,012⁸⁸. IVGID failed to report in 2020 and 2021. And then in 2022 it reported 839 employees. However since then, Transparent Nevada has ceased reporting. But the point here is that regardless of what today’s number actually is, it’s a whole lot more than 283!

The Per FTE Cost For The District‘s Central Services Compared to The Per Employee Cost Insofar as Each of The District‘s 1,000 or More Employees: Where central services costs are founded upon FTEs, the higher the per FTE cost, the greater central services cost transfer from the District’s enterprise funds. In other words, another “means to (supercharge) a justified ends.” So what services do IVGID’s HR, Accounting (Finance) and IT Departments actually furnish to each of its Funds, Departments, Divisions, and Activities? And are they “necessary…for the proper and efficient administration and performance of the…fund(s)” from which transfers are budgeted to be made¹²? Are the reasonably priced¹⁰? Let’s begin answering these question by examining our General Fund HR, Finance and IT Departments.

What services does HR furnish? Hiring, firing, compensation, benefits, training, recruiting, etc. So don’t these services have to be furnished for all employees, as opposed to just FTEs? And when you have a constant flow of seasonal or part time employees who have jobs supporting commercial “for profit” business enterprises, isn’t HR furnishing more services to these employees versus its permanent full time employees? And are all of these employees necessary just to provide water, sewer, and recreation facilities to local parcel owners?

Let’s examine Finance. What services does Finance furnish? Transaction processing, invoice payment and monitoring, expense reporting, budgeting, auditing, etc. If you’re operating a number of commercial “for profit” business enterprise endeavors, as does IVGID, isn’t Finance furnishing more services to these businesses, than would be the case if IVGID weren’t in business? And because IVGID is a local government, isn’t it required to comply with a series of Local Government Budget and Finance Act⁸⁹ (“LGBFA”) requirements having little if anything to do with providing water, sewer, and public recreation services to local parcel owners? Like yearly tentative⁹⁰ and final⁹¹ budgets, annual audits⁹², annual reports of indebtedness⁹³, annual capital improvement plans⁹⁴, annual reports concerning capital improvements owned, leased or operated⁹⁵ and indebtedness⁹⁶, etc.

Finally, let’s examine IT. What services does IT furnish? It manages IT infrastructure, provides helpdesk support, and implements security measures. Essentially, it’s the “backbone” of an organization’s IT needs, allowing other departments to focus on their core functions. Again, if you’re operating a number of commercial “for profit” business enterprise endeavors, isn’t IT furnishing more services to these businesses, than would be the case if IVGID weren’t in business?

“The District’s Central Service Cost Allocations Lack Full Transparency:” At pages 15-16 of the Moss Adams report the consultant determined that the District’s central services cost allocation plan is “simplistic” and “lack(s) the detail of which specific budgeted expenditure line items make…up the central service cost total to be allocated.” It therefore recommended “the District…improve the transparency of its plan:

By providing the detail of line items included in the budget that make up the total central service costs that ultimately are allocated to the District’s various activities (and)…revising (its) Policies and Practices to include the methodology…used to allocate central service costs (which)…should allow for different bases for different types of costs incurred to better match amounts allocated with the drivers of those costs to the activities responsible for paying for them.”

And specifically “to improve the transparency of the internal service costs allocated,” Moss Adams recommended:

“The District…consider accounting for central services within an Internal Services Fund (‘ISF’) instead of through reimbursements to the General Fund. ISFs provide a mechanism to accumulate costs that benefit multiple activities/funds, (and) allow for the capturing of all costs on a full accrual basis…The use of ISFs (will) require the setting of rates for interfund charges, over time, on a cost-reimbursement basis…We recommend a detailed schedule of the individual expenditure line items in the budget that make up the total to be allocated be included in the budget document along with the support for the allocation bases. To better match the costs of services used by each activity, we recommend identifying the different types of costs to be allocated and using a basis for allocation for each type that better aligns with the drivers of that cost to the benefitting activities…We recommend that interfund charges eventually become based on actual costs incurred…The correct use of an internal services fund will require reimbursement of actual costs incurred.”⁹⁷

Four (4) or more years, and how many of these recommendations have been implemented? The answer is none. And why is that? Because staff have no interest in coming up with a bona fide central services cost allocation plan. Because if they did, wouldn’t they have incorporated Moss Adams’ recommendations? What they really have an interest in accomplishing is coming up with an artifice which allows them to cover the financial shortfall between budgeted revenues and intentional overspending. And that artifice is their “so called” central services cost allocation plan. So for these reasons, we believe staff’s failure to implement any of Moss Adam’s central services cost allocation recommendations serves as additional evidence that the District’s annual update to its central services cost allocation plan does not “equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds”⁶ as staff and past Boards have represented.

Over Reliance Upon a FTE Methodology Skews Allocation Amongst The District‘s Various Funds/Departments/Divisions/Activities: Namely, those which generate the greatest revenues capable of assessment. In order to document this statement of fact, the reader can view the summary spreadsheet below which depicts FTEs by District departments, and their effect upon total central services cost allocations. In particular, we have highlighted the effect insofar as the District’s Utility Fund is concerned. Because it consists of the fewest number of FTEs, realizing some of the highest District per employee wages and benefits (employees are unionized), and expending some of the highest equipment and machinery costs (reported under “Services and Supplies”). Stated a bit differently, the District’s allocation of per FTE central services costs is so high to the Utility Fund compared to the remainder of its operations, because “that’s where the money is.”⁹⁸

Year	Utility FTEs	Percentage All FTEs	General Gov‘t FTEs	Culture & Recreation FTEs	Total FTEs	Total Allocated Central Services Costs	Utility Fund Portion of Allocated Central Services Costs	Utility Fund Percentage of Allocated Central Services Costs
201499	32	13.45%	37	167	238	$ 1,068,996	$ 291,000	27.22%
2015100	32.4	13.88%	35.7	165.4	233.5	$ 1,101,000	$ 283,000	25.7%
2016101	34.5	14.34%	39.8	166.3	240.6	$ 1,123,000	$ 304,400	27.11%
2017102	34.6	13.68%	39.4	179	253	$ 1,177,200	$ 324,400	27.56%
2018103	34.6	13.43%	39.9	185.1	259.6	$ 1,094,000	$ 297,000	27.15%
2019104	34.6	12.3%	41.9	193.8	270.3	$ 1,169,400	$ 308,600	26.39%
2020105	34.2	12.4%	42.4	199.1	275.7	$ 1,367,400	$ 353,070	25.82%
2021106	35.2	13.63%	40.08	182.2	258.2	$ 1,335,748	$ 356,440	26.7%
2022107	37.5	13.97%	40.07	190.2	268.4	$ 1,538,807	$ 445,092	28.92%
2023108	36.2	13.81%	40.1	184.7	261	$ 1,331,154	$ 0	0%
2024109	41.2	15.78%	44.4	175.5	261.1	$ 2,245,015	$ 707,734	31.52%
2025110	41.2	14.54%	44.3	197.9	283.4	$ 3,742,013	$ 1,471,647	39.33%
2026111	36.9	16.04%	33.25	159.85	230	$ 3,100,000	$ 1,349,000	43.52%

16% of total FTEs, yet 43.5% of all central services costs? For a Department which consists of very few employees (not portions of employees), dedicated one-hundred percent (100%) to Utility Fund functions¹¹², very little employee turnover¹¹³, their own dedicated administrative building, with employees dedicated to their own administrative business office functions, and where the mailing and billing of 4,266¹¹⁴ monthly water and/or sewer bills have been outsourced to DataPrint, LLC. And for 2024-25, an unbelievable $1,471,647 of allegedly necessarily incurred and reasonably priced allocated central services costs¹⁰⁵! We’re sorry. But in our opinion, this type of allocation doesn’t even pass the rudimentary “smell” test. Let alone the “equitable distribution”¹³ one.

Rather, examining the the summary spreadsheet depicted above which reports yearly General Fund revenues, expenses, deficiencies, central services cost allocations, and their effect on fund balance, on can clearly see that as General Fund revenues have remained relatively static, expenses have exploded (especially starting in 2023), and so have the amount of alleged central services cost allocations¹¹⁵. And for these reasons, we believe the District’s annual update to its central services cost allocation plan is not “to equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds”⁶ as staff and past Boards have represented.

Additional Evidence – The District‘s Failure to Equitably Allocate Its Alleged Central Services Costs – Allocation Amongst All Funds/Divisions/Departments/Activities: Recall that the District’s central services cost allocation plan⁵, in part, is based upon allocation amongst all District Funds/Departments/Divisions²⁵ which arguably benefit from the same. However, that’s not what happens in the real world. Take a look at the 2024-25 Plan the IVGID Board adopted at its May 31, 2024 meeting¹¹⁶. The document identifies twelve (12) different District divisions/departments/activities which are incorporated into the District’s Plan. Each is assigned an allocated percentage of total central services costs. Under the column labeled “Internal Services,” no allocation whatsoever is billed notwithstanding this fund allegedly benefits from nine percent (9%) of all central services.

The reader’s attention is now directed to the column labeled “General.” Notwithstanding this fund allegedly benefits from thirteen percent (13%) of all central service, just like the District’s Internal Services Fund the amount billed to total 2024-25 allocation is zero! In other words, for 2024-25 a combined twenty-five percent (25%) of all central services costs have not been allocated amongst all District departments/divisions.

The reader’s attention is now directed to the summary spreadsheet above which depicts FTEs by District departments, and their effect upon total central services cost allocations. In particular, the reader’s attention is directed to the row for 2023. Notwithstanding 36.2 FTEs, the District’s Utility Fund was assigned no central services costs whatsoever!

As reported above, beginning in fiscal year 2023-24 the Board decided to transfer financial reporting of “Parks’” meager revenues and out-of-control expenses to the District’s General Fund. Prior thereto it was a sub-fund under the District’s Community Services Fund. And as a sub-fund, it was charged its allocated portion of the District’s central services costs⁵⁸. But once this transfer in reporting took place, District staff stopped charging Parks its allocated portion of central services costs. Notwithstanding it employed a minimum of 8.4 FTEs.

Four examples that for whatever reasons, demonstrate the District’s central services cost allocation plans do not allocate all eligible costs amongst all District Funds/Departments/Divisions²⁵. Rather, staff pick and choose what District funds/departments/divisions/activities reimburse the General Fund for the costs of the central services allegedly furnished, even though the District as a whole allegedly benefits therefrom. Which ends up skewing the allocation amongst only a portion of all FTEs.

The District takes the position its “General…and Internal Service Funds…(need) not be billed, as it would only add a layer to recalculating their related rates and charges to…other funds.”¹¹⁷ We disagree. All District funds/departments/divisions/activities are required to be billed their equitably allocated portion of central services costs²⁵. If that ends up increasing the rates charged by Internal Services to other District departments, then so be it! Because then the truth will be revealed and we can have a discussion about whether it costs local parcel owners more or less to maintain an internal services department, than it costs to outsource these functions. “Governments must weigh the benefits of an internal services costing system against the cost and complexity of system design choices.”¹¹⁸

And insofar as the General Fund is concerned, here we’re talking about central services furnished to the General Funds FTEs rather than any other department’s FTEs. These costs can’t be billed out to other departments given NRS 354.613(8)(b) instructs that “only (an) enterprise fund’s equitable share of those expenses may be treated as expenses of the enterprise fund and allocated to it.” And the fact excess allocated central services costs add to fund balance, means the General Fund pays nothing for the central services furnished to its FTE’s. Notwithstanding its obligation to pay its fair share.

These are all reasons why we believe the District’s annual update to its central services cost allocation plan does not “equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds”⁶ as staff and past Boards have represented.

Additional Evidence – The District‘s Failure to Equitably Allocate Its Alleged Central Services Costs – The Allocation of More Than What is Equitable: Once a local “government…choose(s) to allocate executive and legislative costs to the utilities or other funds with restricted revenues sources, they should exercise caution and…maintain documentation to show that those charges are equitable and reflect the cost of actual services provided.”¹¹⁹ Precisely what NAC 354.867(1)(d) instructs (they be “documented adequately for independent verification”). And here adequate documentation is necessary.

Staff tell the public that “the District…limit(s) the allocation (to) allowable administrative overhead costs to Human Resources and Finance/Accounting expenditures” only¹²⁰. In other words:

“Eligible costs to be allocated in the FY2022/23 fiscal year are based on the final General Fund budgets for Accounting (activity 120) – net of interest earnings revenue credited to the General Fund – and Human Resources (activity 150)…Eighty percent (80%) of the eligible costs of the Accounting budget is allocated based on each Fund/Department/Division/Activity’s percentage of District-wide budgeted non-personnel costs, exclusive of capital, debt and transfers. These would include Professional Services, Services and Supplies, Utilities, and Cost of Goods Sold. One-hundred percent (100%) of costs of the Human Resources budget plus twenty percent (20%) of the eligible costs of the Accounting budget are allocated based on each Fund/Department/Division/Activity’s average percentage of District-wide full-time equivalent (FTE) positions, wages and benefits. The combined amounts of Central Services Overhead costs thus allocated to each Department/Division/Activity represent the amounts budgeted as Central Services Overhead costs within each Fund/Department’s budget….The total of the amount of Central Services Overhead charged to all applicable budgetary units for the accounting period (is)…recorded in the General Fund as a credit (against) expenditures within the Accounting (activity 120) and Human Resources (activity 150) budgets, reflective of each activit(y’)s share of recovered costs.”¹²¹

But in reality, that’s not the truth. Those transfers end up extending to all non-personnel costs assigned to the District’s General Fund exclusive of personnel, capital and debt. Page 114 of the 5/26/2022 Board packet depicts a statement of estimated 2022-23 sources (i.e., revenues) and uses (i.e., expenses) budgeted to the District’s General Fund. That is $4,117,002 of revenue, and $6,773,405 of expenses. Given budgeted personnel costs total $4,279,462, and budgeted capital improvement costs total $633,000, all remaining expenses total $1,860,943. And given there are $1,887,589 of budgeted central services cost transfers, it’s clear this subsidy ends up paying for all remaining operational expenses and more and not just those assigned to Accounting and Human Resources. Thus not only do central services cost transfers cover the financial shortfall between budgeted revenues and intentional overspending assigned to the General Fund, they allow staff to disingenuously proclaim they have passed a balanced budget¹²²!

Additionally, because IVGID is a local government, it is required to comply with a series of Local Government Budget and Finance Act¹²³ (“LGBFA”) requirements having little if anything to do with providing water, sewer, and public recreation services to local parcel owners. Like yearly tentative¹²⁴ and final¹²⁵ budgets, annual audits¹²⁶, annual reports of indebtedness¹²⁷, annual capital improvement plans¹²⁸, annual reports concerning capital improvements owned, leased or operated¹²⁹ and indebtedness¹³⁰, etc. Since General Fund expenses include all of these expenses, it’s improper to assign any allocation to the District’s enterprise funds. Because “only (an) enterprise fund’s equitable share of those expenses may be treated as expenses of the enterprise fund and allocated to it.”¹³¹ Yet the District does. And because it does, these are additional reasons why we believe the District’s annual update to its central services cost allocation plan does not “equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds”⁶ as staff and past Boards have represented.

Additional Evidence – The District‘s Failure to Equitably Allocate Its Alleged Central Services Costs – Year–End Adjustments: ¶3.0.2 of Board Policy No. 18.1.0 instructs that the amount of Central Services Overhead charged out through the allocation plan shall not exceed the actual cost of the overhead incurred. For this reason, prior to the close of the last accounting period of the fiscal year, the cumulative amount of Central Services Charges posted for the fiscal year shall be compared to actual expenditures incurred by Accounting and Human Resources activities. And “to the extent that Central Services Overhead costs charged (and recovered) exceed the amount of eligible overhead costs actually expended, an adjustment (sha)ll be included in the June Central Services Overhead charge.” But this is a task the District never performs. And notwithstanding, the reader can see from the summary spreadsheet depicted above which reports yearly General Fund revenues, expenses, deficiencies, central services cost allocations, and their effect on fund balance, that since 2012 excess charges have been collected and added to an ever growing General Fund balance. This practice represents another reason why we believe the District’s annual update to its central services cost allocation plan does not “equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds”⁶ as staff and past Boards have represented.

Additional Evidence – The District‘s Failure to Equitably Allocate Its Alleged Central Services Costs – Attestation re “Compliance With The Provisions of NAC 354.865 to 354.867, Inclusive:” In order to provide assurance to the State and the public that a the District’s central services cost allocation plan actually complies with law¹³², NAC 354.8668(8) mandates its plans:

“Must include an attestation, signed by the chief financial officer (“CFO”) of the local government or his or her designee, that the central service cost allocation plan complies with the provisions of NAC 354.865 to 354.867, inclusive.”

Don’t you the reader think all local governments which adopt NAC 354.8654 central services cost allocation plans know what NAC 354.8668(8) mandates? Especially when non-adherence is criminal¹³³? Don’t you think that the “so called” professional Finance Directors IVGID employs at a base compensation level which is well in excess of $200,000 annually know this? Don’t you think our trustees, including a former finance professional for Procter & Gamble, and current General Manager (“GM”) who claims to have over thirty (30) years of governmental finance experience, know this? Don’t you think our ignorant rank and file finance employees who’ve been placed on notice of the requirement of NAC 354.8668(8) by members of our community know this? If so, please explain to us why in Incline Village this mandate is never complied with? Never! Let us venture an explanation. Because our former CFOs, after former CFOs, are obviously unwilling to attest to a known falsehood. Which would jeopardize their their continued employment with the District. And we believe this behavior is intentional because former IVGID CFOs do in fact include attestations of some sort (demonstrating they know attestations are required). It’s just that those attestations merely affirm, in lieu, that the one page plan adopted by the Board “was adopted at a meeting taking place…whenever.”

And they stupidly think no one will discover their intentional violations of NAC 354.8668(8). Like we have said. The District’s refusal approve its annual upgraded central services cost allocation plan in a timely manner represents another factor which supports the conclusion we have reached.

Additional Evidence – The District‘s Failure to Equitably Allocate Its Alleged Central Services Costs – Converting the District’s Community Services and Beach Funds From Enterprise to Special Revenue: Faced with added scrutiny over the “so called” central services allegedly provided to the District’s funds other than its General Fund, and the disingenuous explanations like those recited elsewhere, starting in fiscal year 2014-15 staff chose to eliminate the inquiry altogether by convincing the then Board to change the District’s Community Services and Beach Funds from Enterprise¹³⁴ to Special Revenue¹³⁵. The justification given for this change appears at Note 19, on page 46 of the District’s 2014-15 Comprehensive Annual Financial Report (“the 2014-15 CAFR“):

“Effective July 1, 2015, with its new fiscal and budget year, the District began utilizing Special Revenue, Capital Projects and Debt Service governmental fund accounting for (its) Community Services…and…Beach Fund(s), which have to date been accounted for as enterprise funds. The District has changed its approach to the pricing of services and in particular recognizes that the use of the facility fee to provide (financial) resources for capital expenditure and debt service (allegedly) cannot be displayed in a readily understandable fashion for its constituents” in enterprise funds.

What we had here was nothing short of circumventing the protections created by NRS 354.613 so District staff no longer had to concern themselves with the validity of transfers from its Utility, Community Services and Beach enterprise Funds. After all, if transfers to the District’s General Fund are made from a fund other than an enterprise one, how can they be prohibited or limited by NRS 354.613 which speaks to enterprise funds? They can’t!

In our view this behavior (deliberate circumvention of the protections of NRS 354.613 and NAC 354.865 through NAC 354.867) represents an admission by means of conduct that the District’s central services cost transfers represent nothing more than another financial subsidy (just like the RFF/BFF) intended to “plug” the financial shortfall between budgeted revenues and intentional overspending assigned to its General Fund. And to further demonstrate that the conversion of these funds from/to enterprise/special revenue represents circumvention, for fiscal year 2021-22 a new IVGID Board took charge and transitioned the District’s Community Services and Beach Fund(s) back to enterprise fund-types¹³⁶.

The District‘s “So Called“ Central Services Cost Allocation Plan Represents Nothing More Than a Mathematical Formula Which Yields The Intended End Results: If the purpose of the District’s central services cost allocation plan is to cover the financial shortfall between budgeted revenues and intentional overspending, as we contend, then staff need to come up with some mathematical formula which yields the end result intended. Doesn’t it? And if this is the case, we really don’t care about the formula’s justification nor components. Nor its reasonableness nor equitableness. Right? So here District staff had to come up with a formula or methodology. And here’s what it was, at least prior to April of 2023:

sum((x*.80)*s + sum((x*.20)+(y))*sum(f+w+b))*a¹³⁷

Now it doesn’t matter what x, y, f, w, b, and a represent. Because at the end of the day it’s the above formula which prevails because it’s the one which generates the intended result. And the beauty of this formula is that if you don’t get the result you’re looking for, no problem. You have the freedom to adjust a from 1 – 100. Or to change the formul altogether! Which is what happened in April of 2023. As stated above, the Board decided to transfer financial reporting for “Parks” to the District’s General Fund. But this meant there would be a shortage of approximately $1.2 million in the District’s General Fund¹³⁸. So staff chose to cover this shortfall by disingenuously increasing the amount of central services cost transfers. But because one hundred percent (100%) of General Fund Accounting and Human Resources expenses had already been tapped, staff had to concoct another alleged “central service.” And that became “adding Information Technology to (the District’s) Central Services Overhead Allocation Plan.”¹³⁹ In other words, rather than making $2,362,441 in central services cost transfers from the District’s Utility, Community Services and Beach Funds, staff convinced the Board to increase the same by a whopping 50.8% to $3,562,441. And what eventually became even more!

And just so everyone knows, when the current level of central services cost transfers is insufficient to cover the financial shortfall in the General Fund, the formula will again have to be modified to include some other alleged “central service” never before allocated. For these reasons we cannot agree with District staff’s representation that its central services cost transfers represent an equitable distribution of IVGID’s general, overhead, administrative and similar costs⁶.

Numbers Don’t Lie. But Liars Who Tell Us What Those Numbers Represent Do: This saying is a deviation of the maxim attributed to Mark Twain (i.e., that “figures don’t lie, but liars do figure”¹⁴⁰ more than ninety-five (95) years ago. According to Carroll D. Wright, a prominent statistician employed by the U.S. government at the time, who used the expression earlier on June 25, 1889 while addressing the Convention of Commissioners of Bureaus of Statistics of Labor,

“It is our duty, as practical statisticians, to prevent the liar from figuring; in other words, to prevent him from perverting the truth in the interest of some theory he wishes to establish.”

And insofar as District staff and our “rubber stamp” Board are concerned, they’re not truth tellers! It is for the above-reasons we have concluded that the District’s central services cost transfers to its General Fund exhibit the very ills identified by former Assembly person Kirkpatric in her May 11, 2011 testimony before the Assembly Government Affairs Committee¹⁴¹. And they are really no different than the forced RFF/BFF subsidies the District levies from local parcel/dwelling unit owners. In other words, the RFF pays for intentional overspending budgeted to the District’s Community Services Fund. The BFF pays for the same overspending budgeted to the District’s Beach Fund. And now that the reader understands what the District’s central services cost transfers really represent, we submit they accomplish the very same thing insofar as the District’s General Fund is concerned; the same overspending. Ladies and gentlemen. “If it looks like a duck, walks like a duck, and quacks like a duck, then it just may be a duck.”¹⁴²

Conclusion: One can affix any label one wants to a subsidy. And one can come up with any formula one wants which produces the end result one seeks. But at the end of the day, a subsidy is still a subsidy. And that’s what we have here. Okay. If not allocations for legitimate central services costs, exactly what kind of monetary exactments do these transfers represent? In our opinion, criminal! Because NRS 354.626(1) instructs that “any officer or employee of a local government who willfully violates NRS 354.470 to 354.626, inclusive, is guilty of a misdemeanor.”¹⁴³ And now you know!

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Which Extends to Fee Increases From Enterprise Funds: This is an issue closely related to central services cost transfers given “the governing body of a local government may (not)…loan or transfer money from…fees imposed,” and they are separately addressed at NRS 354.613(2)¹⁴⁴. For 2020-21 the IVGID Board increased the BFF from $125 to $500¹⁴⁵. For 2021-22 it increased the BFF from $500 to $680¹⁴⁶. Nowhere was any mention made of whether either of these increases was prohibited by law. Nor that they were necessary for continuation of the purpose(s) for which the Beach Fund was created. Nor whether these increases would be used solely for the purposes for which the fees were collected. Simply transfers from fee increases.

Examining the Parameters of IVGID’s Allocated Central Services Cost Transfers: So with the foregoing matters as a primer, let’s examine NRS 354.613(1), the District’s Central Services Cost Allocation Plan, and those regulations promulgated by the CLGF²¹ on December 20, 2012¹⁴⁷. In response, the District’s Plan allegedly “allocate(s)…eighty percent (80%) of the eligible costs of the Accounting budget…based on each Fund/Department/Division/Activity’s percentage of District-wide budgeted non-personnel costs, exclusive of capital, debt and transfers. These would include Professional Services, Services and Supplies, Utilities, and Cost of Goods Sold. One-hundred percent (100%) of (the) costs of the Human Resources budget plus twenty percent (20%) of the eligible costs of the Accounting budget are allocated based on each Fund/Department/Division/Activity’s average percentage of District-wide full-time equivalent (FTE) positions, wages and benefits.”¹⁴⁸ So with these factors in mind, let’s review the District’s Plan for the fiscal year beginning July 1, 2022¹⁴⁹ to determine what it really allocates, if anything at all.

Schedule B-9, at page 7 of District’s 2022-23 budget (“the 2022 Budget“) depicts budgeted revenues assigned to the District’s General Fund¹⁵⁰. Putting aside the fact history demonstrates that the public cannot rely upon the accuracy of financial information staff choose to share, this page depicts $5,436,402 of budgeted yearly revenues. Now examine budgeted expenditures assigned to the General Fund. You can see they total $7,773,405¹⁵¹. Subtracting expenditures from revenues, the reader0 can see we are left with $2,337,003 of overspending! But this $2,337,003 doesn’t include $1,319,400 of budgeted central services cost transfers¹⁵². When these transfers [nearly twenty-five percent (24.27% to be exact) of all budgeted General Fund revenues from all sources combined] are factored in, we see that overspending really totals a whopping $3,656,403! And rather than the $1,319,400 of central services cost transfers represented, the real number is $2,0362,441¹⁵³.

Recall that according to former Assembly person Kirkpatric⁶, when enterprise funds were originally created they were supposed to ensure that revenues realized from enterprise fund activities would not be transferred to a local government’s General Fund as they are being transferred here. Clearly the District is circumventing the very reasons why NRS 354.613 was enacted.

Examining Some of the Particulars of IVGID’s Allocated Central Services Cost Transfers: Contrary to staff’s representations, every operational expense which is assigned to the General Fund other than personnel! Therefore expenses such as the District’s auditing costs, are paid by this subsidy. As are the legal fees the District incurs with Josh Nelson’s firm to attend Board meetings. And the legal fees the District incurs to defend litigation such as citizen Mark Smith’s public records concealment lawsuit. And the Dr. Bill therapy sessions intended to get all of our trustees to work together. And membership fees in the League of Cities and Chamber of Commerce. And expensive accounting and HR software costs. And their annual licensing renewal fees. And Government Finance Officers Association (“GFOA”) membership and conference attendance fees. And the fees to buy a prestigious GFOA “certificate of excellence” for our Comprehensive Annual Financial Report (“CAFR”). And the funds necessary to replace the ad valorem tax revenue lost by Washoe County’s offset to pay for court ordered tax refunds due to the county’s improper assessment methods. And the fuels management/defensible space services which benefit the entire Incline Village/Crystal Bay community rather than just those whose parcels/dwelling units which are assessed¹⁵⁴.

We could go on-and-on. It’s everything, and everything that has absolutely nothing to do with providing necessary services to the District’s various enterprise departments.

And the District’s Central Services Cost Transfers Represent Nothing More Than a Financial Subsidy For All Overspending Assigned By Staff to the District’s General Fund: For decades prior to adoption of NRS 354.613 in 2011, IVGID staff routinely transferred sums from the District’s enterprise funds to its General Fund without consequence. Their stated intent was was nothing more than to cover the deficiency between revenues and expenses assigned to the General Fund¹¹. Although afterwards the Board adopted a Central Services Cost Allocation Plan (see discussion above) which members asserted represented an “equitabl(e) distribut(ion of) general, overhead and administrative costs Incurred by the District’s General Fund (to)…support the operations of (its)…Enterprise Funds¹⁵⁵, in-truth-and-in-fact the transfers were as they had always been; to cover the deficiency between revenues and expenses assigned to the General Fund. And on May 26, 2022 staff inadvertently admitted this fact was true.

Although staff represent that only “eighty percent (80%) of…eligible costs of the Accounting budget is allocated based on budgeted non-personnel costs exclusive of capital and debt transfers,” and that “one-hundred percent (100%) of (the) costs of the Human Resources budget plus twenty percent (20%) of the eligible costs of the Accounting budget are (similarly) allocated based on…full-time equivalent (FTE) positions,”⁴⁶ the truth of the matter is that those transfers extend to all non-personnel costs assigned to this fund exclusive of capital and debt. Page 114 of the 5/26/2022 Board packet depicts a statement of estimated 2022-23 sources (i.e., revenues) and uses (i.e., expenses) budgeted to the District’s General Fund. That is $4,117,002 of revenues, and $6,773,405 of expenses¹⁵⁶. Given budgeted personnel costs total $4,279,462, and budgeted capital improvement costs total $633,000, all remaining expenses assigned to the District’s General Fund total $1,860,943. And given there are $1,887,589 of budgeted central services cost transfers, it’s clear this subsidy really pays for all remaining operational expenses and not just those assigned to Accounting and Human Resources.

One can affix any label one wants to the subsidy. And one can come up with any methodology one wants which produces the end result staff intends. But at the end of the day a subsidy is still a subsidy. And just as just as we represent, central services cost transfers represent nothing more than a financial subsidy which plugs the difference between budgeted revenues and operational expenses assigned to the General Fund.

So What ‘s the Consequence For Violating NRS 354.613? NRS 354.613(7) provides the answer: “The sole remedy for a violation of this section is the penalty provided in NRS 354.626. (Thus) any person who pays a fee for the enterprise for which the enterprise fund is created¹⁵⁷ may file a complaint with the district attorney or Attorney General alleging a violation of this section for prosecution pursuant to NRS 354.626.”¹⁵⁸

And as Evidence of “Consciousness of Guilt,”¹⁵⁹ Consider How the District Attempted to Circumvent the Protections of NRS 354.613 by Converting its Community Services and Beach Funds from Enterprise to Special Revenue: Faced with added scrutiny over the central services allegedly provided to the District’s various funds other than its General Fund, starting in fiscal year 2014-15, staff chose to eliminate that scrutiny altogether by changing the District’s Community Services and Beach Funds from enterprise⁴ to special revenue¹⁶⁰ Staff’s explanation for this change appears at Note 19, at page 46 of the District’s 2014-15 Comprehensive Annual Financial Report (“the 2014-15 CAFR“): “Effective July 1, 2015, with its new fiscal and budget year, the District began utilizing Special Revenue, Capital Projects and Debt Service governmental fund accounting for (its) Community Services…and…Beach Fund(s), which have to date been accounted for as enterprise funds. The District has changed its approach to the pricing of services and in particular recognizes that the use of the facility fee to provide (financial) resources for capital expenditure and debt service (allegedly) cannot be displayed in a readily understandable fashion for its constituents” in enterprise funds.” Absolute hogwash!

What we had here was nothing short of circumventing the protections created by NRS 354.613! After all, if transfers are made from a fund other than an enterprise one, how can they be prohibited or limited by NRS 354.613? And to further demonstrate that these fund conversions represented circumvention, for fiscal year 2021-22 a new IVGID Board took charge and transitioned the District’s Community Services and Beach Fund(s) back to enterprise fund-types¹⁶¹.

Conclusion: Although you won’t find it clearly stated in the 2011-12 Budget, back then the District budgeted for $771,961 of central services cost transfers¹⁶²; roughly half ($385,981) came from its Utility Fund¹⁶³, and the other half came from its Community Services¹⁶⁴ and Beach¹⁶⁵ Funds¹⁶⁶ combined. Given the District’s 2022-23 budgeted transfers of $2,362,441⁴², allocated central services costs have more than tripled in just ten (10) short years! And this is in spite of the fact the District’s ad valorem and consolidated tax revenues have increased (from $2,405,716¹⁶⁷ to $4,101,174¹⁶⁸) by a whopping nearly 70.5% during the same time period! And if central services cost transfers increase by an additional $1.2 million for 2023-24 should expenses associated with the District’s public parks and athletic fields be transferred to its General Fund, as staff are proposing, the increase in central services cost transfers within ten (10) short years will be a mind boggling 461%!

As bad as these numbers are, the increase in central services cost transfers from the District’s Community Services and Beach Funds¹⁶⁹ has been greater. Nearly 330% (from $357,382⁵⁶ to $1,178,206) from the District’s Community Services Fund, and nearly 494% (from $28,598⁵⁷ to $141,194⁴²) from its Beach Fund! Given the District’s Community Services and Beach Funds are budgeted to overspend nearly $7 million annually, this level of overspending is directly subsidized by the RFF and BFF, respectively, and General Fund overspending is largely subsidized by central services cost transfers from these two funds, hopefully the reader sees that overspending budgeted in the District’s General Fund is actually paid for by the RFF, BFF, and the District’s water and sewer rates and charges¹⁷⁰. And now you know!

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Additional Evidence – IVGID’s Staff‘s May 26, 2022 Admission: On May 26, 2022 staff inadvertently admitted what many in our community have been alleging for years. Staff tell the public that “the District…limit(s its)…allocation (to) allowable administrative overhead costs to Human Resources and Finance/Accounting expenditures” only¹⁷¹. But in reality, that’s not the truth. Those transfers end up extending to all non-personnel costs assigned to the District’s General Fund exclusive of personnel, capital and debt. Page 114 of the 5/26/2022 Board packet depicts a statement of estimated 2022-23 sources (i.e., revenues) and uses (i.e., expenses) budgeted to the District’s General Fund. That was $4,117,002 of revenue, and $6,773,405 of expenses. Given budgeted personnel costs totaled $4,279,462, and budgeted capital improvement costs totaled $633,000, all remaining expenses totaled $1,860,943. But given there were $1,887,589 of budgeted central services cost transfers, it’s clear this subsidy ended up covering the financial shortfall for all remaining operational expenses and not just those assigned to Accounting and Human Resources. We contend this admission is further evidence that the true purpose of the District’s annual update to its central services cost allocation plan is not “to equitably distribute general, overhead and administrative costs incurred by the District’s General Fund in the course of supporting…operations of the District’s (various) enterprise funds”⁶ as District staff and the Board represent.

1. See page 157 of the 2019-20 Budget.
2. We submit NRS 354.474(1) which instructs that “the provisions of NRS 354.470 to 354.626, inclusive, apply to all local governments,” and general improvement districts (“GIDs”) are local governments. NRS 354.474(1)(a) instructs that “’local government’ means every political subdivision or other entity which has the right to levy or receive money from ad valorem or other taxes or any mandatory assessments, and includes…districts organized pursuant to chapter…318.” The Incline Village General Improvement District (“IVGID”) was created pursuant to NRS 318 (see Washoe County Ordinance No. 97, Bill No. 57 effective June 1, 1961). And NRS 318.225 gives it “the right to levy or receive money from ad valorem…taxes.”
3. Regulations adopted pursuant to NRS 354.613(8) [“for the purposes of paragraph (c) of subsection 1, the Committee on Local Government Finance (“CLGF”) shall adopt regulations setting forth the extent to which general, overhead, administrative and similar expenses of a local government of a type described in paragraph (c) of subsection 1 may be allocated to an enterprise fund”] pertaining to the “Allocation of Costs to Enterprise Fund(s).”
4. See our What Are The RFF/BFF According to Us discussion.
5. “The documentation of a local government that identifies, accumulates, allocates or develops billing rates for the allocation of the cost of services and property provided by the local government on a centralized basis to its departments, agencies and enterprise funds” (see NAC 354.8654).
6. See page 043 of the 5/26/2022 Board packet based upon the requirement of NAC 354.8668(5)(a) that the Plan “provides for an equitable distribution of general, overhead, administrative and similar costs of the local government.”
7. NRS 354.613(1) and (2)(c) instruct that “loan(s) or transfer(s of) money from…enterprise fund(s), mon(ies) collected from fees imposed for the purpose for which…enterprise fund(s were)…created or any income or interest earned on money in an enterprise fund,” are impermissible [actually unlawful given NRS 354.626(1) instructs that “any officer or employee of a local government who willfully violates NRS 354.470 to 354.626, inclusive, is guilty of a misdemeanor”] unless, in part, “the loan or transfer is made…for a cost allocation for employees, equipment or other resources related to the purpose of the enterprise fund.” For the purposes of paragraph (c) of subsection 1, NRS 354.613(8) instructs that the CLGF “shall adopt regulations setting forth the extent to which general, overhead, administrative and similar expenses of a local government of a type described in paragraph (c) of subsection 1 may be allocated to an enterprise fund.” Those regulations became effective December 20, 2012, and appear at NAC 354.865 – 867.
8. “‘Be the One’ is a song recorded by United Kingdom and Albanian singer Dua Lipa for her eponymous (2017) debut studio album” (go to https://en.wikipedia.org/wiki/Be_the_One_(Dua_Lipa_song)).
9. The “veil of secrecy refers to a situation where something is intentionally kept hidden or concealed, preventing the truth from being revealed, and creating a sense of mystery or opacity” (go to https://www.oxfordlearnersdictionaries.com/definition/american_english/veil_1#:~:text=%5Bsingular%5D%20(formal)%20something,behind%20a%20veil%20of%20secrecy).
10. See NAC 354.867(1) which mandates these costs adhere to this requirement.
11. See NAC 354.867(2)(a) which mandates these costs adhere to this requirement.
12. See NAC 354.867(1)(a) which mandates these costs adhere to this requirement.
13. See NAC 354.8668(5)(a) which mandates these costs adhere to this requirement.
14. See NAC 354.8668(5)(b) which mandates these costs adhere to this requirement.
15. See NAC 354.8668(2) which mandates these costs adhere to this requirement.
16. See NAC 354.867(1)(c) which mandates that these costs adhere to this requirement.
17. See NAC 354.867(2)(c) which mandates these costs not exceed these prices.
18. See NAC 354.867(2)(b) which mandates these costs adhere to this requirement.
19. See NAC 354.867(2)(b) which mandates these costs evidence “an arm’s length transaction.”
20. See NAC 354.867(1)(d) which mandates these costs be adequately documented for independent verification.
21. See NAC 354.867(2)(d) which mandates these costs adhere to these requirements.
22. See section 2.0.2.1 of Policy No. 18.1.0, infra.
23. See section 2.0.2.2 of Policy No. 18.1.0, infra.
24. See page 16 of that January 14, 2021 Moss Adams, LLP “Evaluat(ing)…Certain (District) Account and Reporting Matters” (“the Moss Adams report“).
25. In other words, “approved by the governing body under a nonconsent item that is separately listed on the agenda for a regular meeting of the governing body” [see NRS 354.613(1)(c)].
26. See NRS 354.596(2). Understand that here we’re talking about a tentative rather than final budget. A local government’s final budget need not “be adopted (until) on or before June 1 of each year” [see NRS 354.598(2)]. Notwithstanding, as the reader will learn below, the District’s central services cost allocation plan is improperly “based on the final General Fund budgets for Accounting…Human Resources” and Information Technology.
27. See Supplemental Item G.3.B. to the Board’s May 31, 2024 meeting packet.
28. See page 044 of the 5/26/2022 Board packet.
29. See page 22 of the District’s 2011-12 CAFR.
30. See page 23 of the District’s 2012-13 CAFR.
31. Supplemented by $3,764 from sale of assets.
32. See page 23 of the District’s 2013-14 CAFR.
33. See page 23 of the District’s 2014-15 CAFR.
34. See page 26 of the District’s 2015-16 CAFR.
35. “As of July 1, 2015 the Board of Trustees established Special Revenue, Capital Project and Debt Service
    funds for its Community Services and Beach activities” (see Note 14 at page 53 of the District’s 2015-16 CAFR). $250,000 of community services cost transfers were re-distributed to the District’s Community Services Capital Projects special revenue funds (see page 26 and Note 7 at page 49 of the District’s 2015-16 CAFR).
36. See page 26 of the District’s 2016-17 CAFR.
37. “On August 29, 2012 the Board…established $400,000 Committed balance in the General Fund. Upon determination that the General Fund (would be)…able to meet its obligations, the District w(ould) then release the commitment…and make a transfer to the Community Services Special Revenue Fund. (Given) the District’s budget for the year ending June 30, 2017 included making the transfer…to
    the Community Services Special Revenue Fund,” $400,000 of community services cost transfers were re-distributed to the District’s Community
    Services Special Revenue Fund (see Note 14 at page 51 of the District’s 2016-17 CAFR).
38. See page 25 of the District’s 2017-18 CAFR.
39. Supplemented by $16 from sale of assets.
40. See page 25 of the District’s 2018-19 CAFR.
41. “The Governmental Funds Statement of Revenues, Expenditures, and Change in Fund Balance evidences an $800,000 prior period adjustment (see page 27 of the District’s 2018-19 CAFR) “as a result of A Prior Period Adjustment was made “to reflect (a)…transfer from the Workers Compensation
    Fund” (see Note 22 at page 56 of the District’s 2018-19 CAFR). And $325,644 of community services cost transfers were re-distributed (see Note 7 at page 48 of the District’s 2018-19 CAFR) to the District’s Community Services Capital Project special revenue fund.
42. See page 60 of the District’s 2019-2020 CAFR.
43. $300,000 of community services cost transfers were re-distributed (see Note 8 at page 47 of the District’s 2019-2020 CAFR) from community services cost transfers to the District’s Community Services ($241,875) and Beach ($13,125) special revenue (see page 23 of the District’s 2019-2020 CAFR), and Utility ($45,000) enterprise fund (see Note 8 at page 47 of the District’s 2019-2020 CAFR).
44. See page 51 of the District’s 2020-2021 CAFR.
45. Net changes in fund balances for the District’s Community Services and Beach Special Revenue, Capital Project and Debt Service funds, combined, totaled $3,207,771 (see page 65 of the District’s 2020-2021 CAFR). But “the Governmental Funds Statement of Revenues, Expenditures, and Change in Fund Balance discloses three prior period adjustments. The first (wa)s a transfer between the Community Services Special Revenue Fund and the Community Services Capital Projects Fund that (wa)s reported in the prior year $1,637,400 lower than the entry in the financial reports. The second…(wa)s for the $243,512 that was reported as unavailable revenue but should have been recorded as revenue when received in prior years. (And) there were several assets capitalized in prior years that the auditors determined should not have been capitalized. The total affect to the financial reports was $3,207,771 (see Note 22 at page 44 of the District’s 2020-2021 CAFR). Excess General Fund revenues and central services transfers were allocated amongst the District’s General, Community Services and Beach, Capital Project and Debt Service special revenue funds. The portion allocated to the General Fund was $1,100,411 inclusive of the above $243,512 in prior years that should have been recorded as revenue. The remaining $2,350,872 increased the fund balances in the Community Services ($2,323,286) and Debt Service ($27,586) special revenue funds (see page 21 of the District’s 2020-2021 CAFR).
46. Also see page 64 of the District’s 2020-2021 CAFR.
47. See page 53 of the District’s 2021-2022 CAFR.
48. See page 25 of the District’s 2021-2022 CAFR.
49. Less central services cost transfers were necessary ($188,504) given the “excess…of revenues over expenditures” supplemented by a $94,197 “prior period adjustment…(evidenced in) the Statement of Activities, (and) the Governmental Funds Statement of Revenues, Expenditures, and Change in Fund Balance” (see page 21 of the District’s 2021-2022 CAFR), and a $192,287 loan to the Internal Services Fund (see pages 20 and 24 of the District’s 2021-2022 CAFR.
50. See page 25 of The District’s 2006-07 CAFR.
51. See page 16 of the 2010-11 CAFR.
52. See page 14 of the 2021-22 CAFR.
53. See Note 8 at page 40 of the District’s 2022-2023 CAFR.
54. See page 10 of Schedule F-1 to the District’s 2023-24 4404LGF.
55. And violative of the plan’s requirement that “eligible costs…(be) allocated to all District Funds/Departments/Divisions.”²⁵
56. See NRS 354.6118 and NAC 354.290 which, in part, require a public hearing and resolution authorizing the loan filed with the Department of Taxation.” Here neither took place.
57. See pages 20 and 24 of the District’s 2021-2022 CAFR, and pages 19, 21, and 23 of the District’s 2022-2023 CAFR.
58. See page 9, Schedule B-10 of the 2021-22 Budget.
59. See page 22 of the District’s 2021-22 CAFR.
60. A minimum of $1,142,050 annually (see page 8 of Schedule B-10 to the District’s 2023-24 Form 4404LGF).
61. For decades before, revenues and expenses associated with the District’s parks and athletic fields were assigned to its “Parks” Fund (for fiscal year 2022-23 the reader can examine staff’s financial reporting of this sub-fund at pages 160-163 of the 5/26/2022 Board packet.”).
62. There was this belief at the time (one in which we agree) that facilities and services provided to the general public as a whole should be paid for from general revenues (such as taxes) rather than assessing local parcels/dwelling units for the alleged “availability” to access and use the same.
63. See pages 150-151 of the packet of materials prepared by staff in anticipation of the Board’s February 22, 2023 meeting (“the 2/22/2023 Board packet“).
64. See page 150 of the 2/22/2023 Board packet.
65. See our History of The District’s Central Services Cost Transfers discussion.
66. See Note 12 labeled “Transfers” at page 44 to the District’s 2004-05 Comprehensive Annual (Audited) Financial Report (“CAFR”), page 43 to its 2005-06 CAFR, page 42 to its 2006-07 CAFR, page 38 to its 2007-08 CAFR, page 43 to its 2008-09 and 2009-10 CAFRs, and page 42 to its 2010-11 CAFR.
67. Because ¶1.1 of Board Policy No. 6.1.0 mandates adoption of a balanced operating budget.
68. See pages 21 and 24 of the District’s 2022-2023 CAFR.
69. $1,000,000 of central services cost transfers were re-distributed “to the Utility Fund to aid in the cost of construction on the Effluent Pipeline” (see Note 8 at page 40 of the District’s 2022-2023 CAFR). An additional $330,735 of a $585,843 loan to the Internal Services Fund (see pages 19, 21, and 23 of the District’s 2022-2023 CAFR) was re-distributed augmented by a $255,108 reduction in fund balance.
70. See page 8 of the Supplemental Item E.2 to the packet of materials prepared by staff in anticipation of the Board’s April 14, 2025 meeting (“the 4/14/2025 Board packet“).
71. Estimated inasmuch as of the date this web page was created, the District had failed to share this data.
72. Estimated Year Ending 6/30/2025⁷⁴.
73. See the District’s 2025-26 tentative budget Form 4404LGF.
74. See pages 117-118 of the packet of materials prepared by staff in anticipations of the Board’s April 9, 2025 meeting (“the 4/9/2025 Board packet“).
75. In other words, “approved by the governing body under a nonconsent item that is separately listed on the agenda for a regular meeting of the governing body” [see NRS 354.613(1)(c)].
76. See NRS 354.596(2). Understand that here we’re talking about a tentative rather than final budget. A local government’s final budget need not “be adopted (until) on or before June 1 of each year” [see NRS 354.598(2)]. Notwithstanding, as the reader will learn below, the District’s central services cost allocation plan is improperly “based on the final General Fund budgets for Accounting…Human Resources” and Information Technology.
77. See Supplemental Item G.3.B. to the Board’s May 31, 2024 meeting packet.
78. See page 16 of that January 14, 2021 Moss Adams, LLP “Evaluat(ing)…Certain (District) Account and Reporting Matters” (“the Moss Adams report“).
79. See our What is a GID discussion.
80. See NRS 318.075.
81. See our What is a GID discussion.
82. See our Why The Need For GIDs Discussion.
83. See ¶II at page 8 of Legislative Commission of the Legislative Counsel Bureau, State of Nevada (“LCB”), Bulletin No. 77-11, Creation, Financing and Governance of General Improvement Districts, September 1976 (“LCB Bulletin 77-11”).
84. See Dillon’s Rule – NRS 244.137 and 268.001.
85. See our Powers a GID May Exercise discussion.
86. See NRS 318.116.
87. See NRS 318.015(1).
88. In contrast the county of Carson City employed 1,082 employees. And the Sun Valley General Improvement District employed 14 employees.
89. See NRS 354.470, et seq.
90. See NRS 354.596.
91. See NRS 354.598.
92. See NRS 354.624.
93. See NRS 354.6025.
94. NRS 354.5945.
95. See NRS 354.5947.
96. See NRS 354.6025.
97. See pages 18-19 of the Moss Adams report.
98. This is the famous quote about robbing banks wrongly attributed to legendary Jesse James (see The Story of Mistaken Attribution).
99. See The District’s 2016 Form 4404LGF.
100. See The District’s 2017 Form 4404LGF.
101. See The District’s 2018 Form 4404LGF.
102. See The District’s 2019 Form 4404LGF.
103. See The District’s 2020 Form 4404LGF.
104. See The District’s 2021 Form 4404LGF.
105. See The District’s 2022 Form 4404LGF.
106. See The District’s 2023 Form 4404LGF.
107. See The District’s 2024 Form 4404LGF.
108. See The District’s 2025 Form 4404LGF.
109. See The District’s 2026 Form 4404LGF.
110. See The District’s April 14, 2025 BOT Meeting (estimated current 06/30/25 year).
111. See The District’s April 14, 2025 BOT Meeting (budgeted 06/30/26 year).
112. See pages 082-083 of the packet of materials prepared by staff in anticipation of the Board’s January 25, 2023 meeting (“the 1/25/2023 Board packet“).
113. 32 full-time positions, and 2 part time positions in FY 2024-25 [see page 186 of the packet of materials prepared by staff in anticipation of the Board’s March 12, 2025 meeting (“the 3/12/2025 Board packet“)].
114. See page 25 of that April 2022 Water and Sewer Rate Study.
115. Because in our opinion, the District’s central services costs really represent the difference between budgeted revenues and intentional overspending.
116. See page 41 of the packet of supplemental materials prepared by staff in anticipation of the Board’s May 31, 2024 meeting (“the 5/31/2024 Board packet”).
117. See ¶2.0.1 of Policy No. 18.1.0.
118. See the Government Finance Officer’s Association’s (“GFOA”) discussion on Pricing Internal Services.
119. See the Office of the Washington State Auditor’s discussion on Overhead Cost Allocations.
120. See page 24 of the packet of materials prepared by staff in anticipation of the Board’s May 27, 2020 meeting (“the 5/27/20 Board packet“).
121. See pages 043-044 of the packet of materials prepared by staff in anticipation of the Board’s May 26, 2022 meeting (“the 5/26/2022 Board packet“).
122. ¶1.1 of Board Policy No. 6.1.0 mandates adoption of a balanced operating budget.
123. See NRS 354.470, et seq.
124. See NRS 354.596.
125. See NRS 354.598.
126. See NRS 354.624.
127. See NRS 354.6025.
128. NRS 354.5945.
129. See NRS 354.5947.
130. See NRS 354.6025.
131. See NRS 354.613(8)(b).
132. That is, “NAC 354.865 to 354.867, inclusive.”
133. See NRS 354.626(1) – “any officer or employee of a local government who willfully violates NRS 354.470 to 354.626, inclusive, is guilty of a misdemeanor.”
134. NRS 354.517 defines an enterprise fund as one: “established to account for operations: 1. Which are financed and conducted in a manner similar to the operations of private business enterprises, where the intent of the governing body is to have the expenses…of providing goods or services on a continuing basis to the general public, financed or recovered primarily through charges to the users; or, 2. For which the governing body has decided that a periodic determination of revenues earned, expenses incurred and net income is consistent with public policy and is appropriate for capital maintenance, management control, accountability or other purposes.”
135. NRS 354.270 defines Special Revenue Fund to mean one “used to account for specific revenue sources, other than sources for major capital projects, which are restricted by law to (the) expenditure for specified purposes.”
136. See page 38 of the packet of materials prepared by staff in anticipation of the Board’s May 26, 2021 meeting (“the 5/26/2021 Board packet“).
137. Here’s your legend: x = Accounting budget net of credit for interest earnings; y = Human Resources and Payroll budget; f = District wide budgeted FTEs; w = District wide budgeted wages; b = District wide budgeted benefits; s = District wide budgeted services and supplies; a = allocation factor, from 1 – 100.
138. See pages 150-151 of the packet of materials prepared by staff in anticipation of the Board’s February 22, 2023 meeting (“the 2/22/2023 Board packet“).
139. See page 150 of the 2/22/2023 Board packet.
140. Go to https://quoteinvestigator.com/2010/11/15/liars-figure/.
141. See page 39 of the minutes of the May 11, 2011 public hearing session for AB471 before that Committee.
142. A test devised by the US labour leader Walter Reuther (1907–70) in the McCarthy era [go to https://www.oxfordreference.com/display/10.1093/acref/9780199916108.001.0001/acref-9780199916108-e-4080;jsessionid=624359E7E817E1DEDF4DECF3605AA43B#:~:text=and%20Legal%20Notice).-,If%20it%20looks%20like%20a%20duck%2C%20walks%20like%20a%20duck,just%20may%20be%20a%20duck.&text=A%20test%20devised%20by%20the,era%20(seeMcCarthyism%20…&text=PRINTED%20FROM%20OXFORD%20REFERENCE%20(www.oxfordreference.com).,-(c)%20Copyright%20Oxford)].
143. Recall that the NRS which has been violated is NRS 354.613(1) which incorporates NAC 354.865 to NAC 354.867 through NRS 354.613(8).
144. “The governing body of a local government may (not) increase the amount of any fee imposed for the purpose for which an enterprise fund was created (unless and until it first)…determines that: (a) the increase is not prohibited by law; (b) the increase is necessary for the continuation or expansion of the purpose for which the enterprise fund was created; and, (c) all fees that are deposited in the enterprise fund are used solely for the purposes for which the fees are collected.
145. See pages 33-179 of the packet of materials prepared by staff in anticipation of the Board’s May 26, 2021 meeting (“the 5/26/2021 Board packet“).
146. See page 52 of the 5/26/2021 Board packet.
147. Based upon the mandate of NRS 354.613(8) which states that “for the purposes of paragraph (c) of subsection 1, the CLGF shall adopt regulations setting forth the extent to which general, overhead, administrative and similar expenses of a local government of a type described in paragraph (c) of subsection 1 may be allocated to an enterprise fund” with the understanding those “regulations must require that: (a) Each cost allocation makes an equitable distribution of all general, overhead, administrative and similar expenses of the local government among all activities of the local government, including the activities funded by the enterprise fund; and, (b) Only the enterprise fund’s equitable share of those expenses may be treated as expenses of the enterprise fund and allocated to it pursuant to paragraph (c) of subsection 1.”
148. See page 043. of the packet of materials prepared by staff in anticipation of the Board’s May 26, 2022 meeting (“the 5/26/2022 Board packet“).
149. See pages 042-045 of the 5/26/2022 Board packet.
150. The fund used by staff to report system wide revenues and expenses assigned to governmental functions.
151. See Schedule B-10, at page 8 of the 2022 Budget.
152. See Schedule B-9, at page 7 of the 2022 Budget.
153. See page 045 of the 2022 Budget.
154. So you tell us. What do any of the services represented by any of these costs have to do with necessary, reasonable or equitable costs the General Fund incurs on the District’s other departments’ behaves?
155. See page 043 of the 5/26/2022 Board packet.
156. The statement only discloses $4,885,816 of expenses. But this number is deceitful because $1,887,589 of central services cost revenue is depicted as a negative expense. When this negative is reversed and removed from the equation, the reader is left with $6,773,405 of expenses just as we represent!
157. And as the reader will learn, the subject central services cost transfers were funded by various ” fees” paid by local parcel owners.
158. NRS 354.626(1) states in part that any “officer or employee of a local government (who) willfully violates NRS 354.470 to 354.626, inclusive, is guilty of a misdemeanor and upon conviction thereof ceases to hold his or her office or employment.”
159. “Consciousness of guilt is the inference that (a) defendant knows…he is guilty of a crime because he has taken one or more of the following actions…a false alibi or explanation for one’s actions…In a criminal trial the District Attorney or prosecutor can show that this type of conduct was due to a defendant’s criminal conduct and…would have not occurred otherwise” (go to https://gambonelaw.com/what-is-consciousness-of-guilt-and-why-its-a-problem/).
160. NRS 354.270 defines a Special Revenue Fund to mean one “used to account for specific revenue sources, other than sources for major capital projects, which are restricted by law to (the) expenditure for specified purposes.”
161. See page 38 of the 5/26/2021 Board packet.
162. See the “transfers in/out” entry at pages 83 and0 103 of the 2011-12 Budget.
163. See the “transfers in/out” entry at page 114 of the 2011-12 Budget.
164. See the $357,382 of “transfers in/out” entry at page 153 of the 2011-12 Budget.
165. See the $28,598 of “transfers in/out” entry at page 253 of the 2011-12 Budget.
166. This is because for decades, staff arbitrarily transferred: 50% of this deficiency from the District’s Utility Fund, 45% from the District’s Community Services Fund, and 5% from the District’s Beach Fund.
167. See page 104 of the 2011-12 Budget.
168. See page 66 of the 5/26/2022 Board packet.
169. The two funds subsidized by the District’s Recreation Facility Fees.
170. Which are higher than “just and reasonable.” In Springfield Gas & Electric Co. v. City of Springfield, 292 Ill. 236, 126 N.E. 739, 744 (1920) [affirmed at 257 U.S. 66, 42 S.Ct. 24], and cited with approval by the Nevada Office of Attorney General (“OAG”) at A.G.O. 53-231 (February 9, 1953), it was declared that a public utility’s rates and charges must be just and reasonable. And this term was defined as “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,” and none other.
171. See page 24 of the packet of materials prepared by staff in anticipation of the Board’s May 27, 2020 meeting (“the 5/27/20 Board packet“).