As elsewhere discussed, since general improvement districts (“GIDs”) are not general purpose governments¹ they have no powers to charge regulatory nor excise fees. And only limited power to tax². And because ad valorem tax rates must be equalized according to law amongst overlapping taxing authorities³ (IVGID is such a district), and yearly tax increases are abated to the extent they exceed statutory maximums⁴, the amounts left over for those GIDs which do levy ad valorem taxes⁵ are shockingly small⁶. In fact, they’re essentially nonexistent.

Moreover, many GIDs do not have the adequate size nor tax base to support the extensive services some, like IVGID, attempt to provide⁷. And to magnify the negative effect of these revenue inadequacies, many County Boards of Commissioners (“County Boards”) have transferred demand for the services they should be legitimately providing from the county to the GIDs they have created⁷. Because IVGID has admitted that a pre-condition for the addition of new GID basic powers is that they be “economically sound and feasible,”⁸ when the IVGID Board of Trustees (“Board”) asked the Washoe County Board (“the County Board”) to grant the District new basic powers to furnish facilities for public recreation (so it could use them to acquire two Lake Tahoe beaches), Board member Harold B. Tiller expressly represented⁹ that if these new powers were granted:

a) The only recreational facilities to be acquired would be “park properties (including…two beaches and)…”

b) “All (other contemplated)…recreational facilities…w(ould) be privately owned…operated” and presumably financed.

c) “A bond issue to acquire these (beach) facilities” was contemplated;

d) “Operating expense(s) w(ould) average $20,000 annually;” and,

e) Ad valorem “taxes” based upon “the assessed value of IVGID, together with its expected growth, w(ould) readily finance (beach)…costs (of) acquisition and operation…working capital, and reserve(s).”¹⁰

But the moment IVGID was granted these new basic powers, everything changed. On October 5, 1967, in anticipation of entering into a contract to purchase the beaches from Crystal Bay Development Co. (“CBDC”), the IVGID Board adopted Resolution No. 419 [pursuant to NRS 318.197(1)] which fixed rates, tolls and charges associated with anticipated acquisition and operation of the beaches¹¹. The reason being it was necessary said charges be fixed prior to adoption of a resolution providing for the issuance of revenue bonds (see Resolution No. 420 below) in order to create the funding source for acquisition of Burnt Cedar and Incline Beaches and the services and facilities thereof (i.e., the lands and facilities of the community beaches), and to pledge the net revenues to be derived from those rates, tolls and charges¹².

Contemporaneous with adoption of Resolution No. 419, the IVGID Board adopted Resolution No. 420 which authorized the issuance of $3.6 million¹³ of revenue bonds¹⁴ expressly for the acquisition of Burnt Cedar and Incline Beaches. ¶8.03 of Resolution No. 420 recited that

As a revenue source for the furnishing of said recreational facilities, and the availability of service (at) said facilities, the IVGID Board had or would thereafter establish “standby charges” (pursuant to Resolution No. 419) as to all privately owned properties within the District. And ¶8.34 pledged those and other revenue charges as a prior first charge and lien against the beaches.

These actions marked the birth of IVGID’s RFF; what the District today labels as a NRS 318.197(1) standby service charge for the mere “availability of use” of the District’s public recreation facilities.

As subsequent Boards decided to acquire more-and-more, notwithstanding Harold Tiller’s October 25, 1965 representations to the County Board and the public that “all (other contemplated)…recreational facilities…w(ould) be privately owned…operated” and presumably financed, hopefully the reader can begin to understand “why” there is a RFF. And why it has become the District’s “go to” funding source for overspending of all kinds¹⁵.

Thus the die was cast for everything which followed. And has followed. And now you know how, why and when the RFF was created!

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1. Those with municipal police powers to provide for the health, safety and welfare of its inhabitants.
2. The only taxes a GID can permissibly levy are general ad valorem taxes (see NRS 318.225).
3. See section D of 2020-21 Nevada Department of Taxation (“NDOT”) Redbook, Property Tax Rates For Nevada Local Governments.
4. See NRS 361.4723, et seq.
5. Although NRS 318.225 gives GID “board(s the)…power and authority to levy and collect general (ad valorem) taxes on and against all taxable property within the district, not all GIDs levy ad valorem taxes.
6. For example, Washoe County reports that for fiscal year 2020 it collected nearly $220 million in ad valorem taxes county wide. The portion collected from just Incline Village and Crystal Bay properties totaled in excess of $20,455,067.15 (see February 23, 2021 e-mail from Jeri Renshaw, Administrative Secretary in the Washoe County’s Comptroller’s Office). In comparison, the amount of IVGID ad valorem taxes separately collected was estimated at roughly $1.77 million (see schedule B-9, page 8 of the 2020-21 IVGID Budget),
7. See ¶II, page 9 of the Legislative Commission of the Legislative Counsel Bureau, State of Nevada, Bulletin No. 77-11, Creation, Financing and Governance of General Improvement Districts, September 1976 (“LCB Bulletin 77-11”).
8. See NRS 318.055(4)(c) which instructs a GID’s “initiating ordinance must set forth…a statement that the ordinance…will be based on the board’s finding…that…creation of the district is economically sound and feasible,” and NRS 318.077 which instructs a GID “board may elect to add basic powers not provided in its formation, in which event (it)…shall cause proceedings to be had by the board of county commissioners similar, as nearly as may be, to those provided for the formation of the district.” On August 26, 1965, IVGID’s then attorney, E.A. Wilson, sent a letter to the Washoe County Board wherein he urged it “retake proceedings for (granting IVGID)…recreation powers” pursuant to the IVGID Board’s Resolution No. 279 request adopted August 12, 1965, to “include a statement that (it)…would be based upon the findings of convenience and necessity…economy and feasibility.”
9. See pages 159-160 of the packet of materials prepared by staff in anticipation of the Board’s May 27, 2020 meeting (“the 5/27/2020 Board packet”).
10. In other words, the District’s ad valorem taxes would be the revenue source used to acquire the beaches, service the contemplated bond issue, and pay the beaches’ anticipated operational costs.
11. See pages 410-411 of the packet of materials prepared by staff in anticipation of the Board’s August 27, 2018 meeting (“the 8/27/2018 Board packet”). Subsequently (on April 8, 1968), the IVGID Board adopted Resolution No. 451 which amended the service charge(s) adopted in Resolution No. 419 (see pages 413-414 of the 8/27/2018 Board packet).
12. In other words, Mr. Tiller’s representations to the County Board and the public were false! Rather than the District’s share of ad valorem taxes based upon “the assessed value of IVGID, together with its expected growth,” the District had created a completely different revenue source.
13. Subsequently (April 16, 1968), the IVGID Board adopted Resolution No. 450 which authorized issuance of $2.685 million in bonds in accordance with pages 612-616 of that settlement agreement between the Washoe County Board, IVGID, CBDC, Incline Village Beach Corporation (“IVBC”), and a number of prejudiced Incline Village parcel owners filed with the Second Judicial District Court on April 11, 1968.
14. NRS 318.275(1)(c)  authorizes GIDs to issue revenue bonds.
15. As an example, explained elsewhere, in 1976 IVGID decided to purchase Diamond Peak, both golf courses and Bowl Incline. Since the playbook for acquisition of the beaches and its funding had worked so well, why not use the same model to acquire more and more? So on July 19, 1976 the then IVGID Board adopted Resolution No. 1262 which authorized the issuance of $5.71 million of new revenue bonds (labeled “the Special Obligation Bonds of 1976”) to: pay off the then outstanding principal due under the Revenue Bonds of 1968 [the proceeds of which had been used to purchase the beaches; pay the seller [Japan Golf Promotions (U.S.A.), Inc. (“JGP”)] $1.2 million for Incline Village’s golf courses, The Chateau, and Bowl Incline, and another $1.5 million for Ski Incline and the chipping area adjacent to the Championship Golf Course driving range; and, to provide a $600,000 funding source to pay for contemplated capital improvements/repairs to the Championship Golf Course and Ski Incline. And a week later (on July 12, 1976), in anticipation of servicing these new Special Obligation Bonds of 1976, the IVGID Board adopted Resolution No. 1261 which instantly doubled the RFF.