Here we discuss the Incline Village General Improvement District’s (“IVGID’s”) maintenance, repair, improvement and renovation of Diamond Peak after its acquisition, and staff’s plans for more. And where they believe the necessary moneys will come from. Although Ski Incline opened its doors on November 19, 1966¹, recall that in 1976 when it was acquired from Japan Golf Promotion (U.S.A.), Inc. (“JGP”) it had fallen into a state of disrepair. In fact, this was one of the reasons for its acquisition. According to our General Manager (“GM”) at the time, it immediately required “$355,000 worth of repairs and replacements…$195,000 in maintenance items, and $270,000 in facilities expansion.”² And according to “District…Bond Counsel” at the time:

“The District could sell bonds to sufficiently cover the acquisition and…initial cost of rehabilitation, providing the Board was willing to increase the annual Recreation Charge.”

So as a result, the Board

“Examined the results of an increase of doubling the amount of the annual Recreation Charge and…determined that sufficient revenues would result from this increase to fund the expanded recreation programs which the community (allegedly) desire(d).”

And from the proceeds of the Special Obligation Bonds of 1976 (see IVGID Resolution No. 1262), $455,123 was earmarked for “additional (Ski Incline) vehicle acquisition, ski lift and ski lodge alteration, parking lot resurfacing(, and) the acquisition and installation of additional snow making equipment and water distribution lines.”³ And the servicing and principal repayment costs associated with those bonds were to be paid in conformity with NRS 318.197(1)⁴.

Maintenance, Repair And Capital Expenses: As we’ve elsewhere explained, when IVGID acquired Ski Incline its represented funding source was really its Recreation Facility Fee (“RFF”). So when it came to operational expenses⁵, including maintenance and repair⁶, where did the money come from? The answer is reported in the District’s Community Services Fund. And it reveals that operational revenues have never in IVGID’s history been sufficient to pay for budgeted capital expenditures⁷, let alone maintenance and repair costs, assigned to the Ski Sub-Fund. Consequently, the RFF has been used to plug the financial shortfall between budgeted revenues and intentional overspending. And given it’s disingenuous to “cherry pick” any particular source of revenue as the source for payment of a specific expenditure, it’s evident ski operational maintenance and repair (bundled under the “services and supplies” moniker) and “capital improvement” expenditures are all funded by the RFF. With this in mind, consider the following:

Expansion Highlights: “In 1985…an expansion plan was developed…Ski resort Manager Jurgen Wetzstein led…development of the upper mountain and oversaw the addition of the mile-long Crystal Quad chairlift to reach the top of the peak. This expansion doubled the resort’s skiable acreage and added more advanced terrain. (At the same time) the resort extended its snowmaking system to cover the upper mountain and added more grooming equipment.”⁸ “In 1986 the Ski Lodge was renovated, the Ski Incline Master Plan was completed, and planning began for expanding Ski Incline.”⁹

“With the turn of the century, Diamond Peak embarked on a two-part, $8.5-million dollar capital improvement project. In 2002, it again expanded and improved the snowmaking system to permit snowmaking capabilities on 75 percent of developed terrain. The mid-mountain Snowflake Lodge was…renovated and expanded with a new wrap-around deck featuring panoramic views of Lake Tahoe and the Sierra Nevada mountain range.

In 2003, Diamond Peak replaced its old Crystal Quad chair lift with a new, high-speed detachable Crystal Express quad to the top of the mountain. The $2.8-million-dollar investment replaced the outdated 16-year-old chair with new technology and cut the ride time in half, getting skiers and boarders to the 8,540’ summit in just five minutes.

In 2008, Diamond Peak spent $4 million dollars renovating the base lodge which included an expanded rental shop, Loft Bar, and a 300-square foot outdoor patio. In addition to the existing wrap-around sun deck, a 300-square foot meeting room, new restrooms, fixtures, siding, and more (were added).

In the summer of 2009, Diamond Peak rebuilt its snowmaking system to allow for more efficient snow production.

In 2010, Diamond Peak completed a large renovation project with a new Skier Services Building, featuring a plaza area, ticket windows, Child Ski Center, Ski Patrol, and offices.”⁸

“In 2013(, at the urging of former IVGID engineer Brad Johnson, the District commissioned an updated ski master plan assessment with the SE Group)…to revisit the potential for future development and to potentially introduce summer activities. The Master Plan was presented to the Incline Village General Improvement District Board of Trustees in 2015¹⁰. (In spite of a whopping estimated 2014 price tag of $16,408,462¹¹ down from $18,257,584¹² (go to https://www.diamondpeak.com/wp-content/uploads/sites/2/2023/02/DiamondPeak_MasterPlan_July2014.pdf)…the board voted to approve the (now) amended Diamond Peak Master Plan and send it along to the Tahoe Regional Planning Agency (TRPA), the United States Forest Service (USFS), and Washoe County for environmental clearances and review…

In 2025, IVGID began preliminary planning work on the potential Snowflake Lodge Replacement Project, which was originally identified as part of the updated Master Plan.”⁸

Ski Incline Changes Its Name: “Because its skiing terrain changed so dramatically with the addition of mostly advanced runs on the upper mountain, (in 1988⁹) the resort’s name was changed to ‘Diamond Peak at Ski Incline,’ alluding to the industry’s ‘black diamond’ symbol for advanced ski terrain. As time passed, the name ‘Diamond Peak’ stuck and ‘Ski Incline’ was retired to the history books.”⁸

The Future: “Within this context, the (updated) Diamond Peak Master Plan revisit(ed) the vision for the future development of Diamond Peak as a community recreational resource…explor(ing) opportunities for maximizing the existing winter business and assess(ing) the potential for introducing new summer activities that w(ould) generate additional revenue…serv(ing) as a blueprint for future development of multi-season activities (both winter and summer).”¹³ With this mandate in mind, the updated Diamond Peak Master Plan makes the following allegedly vital (Disney World type) recommendations which “provide a road map for maintaining and/or revitalizing…existing community amenities and/or expan(sion)…to provide new features the community desires:”¹⁴

1. “Upgrad(e of)…the Lakeview lift to enable better uphill and downhill transport of pedestrians so that the lift can provide access to (an) upgraded Snowflake Lodge facility;”¹⁵

2. “Installation of a new fixed-grip chairlift on the Spillway trail, and the addition of (a) Backside lift serving…new backcountry-style expansion terrain;”¹⁶ 

3. Further “lift upgrades and replacements…to replace older equipment with newer technology;”¹⁶

4. “Terrain expansion of approximately 387 acres on the Humboldt-Toiyabe National Forest…Terrain improvements such as trail grading and clearing would be limited to lift construction and establishing the required access/egress routes;”¹⁶

5. “Grade…the upper section of Ridge Trail…to remove the steep section and improve the experience for Novice level skiers/riders;”¹⁷

6. “Extend…the bottom of the FIS trail (the FIS “road”) to the east to allow for improved egress from the G.S. and O. God trails back to the Lakeview lift and base area facilities;”¹⁸

7. Extend “additional snowmaking on the Diamondback and Freeway trails;”¹⁸

8. Inasmuch as “certain areas of the course have been allowed to become overgrown and act to limit the playable terrain and…reduce visibility of natural landscape and course features…execute an Underbrush Remediation Program;”

9. Expand lift “Comfortable Carrying Capacity”¹⁸ from 2,440¹⁹ to 3,150¹⁹ or even as much as 3,308²⁰;

10. Construction of “a new (Snowflake Lodge) facility in the same location (of the existing facility)…8,500 square feet • 225 indoor seats…• 225 outdoor seats;”²¹

11. Installation of “a (mountain) bike skills park and pump track (at)…the lower beginner trail and area around the base lodge;”²²

12. Installation of “a mountain bike trail network;”²³

13. Installation of a zip-line “Tree Top Canopy Tour…begin(ning) at the top of Crystal Ridge, (and) zig-zagging down the mountain to the base;”²³

14. Installation of an “Aerial Adventure Course…on the slopes below the Snowflake Lodge…constructed between trees or platforms…comprised of many different elements, including ladders, nets, swings, bridges and zip lines;”²⁴

15. Incorporation of “a climbing wall…(an artificially constructed wall with interchangeable/repositionable holds for hands and feet)…incorporated into the structure of the new Snowflake Lodge facility;”²⁵

16. Installation of an “alpine coaster…(traveling in a self-braking, two-person sled which travels on two tubular rails)…to be located primarily within the tree islands on the lower slopes of the mountain, beginning and ending in the base area for ease of access;”²⁶

17. Implementation of “Segway…(a ‘Segway’ is a two-wheeled, personal electric vehicle that allows riders to maneuver and balance the machine while standing up)…tours;”²⁷ and,

18. Enhanced events. “With the new summer activities, existing base infrastructure and planned upgrades to the Snowflake Lodge, Diamond Peak has the ability to host group events and gatherings that would benefit from the unique activities and opportunities available on the mountain. These include: • Small-scale races • Local Festivals • Special events (weddings, retreats, local fundraisers and meetings etc.).”²⁷

Financing Construction/Acquisition of These Capital Improvements: Listen to where the District plans on coming up with the pie-in-the-sky money for these capital improvements²⁸:

“The necessary capital for th(is) project…has been assumed to be originated through the use of a bond issue with the payments/retirement of the bonded debt an included expense to the financial performance²⁹…A strategic phasing sequence was selected to divide the capital expenditure into five phases (with Phase 1 broken down into 1a and 1b), spanning approximately twelve years, (and) requiring roughly $2.4 million, $1.7 million, $6.1 million, $3.1 million, and $3.0 million, respectively…Phase 1a–1b would be initiated with 100% bonded capital of roughly $4 million….For Phase 2, it has been assumed that the net operating income (NOI) produced by Phase 1a–1b would be available to partially fund the implementation of this phase. Of the $6.2 million required to develop the infrastructure in Phase 2, approximately $2.8 million would be provided by earlier phasing NOI. The remaining $3.3 million would be bonded similar to Phase 1a–1b…The model assumes that cumulative NOI (from Phases 1a–1b and 2) would be available to fully fund the capital expenditures for Phase 3 and subsequently Phase 4; therefore, debt service has not been deducted for the third or fourth phases.”

While th(is) financial analysis (has) made certain assumptions regarding the specific timing of each of the planned phases, the actual timing may be varied based on the performance of the preceding phase. Individual phases may be accelerated or decelerated as warranted. Additionally, certain synergistic benefits are achieved through the phasing programs selected.”³⁰. Stated differently,

“As with all financial analyses and modeling, key inputs to the evaluation are frequently, and necessarily, based upon informed assumptions and the establishment of key parameters…(However,) the master plan and financial model undertaken for Diamond Peak are unique to the specific setting, economic conditions and attributes of Diamond Peak and Incline Village. (Because) exact, or even similar, plans and situations do not exist. While th(e Master Plan‘s) financial analysis has been carefully based on similar circumstances, operations and experiences observed at other multi-season resorts nationwide, it is recognized that there are no precisely comparable situations. The(refore, the) Diamond Peak Master Plan and financial analysis were custom built to accurately evaluate physical, social and market conditions specific to the resort and Incline Village, Nevada.”³¹

And now you know.

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1. Go to https://www.diamondpeak.com/about/.
2. See the minutes of the Board’s June 29, 1976 special meeting.
3. See ¶8(ii) of section 5.01(c) of Resolution No. 1262.
4. NRS 318.197(1) instructs that “the board may fix, and from time to time increase or decrease…rates, tolls or charges other than special assessments…and pledge the revenue for the payment of any indebtedness or special obligations of the district.”
5. Governmental financial reporting instructs that operational expenses are supposed to be paid for with revenues the product of exchange transactions (ones where “two parties give up and receive…goods, services, or assets…of similar value”). Since the RFF is not the product of exchange transactions, GASB Statement Nos. 33, 36 and pre-November 30, 1989 Financial Accounting Standard Board (“FASB“) and American Institute of Certified Public Accountants (“AICPA“) pronouncements incorporated through GASB Statement No. 62, instruct the RFF does not represent operational revenue.
6. NRS 318.145 instructs that GID “board(s) shall have the power to…maintain and repair the improvements acquired by the district, including, without limitation…all facilities of the district relating to any basic power which the district is authorized to exercise.”
7. As an example, look at the District’s fiscal year 2019-2024 “Statement(s) of Income, Expenses and Change(s) in Net Position” for the Ski Fund [see page 615 of the packet of materials prepared by staff in anticipation of the IVGID Board’s May 25, 2023 meeting (“the 5/25/2023 Board packet“)]. Once one removes the RFF from this sub-fund (which is wrongly identified as operational income), one sees operational losses for each and every year.
8. Go to https://www.diamondpeak.com/about/.
9. Go to https://www.yourtahoeplace.com/news/history-of-ivgid/.
10. That Plan can be viewed at https://www.diamondpeak.com/wp-content/uploads/sites/2/2023/02/DiamondPeak_MasterPlan_August2015.pdf.
11. See page 55 of the Master Plan
12. See page 55 of the earlier July 2014 version of the Plan
13. See page 2 of the updated Diamond Peak Master Plan.
14. Go to https://www.yourtahoeplace.com/about-ivgid/resources/master-plans-studies/.
15. See page 29 of the updated Diamond Peak Master Plan.
16. See page 31 of the updated Diamond Peak Master Plan.
17. See page 30 of the updated Diamond Peak Master Plan.
18. “The daily, at-one-time guest population to which all ski resort functions are balanced” (see page 34 of the updated Diamond Peak Master Plan).
19. See page 35 of the updated Diamond Peak Master Plan.
20. See page 39 of the updated Diamond Peak Master Plan.
21. See page 36 of the updated Diamond Peak Master Plan.
22. See page 44 of the updated Diamond Peak Master Plan.
23. See page 46 of the updated Diamond Peak Master Plan.
24. See page 46 of the updated Diamond Peak Master Plan.
25. See page 47 of the updated Diamond Peak Master Plan.
26. See page 48 of the updated Diamond Peak Master Plan.
27. See page 52 of the updated Diamond Peak Master Plan.
28. See pages 54 and 60 of the Master Plan.
29. In other words, an increased RFF.
30. See page 56 of the Master Plan.
31. See page 54 of the Master Plan.