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Lobbying Law Makers/Regulators to Advocate For/Against State of Nevada Legislation

IVGID 101 Posted on by

Introduction: As demonstrated elsewhere, general improvement districts (“GIDs”) are limited purpose special districts. Their powers are strictly construed and limited1 to those provided by the Legislature2, as explicitly conferred by their respective County Boards of Commissioners (“County Boards”), in their initiating ordinances3, as supplemented if at all by: those “additional basic power(s expressly) granted4…pursuant to NRS 318.077;”5 “sections of this chapter (NRS 318) designated therein;”3 and, none other1.

Is Lobbying Law Makers a Power Expressly Granted to GIDs? As with the propriety of all local governmental powers, we begin our analysis with the Nevada Constitution given it “is the ‘supreme law of the state which ‘control[s] over any conflicting statutory provisions.’”6 Nev. Const. Art. 8, Sec. 8 instructs that the Legislature shall provide for/restrict the powers of general purpose governments. Since the Legislature has created the GID law7, and the Incline Village General Improvement District (“IVGID”) is a GID8, its powers are therefore to be recognized/restricted by NRS 318.

IVGID’s Powers: The basic powers the Washoe County Board has expressly granted to IVGID (all of which have been provided by the Legislature2) consist of furnishing facilities for: streets, alleys and public highways9; curbs and gutters10; sidewalks11; storm drainage and flood control12; sanitary sewerage13; water14; lighting public streets, ways and places15; the collection and disposal of garbage and refuse16; public recreation17; and, electric light and power18. Notably, nowhere has the Washoe County Board granted to IVGID municipal police powers19 to provide for the health, safety or general welfare of those inhabitants within its geographical boundaries20 even where those inhabitants, or IVGID itself, may be “interested” in proposed statewide legislation/regulation. Nor has it granted to IVGID the basic power to pass laws or legislate21. Nor to lobby legislators and other elected/regulatory officials to influence statewide legislation. This is because by definition, no GID possesses such powers22!

Moreover, look at NRS 318.116 and show us where GIDs are empowered to exercise such influencing State legislation powers. Show us how these powers are necessarily or fairly implied in or incident to other powers which have been expressly granted to the District. Show us how these powers are essential to accomplishment of the District’s declared objects and purposes – not merely convenient, but indispensable23. Notwithstanding the answers to all of these questions are a resounding nowhere, District staff think it’s perfectly permissible to spend any monies under their control, regardless of the source(s) or representation(s) giving rise to their receipt, on virtually anything of their choosing. And here that anything are lobbyists to influence statewide legislation/regulation.

The Particulars: For years staff quietly hid the fact they were paying lobbyist Mary Walker to monitor legislative/other state governmental matters and advocate on the District’s behalf for the passage/defeat. At the Incline Village General Improvement District (“IVGID”) Board’s August 27, 2018 meeting former General Manager (“GM”) Steven Pinkerton formally raised the issue of securing possible “legislative advocacy services for the (then) upcoming 2019 State legislative session.”24 It was then he announced that up until 2013 the District had in fact engaged in these types of activities with Ms. Walker25. And as a result, at the Board’s December 18, 2018 meeting the Board approved (based upon staff’s urging) entrance into a six and one-half (6-1/2) month (from December 13, 2018-June 30, 2019) agreement with lobbyist Tri-Strategies for state legislative advocacy services. According to the scope of work description encompassed within the Tri-Strategies written agreement26 approved by the District:

1. Creation of a roadmap for engaging select, targeted legislators, “influential elected state officials” and “state bureaucratic staff,” to align the District’s structure with strategy for “alliance building and sponsorship;”

2. “Developing…establish(ing) and execut(ing a)…successful…governmental relations plan;”

3. “Monitor(ing), track(ing) and spearhead(ing) bills and regulations, both during the legislative session as well as during the interim;”

4. Participating “in relevant committees and floor sessions to ensure IVGID’s interests are well represented;”

5. “While in session…implement(ing) a full court press to persuade legislators to support pivotal legislation and defeat harmful misguided27 legislation;” and,

6. Making “recommendations…that w(ould) bring all of (Tri-Strategies’) work together and serve as a framework for (its) expert advice on future government relations that w(ould) assist in achieving…IVGID’s both short and long term goals.”

At the Board’s January 28, 2021 meeting it entered into another legislative advocacy agreement with Tri-Strategies for the then upcoming eighty-first (81st) session of the Legislature28. At its August 10, 2021 meeting, the Board “doubled down” by extending its agreement with Tri-Strategies for a special session of the Legislature29. And at its March 30, 2022 meeting, the Board extended its agreement with Tri-Strategies through December 31, 2022 “to ensure that the District (wa)s at the table in order to present and possibly receive…Federal, State and local funds available through programs by same entities.”30.

The Costs the District Incurred: The District’s costs for legislative advocacy services with Mary Walker was $3,000/month31. The cost with Tri-Strategies was $25,20032 or more annually, or $3,000/month33. Insofar as the December 18, 2018 Tri-Strategies agreement is concerned, the Board agreed to pay $4,000 per month ($2,193 for the pro-rated month of December of 2018) plus approved travel and other expenses34. For 2021 the Board agreed to pay $15,000 plus approved travel and other expenses35. At its August 10, 2021 meeting the Board agreed to pay Tri-Strategies another $20,00029! And at its March 30, 2022 meeting the Board agreed to pay Tri-Strategies yet another $20,00030! When combined with similar federal legislative advocacy services paid to Marcus Faust36, we hope the reader can see we’re talking about over a whopping $120,000 annually!

Ultimately These Costs Are Subsidized by the District’s “Go To” Funding Sources: According to staff these expenses are budgeted each year to the District’s General Fund under the GM’s discretionary “spending authority.”37 But since the Board budgets to overspend38, like nearly everything else the public’s staff administer, the subject legislative advocacy expenditures require financial subsidy from somewhere. And here most of that somewhere ends up being the District’s “go to” funding sources for essentially everything; Recreation (“RFF”) and Beach (“BFF”) Facility Fees and water/sewer utility rates involuntarily assessed against all non-exempt parcels/dwelling units within IVGID’s boundaries39.

Moreover, Advocating For/Against State Legislation/Regulation is Not an Economically Sound Nor Feasible Endeavor: Apart from the fact the District has no power to engage in legislative advocacy services, NRS 318.055(4)(c)(2) instructs that before a GID can be granted a new basic power to exercise, its County Board must find “that…(the granting of the power, once exercised, will be) economically sound and feasible.”40 Given the District is required to involuntarily assess local parcel/dwelling unit owners nearly $7 million annually in financial subsidies assigned to its Community Services and Beach Funds, and payment of the subject legislative advocacy services ultimately comes from this subsidy (see discussion above), we submit the District has no power to advocate for/against State legislation/regulation, nor to spend public funds with someone else to do advocacy bidding on its behalf, because it is economically unsound and unfeasible.

At the Board’s June 9, 2021 and August 10, 2021 meetings Tri-Strategies came up with an argument expressly addressing this economic , soundness and feasibility requirement. It was “continuation of (its) existing contract or a new contract for more services” given the Governor was going to call a special session of the Legislature to address available federal funds under President Biden’s pending Infrastructure Investment and Jobs bill which subsequently became law on November 15, 2021. As the narrative went, the State was going to receive $X.00 Billion under this bill which would then be available to Nevada counties for necessary infrastructure repairs/upgrades. According to staff “there (was going to be)…a lot of money out there,” Tri-Strategies would be the District’s mouthpiece to allegedly secure a portion of that money, and our GM was “very confident…the return on…investment (with Tri-Strategies would)…be (well) worth it.”41

Well if the reader believes any of this propaganda, we have a couple of public bridges you might be interested in purchasing! So far the District has received nothing, and the odds are overwhelming that when everything is said and done, this investment will have been just another complete waste of public funds. In other words, no economic soundness nor feasibility.

NRS 205.300(1): Assuming the answer to these questions is no, we call the reader’s attention to NRS 205.300(1) and 205.377(1). NRS 205.300(1) instructs that “any bailee of any money, goods or property, who…uses or appropriates the money, property or effects or any part thereof in any manner or for any other purpose than that for which they were deposited or entrusted, is guilty of embezzlement, and shall be punished in the manner prescribed by law for the stealing or larceny of property of the kind and name of the money, goods, property or effects so taken, converted, stolen, used or appropriated.” As elsewhere explained, according to the Board and staff the: RFF is an “annual…standby and service charge…for the (mere) availability of use of the (public) recreational facilities…described”42 more particularly therein43 upon the pre-condition the user fees assessed at those facilities are paid; BFF is an “annual…standby and service charge…for the (mere) availability of use of the beaches”44 upon the pre-condition the user fees assessed at those facilities are paid if not pre-paid via issuances of a Picture Pass; and, the utility rates the District charges are the fees determined by the Board for the sewer and/or water services the District furnishes.

So do the subject legislative advocacy services represent the costs the District incurs to make the public’s recreational facilities available to those parcels/dwelling units which are assessed the RFF? Do they represent the costs the District incurs to make the beaches available to those parcels/dwelling units with beach access which are assessed the BFF? Do they represent the costs the District incurs for the sewer and/or water services the District furnishes which are provided to the parcels/dwelling units which are assessed sewer and/or water charges? So have the bailees (i.e., District staff) who have received, used and appropriated these fees used “any part thereof in any manner or for any other purpose than that for which they were deposited or entrusted?”

NRS 205.377(1): instructs that “a person shall not, in the course of an enterprise or occupation, knowingly and with the intent to defraud, engage in an act, practice or course of business or employ a device, scheme or artifice which operates or would operate as a fraud or deceit upon a person by means of a false representation or omission of a material fact that: (a) The person knows to be false or omitted; (b) The person intends another to rely on; and (c) Results in a loss to any person who relied on the false representation or omission; in at least two transactions that have the same or similar pattern, intents, results, accomplices, victims or methods of commission, or are otherwise interrelated by distinguishing characteristics and are not isolated incidents within 4 years…in which the aggregate loss or intended loss is more than $1,200.”

Given District staff’s use of the RFF, BFF and sewer and/or water charges paid by local parcel/dwelling units, in part, on legislative advocacy services (see discussion above), is not the IVGID Board and staff guilty of having “knowingly and with the intent to defraud, engage(d) in an act, practice or course of business or employ(ed) a device, scheme or artifice which operates…as a fraud or deceit upon…person(s) by means of…false representation(s) or omission(s) of…material fact that: (a) the(y)…know…to be false or omitted; (b) the(y)…intend…another to rely on…(c) result(ing) in a loss to any person who (has) relied on the false representation or omission; in at least two transactions that have the same or similar pattern, intents, results, accomplices, victims or methods of commission, or are otherwise interrelated by distinguishing characteristics and are not isolated incidents within 4 years…in which the aggregate loss or intended loss is more than $1,200?”

The District’s Justification: We believe there is none. However, if the reader would like to consider the Board’s/staff’s perceived justification and our reply, you are directed to our Staff’s/the Board’s Justification For Exceeding the Limited Powers the District May Permissibly Exercise discussion.

Conclusion: Does any of this sound like something a limited purpose special district should be doing? And does it sound appropriate that the funding for such endeavors should ultimately come from a special tax involuntarily levied against local property/dwelling unit owners under the guise it pays for the alleged availability for those parcels [rather than their owner(s)] which are assessed to access and use the District’s public recreation and beach venues (even though they are just as available to be accessed and used by the general public as a whole, whether or not any individual member pays that tax, as those whose properties are assessed)?

Finally, not that justification can come from what any of the eighty-four (84) [as of fiscal year 2011] or more other Nevada GIDs in the State45 do, how many do you think have hired lobbyists to advocate on their behaves for/against proposed State legislation/regulation? What about Nevada special districts46 other than GIDs (like school, library, transportation, irrigation or fire protection districts47)? To our knowledge there is only one other than IVGID48. And in this single case it’s really not a stand alone lobbyist per se49. Regardless, we submit that the fact the overwhelming majority of other GIDs in the State do not lobby the Legislature in favor/against proposed State legislation/regulation in addition to everything else, is evidence neither should IVGID!

  1. See A.G.O. No. 63-61, p. 102, at p. 103 (August 12, 1963).
  2. See NRS 318.116.
  3. See NRS 318.055(4)(b).
  4. See NRS 318.055(4)(a).
  5. NRS 318.077 allows a GID “board (to) elect to add basic powers not provided in its formation, in which event the board 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, and with like effect.”
  6. See Thomas v. Nev. Yellow Cab Corp., 130 Nev. Adv. Op. 52, 327 P.3d 518, 521 (2014).
  7. See NRS 318.010.
  8. NRS 318.015(1) instructs that “each district organized pursuant to the provisions of this chapter shall be a body corporate and politic…quasi-municipal corporation” and general improvement district. 
  9. See sec. 3(a) of Ordinance 97, Bill 57, as authorized by NRS 318.116(7).
  10. See sec. 3(b) of Ordinance 97, Bill 57, as authorized by NRS 318.116(8).
  11. See sec. 3(c) of Ordinance 97, Bill 57, as authorized by NRS 318.116(9).
  12. See sec. 3(d) of Ordinance 97, Bill 57, as authorized by NRS 318.116(10).
  13. See sec. 3(e) of Ordinance 97, Bill 57, as authorized by NRS 318.116(11).
  14. See sec. 3(g) of Ordinance 97, Bill 57, as authorized by NRS 318.116(15).
  15. See sec. 3(i) of Ordinance 97, Bill 102, as authorized by NRS 318.116(16).
  16. See sec. 3(j) of Ordinance 97, Bill 102, as authorized by NRS 318.116(13).
  17. See sec. 21.5 of former NRS 318.143(1) [SB297, Chapter 413, page 1088, 1965 Statutes]. At the next legislative session this provision was amended to delete the word “public” [see sec 63 of former NRS 318.143(1) {SB408, Chapter 582, page 1714, 1967 Statutes]. At the same time sec. 24 of former NRS 318.116 was adopted [SB408, Chapter 582, page 1693, 1967 Statutes] which added the basic power of “furnishing recreation facilities.” Today this basic power appears at NRS 318.116(14).
  18. See sec. 3(l)(1) of Ordinance 97, Bill 227, as authorized by NRS 318.116(1).
  19. “Police power(s) do…not specifically refer to the right of state and local governments to create police forces…(Rather, they are) defined as the power of a governmental body to impose laws and regulations which are reasonably related to the protection or promotion of a public good…for the benefit of their communities…such as health, safety or welfare…The sovereign power of a state includes protection of safety, health, morals, prosperity, comfort, convenience and welfare of the public. In the U.S., the authority to regulate local matters concerning health, safety, and morality of state residents is reserved to states under the Tenth (10th) Amendment to the (U.S.) Constitution…Usually states delegate to their political subdivisions the power to enact measures to preserve and protect safety, health, welfare, and morals of the community” (go to https://municipal.uslegal.com/police-powers/).
  20. Do a search for municipal police powers in NRS 318. They do not exist. Now do the same thing insofar as counties [NRS 244.137(6) instructs that counties are empowered to address matters of local concern. Matters of local concern are defined at NRS 244.143(2)(a) to include public health, safety and welfare], incorporated cities [NRS 267.530 instructs that the powers set forth in “NRS 267.450 to 267.525, inclusive, (are) necessary to secure the public health, safety, convenience and welfare” of an incorporated city’s inhabitants] and unincorporated towns [NRS 269.190, et seq. address the powers unincorporated towns may exercise. Those powers are listed under the under the “public health, safety, and morals” provisions of NRS chapter 269. NRS 269.190 instructs that “boards of county commissioners may establish and maintain a board of health in any unincorporated town;” NRS 269.235(1) and 269.240(5) instruct that a “town board or board of county commissioners may appoint from the residents of an unincorporated town one chief of police and as many other peace officers as…in (their) judgment, the public safety may require;” and, NRS 269.128 instructs that the “property, public services and franchises” unincorporated towns may exercise “promote the general welfare of those inhabitants”] are concerned. As the reader can see, the exact opposite is true. The fact counties, cities and unincorporated towns have expressly been granted municipal police powers and GIDs have not, is further evidence the Legislature did not intend that GIDs provide for the health, safety and general welfare of those inhabiting their geographic boundaries. Stated differently, since Washoe County already has the power to provide for the health, safety and welfare of Incline Village/Crystal Bay inhabitants, why do the latter require IVGID to do the same thing?
  21. Although NRS 318.205 gives GID Boards “the power to adopt and amend bylaws…1. For carrying on the business, objects and affairs of the board and…the District (and) 2. Regulating the use or right of use of any project or improvement…not in conflict with the Constitution and laws of the State” of Nevada, this is a far cry from passing laws and legislating.
  22. NRS 318.075(1) instructs that IVGID is a “quasi-municipal corporation.” But what is a quasi-municipal corporation? According to Eugene McQuillin’s landmark treatise The Law of Municipal Corporations 2d Ed., Chapter 2, §135, Municipal Corporations Distinguished From Quasi-Corporations, at page 403 (1940 Revision by Ray Smith), considered the definitive work in the area of municipal corporations, quasi-municipal corporations are “public agenc(ies) endowed with such of the (limited) attributes of a municipality as may be necessary in the performance of (their) limited objective(s). In other words…public agenc(ies) created or authorized by the legislature to aid the state in, or to take charge of, some public or state work, other than community government, for the general welfare…They are bodies that possess a limited number of corporate powers…which are low down in the scale or grade of corporate existence.” In other words, GIDs have no power to provide “community government (services) for the general welfare” of its inhabitants.
  23. Recall that NRS 244.137 instructs that “(1) Historically under Nevada law, the exercise of powers by a board of county commissioners has been governed by a common-law rule on local governmental power known as Dillon’s Rule, which…set(s) forth the common-law rule defining and limiting the powers of local governments…Dillon’s Rule provides that a board of (a local government)…may exercise only the following powers and no others: (a) Those powers granted in express terms by the Nevada Constitution or statute; (b) Those powers necessarily or fairly implied in or incident to the powers expressly granted; and, (c) Those powers essential to the accomplishment of the declared objects and purposes of the county and not merely convenient but indispensable. (4) Dillon’s Rule also provides that if there is any fair or reasonable doubt concerning the existence of a power, that doubt is resolved against the (governing) board…and the power is denied.” Although this statute literally applies to county governments, since it accurately instructs that Dillon’s Rule applies to all forms of local government, most legal professionals will counsel it is equally instructive insofar as GIDs are concerned.
  24. See page 168 of the packet of materials prepared by staff in anticipation of the Board’s December 12, 2018 meeting (“the 12/18/2018 Board packet”)].
  25. See page 98 of the packet of materials prepared by staff in anticipation of the Board’s January 23, 2019 (“the 1/23/2019 Board packet”).
  26. See page 171 of the 12/18/2018 Board packet.
  27. This is code speak for matters advanced by members of our community seen by staff to be disgruntled.
  28. See pages 205-208 of the packet of materials prepared by staff in anticipation of the Board’s January 28, 2021 meeting (“the 1/28/2021 Board packet“).
  29. See pages 120-127 of the packet of materials prepared by staff in anticipation of the Board’s August 10, 2021 meeting (“the 8/10/2021 Board packet“).
  30. See pages 127-128 of the packet of materials prepared by staff in anticipation of the Board’s March 30, 2022 meeting [“the 3/30/2022 Board packet“].
  31. At the Board’s August 8, 2012 meeting for instance, it approved entrance into one of Ms. Walker’s agreements which provided for compensation at the rate of $3,000/month, even in those alternate years where the State Legislation was not in session [see pages 107-111 of the packet of materials prepared by staff in anticipation of the Board’s August 8, 2012 meeting (“the 8/8/2012 Board packet”)].
  32. See Schedules 30-31 at pages 28-29 of the 2020-21 Budget.
  33. See page 127 of the 8/10/2021 Board packet.
  34. See page 172 of the 12/18/2018 Board packet.
  35. See page 208 of the 1/28/2021 Board packet.
  36. Go to https://ivgid101.com/federal_lobbying/.
  37. See page 204 of the 1/28/2021 Board packet.
  38. Take a look at the District’s latest (2021-22) Budget. At Schedule B-9, page 8 it reports $4,788,553 of estimated actual year ending June 30, 2021 revenues. At Schedule B-10, page 9 it reports $4,521,650 of estimated actual year ending June 30, 2021 expenditures. But $1,471,440 of revenues come from “central service cost allocation(s).” And as elsewhere explained, this allocation is really a financial subsidy to the General Fund which comes from the RFF, BFF and the utility rates and charges local parcel owners are compelled to pay/guaranty. When this subsidy is deducted from revenues, we see that for 2020-21 the District actually overspent $1,204,537! When you budget to overspend, it’s disingenuous to “cherry pick” any single source and assign payment. It’s every expenditure! And so here the Board has budgeted to overspend for State legislative advocacy services.
  39. Since this expenditure is assigned to the District’s General Fund, technically, its cost is not directly subsidized by the RFF/BFF or the utility rates the District charges. However as stated elsewhere, the IVGID Board budgets to overspend in the District’s General Fund. And this overspending requires subsidization. Although that subsidy is called “central services cost” revenue, in reality, this cost is paid by the RFF, BFF, and the utility rates, tolls and charges involuntarily paid by local parcel/dwelling unit owners.
  40. Although this statute technically speaks to before a GID can be created, very early on (see attorney E.A. Wilson’s August 26, 1965 letter to the Washoe County Board) the District took the position this same requisite applies whenever a GID seeks new basic powers.
  41. See pages 120-121 of the 8/10/2021 Board packet. Right! As if Washoe County would give any portion of these precious funds to the District for anything.
  42. See page 111 of the packet of materials prepared by staff in anticipation of the Board’s May 27, 2020 meeting (“the 5/27/2020 Board packet”).
  43. See page 113 of the 5/27/2020 Board packet.
  44. See pages 111 and 113 of the 5/27/2020 Board packet.
  45. See Table 1 of University of Nevada Cooperative Extension Fact Sheet-13-32, Funding Economic Development in Nevada: General Improvement Districts, Frederick Steinmann (2012).
  46. GIDs are “special districts” [see NRS 308.020(2)].
  47. Can you imagine if your local library district hired a lobbyist paid for with public funds to advocate for/against statewide legislation under the guise that expenditure had something legitimately to do with providing library services?
  48. The Sun Valley General Improvement District (“SVGID”).
  49. Although Darrin Price is registered with the Legislature as SVID’s paid lobbyist (go to https://www.leg.state.nv.us/Lobbyist/79th2017/Lobbyist?lobbyist-grid-pageSize=10&lobbyist-grid-page=76). He’s its former General Manager (go to https://www.svgid.com/wp-content/uploads/JAN2314M.pdf).

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