Given we’ve shared that a general improvement district’s (“GID’s”) Board of Trustees’ (“Board’s”) power to “fix, and from time to time increase or decrease…rates, tolls or charges other than special assessments” flows from NRS 318.197(1), and that this NRS instructs those exactments may “includ(e)…service charges…for services or facilities furnished,” here we examine what are “service charges?” And whether they legitimately pay the costs the District incurs to furnish recreation services or facilities. Although NRS 318.197 expressly uses the words “service charge,” nowhere is the term defined. So we’re relegated to searching elsewhere. And here’s what we’ve discovered.

“A service charge is a fee collected to pay for services related to (a)…product or service being purchased. The charge is usually added at the time of the transaction. Many industries collect service charges, including restaurants, banking, and travel and tourism. When collected, these charges may cover services rendered to the (customer), or they may cover administrative or processing costs (associated therewith. Since service charges are paid directly to the (provider of a service,) they are different from tips, which are paid to the (person) who (actually) renders the service.”¹

“Service charges come with different names depending on the industry…For example, a ‘service charge’ is typically added to your bill in a (San Francisco) restaurant to pay for” employees’ health care costs². At many hotels a “resort fee” is added to the cost of your lodging for the availability of wi-fi, a couple of bottles of water per day, access to the facility’s swimming pool and fitness facilities, etc. At financial institutions the charge can be “a monthly fee…charged…for maintaining a checking or savings account…In the airline industry(, it can be an additional charge)…to pay for services such as entertainment, baggage handling, seat selection, (a meal,) travel agent commissions, etc…In the utility industry(, it can be a charge)…in addition to the actual bill (itself) for power…used.”³ It can be an additional fee imposed for the privilege of using a credit card to make payment. Finally, “Airbnb is an example of an online rental platform that imposes ‘service charges’ to cover company costs.”¹¹

So now you know!

1. Go to https://www.investopedia.com/terms/s/service-charge.asp.
2. Go to https://corporatefinanceinstitute.com/resources/wealth-management/service-charge/#:~:text=A%20service%20charge%2C%20also%20called,of%20a%20product%20or%20service.
3. Look at your IVGID utility bill. In addition to charges for actual water used or capital improvement costs, you will discover a separate monthly “administrative” charge. This is service charge.