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November 2, 2011
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Washoe County manager shuns IVGID lump-sum tax-revolt payoff idea

INCLINE VILLAGE, Nev. — Washoe County Manager Katy Simon on Wednesday called IVGID’s lump-sum payoff suggestion regarding the Incline tax revolt refunds “an innovative idea” that is not very likely to be accepted.

In a Wednesday email to the Bonanza, Simon explained that the proposal — which was discussed at the Oct. 26 Incline Village General Improvement District board of trustees meeting — is unfair to the county’s taxpayers who would likely be held liable for covering a portion of IVGID’s amount owed.

“... As they say, ‘You can’t knock a guy for trying.’ But there are ... statutes which define what can and can’t be done,” Simon said. “In this case, the court-ordered interest accrues until the refunds are paid, and the government entities have use of the overpaid taxes until the refunds are paid and property tax distributions of all entities are reduced consistent with the refunds plus interest.”

On Oct. 26, IVGID staff presented an $850,000 savings plan that would allow the district to pay off what it feels is its rightful share of the $43 million tax revolt pot, based on the Nevada Supreme Court-mandated refunds from Washoe County to 8,700 Incline parcel holders for the 2006-07 fiscal year.

Part of IVGID’s strategy, officials said, is to pay off Washoe County in one lump sum, the goal being to not be responsible for any interest that will build up over the next 18 months — the estimated amount of time before all refunds are paid off. IVGID estimates it could be charged as much as $4,000 per month in interest, although that rate would diminish as refunds are paid off over time.

“(IVGID’s) request proposes to ask all the taxpayers of Washoe County to subsidize, or cover IVGID’s portion of the interest due in the remaining time until all the refunds are completed,” Simon said Wednesday. “We have found no legal authority for one entity to receive such a subsidy at the expense of the others who are affected.”

During public comment last week, former board trustee Gene Brockman backed the lump-sum idea, saying the district would be best served taking a $800,000 check, laying it on the table at a meeting with the county and using it to negotiate a solution.

Crystal Bay resident Frank Wright said he couldn’t foresee a situation in which the county would accept such a deal, as it would be liable for the interest that would accrue on behalf of IVGID for the next year and a half.

The board eventually decided to delay such a confrontation until staff and district legal counsel can meet with county officials and perhaps get a feel if the offer is doable.

On Wednesday, Simon said county residents would likely see service reductions if it were to accept IVGID’s proposal.

“After dramatic service reductions throughout the County as a result of cutting $161 million and 915 jobs from Washoe County government in four years, or 27% of our workforce, a subsidy of that nature would worsen the service reductions suffered throughout the County.”

While staff will try to come back with a recommendation in time for the board’s Nov. 9 meeting, Horn said it likely will be up for approval at the Nov. 30 gathering.

While IVGID is on the hook for about $1 million, the North Lake Tahoe Fire Protection District is expected to pay about $6.5 million into the $43 million pot.

As reported previously in the Bonanza, the fire district has only set aside about $3.3 million. The fire board last discussed the issue at its Sept. 21 meeting, and should discuss it again at the Nov. 16 meeting, said legal counsel Geno Menchetti in a phone interview this week.

Any decision regarding repayment or perhaps fighting the amount owed (or for that matter, the estimated $1 million or so in interest) via a lawsuit will be up to the fire board to decide, Menchetti said, although he did add some personal thoughts to the issue.

“In today’s economic world, spending more cash on attorney fees might not be prudent ... but it’s $ 1 million. That’s a lot of money ... it might be worth fighting for” he said.

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Tahoe Daily Tribune Updated Nov 2, 2011 07:58PM Published Nov 2, 2011 07:56PM Copyright 2011 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.