Debate on funding for Incline Village capital projects looms
INCLINE VILLAGE, Nev. — With a number of identified capital projects already on the district’s plate and a community services master plan in the works, trustees are poised for some frank conversations later this year about how best to pay for prioritized projects.
An early version of what will be a larger discussion down the road occurred Monday when trustees reviewed a draft capital improvement project budget for 2019-20 and an abbreviated five year capital plan.
Although one component of the Incline Village General Improvement District’s overall budget, the capital projects portion sparked what several trustees described as a positive discussion about how the district will fund future projects and equipment needs.
In its simplest explanation, the district is unable to afford the projects laid out over the next five years with its current funding resources through IVGID’s facility fee.
The slew of options expected to be discussed in the future include bonding and reorganizing how funds from the facility fee are divided. Although none of the trustees present advocated for such a move, raising the fee could be another element of future discussions.
In advocating for bonds — an approach unopposed by the four trustees who participated in the discussion (Trustee Matthew Dent was absent due to what Trustee Tim Callicrate said was a medical emergency) — Trustee and Board Treasurer Peter Morris said he could not conceive of a scenario where the district would not have to raise fees should the board decide against going for bonds in the future.
“Future” is important in this scenario, as Finance Director Gerry Eick noted that the district could make it through the immediate fiscal year without bonds and with a limited draw down of the community services reserve fund if trustees agree to lease some equipment — specifically golf carts and a snowcat.
Based on the proposal before trustees, the district is proposing spending down approximately $1.15 million of the $10.3 million community services reserve fund balance in the coming year.
If IVGID opted to purchase the snowcat and the golf carts for the district’s Mountain Course, the drawdown of the fund balance in the coming year would be closer to $2 million, according to Eick. Leasing the equipment limits the first year cost to about $100,000.
Morris and trustees Kendra Wong and Philip Horan favored moving forward with the leasing option, while Callicrate said he favored purchasing.
As he explained, Callicrate sees potential in spending down some of the fund balance to try to maximize investment. Aside from the leasing question, he said he would like to see the district invest in projects that, while more expensive initially, would last longer and potentially lead to greater long term cost savings.
One example that he repeated during the meeting was the Mountain Course clubhouse, which sustained significant damage last year during a fire.
The five-year capital project calls for $861,800 in renovations, with an estimated $300,000 coming from an insurance payout. Rather than spend the money rehabbing an old facility, Callicrate said he would like to see the district explore building an entirely new clubhouse.
Similarly, Callicrate said he would like to explore replacing the Burnt Cedar Pool, rather than making incremental improvements, sooner rather than later.
With insufficient funds in the beach reserve fund — the community services reserve fund and the beach reserve fund are two separate funds — to pay for an entire pool replacement fund, Callicrate suggested changing the allocation of the overall fee so that more money would go into the beach fund in a given year and less would go into the community service fund.
The funding gap in the community service fund could be filled by further spending down the reserve and bonding for specific projects, as staff has suggest in future years.
On the subject of spending down reserves in the community service fund, a sizeable portion of the reserve in recent years has been earmarked for the Diamond Peak Master Plan, which remains controversial for some residents and has yet to receive approval from the U.S. Forest Service. The most recent figures have $4.1 million budgeted for the plan.
The money is not required to be spent on the project, rather board policy in recent years has been to budget for that project so that should it be approved in the future it won’t negatively impact the fund balance.
However, that policy could be changing.
Trustee Horan said he didn’t feel the district should be saving for the Diamond Peak Master Plan at this time, given that the Forest Service has not decided whether to approve it and some community members are opposed to the master plan — a proposal that includes the expansion into summer recreation activities and amenities.
While in favor of not saving for the Diamond Peak Master Plan, Horan said he was not quite ready to start spending down the community service fund balance. And similarly, he was not in favor of reallocating the funding allocation between community service and beaches, although he said he was not opposed to considering it in the future.
One reason Wong and others pointed to for not spending down the community services fund balance is the in-the-works community services master plan — a comprehensive document intended to help prioritize the desires of the community.
With that document still in draft form and not expected to be completed until later this year, Wong said she was opposed to reallocating the fees at this time. Wong would like to see the community services master plan completed before making significant decisions, such as spending down the fund balance.
She described the discussion as positive and worth picking up next year.
That drew a request from Morris to start the discussion earlier than next year. He said he would like to see a larger discussion about long term projects, and how to pay for those projects, later this year.
“The day of reckoning is coming …” he said.
After some discussion, Wong agreed that those discussion could likely get underway in October, depending on how the community services master plan process continues.