GIDs under scrutiny by Legislature
Nevada’s special taxing districts are being examined for funds they receive from the state, according to Michael Pitlock, executive director of the Nevada Department of Taxation.
A subcommittee on finance, which met during the interim of the Nevada Legislature, examined revenue among special districts from state and local taxes under the directive Senate Concurrent Resolution 40, passed in the 1995 session.
Pitlock said one of the recommendations of the committee was to freeze the amount of sales tax distributed to the districts until the study is completed.
The Legislature can expect to see legislation reflecting these recommendations, with the committee’s report tied up in the legal division to draft bills, according to the committee’s secretary.
“It’s a fairly complicated set of bills,” Pitlock said, so he didn’t think many recommendations would see fruition until the fiscal year 1999.
He added, this would give governmental entities time to adjust to the changes.
He said the committee’s initial recommendation was to stop all sales tax to the districts and make them self-sufficient, “but some committee members thought that was too extreme.”
The committee also examined ways to make it easier for taxing districts to consolidate, because it is more efficient to provide funds to a large governmental entity instead of a lot of smaller ones, he said.
He added that the districts would be able to consolidate without concern of financial loss to create economies of scale. Consolidation would be a choice.
Many Nevada officials are aware of consolidation options, especially those from Douglas County because of the large number of general improvement districts located in the county.
According to the Nevada Department of Taxation, Douglas has 22 GIDs out of the states total 152 special taxing districts including hospitals and fire departments.
Assemblyman Lynn Hettrick, R-Gardnerville, said he thought the issue of consolidation of GIDs should be explored.
“We should take the time to discover what would best serve us,” he said. “There are a lot of good things about the general improvement districts but direct tax districts is not always the best way to distribute taxes.”
He also said that with the large number of GIDs, there should be some consideration given to the rules governing forming a GID.
He suggested making it tougher to create a GID.
According to the Nevada Revised Statutes, a GID can be proposed by any owner of property located in the district and adopted by resolution of the county commission.
Hettrick said he thought some districts were unnecessary, like one that was set up to solely for cable television.
At this point, according to the NRS, the state doesn’t have a say in the formation or dissolution of a GID.
NRS 318 reads: “Whenever a majority of the members of the board of the county commission of any county deem it to be in the best interest of the county and of the district, that the district be merged, consolidated or dissolved, it shall so be determined by ordinance.”
In addition the commission must make sure that all debts of the district either be paid or merged, and that the services performed by the district are no longer needed or can be more effectively performed by an existing unit of government.
Beyond that, the county clerk has to notify all the property owners and a public hearing is held. If a majority of the property owners object to the ordinance, then it shall not pass.
Ron Kruse, Indian Hills General Improvement District chairman and interim manager, said the county should take over most of the districts.
He said consolidation would be normal evolution.
“It’s not going to happen over night,” he said. “The county has got to put on a lot of Band Aids first.
Referring to GIDs at the Lake, he said, “By bringing them under one government instead of separate entities, it give them more options and spreads the cost around. It gives them equal footing by sharing the responsibility.
“It makes good sense because of the tremendous cost of water treatment.”
He said he also thought the county should take over IHGID.
The GID, which manages sewer, water, streets, parks and snow removal for 1,100 homes, was “kind of a mom and pop operation when we started (in 1973),” Kruse said. “It was a grand idea in its time. But I think it has served its purpose.
“With all the development – the district has doubled in the last four years – it is limited in nature and finance. It is a small entity but is starting to see big-time cost.”
Indian Hills is looking to fill the position of general manager left vacant by Dave Campbell who quite after being arrested for allegations of embezzlement Feb. 6.
The full-time positions pays $36,000 to $56,000, Kruse said.
Administrative cost is one reason County Commissioner Jacques Etchegoyhen said some of the districts should be consolidated.
Some GIDs are spending a third of their total budget on administration, he said.
“Most would like to keep that around 10 percent,” he said.
He said consolidation of districts should be considered because some of the GIDs are in a “financial iffy situation.
“But if the district is providing good service to the people nobody is looking at taking this district over.”
He said a regional government is more appropriate “instead of making them smaller and smaller, with each level of government costing more and more.”
This regional government is the county, he added.
Commissioner Don Miner said he thought consolidation of GIDs would be good for those that wanted to.
This consolidation would strengthen the larger, more self-sufficient GIDs, he said.
Candi Rohr, general manager of the Kingsbury GID for the past 12-1/2 years, said some consolidation of districts was warranted.
“Only if the same level of service is met or improved she said.”
KGID provides water for 2,200 residents, sewer for 1,700 and maintains roads and snow removal.
She said consolidation would be effective in the area of roads.
However, she didn’t think that the road system should be brought under the general Douglas County road system.
“They are challenged with their own road issues,” she said.
She proposed instead consolidating Tahoe districts to do road work, a plan somewhat like what the Tahoe Citizens Committee is proposing through its transportation plan at South Shore, which would replace road work and snow removal done by 16 GIDs.
Kingsbury is a member of the TCC.
“We felt that those issues needed to be explored,” Rohr said. “But we haven’t taken a stand yet.”
The KGID is prepared to solve its own funding problems and has formed a citizens’ advisory committee to explore the area of roads and snow removal.
Rohr said the district is working with the public to find additional funds because of revenue restrictions based on state law.
Some of the funding alternatives mentioned were voter-approved bonds and voter-approved tax override.
She said the GID has to be responsible for things the county has chosen not to undertake.