Incline will challenge ruling on $43 million tax refund |

Incline will challenge ruling on $43 million tax refund

by Kevin MacMillan
North Lake Tahoe Bonanza

The Incline Village fire district will appeal a judge’s ruling in favor of Washoe County regarding the lawsuit challenging property tax revenues being withheld in order to pay back a court-ordered $43 million refund tab to local homeowners.

In a verbal decision last Thursday, Washoe County District Court Judge Patrick Flanagan denied the North Lake Tahoe Fire Protection District’s December suit.

“We are pleased the judge (ruled in the county’s favor),” said Washoe County Chief Deputy District Attorney David Creekman in a Monday interview.

Later Monday, fire district legal counsel Geno Menchetti said he was disappointed in the decision. However, as he revealed at Wednesday’s fire board meeting, the ruling isn’t the end of the line.

Flanagan did not rule in the district’s favor, Menchetti said, because the Washoe County Commission’s vote last year to instruct its treasurer, Tammi Davis, to pay back the $43 million – and thus, begin withholding funds from the four public entities who share in the cost, including the fire district – was a “discretionary decision.”

“(Flanagan) wasn’t going to substitute his discretion over the (commission’s) discretion,” Menchetti told directors, who eventually voted 5-0 for Menchetti to work with other attorneys to file an appeal.

While the ruling isn’t in the fire district’s favor, it appears the district has finally caught the attention of the county’s legal staff. Prior to filing the suit, Menchetti said numerous attempts to meet with Washoe attorneys to resolve the issue weren’t fruitful.

“They’re response wasn’t just ‘no,'” Menchetti memorably told directors at the December board meeting, “but ‘hell no.'”

That tune since has changed, he said after Wednesday’s meeting, as county legal staff has since reached out and said “let’s talk about this.”

“We plan to meet … to see of there is an appropriate way to resolve this,” Menchetti said.

Regardless of what may come out of that meeting, Menchetti said it’s still important to appeal Flanagan’s ruling, as NLTFPD still believes the county should not be withholding the funds.

According to previous reports, of the entire $6.5 million for which NLTFPD is responsible in paying back into the $43 million refund, it has only saved about half. In order for the remaining cash to be included in the full refund, the county is withholding that remainder by not releasing the money to the district like it would in other fiscal years.

The fire district challenged that withholding, saying the Incline community will see substandard fire and emergency service without the money.

The original suit also requests NLTFPD not be responsible for paying interest associated with the withheld funds, considering it was the county’s decision to challenge the initial tax revolt suits for numerous years, thus delaying the refund process. Of the $6.5 million, about $1 million is estimated as interest.

In late January, the Incline Village General Improvement District joined the fire district’s suit, as both entities shared similar complaints. According to previous reports, IVGID owes about $1 million to the $43 million pot; about $270,000 is estimated as interest.

In an interview last week, Randy Drake, chief general counsel of the Washoe County School District, said he was evaluating the Incline lawsuit and had no immediate plans to join. Of the $14-$15 million WCSD must pay back into the refunds, almost $2.2 million is interest, he said.