Study: Cityhood could lower taxes
December 10, 2004
Indian Hills cityhood could mean decreased taxes for its residents as well as increased revenue for the county, according to a report by a Reno consulting firm.
If the new city assimilates north Douglas County’s commercial redevelopment district and assumes that portion of the debt, the flow of tax dollars to various Douglas County entities would increase significantly, states the report from Meridian Business Advisors.
“The Douglas County School District benefits the most from the dissolution, receiving an estimated $350,000 based on the assumptions used in this analysis,” said the report, written by consultant Candace Evart.
“The Indian Hills GID and Douglas County would follow, with an estimated $278,000 and $223,000 respectively.
“It is safe to assume that, given constant tax rates, annual revenue would increase over (these figures), due to annual increases in assessed values,” Evart said.
Originally intended to fund the revitalization of blighted urban areas, redevelopment finances improvements through tax increment financing.
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Rather than directly taxing property owners within the affected area, a portion of the local tax revenues beyond a base level are siphoned off for improvement, modernization, reconstruction or rehabilitation.
Under this plan, Indian Hills would be responsible for retiring that portion of Douglas County’s redevelopment debt, and part of its revenue would be used for this purpose, the report said.
The following are just a few of the amendments to the original budget compiled by Jim Bentley, general manager of the Indian Hills General Improvement District.
• The predicted beginning fund balance dropped significantly, from an estimated $2 million to $350,000.
• Ad valorem tax revenues from the west side commercial development would add an estimated $292,000 to the city’s revenues, while those revenues from the new east side development would add another $450,000 per year.
• The cost needed each year to pay down the development debt totals about $274,000.
County Manager Dan Holler said the debt is not segregated. The current debt service for redevelopment totals $525,844 annually. Another $275,000 is paid for the Carson Valley Plaza.
The debt service includes payments for all redevelopment, from Walley’s Hot Springs to the Carson City border.
• A $221,975 contingency fund was set aside in this budget, to cover any additional costs for employees.
The debate concerning incorporation began in August, following the release of the Bentley report that promises a 13.3 percent decrease in property taxes. The Meridian report figures also show those taxes going down the same amount, from 75 to 65 cents per $100 assessed valuation over the next 10 years.
The District already provides a number of local services, including water and sewer, street maintenance, storm drainage, public parks and recreation programs.
Douglas County Manager Dan Holler said he has not seen the Meridian report. His most recent analysis of the Indian Hills cityhood plan shows an estimated $2 million budget deficit by the second year, mushrooming to $25 million the 10th year after incorporation.
Bentley said no city in Nevada would be allowed to accrue that kind of debt.
“The State Department of Taxation and locally, the Debt Management Commission, would lock us down,” Bentley said.
— Susie Vasquez can be reached at email@example.com or 782-5121, ext. 211.
What: Indian Hills General Improvement District
When: 7 p.m. Wednesday
Where: District Board Room at James Lee Park, 3394 James Lee Park Drive in Indian Hills