IVGID Meeting Highlights

IVGID May 27, 2020 Board of Trustees Meeting Highlights
The Board held the required Public Hearings on the District’s Operating and Capital Improvement Project Budgets for Fiscal Year 2020-2021 and the Collection of Standby and Service Charges for Fiscal Year 2020-2021.

Public participation was overwhelmingly opposed to the District’s Budgets and the District’s collection of $330 for the Rec Fee and $500 for the Beach Fee.

Director of Finance Navazio gave an overview of the District’s Operating and Capital Improvement Project Budgets for Fiscal Year 2020-2021. Budget workshops were held on March 7 and 19 whereby Staff received direction from the Board on strategies and approaches to modifying the budget  and discussions were held  on alternatives to setting the annual Recreation and Beach Facility Standby and Service fees.

Mr. Navazio reported that at the May 19th Budget meeting, the majority of the Board directed Staff to reduce the Recreation Fee from $705.00 to $330.00 and to increase the Beach Fee to $500.00 for the new fiscal year.  This will leave the total combined fees at $830.00; the same level as the prior fiscal year.  Mr. Navazio also explained there is another item later on the agenda to authorize Washoe County to collect these fees on the Washoe County tax roll.

Public Service Announcements during Public Comment
Mr. Hansen of Waste Management announced pine needle waste collection will begin Monday, June 1, 2020. There will be an annual CPI price increase to bring Waste Management rates in alignment with operational costs in accordance with Waste Management’s  contract with the District. The average rate increase per Incline resident will be 4 cents per month. This is an annual increase of just under 50 cents per year. During the COVID-19 period, Waste Management suspended late fees and finance charges.

Interim General Manager Report
Interim General Manager Winquest provided a few brief highlights from his written report:

Board Treasurer Schmitz requested  an update on the District’s request for funding from the US Army Corps of Engineers (“USACE”) for the emergency effluent pond lining and the replacement of 6 miles of our effluent pipeline. Mr. Winquest stated that the USACE has not given an update on partnership agreements or funding, because they are focused on COVID issues.

Attending Legal Counsel Report
The attending District Law Firm Hutchison & Steffen had nothing to report to the Board.

Board Treasurer Report
Trustee Treasurer Schmitz updated the Board on the upcoming changes in District accounting and reporting.  Trustee Schmitz has continued to meet with the District Controller and the Director of Finance to reformat the monthly financial reports that will be provided to the Board and disseminated on the website to the public. The current monthly format reports all revenue but only operating expenses. The report does not currently include capital project or debt service expenses.  Beginning July 1st, Staff will reformat the financial reporting to reflect all District revenues and all operating, capital project and debt service expenses. Beginning June 16, Trustee Schmitz will receive a monthly wire and procurement report. This information will be provided to the Trustees and the public in future reports. The planned Board Treasurer Report will provide everyone with a comprehensive and transparent financial report.

Audit Committee Chair Report
Audit Committee Chair Dent reported that the Audit Committee met at 4 pm earlier in the day, and the following are highlights of the meeting:

General Business Items
The Board unanimously approved the Revision to Policy 18.1.0 “Central Services Cost Allocation Plan”  and approved the Central Services Cost Allocation (“CSCA”) Plan submitted to the State. This involved the approval of the transfer of $1,471,000 from the Utility, Community Services and Beach Special Revenue Funds to the General Fund for reimbursement of general administrative costs.

During discussion, Trustee Schmitz noted that it is the District’s intent to allow this allocation only in conformance with the Nevada Revised Statutes (NRS), Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Standards Board (GASB) Statements.

Trustee Schmitz emphasized that the General Fund has a fund balance in excess of the Board policy for the appropriate level of fund balance while the Utility Fund did not have adequate working capital. She requested the Board consider eliminating the close to $400,000 CSCA reimbursement transfer from the Utility Fund to the General Fund to help remediate the Utility Fund deficiency. Trustee Morris did not know if this was permissible. Director of Finance said it was allowable. The Board could choose not to charge the Utility Fund for General Administrative costs and the General Fund could also provide subsidies to the Utility Fund at the Board’s discretion. Trustee Wong did not want to consider any change to the CSCA and stated that the financial condition of the Utility Fund could be addressed in the Fall when a new utility rate study and capital reserve plan is presented to the Board.  Utility user rates could be adjusted at that time.  The Board did not make any changes to the CSCA plan.

The Board unanimously approved and adopted the Recreation Facility Fee of $330 per parcel/dwelling unit and the Beach Facility Fee of $500 per parcel/dwelling unit. These combined fees total $6,580,990.

With respect to adopting a total of $830 for the Recreation and Beach Facility Fees, Trustee Schmitz clarified her former recommendation at the Board budget workshop. Her recommendation to reduce the total fees for the upcoming fiscal year was based on the financial information contained in the May19th budget workshop packet demonstrated the combined Recreation and Beach Facility Fee could be reduced while still delivering the same level of services and planned capital improvement projects.  However, the financial documents presented to the Trustees were incorrect as the fund balances failed to include $2.5 million of carry over projects and excluded the Ski Way Project costs. Upon review of the corrected financial data and the Board majority’s desire to raise the Beach fee to $500 to provide funding for the new Burnt Cedar Pool and Beach facility improvements, Trustee Schmitz stated the fees needed to be left at the $830.00 level at this time to deliver on the 5 year capital project plan. She requested, along with Board Chair Callicrate, that all funds collected for capital projects be committed by the Board to specific capital projects so the community can be assured the District is committed to implementing and completing these projects.

Trustee Schmitz noted the collection of the Rec Fee identified the operating uses by venue but did not allocate the funds collected for capital projects by venue. Mr. Navazio stated that approximately $533,000 was arbitrarily assigned and that over $3 million for 2020-2021 capital projects would be provided by the Community Services Fund’s surplus fund balance.
The Board unanimously approved the Fiscal Year 2020/2021 Budget as prepared on State Form 4404LGF and unanimously approved the 2020/2021 Capital Improvement Project Budget.

At the start of the discussion, Mr. Winquest affirmed that he and his Staff are financial stewards of managing the District venues, facilities, and operations, and during these uncertain times will carefully administer and oversee the budget.

Trustee Schmitz asked if the utility fund budget needed any revision to restrict the $2 million collected from utility fund ratepayers this year for the replacement of the 6 miles of failing effluent pipeline.  Mr. Navazio explained that these funds did not need to be restricted by the Board at this time.  Chair Callicrate stated that the Board had restricted the $9.6 million already collected from ratepayers and it was the Board’s intent to continue to restrict the $2 million collected annually to fund this project.

Trustee Schmitz asked if the $2.7 million budgeted for the Burnt Cedar Pool needed to be amended to $2 million to reflect the Board direction at the May 19th Budget workshop.  Mr. Navazio said that no budget amendment was needed and that it would be corrected in a later report.

Trustee Schmitz inquired about Letter of Transmittal required to be submitted to the Nevada Department of Taxation. It was excluded from the Board packet. Mr. Navazio stated he would be reformatting his Memo to the Board as the Letter of Transmittal. Trustee Schmitz pointed out that the numbers and description of sources and uses needed to be clarified and confirmed for accuracy. Amounts contained in the memo did not align. Mr. Navazio stated he would make all necessary revisions and corrections.

The Board unanimously adopted and approved Resolution Number 1879 to Approve and Report for Collection on the Washoe County Tax Roll of Recreation Standby and Services Charges for Fiscal Year 2020/2021.

In response to a citizen during public comment questioning the equitability of assessments on different parcels and dwelling units whereby some residential and commercial properties, apartments, and condos paid multiple fees and others one or two, Trustee Schmitz requested clarification from Mr. Navazio. He stated that he would provide a write-up on the assessment of parcels, single family homes and multi-family dwelling units, as well as exceptions, like Sierra Nevada College.

The Board unanimously approved Resolution Number 1880, a resolution of intent to initiate the process to transition the Incline Village General Improvement District from use of Governmental Fund type Special Revenue funds to use Proprietary Type Enterprise funds for the District’s Community Services and Beach funds beginning with the FY 2021/2022 budget.  The Board had previously directed Staff to explore this transition back to Enterprise Funds. This is how the Community Services and Beach Funds were accounted and reported since their inception until fiscal year 2015/16 when the former Director of Finance and previous General Manager instituted the change to governmental funds.   Trustee Schmitz requested Mr. Navazio prepare a document writing up for future Boards why this accounting and reporting change was being made so that they have the information readily available. It was noted that Mr. Navazio and staff have has been unable to find documentation as to why the change to the current method was made in 2015. Trustees Callicrate and Dent emphasized the importance of written documentation and requested it be posted on the District’s website.

There was discussion of a settlement offer received by the District from the Attorney of Aaron Katz, with an expiration date of June 2, 2020. Trustee Morris stated that any settlement offer should be outright rejected. The GM, Trustees and attending legal Counsel were unable to definitively determine the settlement amount being requested. Trustees requested attending legal counsel to provide clarification on the settlement being offered.  Counsel stated that the confusing way the letter was written established the inadequacy of the offer. The Board rejected the settlement offer and took no further action.

The Meeting Minutes of the May 7, 2020 Special Meeting were approved. The Meeting Minutes of  May 6, 2020 will be brought to the Board for approval at the next District meeting.