Jim Clark: How much can Incline Village’s assessed value be leveraged?
Special to the Bonanza
Some of the information included in this opinion column surrounds potential improvements at Diamond Peak Ski Resort. It should be noted that the resort’s master plan has yet to be adopted. Further, most projects included in the master plan would require future board of trustees approval.
I was in a bad mood earlier this month when I went to the County Treasurer’s office to pay my property taxes. While waiting I scanned my tax bill to see which agencies got how much. I took some satisfaction seeing that the IVGID recreation fee remained unchanged from prior years and … wait a minute … here’s a line I hadn’t noticed before.
In addition to the rec. fee IVGID also assesses an ad valorem tax with a mill rate of $0.1269 per $100 of assessed valuation. Wow. Multiplied by Incline/Crystal Bay’s assessed valuation of $1.457 billion that comes to some serious money.
The county folks told me they didn’t know where that rate came from but they would find out. A few days later I received an email from Washoe Deputy Treasurer Brenda Mathers saying: “The State of Nevada determines the maximum rate but the IVGID board determines the actual rate.” She referred me to IVGID board minutes of May 21, 2015 where they approved the maximum rate.
I shared this with Incline resident Cliff Dobler, a savvy property investor, CPA and Republican (which qualifies him for mention in this column). He told me that IVGID has consistently increased the ad valorem mill rate every year.
In 2010, it was $0.0806; in 2012 it was $0.1153; in 2014 it was $0.1157 and this year it’s $0.1269. That’s nearly a 10% annual increase in the rate alone and all the while the community’s assessed valuation increases each year as property values rise, old homes are scraped and new megahomes built.
“That ain’t the half of it,” Cliff said. “Take a look at IVGID’s five year capital plan, approved by a split vote earlier this year.” The community is on track to spend over $56 million on capital projects during the next five years, Cliff explained.
Excluding utility costs (mainly a new sewer effluent line) capital outlays are scheduled to be $35 million. This includes about $12 million to replace older assets (new IVGID office, new Mountain Golf Clubhouse, parking lot, creek restoration & beach facilities).
The remaining $23 million is allocated to the Diamond Peak master plan summer activities and Snowflake Lodge replacement, winter upgrades and improvements to other venues.
Paying for all this is the challenge, according to Cliff. The capital plan envisions about $11 million from the rec fee, $2.3 million from Beach Fund reserves, a little over $1.1 million in grants and $4.2 million in “net profits” from Diamond Peak summer activities.
Considering that all of our current venues have to be subsidized by property owners’ rec. fees counting on “net profits” may be overly optimistic. Finally, whatever else is needed is to be funded by issuing bonds … borrowing … currently estimated at over $17 million secured by … what else … Incline/Crystal Bay’s assessed valuation.
All of these figures can be viewed on http://www.ivgid.org.
How far can the community’s assessed valuation be leveraged? Currently the consolidated real property tax rates (all agencies) in Incline/Crystal Bay is $3.456 per $100 of assessed valuation. Nevada law limits the maximum consolidated tax rates to $3.64 per $100 of assessed valuation (Reno and Sparks are already there).
That limit, however, does not apply to special assessments such as the rec. fee.
So, what will Incline/Crystal Bay look like five years from now? Will it be a happy place with all sorts of people spending money having year round fun at IVGID recreation venues, waiting patiently for a dinner reservation at the always full $6 million Snowflake Lodge Restaurant? Or will we look more like Greece? Or maybe Puerto Rico?
Bonanza readers, do you agree or disagree with Cliff Dobler’s analysis? Your opinion counts. Emails to the Bonanza can be sent to email@example.com.
Jim Clark is president of Republican Advocates. He has served on the Nevada and Washoe County GOP Central Committees. He can be reached at firstname.lastname@example.org.