MINUTES OF THE

SELECT COMMITTEE ON THE CREATION OF TAHOE COUNTY

 

Sixty-ninth Session

June 3, 1997

 

 

The Select Committee on the Creation of Tahoe County was called to order at 3:20 p.m., on Tuesday, June 3, 1997.  Co-Chairmen Ann O’Connell and Douglas Bache presided in Room 1214 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Guest List.

 

 

SENATE COMMITTEE MEMBERS PRESENT:

 

Senator Ann O’Connell, Co-Chairman

Senator Ernest  (Ernie) E. Adler

Senator Lawrence E. Jacobsen

Senator Bernice Mathews

Senator Jon C. Porter

Senator William J. Raggio

Senator Raymond C. Shaffer

 

ASSEMBLY COMMITTEE MEMBERS PRESENT:

 

Assemblyman Douglas (Doug) A. Bache, Co-Chairman

Assemblyman Mark E. Amodei

Assemblyman Joseph E. Dini, Jr.

Assemblyman Peter (Pete) G. Ernaut

Assemblywoman Vivian L. Freeman

Assemblyman Lynn C. Hettrick

Assemblyman Richard (Rick) D. Perkins

 

GUEST LEGISLATORS PRESENT:

 

Senator Mark A. James, Clark County Senatorial District No. 8

Senator Bill R. O’Donnell, Clark County Senatorial District No. 5

Senator Alice Costandina (Dina) Titus,

       Clark County Senatorial District No. 7

Senator Randolph J. Townsend, Washoe County Senatorial District No. 4

Assemblyman Bernard (Bernie) Anderson,

       Washoe County Assembly District No. 31

Assemblywoman Jan Evans, Washoe County Assembly District No. 30

Assemblyman Patrick (Pat) T. Hickey,

       Washoe County Assembly District No. 27

Assemblyman David E. Humke, Washoe County Assembly District No. 26

 

STAFF MEMBERS PRESENT:

 

Dana Bennett, Committee Policy Analyst, Research Division,

Legislative Counsel Bureau (LCB)

Philene Anderson, Committee Secretary,

Assembly Committee on Government Affairs

         Kelly Liston, Committee Secretary,

Assembly Committee on Government Affairs

         Deborah Riggs, Committee Secretary,

Senate Committee on Government Affairs

         Randall C. Robison, Committee Secretary, Senate Committee on Judiciary

 

OTHERS PRESENT:

 

Daniel Barnett, Senior Vice President and General Manager,

Harrah’s Lake Tahoe, and

President, Lake Tahoe Gaming Alliance

Morgan Baumgartner, Attorney, Lionel, Sawyer, and Collins

Mary Bennington, Vice President, Douglas County School Board (DCSB)

Les Berkson, Attorney, Kingsbury General Improvement District

Dave Bolick, Executive Director, Carson Valley Chamber of Commerce

         and Visitors Authority (CVCCVA)

Sandy Cable, Executive Director, Business Council of Douglas County

Robert Chester, Chairman, Board of Trustees,

Lakeridge General Improvement District (GID)

Pendery Clark, Superintendent, Douglas County School District (DCSD)

Terry D. Clodt, Resident, Douglas County

Jacques Etchegoyhen, Chairman,

Douglas County Board of County Commissioners

Candace Evert, Owner, Fox Consulting

Kathy Farrell, Executive Director, Tahoe Douglas Chamber of Commerce

Don Forrester, Member, Douglas County School Board

Katie Graham, Resident and Parent, Cave Rock (Douglas County)

C. Joseph Guild, III, Attorney at Law and

Representative for Douglas County

Ted Harris, Resident, Incline Village

Mary Henderson, Public Affairs Director, Washoe County

Daniel C. Holler, County Manager, Douglas County

Michael Jabara, Chairman, Tahoe Citizens Committee (TCC)

Cheri Johnson, President, Douglas County School Board

Brian K. Krolicki, Chief Deputy Treasurer, Office of the State Treasurer

Kelly Krolicki, Executive Coordinator, Tahoe Citizens Committee

Helene Larson-Yates, Coordinator, Tahoe Citizens Committee,

North Shore

Tony Laurean, Resident and Parent, Douglas County

James Nakada, Chairman, Board of Trustees,

Incline Village General Improvement District

Mark Neddenriep, President, Business Council of Douglas County

Kevin Servatius, Senior Vice President and General Manager,

         Harvey’s Lake Tahoe

Katy Simon, Assistant County Manager and Finance Director,

Washoe County

Roxanne Stangle, President, Carson Valley Chamber of Commerce and

Visitors Authority

Harvey Whittemore, Attorney at Law and Partner,

Lionel, Sawyer, and Collins

 

Prior to the start of the meeting, Harvey Whittemore, Partner with Lionel, Sawyer and Collins Law Firm, distributed a binder to each member of the committee (Exhibit C).  A copy of the binder’s table of contents is attached to these minutes; however, the entire binder may be reviewed in the Research Library of the Legislative Counsel Bureau.  The binder contains the following 15 items, individually tabbed:

 

·       “Presentation to Select Committee,” dated June 3, 1997;

 

·       “Financial Analysis - Tahoe County School District and Recapture Plan”;

 

·       “Map of Tahoe County”;

 

·       “SCCRT [Supplemental City/County Relief Tax] State Distribution Formula”;

 

·       “TCC Mitigation Proposal”;

 

·       “’A Comparative Study of Douglas County Schools’” dated March, 1997;

 

·       “Lake Tahoe Schools Facilities Report,” dated March, 1997;

 

·       “Legal Effect Upon Public Schools Upon Creating New County,” dated February, 1997;

 

·       “Resolution from Tahoe Douglas Chamber of Commerce,” dated November, 1996;

 

·       “Excerpts from SCR 30 MAP Report,” dated July, 1996;

 

·       “’Tahoe Township Financial Study’- Deloitte & Touche,” dated March, 1996;

 

·       “AB332 Creates Ponderosa County,” dated March, 1995;

 

·       “TRPA Compact & Other Information,” dated October, 1994;

 

·       “AB 217 Creates Tahoe County,” dated January, 1979; and

 

·       “Douglas County Lodgers Act,” dated 1969.

 

Chairman Bache called the meeting to order and the secretary called roll.  He opened the hearing for testimony on the possible creation of Tahoe County.

 

An individual whose real name was not provided for the record but who was dressed to imitate Mark Twain made the following remarks:

 

         “Honorable members of the Select Committee:

 

         “In examining the names on this committee and seeing Messers. Dini, Raggio, and Jacobsen, it’s like having a vase of odor of roses in a glue factory.  Well, it won’t extinguish the stench, but it will modify it. 

 

“Everything I’ve read and heard concerning the proposed new county revolves around arguments involving finances and figures.  And it occurs to me that the important issue, the essential issue is custom.  Nevada’s mountain people are no more like Nevada’s valley people than Washoe Indians are like Goshoats [sic].  And the way it stands now, we’re trying to keep them all on the same reservation.  People of different cultures have different needs. They require different services. 

 

“Specific example, I couldn’t find a place to park out here for all of the Oldsmobiles and Infinitis.  I understand they get quite good mileage, but up at Lake Tahoe, you won’t find an Oldsmobile.  They drive Jeeps.  They don’t have the same pets, even.  At Tahoe, the people have dogs, big dogs.  They buy their dog food in 100 pound lots.  Down here, they prefer Iguanas for pets.

 

“Like their pets, different people have different needs.  Valley people drink whiskey and fight over water.  Mountain people drink Merlot, they not only drink Merlot, they hoard Merlot.  You will not see a bottle of Merlot on a shelf at Raley’s in Incline Village until after Labor Day.

 

“And the children of the people of the valley, they need physical education classes in school to stay fit and keep their bodies strong.  At Tahoe, they send their children out to shovel snow six months out of the year.  At Tahoe, shoveling snow is physical education.  People at Tahoe have children so they won’t have to shovel snow.

 

“Valley people need schools.  Mountain children on a snow day, go home, jump on the Internet, surf around, learn more in one day than they can learn in a week in school.

 

“In light of the fact that the new proposed county will probably elect to have home schooling on the Internet in the years to come, I would submit that we move ahead with the proposed new county.  And, at risk of damaging my reputation for modesty, I would submit that this new county be called Mark Twain County.  As for the proposed mitigation package for Douglas County, with fiscal assistance over the next 3 or 4 years, I say, let them freeze in the dark, as the expression is.  I shall be speaking in Minden next week, and so I reserve the God-given right to reverse my stand on the mitigation package.  But my stand on the proposed new Mark Twain County has fewer holes in it than Cave Rock.  In fact, I predict that President Clinton when he visits here soon will propose that the formation and financing of Mark Twain County is necessary for the security of the United States.  At that point, I rest my case.

 

“Its not often I get a chance to introduce an attorney.  As an author, I’ve always found it a service to retain an attorney because I found it so distasteful to deal directly with a publisher that I would rather work through the attorney and lose the case.  Ladies and gentlemen, I give you Harvey Whittemore.”

 

Mr. Whittemore, a Partner with the law firm of Lionel, Sawyer and Collins, announced he was representing the Tahoe Citizens Committee (TCC) and opined there was no issue more serious than self government “and determination by individuals in a democracy.”  He said the issues to be discussed during this hearing regarding the formation of Tahoe County included the financial feasibility and viability of such a county; whether it was legislatively possible; and problems which had not been addressed.

 

Further, Mr. Whittemore stressed the residents in the Tahoe Basin were as important as the area’s environment.  “There is no doubt that the people who live in that area deserve the same sort of scrutiny and legal system which we have imposed on the environment with respect to its development to accommodate the needs of citizens as they go forward into the next millennium,” he said. 

 

Mr. Whittemore said members of the TCC realized the committee would be making a difficult decision regarding the formation of a new county.  He assured the members the issue was not requested lightly and that any legislative proposal drafted after this hearing could differ from that which was to be discussed during this meeting.  “But we think its important that we walk you through what we believe is a compelling case to at least begin the process of looking at this issue as we go forward,” he continued.

 

Further, Mr. Whittemore said Tahoe County was the solution to a “unique set of problems.”  Although opposers objected to such a formation with the reason that it would set a precedent for similar legislation in other parts of the state, Mr. Whittemore reiterated the problems in Lake Tahoe were unique to that area.  “I think that you will also find that the solutions which we are proposing are reasonable and financially sound.”

 

Mr. Whittemore introduced Michael Jabara and Kelly Krolicki, Chairman and Executive Coordinator, respectively, for the TCC.  Mr. Whittemore requested permission to introduce other witnesses as the presentation unfolded, to which the Chairman indicated his approval.

 

Mr. Jabara noted his appreciation for the opportunity to present what he termed a “compelling case for self government” for the Nevada portion of the Tahoe Basin.  In particular, he noted his pleasure that a select committee was formed to address the issue.

 

(The representatives of the TCC, as well as other proponents of Tahoe County, referred to the document titled “Presentation to Select Committee” identified as Tab 1 in Exhibit C.  This document contained copies of slides shown during the hearing.  For more information, please see Exhibit C in the Research Library of the LCB.)

 

To begin, Mr. Jabara provided background information on TCC.  According to him, the TCC was formed because the Tahoe citizens perceived a lack of responsive, responsible, and accountable government by the governing bodies; namely, Douglas County and Washoe County.  The TCC was founded in November, 1995, with 10 members.  After a series of weekly meetings, Mr. Jabara explained, and much preparation by its members, the organization grew to over 1,000 members.  Approximately 640 resided in the South Shore, 400 were residents in the Incline Village area, and a few members lived outside the Basin.

 

Mr. Jabara explained the overview would begin at the end of World War II and end with the current perspective.  Three different panels of witnesses would address three issues pinpointed by the TCC as the most significant.  Mr. Jabara noted, those topics were the visitor economy and serious decline; the historical neglect by valley governments; and inadequate schools.  Mr. Jabara assured the members specific examples would be presented.

 

To conclude the presentation, Mr. Jabara, along with Morgan Baumgartner of Lionel, Sawyer, and Collins, as well as Candace Evert of Fox Consulting, would discuss why the formation of Tahoe County was reasonable—financially, legally, and politically.

 

Mr. Jabara introduced Kelly Krolicki and informed the members that Ms. Krolicki was the Political Director for the Republican Party of the State of Nevada and a long-time resident of Lake Tahoe.

 

Ms. Krolicki expressed her personal appreciation to Senator Jacobsen and Assemblyman Hettrick, the two legislators who represented her community.  She explained that during a conversation she had with Assemblyman Hettrick in 1995, the creation of Tahoe County was not designed to “gut” other counties.  Rather, she emphasized, it was about “creating two great counties.  If I didn’t believe that, I wouldn’t be sitting in front of you today.”

 

Both the Tahoe Basin and Carson Valley were excellent places to live, Ms. Krolicki noted.  She informed the members her parents moved into the Tahoe Basin when she was 4 years old, and, except for a short period during her college years, she remained a resident of that area.  She attended graduate school at the University of Nevada, Reno.

 

Turning to the historical perspective of the Basin, Ms. Krolicki said two themes were consistent:

 

1.    The Tahoe Basin requested self-government three times during the past 20 years.

 

2.    Outside forces shaped the landscape in the Basin.

 

In 1946, Ms. Krolicki continued, Harvey Gross opened the first gaming establishment.  In 1965, the Federal Government outlawed septic tanks and required the effluent to be pumped out of the Basin.  The 1969 Lodgers Act was significant, Ms. Krolicki commented, because it allowed the room tax to be used for something other than the promotion of tourism.  During that time, Douglas County had approximately 7,000 residents—with approximately 50 percent living at the Lake.

 

In 1979, A.B. 217 was introduced.  The measure would have created Tahoe County.  It passed the Assembly, but died in the Senate.  In 1980, the Tahoe Regional Planning Agency (TRPA) Compact, the bi-state federal compact created to allow for joint planning of the Tahoe Basin between the states of California and Nevada, was revised.

 

Ms. Krolicki opined the TRPA Compact was noteworthy because it limited the residential and commercial growth in the basin.  It also limited the number of gaming industries allowed in the Basin.  As currently written, the compact would prohibit additional gaming in the Lake Tahoe area.  In addition, the compact created a building moratorium which caused many realtors and developers to move out of the Basin.

 

The State of Nevada’s tax shift brought another unique problem to the Tahoe area, Ms. Krolicki said.  She explained that the Basin had many special improvements districts; in the past, property owners funded general improvement districts (GIDs) through property taxes.  When the legislature enacted a measure changing that funding from property to sales taxes, Douglas County did not have a tax rate.  In order to make the formula work in the Basin, the legislature created a “phony rate,” she commented.

 

Continuing, Ms. Krolicki said in 1987, the Basin attempted to incorporate, but the measure lost by approximately 200 votes.  In 1995, Assemblyman Ernaut introduced A.B. 322 of the 68th Session (commonly called the “Ponderosa County bill”), but the measure died in the Assembly Committee on Government Affairs.  Also in 1995, the Douglas County Board of County Commissioners voted to purchase the Slash Bar H Ranch which would have created an “enormous” financial impact on Douglas County, and the Tahoe portion of that county.  According to Ms. Krolicki, the monies to purchase that ranch were to come out of the Room Tax Fund and the Water Fund—the two portions of the County’s General Fund which were supplemented primarily by the Tahoe Basin, yet Tahoe’s residents would have received “very little benefit” from that purchase.  At that same time, the TCC was formed.

 

Finally, Ms. Krolicki noted the proposal for Tahoe County originated in 1996.

 

Mr. Jabara mentioned the impact of “no-growth” on the Tahoe Basin was pervasive.  Based on research conducted by the TCC, the residents who resided in the Basin lived under the strictest land management in the U.S.  No other area was as regulated in regards to development, percentage of land available for construction, erosion control, and so forth.  However, Mr. Jabara indicated such controls assisted in maintaining the beauty of the Tahoe area.

 

The Basin’s infrastructure had aged substantially, Mr. Jabara indicated.  He said the needs for updated infrastructure were apparent on the Basin’s highways, particularly Highway 50 to Meyers on both the California and Nevada portions of the Basin.

 

Another situation that differed from events in southern Nevada concerned the need to finance growth.  Mr. Jabara stated the Tahoe Basin would not need to include those factors in its capital and operations budgets.

 

According to Mr. Jabara, the issue that brought the most support was the “growing sense of disenfranchisement” the Tahoe citizens experienced from their respective governing bodies.  He repeated statistics discussed previously by Ms. Krolicki regarding the tremendous growth in Douglas and Washoe Counties over the last 27 years.  However, he indicated the Office of the State Demographer (University and Community College System of Nevada) estimated by the year 2000, Douglas County could have over 40,000 residents while the Lake would remain constant with a population of 7,300 due to growth controls.  During that same period of time, Washoe County could expect approximately 360,000 residents to be living in its boundaries, while the populations of Crystal Bay and Incline Village, combined, would stay at 11,000.

 

Politically, whereas in 1980 voters at the Lake elected two commissioners to the Douglas County Board of County Commissioners, by 1990, Lake representatives had been reduced to one.  Again, the State Demographer anticipated by the year 2000, the Lake would lose its last representative on the commission.

 

Mr. Jabara reiterated that the sense of disenfranchisement resulted from the various external forces controlling the Lake, including state regulations from both California and Nevada as well as federal laws and agencies.

 

Mr. Whittemore then introduced the following individuals who, along with himself, would address the issue of visitor economy and decline in the Basin:

 

·       Dan Barnett, Senior Vice President and General Manager, Harrah’s Lake Tahoe, and President, Lake Tahoe Gaming Association;

 

·       Kathy Farrell, Executive Director, Tahoe Douglas Chamber of Commerce;

 

·       Kevin Servatius, Senior Vice President and General Manager, Harvey’s Lake Tahoe.

 

To start, Mr. Barnett, referring to pages 7 through 12 of the presentation (Exhibit C), explained the graphs depicted trends in gaming revenues, market “head counts,” and room occupancies in Douglas County, South Lake Tahoe, and North Shore.  The charts revealed declines in those areas.

 

Mr. Barnett said Harrah’s Lake Tahoe remained profitable because the company continued to adapt to a changing marketplace, one that, according to him, was “trending in definitely the wrong direction.”  Mr. Barnett remarked Harrah’s Lake Tahoe, along with Bill’s Casino employed 2,800 people—350 fewer employees than the company had in 1993.

 

Further, the gaming industry was very competitive, Mr. Barnett stated.  In South Lake Tahoe, casinos did not compete on a “level playing field.”  Due to restrictions with the infrastructure, volume strategies could not be utilized.  He stressed, “I am not in the business of creating counties.  I enter the realm of politics and the realm of community development because I have an obligation to be proactive and to act decisively to shape the future of the marketplace and the future of Harrah’s Lake Tahoe.”

 

Mr. Barnett stressed the issue concerned the visitor’s economy as well as product and promotion, which represented more than the Tax on Transient Lodging (TOT; or more commonly referred to as the room tax).  In his opinion, the Lake was unable to compete when the Douglas County Commission offered what Mr. Barnett called “part-time appeasement” rather than a “full-time partnership.”

 

He continued by emphasizing that Carson Valley issues were a full-time job.  According to Mr. Barnett, members of the commission acknowledged such.  He commended their recent efforts but noted his apprehension for the future which might entail new county commissioners struggling to address new valley matters while Lake concerns remained the same.  He concluded, “We need visionaries who advocate a master plan that promotes the unique attributes of a resort destination.”

 

Mr. Barnett turned the presentation over to Mr. Servatius, who informed the members that he, along with Mr. Barnett, resided in the Carson Valley.  He noted the past 6 months had been challenging as he struggled with being a citizen and resident of Carson Valley as well as a being a businessman at the Lake.  He related his strong affection for Carson Valley.

 

Mr. Servatius expressed appreciation to the members for the opportunity to present information regarding Tahoe County.  He noted as Douglas County  grew, the Lake Tahoe community dealt with stagnation, an infrastructure that had deteriorated, and a marketplace which had declined.  Mr. Servatius supported the creation of the new county, both as a citizen and a resident.

 

Mr. Servatius opined the prior Douglas County Commission had not appeared concerned about the plight of the Tahoe economy nor were they knowledgeable about the basic Basin-specific concerns of its residents.  He commended members of the current commission.  But, as a citizen and a businessman, he realized that commission membership could change in the future.  “The census in the year 2000 could create a commission where not one commissioner is a resident of the Tahoe Basin,” Mr. Servatius reiterated.  At present, Tahoe was represented by one commissioner, but, he remarked, shortly, based on the demographics revealed earlier by Mr. Jabara, the region could lose that representation.  And this statistic frightened him, he said.

 

He continued a commission made up of people who did not live and experience the unique issues facing Lake Tahoe daily could not guarantee the Basin the future it deserves.   According to Mr. Servatius, the four major casinos eliminated over 800 service jobs in the past 10 years.  As one of the senior executives during that downsizing, Mr. Servatius informed the members the experience was “painful business.”  During that 10-year period, he watched the county agencies “debate and wrangle over the elimination of one, two, or three positions.”  He stressed that he had no interest in witnessing any “further deterioration” of the casino marketplace.

 

Finally, Mr. Servatius opined, the potential lack of representation was unacceptable because of the redevelopment projects that could rejuvenate the Basin community.  While the county commissioners wrestled with the Valley’s master plan, debated over growth, and considered the acquisition of the Slash Bar H and trail access to the foothills, the Lake’s economy sputtered, he stated.  The Tahoe business community allied itself California and the City of South Lake Tahoe for leadership to create redevelopment districts.  Because of this alliance, Mr. Servatius explained, redevelopment became a reality.  And with it, the casinos had an opportunity to survive in a challenging world.

 

Mr. Servatius then discussed slides presented to the committee.  (Copies of these slides may be reviewed on pages 9 through 11 of the document in Tab 1 of Exhibit C.)

 

·       Page 9:  Nevada/California border if a person was driving from California into Nevada and approaching the Stateline area.  An arrow on the slide points toward a redevelopment park of approximately 34 acres.  Mr. Servatius explained when completed in the year 2000 or 2001, the park would include a gondola and over $200 million would have been spent.

 

·       Page 10:  A gas station in the Stateline area which had been part of a redevelopment project.  Another slide depicted Kingsbury Grade and its lack of infrastructure while a third slide was a picture taken by Round Hill.

 

·       Page 11:  This picture showed the “Welcome to Nevada” sign on Route 28 in Crystal Bay along with a motel that had an empty parking lot except for a Subaru which was missing one tire.

 

Mr. Servatius said many of the pictures depicted the “blight” experienced by many business owners in Nevada’s portion of Lake Tahoe.

 

Further, Mr. Servatius remarked that the creation of Tahoe County could provide focused leadership which would benefit the environment, citizens, and economy.  He repeated the redevelopment projects being considered included a convention center, a gondola lift from Stateline to Monument Peak, and a “world-class destination resort.”

 

The Carson Valley’s future was bright, Mr. Servatius said, and both counties should thrive.  He urged the members to exhibit “the courage to make a hard decision.”  Mr. Servatius acknowledged the creation of a new county was politically challenging.  “But change is what this country’s about,” he commented.  He asked the committee to provide the leadership and representation that Tahoe deserved for the future.

 

Mr. Servatius introduced Kathy Farrell, Executive Director of the Tahoe Douglas Chamber of Commerce and Visitors’ Center (TDCCVC).  Ms. Farrell said she had been in this position for nearly 14 years.  The office was located on Highway 50, 2 miles from the state line, was open 7 days per week, and served nearly 90,000 visitors annually.

 

Further, the TDCCVC represented nearly 640 businesses, of which only 6 were casinos.  The balance were companies that either directly served, or provided service to an entity that served, visitors.  Commerce was the Basin’s tourism.  “As tourism goes, so goes the South Shore economy,” she stressed, “the two are inexplicably tied.  When tourism hiccups, we all reach for the Alka Seltzer.  When the spending patterns of the tourist takes a nose-dive, everyone clutches for the oxygen mask.  And, translated, that means a reduction of financial reserves, the elimination of reinvestment capital, and the ability to upgrade existing products much less create new ones, both of which are a requirement for continuing to appeal to our current customers as well as being able to lure new ones.”

 

Lastly, when the economy suffered, it detrimentally impacted the ability for “new money” to be invested in the area, Ms. Farrell explained.

 

Ms. Farrell made the following comments and they are included in these minutes verbatim:

 

“Though everyone lauds redevelopment and it is heralded as the salvation of South Lake Tahoe, California, redevelopment along Nevada’s shores of Lake Tahoe has been given lip service only, and, at best, is in the embryonic stage.  In truth, we were talking about the fact that it seems only those developers and entrepreneurs with the unique combination of more money than they can keep track of, a passion for Lake Tahoe, and a touch of insanity are willing to invest in the Basin.  What we ruefully refer to as poverty with a view . . . .

 

“Several years ago, we began to plead with Douglas County officials to feed the goose that laid the golden egg and urged them to direct spending of the room tax fund toward promotion—the original intent of the legislation.  But, I think the bad habit of funding libraries and senior nutrition programs and parks and recreation, all of which are laudable services, had become too ingrained for the commissioners to shift the services back to the ad valorem rolls where they belonged—that is, without provoking the wrath of the property owners and the voters . . . the majority of whom lived in the valley.

 

“For years, Nevada’s citizens at Lake Tahoe were politely ignored by the governing majority in the Carson Valley, and frankly, the feeling was mutual and of little consequence.  During its heyday, Lake Tahoe basked in her economic prosperity, oblivious to the impending fiscal gloom and doom that would characterize the ‘90s.  It did not matter that the room tax they generated, which was easily over 96 percent of what was generated in Douglas County, was spent almost entirely in the Valley—it seemed they had enough for everyone.  Then the national economy began to erode and nowhere worse than California, which is the seventh largest GNP in the world in our primary market.  We just tightened our belt and hunkered down and hoped we would survive the winds of change—we had before.

 

“Then gaming began a wild proliferation expanding beyond even the most liberal prognosticators expectations.  Still, we kept a stiff upper lip, and optimistically predicted the latest trend would not significantly impact us.  But research and common sense shows that it has seriously encroached upon our market, which has also come under the assault from well-established gaming destinations, namely, Las Vegas and the Indian casinos.

 

“We must now face the ominous reality that what we had euphemistically referred to as a flat market for many years was, in fact, an economy in grave decline.  We have gone well beyond being able to revive the goose by a pat on the head and a few dollars more.  We are at the junction where drastic measures must be taken immediately . . . to reverse the trend that I think threatens to destroy the South Shore economy.

 

“I do not overstate the dire circumstances under which we find ourselves.  And, I believe it is only because certain members of the gaming community were so well established and efficiently operated that we are being sustained today.  I do not know how much longer they can or will be willing to continue the struggle absent a true and deep commitment by the rest of the community that is so absolutely dependent upon them.

 

“I hear your reluctance to make a decision that is anything other than revenue-neutral as it relates to the rest of Douglas County.  And, I wonder where that concern has been relative to life at the Lake and why it has taken until now to force, literally force, the issue of economic diversification for Douglas County as well as the rest of the state.

 

“We believe it is unconscionable and evasive to dodge the equity issue in Douglas County just because similar situations exist throughout the state—where one segment of the county disproportionately finances the rest.  Nowhere else in Nevada are residents subjected to the regular touring environment that absolutely precludes growth and is practically punitive in its restrictions governing any action that would result in product improvement, development, or revision.  Nowhere else is transportation such a critical issue with such limited possibilities for resolution.  Nowhere else does the closure of a single road paralyze the community until the road is reopened.

 

“We submit to you that it is, after all, possible to set a positive precedent by taking the bold action of separating the Lake portions of Douglas and Washoe Counties from their valley counterparts and allowing its citizens to move forward in their quest for representative, responsive, fiscally responsible, and prudent self-government.”

 

After listening to the three previous speakers, Senator Shaffer commented he had served on the oversight committee for the TRPA for 12 years.  He expressed his “great concern about retaining the integrity of the Lake as it is today,” but he noted the area had deteriorated over the years.  He questioned how renovation or new construction could be accomplished while maintaining the “integrity” of the Basin.

 

Mr. Servatius responded the projects described earlier represented growth.  Under the California Redevelopment Act, existing structures would be torn down.  In their places, new facilities would be constructed.  He said the growth would not be “classic, unbridled growth that Las Vegas” experienced.  Rather it would be “balanced growth . . . refurbishing Lake Tahoe.”  He reiterated that such projects were on the California side of the Lake.  As of this meeting, no improvement district nor redevelopment agency in the casino core had been created; and, according to Mr. Servatius, casino executives were concerned.

 

Ms. Farrell further responded that “it is not classic growth any more than we are a traditional chamber.  But, we do believe that the problems are so unique to the Tahoe Basin that they warrant a separate government whose sole purpose it is to protect the environment while promoting a quality of life for its citizens—that it literally mandates that kind of attention.”  She reiterated it was not growth “in the traditional sense.”

 

Senator Raggio clarified that, based on previous testimony, the witnesses claimed a local government would provide more control, the Basin’s economy would improve, and redevelopment projects or districts could be implemented.  He noted most of the testimony had been directed toward Douglas County’s previous commissioners.  Senator Raggio requested specific examples where the Basin community had been impeded “directly by governmental failure or otherwise” to complete redevelopment projects, such as the failure to approve a project or something to that effect.

 

Mr. Servatius admitted he could not cite an example where members of the current Douglas County commission had impeded the redevelopment process.  However, the former commission lacked an approval process.  Residents look to their commissioners for leadership with the economy, and to assist citizens’ understanding of how the tourism industry impacts revenue sources, he explained.  Former commissioners were ignorant about projects the businesses were heading, Mr. Servatius opined.

 

Although he could not state the commission had impeded any projects, Mr. Servatius noted the members appeared to unaware of Basin-specific redevelopment plans required to help stimulate the Basin’s economy.  Further, he remarked those members had not engaged in an active partnership with Tahoe’s businesses.  In his opinion, such partnerships would be “the signature of effective government in the future, both the public sector and the private sector leading together.”

 

Senator Adler asked the following two questions:

 

·       On the North Shore, were there any redevelopment plans for those casinos or properties that were shown in the slide presentation which were described as “blighted” (page 11); and

 

·       In Las Vegas, there was a redevelopment of downtown which included both visitor promotion and redevelopment dollars.  This project was completed without the need for a new governmental entity.  Would that be possible at the Lake?

 

Responding to the first question, Mr. Whittemore said King’s Beach (California) created a redevelopment district.  But, Nevada’s portion of North Shore did not.  According to him, questions raised by Senators Adler, Raggio, and Shaffer addressed the need for the reallocation of room tax funds to marketing and promotion.  Those funds could then be used for redevelopment projects, which, in turn, would increase visitors to the area.

 

To answer Senator Adler’s second question, Mr. Whittemore explained a project similar to the one in downtown Las Vegas (referred to as the “Fremont Street Experience”) would be possible if there was a limit on where room tax dollars were allocated.  Continuing, Mr. Whittemore said the system implemented in Las Vegas allocated the majority of its TOT to specific market-driven programs.  But, for North Shore, those funds were unallocated and could be used for programs unrelated to the Basin.

 

Mr. Whittemore then introduced the next panel, the members of which would address GIDs and Special Improvement Districts (SIDs).  Mr. Whittemore explained that Bruce Kanoff, former Douglas County Commissioner, had planned to attend but suffered a back injury and was unable to do so.  Therefore, Ms. Krolicki would present the information Mr. Kanoff had planned to impart.

 

The first speaker on this panel was Robert Chester, Chairman of the Board of Trustees, Lakeridge GID.  Mr. Chester had been a trustee of the Tahoe Douglas Fire Protection District (TDFPD).  He said he, along with his wife, Annette, had been active in the Lake Tahoe community for over 20 years.  They purchased their first home in the area in 1975 at Marlette Bay.

 

Mr. Chester explained the Tahoe portions of Douglas and Washoe Counties were separated from their respective valleys, with the only access being the Mount Rose Highway, Spooner Summit, and Kingsbury Grade.  That geographical separation, the actual distance between the Valley community and the Lake, and cultural differences were the key factors in the formation of the relationship between Douglas County and those residents who chose to build their community at Lake Tahoe.

 

According to Mr. Chester, the governing members implied if people chose to live at the Lake, they would be required to manage the area.  The commission formed SIDs, but, he opined, its members were only interested in the continuing receipt of tax dollars from Lake residents.  As a result, residents paid taxes for 11 road districts, 11 water purveyors, 6 sewer districts, 2 fire protection districts, and 1 district for recreational facilities.  Mr. Chester acknowledged some districts overlapped, but South Shore had a combined total of 17 GIDs and SIDs, which provided services to approximately 16,000 residents.  He joked, “From what I’ve read lately, that’s probably about the same number of people who will move into Las Vegas in the next several weeks.”

 

While the road districts maintained most of the area, Douglas County was responsible for two roads:  the one that looped around the South Shore clubs, and the connecting road to Whittell High School from Highway 50.  Mr. Chester noted that was a total of 2.6 miles in the entire Basin.

 

Historically, Mr. Chester commented, the Lake residents perceived themselves as second-class when it came to county services.  Because of recent problems generated by rapid growth in the Valley, the majority of the commissioners became “consumed” by Valley issues.  And, Mr. Chester acknowledged, their concerns were justified.  But, he continued, the members had “demonstrated . . . little understanding and even less concern for the unique issues facing” Lake citizens.  He was apprehensive that “this insensitivity” would continue as the population imbalance worsened.

 

The second-class status perceived by Lake residents was rooted in the history of how the infrastructure needs of the Lake had been handled.  In the ‘50s, residents were told to pay for roads; in the ‘60s, pay for the sewer system; in the ‘70s, pay for fire protection; in the ‘80s, pay for the water system; and in the ‘90s, “pay for our Carson Valley green space,” Mr. Chester explained, in the form of the proposed acquisition of the Slash Bar H, which was derailed.

 

Mr. Chester turned the presentation over to Les Berkson, an Attorney for the Kingsbury GID.  Mr. Berkson discussed his move to Lake Tahoe in 1964, after his wife, then a member of the State Dairy Commission, visited Incline Village and asked that the family be relocated to the area.  At that time, the U.S. Environmental Protection Agency (EPA) implemented a law that prohibited the use of septic tanks.  By 1974, all houses and commercial buildings in South Shore were on-line with sewage facilities.

 

Mr. Berkson said the Round Hill GID, Kingsbury GID, and Douglas County Sewer Improvement District had been established prior to his move to the Lake.  Eventually, the Tahoe Douglas District was created so the residents living between Round Hill and Glenbrook could be hooked into a sewer facility.  As a result, the area had five sewer districts with refuse flowing into one plant; 23 trustees; and five attorneys.  Mr. Berkson opined the creation of those districts demonstrated the ability of the residents to implement environmental mandates.

 

Mr. Berkson turned his attention to North Shore, where, in 1969, he was hired as counsel for Incline Village.  He served the Village until he was appointed as District Court Judge by then-Governor Richard H. Bryan (currently a U.S. Senator representing Nevada) in 1985.  During the time Mr. Berkson worked as counsel for Incline Village, then General Administrator, Wally White, along with the trustees of the Incline Village GID (or IVGID), worked extensively to develop the most feasible, effective, and inexpensive method of exporting effluent.  They determined the best way was over Mt. Rose; however, the Washoe County Board of County Commissioners refused.  Instead, the refuse was exported through John Ascuaga’s ranch into Douglas County.

 

In conclusion, Mr. Berkson remarked that Tahoe residents exhibited the ability and leadership to maintain the natural beauty and environment of Lake Tahoe.  He noted conservation efforts would continue to be monitored by agencies such as the TRPA, EPA, Health Division (Department of Human Resources), and League to Save Lake Tahoe.  With their guidance, representatives of the proposed Tahoe County could not fail, he emphasized.

 

Ms. Krolicki apologized on behalf of Bruce Kanoff and noted his disappointment in not being able to attend.  Ms. Krolicki reminded the members the TCC was formed in the living room of Mr. Kanoff, and the issues discussed during this hearing were important to him.

 

Ms. Krolicki provided a brief history of Mr. Kanoff’s experience in the Tahoe Basin:

 

·       He moved to Lake Tahoe in 1975 as Fire Chief of the Lake Tahoe Fire Protection District (LTFPD).

 

·       At the time, Douglas County as converting from a cash accounting system to an accrual system.

 

·       Many bills were outstanding, such as:

 

·       Electricity;

 

·       Mortgage;

 

·       Payroll; and

 

·       Water.

 

·       To meet those needs, he borrowed money from a local bank and taught himself the finances for the fire district.

 

Continuing, Ms. Krolicki explained originally, the Lake had two fire protection districts:  the Kingsbury Fire Protection District and the LTFPD.  In 1980, those two districts were merged into the TDFPD. 

 

In 1989, she said, the U.S. Congress enacted, and the EPA implemented, the Safe Drinking Water Act.  At the time, Mr. Kanoff was a commissioner.  Douglas County passed what was referred to as “7-Cent Water Referendum,” an ordinance which, according to Ms. Krolicki, Mr. Kanoff believed was designed to assist the GIDs upgrade some of the water systems to comply with federal law.  When representatives of the Lake’s GIDs requested a portion of those funds, members of the commission offered to loan them the money but noted it was to be paid back, possibly with interest.

 

In 1996, the TCC compiled a referendum repealing the water tax, and it passed.  Following that action, the commission returned some of the funds to the Lake’s water districts.

 

Ms. Krolicki stressed that as a result of no leadership, seven water systems were built at a direct cost to approximately 7,500 residents in excess of $20 million.  According to her, water fees were “extremely high” at the Lake.

 

Regarding the proposed acquisition of the Slash Bar H, the Douglas County Commission approved a green space purchase which would have cost $24 million.  To pay for the ranch, the commission proposed using funds from room and water taxes.  Once the citizens voiced their disapproval, the proposal was abandoned.

 

James Nakada, Chairman, Board of Trustees, IVGID, followed Ms. Krolicki’s presentation.  He explained he served as a member of the Board of Trustees for the Nevada Tahoe Conservation District and as a member on the Streamline Committee for TRPA.  He discussed issues pertinent to Washoe County.

 

To begin, Mr. Nakada reminded the members during the winter of 1996, Incline Village residents, as well as most other residents at the Lake, were isolated as Washoe County did not provide snow removal equipment for those roads.  He said a building had been constructed a few years ago, but the county stored no equipment there.  According to Mr. Nakada, Assemblyman Ernaut was in the process of negotiating to have the equipment moved to Incline Village.

 

In addition, Mr. Nakada noted the Incline Village area received little assistance with health and social services.  People assumed that Incline Village was comprised of affluent people, Mr. Nakada opined.  However, a survey conducted by the Tahoe/Truckee Children’s Network Information in 1995 revealed the following demographics:

 

FAMILY STATISTICS

PERCENT

White families

80

Hispanic families

11

Other minority families

8.2

Single heads of household

25

Separated or divorced

12

Families who had earned less than $30,000

28

Families who had earned between $30,000 and $50,000

21.3

Families who had paid 50 percent of income on housing

17.2

Families who had paid 75 percent of income on housing

6.4

 

SCHOOL STATISTICS

PERCENT

Of 680 students in Incline Village:

 

     Students who had received free or reduced lunches:                 95

14

     Students who had required English-As-A-Second                     Language assistance:  103

 

15

 

In addition, 42 percent of Incline’s families paid cash for health care due to a lack of monetary resources for insurance.

 

As a result of those statistics, private enterprises established programs such as the Children’s Cabinet (not associated with the organization of the same name in Reno) and Project Manna.  In particular, Project Manna provided free food to families in need in both Incline Village and King’s Beach.

 

Mr. Nakada reiterated few services were provided for health care.  Periodically, Washoe County would send a representative to Incline Village.  The main services offered were free or reduced-cost immunizations for flu and pneumonia.  Mr. Nakada mentioned his wife, a registered nurse, often volunteered her services for those programs.

 

Mr. Chester completed the testimony of this panel.  He opined the problem resulted from “a history of misunderstanding, lack of attention, antagonism, and even hostility which has characterized the way in which the Lake has often been treated by county officials whose orientation is Valley focused.”

 

Mr. Chester repeated information provided by Ms. Krolicki regarding Douglas County’s 7-cent ad valorem tax.  He stressed that when ad valorem taxes were imposed, approximately 40 percent were paid by Lake residents.

 

The EPA mandated treatment of all water systems drawing surface water as their water source, Mr. Chester explained.  The EPA made no exceptions for areas like Lake Tahoe where the water was 99.5 percent pure or better.  This resulted in the expenditure of millions of dollars per district because the Lake’s water systems were not interconnected.  The county collected the taxes, and the monies were allocated for water treatment programs.  He reiterated that 40 percent of the money had been paid by Lake residents.  Yet, when applications were submitted requesting funding for the Lake’s systems, the commission stipulated the money would be deemed a loan and required it be paid back.  He emphasized that one commissioner suggested interest should be applied.

 

Mr. Chester, discussing the history of the Lake’s attempts at self-government, said many meetings resulted in “wild and reckless charges that were not only inflammatory but were often totally inaccurate as well.”  He remarked that one commissioner “erupted in a rage at what he called our audacity.”

 

Although one commissioner recently claimed that 90 percent of the people who worked at the South Shore casinos lived in the Valley and would be disenfranchised by the formation of Tahoe County, Mr. Chester noted that “fewer than 10 percent of them live there.”

 

He repeated statistics that revealed demographically, the Lake could lose its last remaining seat on the commission if the Valley population continued to grow.  Continuing, Mr. Chester reminded the members growth at the Lake was restricted by both congressional and state action.  While Valley growth brought with it serious problems, he said those issued were not shared by residents at the Lake.  Rather Lake citizens had other, distinctly different concerns that were of little interest to the Valley residents, but which, he opined, “vitally” affected the lives and future of those who resided at the Lake.

 

Further, in Mr. Chester’s opinion, those differences were at the root of the divisive disputes “between Valley and Lake interests.”  He said the disputes were “exacerbated by the fact that we at the Lake provide significantly more revenue for the county than comes back to us in the way of services.”  Lake residents were faced with continuing federal mandates with which they were required to comply along with consideration of the needs of their communities.

 

Mr. Chester discussed S.B. 254 which would make various changes to formulas for distribution of certain taxes (Bill Draft Request [BDR] No. 32-314).  He said the bill would allocate “revenues to areas of growth, an attribute not shared at Tahoe.”  As a result, Lake residents were concerned that state revenues for their area would decline should S.B. 254 pass.  In addition, residents of Douglas County recently approved a bond for erosion control.  However, to receive funds from that bond, the Lake must provide matching funds.  “I’m not sure where we’re going to be able to find that,” Mr. Chester said.

 

Mr. Chester optimistically concluded a solution was possible.  Citizens at the Lake demonstrated the ability to provide for themselves as it related to road maintenance, snow removal, water and sewer systems, and so forth.  With consolidated infrastructure services, Mr. Chester remarked, they could be more efficient, and with “local autonomy, much more responsive than distant, Valley-oriented governing bodies.”  He opined Lake residents had “earned the right” to govern themselves.  Mr. Chester urged the members to eliminate the hostility by providing Lake residents with “access to the resources we need to grapple with and solve our own problems.”  Finally, he commented, “Give us the opportunity to forge our own future at Tahoe in Tahoe County, please.”

 

Assemblyman Amodei noted the speakers had described problems which sounded significant in terms of neglect by Valley governments.  He questioned if any portion of those matters could be attributed to the Board of Supervisors in Carson City.

 

Mr. Chester responded he had been more involved with Douglas County issues and only recently became aware of similar problems in Incline Village.  He admitted he was not aware of any problems resulting from actions by the Board of Supervisors in Carson City.  There were only a few residential properties at the Lake that resided within the Carson City boundaries, Mr. Chester explained.  Given the growth restraints, he doubted there was any possibility of substantial growth in that area.

 

Assemblyman Amodei noted Nevada was one of the most highly urbanized states in the Nation.  And, with the Federal Government owning 87 percent of the land, Mr. Amodei said he was concerned about a proposal that would remove part of the county he represented even though it appeared there were no significant problems with that area’s governing board.

 

Mr. Whittemore assured Mr. Amodei the issue would be addressed later in the presentation.  He then introduced the next witnesses.

 

Assemblyman Ernaut addressed the members as the representative of Washoe Assembly District No. 37.  He remarked his support for a new county was obvious with his introduction of similar legislation throughout his political career.  He urged the members to consider carefully what the following presenters discussed as it pertained to the school district.

 

Continuing, Mr. Ernaut noted he had been an advocate for a separate school district but not necessarily in conjunction with a separate county.  He advised the school district portion of this proposal might be introduced as separate legislation.  Assemblyman Ernaut repeated his request that the members “pay particular attention” to the discussion should that legislation be necessary.

 

Senator Mathews inquired if S.B. 220, which would authorize the formation of charter schools (BDR 34-246), would assist with Lake problems within their respective school districts.  Assemblyman Ernaut noted his reluctance to address S.B. 220 at this time because, although the bill passed the Senate, the Assembly Committee on Education was still considering action on the measure.  He explained in conversations with Senator Porter, it appeared there was still work to be done on the bill.

 

Assemblyman Ernaut commented, as currently drafted, S.B. 220 did not include provisions that would address the concerns of the parents in Lake Tahoe.  He acknowledged that could change if the bill was amended.

 

Continuing her line of questioning, Senator Mathews asked if Assemblyman Ernaut intended to reconstruct school districts statewide or if he was considering Lake issues only. 

 

Assemblyman Ernaut responded there were several measures relating to school districts under consideration by the legislature.  One bill, S.B. 144, which would require school districts to prescribe rules for school-based decision making and to conduct an evaluation of statutes relating to education (BDR 34-243), resulted from a recommendation of the Legislative Commission’s Subcommittee to Study Reconfiguring the Structure of School Districts in Nevada (Senate Concurrent Resolution No. 30 of the 68th Session, File No. 161, Statutes of Nevada 1995, pages 3033 and 3034), chaired by Senator Porter during the 1995-1996 interim.  If that bill passed in its current form, it would create a mechanism for the proliferation of school districts, Mr. Ernaut explained.  He noted as of this hearing, the bill was still under consideration by the Senate Committee on Health and Human Services.

 

The other measure, as mentioned before, was S.B. 220.  However, Mr. Ernaut reiterated his request that those bills be discussed at a later date.

 

Helene Larson-Yates, TCC Coordinator, North Shore, followed Mr. Ernaut.  She explained the panel would address education and Lake children.  She noted the facilities at the Lake were old and the programs inadequate.  According to her, legislative consultants recommended that the Lake be separated from Douglas and Washoe Counties so the residents could handle their problems directly.  In particular, she mentioned a school bond of $196 million recently approved by voters in Washoe County but which provided no significant funding to Lake schools.

 

Ms. Larson-Yates noted growth at the Lake was flat and probably would be while other counties grew.  In fact, she said, Douglas County was the second-fastest growing county in Nevada.

 

Both counties had elementary, middle, and high schools at the Lake.  The ages of those facilities ranged from 16 to 37 years.  Turning to the slide presentation on page 19 (Tab 1 of Exhibit C), Ms. Larson-Yates advised there was a typographical error as the Incline Elementary School was 33 years old, not 22 years old.  The average age of the facilities was 28.3 years.  Ms. Larson‑Yates opined the buildings were “falling apart.”

 

Mr. Laurean, a resident in the Douglas County area of Lake Tahoe and a parent, explained education was an important issue to him as it had been to his parents.  He taught his children to value education as well, Mr. Lauren said.  Continuing, he noted in 1995, the Board of Trustees for the Douglas County School District (DCSD) offered no honors classes at George Whittell High School (GWHS).  For children planning to attend college, such courses, along with a high grade point average, were imperative for admittance, he opined.

 

Continuing, Mr. Laurean noted the size of the student population at GWHS, combined with the small number of students interested in advance courses, was one of the factors used by the board to determine if courses should be offered.  He asked, “Is one student enough?  If one student is willing to take that class, should there be a class offered?”  Mr. Lauren stressed the parents of children at Lake schools paid 46 percent of the school’s expenses.  “Are we entitled to have equal opportunity and equal education with Valley schools,” he inquired.

 

According to Mr. Laurean, parents complained about the curriculum offered during the 1995-1996 school year.  As a result, the board included honors classes at GWHS for the 1996-1997 school year.  But, he reiterated the lack of such classes in the prior year “bypassed some children out of the system.”  He said during a survey conducted by the board of trustees, 72 percent of the parents at the Lake indicated they were dissatisfied with the facilities at the Lake; however, in the Valley, 65 to 75 percent of the parents expressed satisfaction with courses offered at Valley schools.

 

Mr. Laurean repeated the importance of education to him and his family, and concluded “its extremely important for a child to be able to read, to write, to speak a foreign language, to play a musical instrument, to be able to compute.  If those courses are not offered equally at Lake schools as they are at Valley schools, we are placed in a tremendous disadvantage.”

 

Ted Harris, a resident of Incline Village, thanked the committee for the opportunity to present information relative to the proposed Tahoe County.  Regarding the Washoe County School District (WCSD), Mr. Harris remarked Incline Village’s student population was approximately 1,400 while the total number of students in Washoe county was approximately 50,000.  He said, “by the very nature of the structure of the school district, their main concern is with the schools in Washoe Valley.”

 

Mr. Harris noted many parents and citizens in Incline Village agreed the area needed a new elementary school.  Although the district owned land where a new facility could have been built, the board of trustees decided to sell the site for approximately $850,000.  Mr. Harris commented, “The money disappeared into the coffers of the WCSD never to be seen again . . . .To state that we are second-class citizens is certainly not an understatement.”

 

Further, Mr. Harris relayed an incident where a citizen offered to donate grass to the elementary school so the children could plan on grass rather than decomposed granite.  When the offer was made, the board of trustees rejected it on the grounds that the district could not pay to maintain the grass.  When the parents informed the donor of the board’s decision, the donor offered to finance its maintenance..

 

Another decision by the board that many parents questioned was the determination that Incline High School needed air conditioning.  According to Mr. Harris, the temperatures in Incline Village rarely exceeded 75 or 80 degrees, and, generally, those temperatures occurred during the summer when children were not in school.  When questioned, according to Mr. Harris, the principal’s responded that the rooms required better ventilation rather than air conditioning.  He admitted rooms not originally designed for classroom use had been converted to such although they had not been built with windows.

 

In addition to those problems, the middle school had leaks on the roof, there were holes throughout the athletic fields, and the boiler malfunctioned and was shut off approximately one month earlier than scheduled.  Although the maintenance person at the middle school had requested assistance, the district did not respond.

 

Mr. Harris explained that Incline Village was separated from Washoe County by 35 miles and a mountain pass of approximately 9,000 feet in elevation which was extremely difficult, if not impossible at times, to cross during winter months.  As a result, he said, the parents found it difficult to attend meetings where they could voice their concerns.  He concluded, “We need our own school district, we need our own county as a vehicle under present law to permit us to have our own school district.  The parents of the Lake Tahoe community deserve the right to make the decisions as to what their priorities are in terms of the quality of education, the facilities, and how our dollars should be spent.”

 

Assemblywoman Freeman noted the complaints heard thus far were expressed by many parents throughout Washoe County, not just those in the Tahoe area.  She said an elementary school in her district was over 40 years old and its playground was comprised of decomposed granite and was in need of repair.  She stated the parents of the Lake were not being treated any differently than those in other areas of the county.

 

Regarding Mr. Harris’ remarks about the manner in which school funding was expended, Assemblywoman Freeman commented new schools traditionally were built in areas where growth existed.  She admitted older schools were not receiving the funding that might be needed for repairs, but, she said, “I would suggest to you that your schools up there are no different that those of ours that are in the heart of Washoe County.”

 

Continuing, Assemblywoman Freeman inquired if the principal, the superintendent, or the board of trustees determined which courses should be offered at school facilities.

 

In response, Mr. Laurean opined it was a decision made by the board and implemented by the principal, although he acknowledged he was unfamiliar with the actual process.  Commenting on Mrs. Freeman’s remarks regarding the older facilities in Washoe County, Mr. Laurean stated parents at the Lake were willing to pay additional taxes for new buildings.  He stressed, “We are willing to pay for those facilities.  We’re paying, but we’re not getting them.”

 

Assemblywoman Freeman remarked the United States was founded on the principle that everyone would share risks as well as expenses.  She noted property at the Lake was worth more than in other areas of Washoe County; therefore, Lake residents paid more in property taxes.  She asked, “ . . . are we willing to share the resources that are available with all the children in the state?”  She concluded, “. . . that’s not what I’m hearing from you folks.”

 

Mr. Harris noted a key factor in the inadequacy of building maintenance resulted from “tremendous growth.”  He assured Assemblywoman Freeman, “We don’t mind paying our fair share.  We do mind paying our unfair share,” and noted much of the resources were allocated for new growth in the Valley.  He suggested other mechanisms should be implemented to contribute towards that growth.

 

Senator Adler said the members of the 69th Legislature were committee to improving education.  However, he remarked smaller schools had less faculty, and he doubted the state would ever be in the fiscal position to offer the same number of teachers as were at larger schools.

 

Turning to statements made earlier by Assemblywoman Freeman, Mr. Laurean agreed with her perception that those with the financial ability should assist those who might not have the same resources.  However, he noted Lake residents were concerned about future growth in the Valley that could result in the loss of representation on the commission.

 

Senator Adler advised remote learning facilities could allow a student access to classes offered in other areas of the state.

 

Katie Graham, a 13-year resident of Cave Rock, Nevada, referred the members to Tab 6 of Exhibit C, which contained a document titled, “A Comparative Study of Douglas County Schools,” by Carolyn Hughes Chapman, Ph.D., Associate Professor of Educational Leadership, University of Nevada, Reno, dated March 1997.  Ms. Graham informed the members the report had been commissioned by the DCSD.

 

Further Ms. Graham said the schools at the Lake had been neglected due to the continuous growth in the Valley.  According to her, the principal’s office at Zephyr Cove Elementary School (ZCES) was converted into a classroom to accommodate overcrowded classrooms.  At Kingsbury Middle School (KMS), a portable classroom was placed “in the middle of the parking lot several years ago.”  Ms. Graham advised the students must walk down “an icy hill then across an icy parking lot” to reach the classroom.  As a result, students sustained injuries, such as a need for stitches as well as concussions, from falling on their way to the class.  At GWHS, Ms. Graham commented the library was inadequate.  Often, parents at the Lake drove their students to libraries in Carson City or Reno.  “This is why one of the most significant items in this report,” she said, “is the parents’ overwhelming dissatisfaction with the Lake Tahoe school facilities.”

 

According to Ms. Graham, the report stated that, in comparison to Valley students, those attending schools at the Lake received additional funding of approximately $1,200 per student.  However, she opined it would cost more to educate fewer students as the cost of a teacher’s salary or the expense of a new facilities remained constant.  Continuing, Ms. Graham remarked most of the additional funds was spent on administration costs, teachers’ salaries, and building operations.

 

Ms. Graham stressed parents were surprised when the report revealed that although 49 percent of students at WHS continued their education at a 4-year college in 1995, that percentage dropped significantly to 11 percent in 1996.  “There is something profoundly wrong at this high school,” she asserted. 

 

Further, Ms. Graham advised the members that due to teachers’ leaves of absence, illness, and “even criminal activity,” Whittell High School lost almost one-third of its full-time teaching staff last year.  The students were, instead, taught by many different substitute teachers throughout the year.  According to Ms. Graham, some of those teachers did not have teaching credentials.  She concluded, “The Lake needs a school district whose focus is only on the Lake schools.”

 

Mr. Harris repeated findings of the study conducted by the Management Analysis and Planning (MAP) Consultants, authorized by S.C.R. 30 of the 68th Session, which indicated that “creating a separate school district at Incline Village would have little impact on educational effectiveness, organizational scale, or racial isolation in Washoe County.”  He said Incline Village as well as the Douglas County portion of the Lake, met four of the five criteria for a separate school district as defined by the MAP consultants.  The five criteria the consultants researched were:  educational effectiveness, racial and ethnic composition, organization scale, governmental responsiveness, and community cohesion.  “The opinion of professionals who have studied the issue indicates that a separate school district as part of a new county would be entirely feasible and very practical,” Mr. Harris commented.

 

Senator Porter interrupted to inform the members that “we could probably change the names and faces and hear similar stories about school districts and schools anywhere in the state,” but he stressed the members of the subcommittee authorized by S.C.R. 30 of the 68th Session had not “ever accused any of the school boards of the problems.”  In fact, Senator Porter told the committee that the members had been “very complimentary of school boards statewide.”  He reminded those present that the objective of the interim subcommittee had been to review school facilities, not curricula.

 

Turning to the slide presentation, Senator Porter noted the data had not presented the entire findings of the MAP consultants.  Addressing those individuals on the latest panel, he explained, “please take this criticism not as a criticism of your plan, but I would prefer that the total facts be presented to the committee on the S.C.R. 30 study.”

 

Senator Porter, referring to page 21 of Tab 1 of Exhibit C, quoted the following:

 

“A Proposed School District Located In and Around Zephyr Cove on Lake Tahoe Fares Well on Most Criteria . . .”

 

Then, Senator Porter turned to page 62 of Legislative Counsel Bureau “Bulletin No. 97‑4,” titled, Reconfiguring the Structure of School Districts, dated January 1997, a part of which reads:  “Such a change of boundaries would, however, require significant additional state funding according to the existing terms of the ‘Nevada Plan,’ and create great disparities in capital outlay . . . .”  (Bulletin No. 97-4 can be reviewed in the Research Library of the Legislative Counsel Bureau and is not included as an exhibit to these minutes.)

 

Continuing on page 62 of Bulletin No. 97-4, Senator Porter quoted:

 

“A joint venture of the two school districts [meaning Carson City and Douglas County] might allow construction of a new high school near the border between the Carson City and Jacks Valley/Indian Hills communities, thereby serving the needs of both districts.”

 

Clarifying that he was not “being critical” of the plan presented at this meeting, Senator Porter stated “I think the difference between a good decision and a bad decision is the facts that are presented.”  He turned to page 64 of Bulletin No. 97‑4 and read the paragraph titled, “Washoe County Deconsolidation.”  Highlighting the sentence that directly related to Incline Village, Senator Porter noted:

 

         ”Incline Village is separated from the main population concentration in the county by 35 miles and a 9,000-foot mountain and has a strong sense of community identity.  Creating a separate school district in Incline Village would have little impact on educational effectiveness, organizational scale, or racial isolation in Washoe County.  However, such a change of boundaries would require additional state funding according to the existing provisions of the ‘Nevada Plan,’ and create disparities in capital outlay capabilities.”

 

Referring back to page 21 of Tab 1 of Exhibit C, Senator Porter commented the slide indicated both Incline and the Douglas County portion of Tahoe met four of the five criteria for a separate school district.  He discussed those criteria in detail.

 

Senator Porter noted the criteria used by MAP consultants were “very specific.”  While he acknowledged the report appeared to imply that the Zephyr Cove area met four of the five criteria, he emphasized the consultants noted on page 191, under the subheading “Educational Effectiveness,” that:

 

         “For this proposed organization, there is little evidence that educational effectiveness would be materially altered.”

 

Under the subheading, “Organization Scale” on page 192, the report read:

 

         “The proposed new Tahoe district, especially initially, will be relatively small and may have slightly higher administrative costs per pupil than is now the case.  Over time, that disadvantage can be partially mitigated by the projected growth of the population in the Tahoe Basin.  Some services which are now available from the Douglas District office may not be available to the Zephyr Cove Schools.”

 

Turning to the subheading “Governmental Responsiveness and Community Cohesion,” Senator Porter read the following excerpts (pages 192 and 193):

 

         “In applying this criterion, we look first to ensure that we are not breaking up an existing community of interest . . . It was reported to MAP that Douglas County encourages local communities to participate in local school activities, and attempts to respond to their distinctive needs.”

 

While he did not read from the part of the report which dealt with “Financing and Facilities” for a proposed split between Douglas County and the Zephyr Cove area, Senator Porter mentioned it should be reviewed. 

 

Senator Porter moved to pages 265 through 272 of Bulletin No. 97-4, pertaining to schools in Washoe County. “Again,” he noted, “there is little evidence that educational effectiveness would be materially altered” (page 267).  Turning to page 268, under the subheading “Organization Scale,” Senator Porter briefly commented, “The proposed new district, especially initially, will be at the low end of the optimal size and may have slightly higher administrative costs . . . . Over time, any higher administrative costs may be mitigated by enrollment growth.”

 

Senator Porter reiterated “I just wanted to reflect that there is more to these sentences.  And there are ways to address them.  But I encourage that the full presentation be made to the committee and not just those sections that fit the need today.”  He informed the members the data contained in Bulletin No. 97-4 was “very comprehensive,” and addressed similar problems throughout the state.  He concluded, “Again, I would request that in future presentations, you give the rest of the story.”

 

Mr. Harris expressed appreciation to Senator Porter, and agreed his remarks were “fair and accurate.”  According to Mr. Harris, excess funds collected as a result of the “Nevada Plan” were returned to the state’s General Fund to be redistributed to all counties.  He noted the proposed Tahoe County would not require any additional assistance from the state.  He asked Senator Porter if his understanding of the Nevada Plan was correct.

 

Senator Porter responded he was not an expert on school financing methodology.  However, he noted the consultants reviewed school districts statewide.  He reiterated that their analyses determined Douglas County could be substantially impacted by the creation of a separate school district.  Senator Porter assumed that issue would be addressed later during this hearing.  He said, “. . . you certainly have a lot of good points, but I think its important that we address it entirely.”

 

Ms. Larson-Yates concluded the presentation by indicating comments made thus far “underscored the differences between Reno and Tahoe.”  She opined the creation of a separate school district would allow Tahoe residents to address their community’s needs which might not be based on growth.  According to her, Tahoe County would be the simplest way for those citizens to improve their lives as well as the lives of their children.  Finally, she remarked by creating Tahoe County, the legislature could eliminate “Lake versus Valley battles,” and would renew the state’s commitment to providing quality education for all children.

 

Senator Adler commented the legislature was reviewing other things such as combining community college/high school classes, increasing use of technology, block scheduling, and so forth.  Other options could include authorizing students to attend classes at Western Nevada Community College one day per week for computer training, or busing kids to Douglas High School for use of its computing or math centers, and so on.  Senator Adler opined it was important for the legislature to consider a method to improve the educational model, accountability to parents, and so forth. 

 

Further, Senator Adler noted results would not occur “by . . . simply dividing up school districts.”  Rather, he said, such a process encompassed originality and thoughtful reform.  Senator Adler commented the state needed a better educational model, not replications of old models that might not have worked.

 

Mr. Harris responded that the citizens at Lake Tahoe were geographically separated from Washoe County.  He asserted parents in that area were more knowledgeable about the needs of their school-aged children than district administrators.  As a result of weather conditions, particularly during winter months, many parents in Incline Village were unable to attend board meetings and could not participate in educational issues.

 

Continuing, in response to questions by Speaker Dini, Mr. Harris said Incline Village was part of another district in Washoe County; and, therefore, did not have its own representative on the school board.  Also, he informed Speaker Dini that the Douglas County School Board (DCSB) scheduled meetings in the Tahoe Basin regularly, whereas the Washoe County School Board (WCSB) planned one per year.

 

Ms. Larson-Yates turned the presentation over to Mr. Jabara (identified earlier), who informed the members the next group of witnesses would present the analyses and financial programs which would support the claim that Tahoe County was economically viable.

 

According to Mr. Jabara:

 

·       Candace Evert, Owner of Fox Consulting, and former Director of the Washoe County Budget Analysis, would address the financial viability of Tahoe County; and

 

·       Morgan Baumgartner, Attorney with Lionel, Sawyer, and Collins, would discuss enabling legislation necessary for the county’s creation.

 

Candace Evert began by briefing the members on her experience as it related to financial analysis.  After earning her Master’s Degree in Business Administration from the University of Nevada, Reno, she worked for Washoe County where she served five of seven years as Director of Budget Analysis.  In 1985, she started Fox Consulting, a business specializing in state and local government financial and economic analysis.

 

Further, Ms. Evert explained she served as a member of the Nevada Tax Commission.  Primarily, Ms. Evert said, it was important that the members understand should Tahoe County be created, Ms. Evert would not participate in discussions and/or votes which related to tax rates, distributions of the Supplemental City/County Relief Tax, and so on, for the new county.

 

She directed the members to Tab 2 of Exhibit C, a report for TCC prepared by Fox Consulting.  The report was divided into three sections:

 

A)    “Executive Summary - Financial Feasibility of Tahoe County”;

 

B)   “Executive Summary - Financial Feasibility of Tahoe County School District”; and

 

C)   “Nevada Plan Recapture Program.”

 

Regarding the Tahoe County budget, she noted, which was located behind Tab A, the revenue estimates were jointly developed by the Department of Taxation, their local government section, Fox Consulting, and Lionel, Sawyer, and Collins.  The expenditure estimates were developed by the Fox Consulting and Lionel, Sawyer, and Collins and were based on existing budgets of Douglas and Washoe Counties for the Lake portion.  And when those areas could not be separated from the general county budget, figures from comparably-populated counties within the State of Nevada were used.

 

Under Tab A, there was a spreadsheet with a 6-year budget for the county and road districts as well as other supporting schedules.  The primary findings were:

 

1.    A balanced budget was achieved.  It extended over 6 years.  In the first year, the proposed revenues and expenditures were $25.7 million and included $2.4 million of start-up, or one-time, costs for items such as vehicles, computers, equipment, and so forth.

 

2.    The new county would have 220 full-time employees and approximately 40 seasonal or part-time employees, primarily in parks and recreation. 

 

3.    The new county would serve about 16,500 residents. 

 

4.    Current service levels would be maintained or improved.

 

5.    For line items that were questionable, revenues were underestimated while expenditures were overstated.  Further, the budget included a contingency fund of 3 percent of estimated expenses.  Such contingencies were “of the utmost importance of those unplanned expenditures or emergencies.”

 

(For clarification, during the following discussion regarding tax rates, it is assumed the rate is based on $100 per assessed value unless otherwise stated.)

 

She discussed a document located behind Tab A titled “Schedule 1,” a two‑page estimate of tax rates if Tahoe County were created.  Based on her estimates, the Washoe County citizens in the Tahoe Basin could expect a tax decrease from $3.046 to $2.8518.  Those residents of Douglas County would experience a slight increase from $2.4815 to $2.5406.

 

Senator Raggio noticed that based on the figures in Schedule 1, if Tahoe County were created, the tax rate for those residents in Washoe Valley would decrease to approximately $2.50, but the people who resided in the new county would pay about $2.85.  Ms. Evert commented the $2.50 rate did not include any city or local improvement taxes.  She directed Senator Raggio to the line item “General” under the heading “Ad Valorem,” which contained a significant tax decrease from 81.16 cents to 31.03 cents.

 

Continuing, Senator Raggio asked why items such as a senior center, library, jail, and court had not been included in the budget.  Ms. Evert responded those facilities had been included in the operating budget.  Regarding the jail, she explained it was assumed the new entity would use the current Douglas County facility located at the South Shore.

 

Responding to an additional question by Senator Raggio, Morgan Baumgartner, an attorney for Lionel, Sawyer, and Collins said the justice courts would continue to provide justice court service at the existing courthouses.  The district court, as a temporary measure, would operate out of one of the justice courts.  She assured the members the assumption had been determined after discussing the matter with the current justice court judges.

 

Further, Ms. Baumgartner noted the expenses for the district judge were included in the operating budget.

 

Ms. Evert referred to the “Tahoe County Budget” spreadsheet located behind Tab A of her report.  Page 4 of the budget, a continuation of the estimated expenditures, contained data for both District and Justice Courts.

 

Senator Raggio repeated his question regarding separate ad valorem rates for those expenses, to which Ms. Evert responded the costs would be covered under the general fund ad valorem operating rate.

 

Mr. Whittemore explained the report was designed to “combine items that would otherwise be delineated with separate line items into an operating budget for purposes of showing that the formulation of the budget works.”  He opined it was important that the committee be shown:

 

1.    A balanced budget;

 

2.    A revenue stream that would continue for at least 6 years; and

 

3.    That ad valorem rates would remain “somewhat comparable” without becoming a burden to residents at either end of the Lake.

 

Turning to Exhibit C, Tab 8, Speaker Dini commented Frank W. Daykin, Attorney At Law and former Legislative Counsel for the LCB, suggested the new county be split into two judicial districts.  Speaker Dini inquired if this suggestion would double expenses for the district court.  Further, he asked whether the proposal included costs for public defenders.

 

Mr. Whittemore reiterated the district courts would use the existing justice court facilities.  He noted the legislature could enact statutory changes to allow a family court judge to travel to different districts. 

 

Regarding public defenders, Mr. Whittemore said those costs were included in the operating budget.   He assured the members that backup documents were available if requested.

 

Speaker Dini requested a comparison of costs for public defenders in the existing counties versus the estimated costs of additional attorneys.

 

Ms. Baumgartner said the proposed budget assumed the county would contract with local defenders in a manner similar to that used by Douglas County.  She reminded the members that detailed spreadsheets could be provided at a later time.

 

In response to a question by Senator Adler, Mr. Whittemore said the proposal assumed the Lake would be split between the Second and the Ninth Judicial Districts.  Mr. Whittemore assured Senator Adler the proposal was not eliminating services nor was it changing the existing judicial process.

 

Senator Adler commented the district attorney would appear in two different judicial districts, to which Mr. Whittemore concurred.  He reminded the members that, in the past, district attorneys often served combined judicial districts.

 

Senator Adler noted different rules and bail schedules existed in the various judicial districts.  He inquired if those matters would be coordinated.  Mr. Whittemore explained the process could be addressed legislatively.

 

Turning to another issue, Senator Adler noted the budget proposed that all the GIDs existing in the Douglas County portion of the Lake were eliminated but IVGID remained.  Mr. Jabara explained the proposal included the consolidation and streamlining of governmental services.  He said the proposal was to create an additional transportation district in the North Shore to assume responsibility for those roads currently maintained by Washoe County as well as the maintenance provided by the existing Tahoe Douglas Transportation District.  Mr. Jabara noted road service was one explanation for the rate differential between the two communities.

 

Senator Adler expressed concern that the creation of a new GID could cause problems similar to those discussed earlier by the witnesses.  He suggested the dollars be pooled into one fund and services delivered equally.  Mr. Jabara commented the decision regarding the creation of a new GID was politically based.  He noted residents of North Shore were concerned about the possibility of “major construction that may be required to bring the South Shore roads up to par” while residents of the South Shore were concerned about additional costs for the North Shore roads.  Therefore, the creation of this district appeared to be the best way to address the concerns.

 

Continuing, Mr. Jabara discussed the two fire protection districts at the Lake.  He noted the services were necessary and the operations of the districts were efficient; therefore, it was not necessary to combine those entities.  He admitted the residents would face many challenges in terms of creating the new county and the services that entity needed to provide.  He acknowledged further consolidation might be requested during commission meetings, or, when statutorily required, future legislative sessions.

 

Returning to the subject of public defenders, Assemblyman Hettrick asked for an explanation of the current structure in the two counties.  Ms. Baumgartner said Douglas County contracted with local attorneys for public defender services whereas Washoe County had a separate department with attorneys employed by the county.  Because of the small population that would exist in the new county, the budget assumed public defenders would be contracted similar to the method used by Douglas County.

 

Further, Mr. Whittemore explained the budget presumed court fines of approximately $524,200, an estimate based on the experience of Douglas and Washoe Counties in the Lake Tahoe area.  In addition, library fines of approximately $11,000 could be used for public defender costs, he said.

 

To further clarify, Ms. Baumgartner explained the term “general fund dollars” referred to the monies in the county’s general fund, not those in the state coffers.  She said the justice court and library fines were allocated to the general fund and not specifically dedicated towards public defender costs.  Mr. Whittemore repeated all revenues were included in the county’s general fund and apportioned to the various expense items.

 

Assemblyman Ernaut explained he had been a participant in similar discussions for 6 years.  According to him, during his first term as Assemblyman in 1993, “half of my district wanted to secede from the other half.”  He welcomed Senator Jacobsen, who had been a legislator for a much longer period of time, “to the fray of half his district wanting to secede from the other half.”

 

Assemblyman Ernaut noted his sympathy to those residents who believed they did not receive the types of services for which they paid tax dollars.  He agreed that most people preferred to be self-governed and to be autonomous.  “But,” he said, “the real crux of all of this lies within this document in my mind.  Does the good idea add up on paper?  And does what you make here stand the test of this committee and stand the muster of other experts that are maybe more objective?”  Mr. Ernaut stressed the main point of the discussion was that the report was “only as good as the assumptions you start with.”  He noted, “figures have the tendency to change to fit the mold . . . or the point that somebody’s trying to make.”

 

Assemblyman Ernaut said the bonding issue was “the most salient point” when discussions regarding separating a county began.  He explained individuals who purchased a bond did so with an understanding “that the full faith and credit and the full assessed valuation of that county remains intact during the process of that bond sale.”

 

Noting that Brian K. Krolicki, Chief Deputy Treasurer (Office of the State Treasurer), was present, Assemblyman Ernaut asked the Chairmen if Mr. Krolicki could address whether a new county could be relieved of bond indebtedness assumed prior to its creation.

 

Mr. Krolicki stated his presence at this hearing was as a private citizen and to offer support to his wife, Kelly Krolicki (who testified earlier).  However, as the Secretary for the State Board of Finance, he served as the primary person responsible for all state debt issues.

 

Mr. Krolicki noted he had discussed this matter with several bond counsels.  He admitted he specifically had not requested an opinion from John Swendseid, Attorney and Bond Counsel, who served as bond counsel for nearly all of Nevada’s counties, as Mr. Krolicki did not think it was fair to place him in what could have been a difficult situation.

 

However, after discussions with other states’ counsels, Mr. Krolicki advised similar situations arose when jurisdictions changed as a result of annexation into a city or boundary changes of GIDs.  Primarily, Mr. Krolicki noted, it was important to ensure that the integrity of the bonds was maintained.  He said there were three ways to do so:

 

1.    The entities could enter into an interlocal agreement.  Since all governmental entities issued fixed rate debt for no more than 20 years, the interlocal agreement would include the amount and time period of a particular bond and specify that the new entity would send the funds to the old entity.

 

2.    The entities could inform the bond insurers on Wall Street.  According to Mr. Krolicki, there would be a premium on those bonds as the new entity could insure them to a Triple A rating, a rating significantly higher than other bond credit ratings at the local level.

 

3.    The new county could defease the bonds possibly through a new bond issue, the funds of which would be placed in a escrow account to be administered by a third party.  Those funds would generate interest over the bond period at which time it would be used to retire the debt in full.

 

Upon completing his explanation, Mr. Krolicki repeated that he was present as a private citizen and asked to be excused from further participation in the hearing.

 

Assemblyman Ernaut discussed a situation that developed when the Reno/Sparks Convention and Visitors’ Authority (RSCVA) removed Lake Tahoe from its marketing plan, yet room tax revenues from Lake casinos were allocated to a bond incurred by the RSCVA.  Mr. Ernaut explained an Incline Village Convention and Visitors’ Authority (IVCVA) was created, but residents were upset because those dollars were pledged to an entity now in competition with Lake interests.  In discussions with Mr. Swendseid as well as with the Legislative Counsel (LCB), Assemblyman Ernaut noted the opinion was that the issue could not be mitigated and the funds were to be paid until the debt was retired in 2007.  He asked why a similar situation would not arise with other bonds.

 

Mr. Whittemore responded the language in the bond agreement for the RSCVA was very specific with respect to Incline Village.  However, such language was not contained in Washoe County bonds.

 

Assemblyman Ernaut asked that the language in all the bonds be reviewed.  He noted the county had a variety of indebtedness such as airport bonds, Regional Transportation Commission bonds, bonds for jail facilities, and so forth—all with varying parameters.  Mr. Whittemore assured him that the language had been reviewed and there were “no bonds which cannot be covered by one of the three methods that Mr. Krolicki has identified.”  Mr. Whittemore reiterated that the RSCVA bonds could not be mitigated; therefore, the new county would have to consider that certain proceeds from the room tax would not be available until after the year 2007.

 

Turning to the Douglas County mitigation plan, Assemblyman Ernaut asked if the proposed 1 percent room tax included the Incline Village hotels and motels.

 

Mr. Whittemore responded that page 1 of the Fox Consulting Report contained six questions regarding the financial viability of both the county and the school district, which were:

 

1.    Are the proposed new county and school district financially feasible?

 

2.    Do they remain financially feasible over an extended time frame?

 

3.    Does the school district budget include a mitigation plan to eliminate any negative fiscal impacts to the state?

 

4.    Does the county budget mitigate any negative fiscal impacts to the state?

 

5.    Does the county budget account for and mitigate fiscal impacts to Carson City and Washoe County?

 

6.    Is a mitigation plan included to assist Douglas County in its loss of revenues and reduction in expenditures?

 

Mr. Whittemore answered affirmatively to the first two questions.  Answering Question No. 3, Mr. Whittemore explained a proposal was formulated and could be read under Tab C, the “Recapture Plan.”  Regarding Question No. 6, the proponents received an estimate from Douglas County representatives that the county could experience a financial impact of between $5 and $7 million.  The mitigation plan to address that impact was conditional upon voter approval of additional taxes which would be phased out over a period of time.

 

Moving back to Question No. 5 (which was similar to questions raised earlier by Assemblyman Amodei), Mr. Whittemore said “The Constitution of the State of Nevada” required that counties be contiguous.  Therefore, the proponents chose to use the highway as its guide to keep the area contiguous.  The section of Carson City included in the boundaries of the proposed county would not “significantly add or subtract to any of these problems,” Mr. Whittemore said.  As it related to Washoe County, Mr. Whittemore opined the Valley residents would pay less after the creation of Tahoe County; as a result, the budget assumed no fiscal impacts to Washoe County.

 

Continuing, Mr. Whittemore said the report attempted to address those six concerns.  He opined the figures would withstand scrutiny by any expert.

 

Mr. Whittemore acknowledged C. Joseph Guild, III, an attorney who was in the audience and would be speaking in opposition later in this hearing.  He noted Mr. Guild’s father, Clark Guild, represented the proponents in 1979.  Mr. Whittemore said mitigation plans could be achieved but might require some effort from all parties.  He advised his office had approximately 24 boxes of materials that he would make available to staff of the Fiscal Analysis Division of the LCB if requested.

 

Mr. Ernaut expressed appreciation to Mr. Whittemore for his comments but said he had not received a response to his question.  He agreed there were tax inequity problems that needed to be addressed.  And, Assemblyman Ernaut noted his commitment to “fixing” the problem.  However, he said, “I’ve said many times that I think a county is going too far.  In making that statement, I have to be able to go through your numbers and present a case to you why I think that.”

 

Mr. Ernaut returned the discussion to the RSCVA and the room taxes that were paid from Incline Village.  Mr. Whittemore noted the RSCVA voluntarily returned a portion of that money to the IVCVA.  Mr. Ernaut agreed but stipulated it was only 22 percent of the funds.  Assemblyman Ernaut then drew Mr. Whittemore’s attention to the proposed mitigation for Douglas County.  He repeated his question regarding the inclusion of Incline Village’s casinos in the proposed 1 percent room tax increase.  He said, “Because now you’re asking me to tell my constituents that not only is a portion of your room tax going to the RSCVA which you get very little back from, but now you’re being asked to have another 1 percent room tax that’s going to go to Douglas County which you basically get nothing from.”

 

Mr. Jabara stressed the decision would not rest with the legislature.  Rather, the voters would decide at the time of voter approval for Tahoe County.  Mr. Jabara explained the proposal had three levels:

 

·       Sales taxes;

 

·       Room taxes; and

 

·       Property taxes.

 

Specifically, in answer to Mr. Ernaut’s question, Mr. Jabara confirmed it was proposed to be a county-wide tax and would encompass the entire area from stateline to stateline.

 

Regarding property taxes, Assemblyman Ernaut explained he had discussed the matter previously with Messrs. Jabara and Whittemore.  At that time, he noted, he stressed to them “that I would be open to hearing different discussions, but where I drew the line was to dangle Tahoe County as any type of property tax mitigation panacea—that . . . property taxes were going to go down because of this.”  According to Assemblyman Ernaut, he informed Messrs. Jabara and Whittemore:  “Say anything that you like but if you tell the people in this audience and my constituents their property tax is going to go down if they become their own country, we’re going to have a problem.”

 

Mr. Jabara responded that the TCC had not proscribed the tax rate in the report.  Rather, the TCC requested that the consultant review what it cost to:

 

·       Run a county;

 

·       Run a school district;

 

·       Service public debt; and

 

·       Make sure the “economic engine called tourism is properly fed.”

 

In addition, the consultant was instructed to consider the substantial disparity in tax rates between the two existing counties.  The tax rate in the report was the result of those factors, Mr. Jabara commented.  He repeated remarks made earlier by Ms. Evert regarding the conservativeness of both revenues and expenses.  Mr. Jabara assured Mr. Ernaut the rate was not preconceived.

 

Assemblyman Ernaut noted on page 1 of Tab A, under the heading “Major Findings,” the report began with the fact that Incline Village’s tax rate would decrease by approximately 19 cents.  According to Mr. Whittemore, the proposal was based on the adoption of the “funding mechanism mitigation plan,” and the rates which would need to be imposed statutorily.  He said the consultant attempted to present information to be used by the legislature without making decisions which should be left to the policymakers—namely, the legislators.  Mr. Whittemore assured Assemblyman Ernaut the proposal was not a tax relief plan.

 

But, Assemblyman Ernaut said:

 

         “And I just have to say that on the first page of this—I mean, unless I got a different copy from everybody else—its in bold print and its the first think you lead off with.  And there was no asterisk saying, ‘If you agree to all these things, this is what will happen.’”

 

Assemblyman Ernaut directed the members to page 1 of the report, and repeated:

 

         “ . . . in bold print, it says—again, if somebody else has a different copy—‘The North Shore will have a lower combined tax rate under the new county, $2,8518 compared [to] Washoe County’s current $3.0460.’”

 

Assemblyman Ernaut commented that was “a pretty strong statement to lead the entire package off with,” especially in view of the fact that no qualifying remarks followed the sentence.

 

Ms. Evert directed Mr. Ernaut to Schedule 1 where the county general tax rate for Washoe County was $1.2443 compared to the property rate of 62 cents for Tahoe County.  She explained the decrease resulted because the new county had no need for ad valorem taxes for items such as senior citizen and child protective services, libraries, jails, family courts, or to compensate for funds resulting from A.B. 104 of the 66th Session (Chapter 491, Statutes of Nevada 1991, a measure otherwise known as the “Fair Share Measure” which required Washoe County to repay $6.6 million to Clark County and provided options the county could implement to offset tax distribution losses.)

 

Assemblyman Ernaut stressed those assumptions were contingent on Washoe County relieving the new county of its ¼-cent tax obligation for the RTC and its ¼-cent obligation for A.B. 104 of the 66th Session.  Ms. Evert said those issues needed to be addressed legislatively, but noted Mr. Ernaut’s assumptions were correct.

 

Continuing, Assemblyman Ernaut commented that the report was driven by assumptions; therefore, he opined those assumptions should be clearly defined.  He noted the ¼-cent obligation for RTC was pledged toward repayment of bonds.  Ms. Evert stated her understanding of the difficulty in reviewing the complex documents in a brief, 3- or 4-hour meeting.  She repeated the offer made earlier by Ms. Baumgartner and Mr. Whittemore to review her materials with staff.  Assemblyman Ernaut, noting his respect for the witness, said, “I think I’m digesting it fine.”  He commented the assumptions had to be legitimate, not a “wish list.”  Ms. Evert agreed and expressed her confidence that the assumptions would be considered legitimate and reasonable upon any review.

 

Responding to another question by Assemblyman Ernaut, Ms. Evert commented the $2.8518 tax rate for Incline Village residents did not include mitigation to Douglas County.  But, she added, any such mitigation would be attempted first through sales taxes; secondly by room taxes; and lastly, through property taxes. 

 

Assemblyman Ernaut interrupted to point out that the report stated “property tax increase of 2 cents” would generate about $300,000 to mitigate the fiscal impacts to Douglas County.  Mr. Jabara responded the mitigation plan was not definitive as the fiscal impacts were unknown.  He said the TCC and the consultants received a preliminary figure from Dan Holler, Douglas County Manager, but Mr. Jabara noted the figures were “relatively unsubstantiated.”  The TCC proposed any mitigation amount be certified by the Nevada Tax Commission.  After certification, “a combination of taxes . . . would then be used to mitigate whatever that amount is,” Mr. Jabara said.

 

Continuing, Mr. Jabara explained the proponents chose $5 million as a mitigation figure and then determined the best method to repay those figures was through increasing sales taxes by 1½ percent, increasing room taxes by 1 percent, and adding 4 cents to property taxes.  Assemblyman Ernaut commented a question could be raised about the choice of $5 million as opposed to the $6.6 million calculated by Mr. Holler.  Mr. Jabara responded it was “strictly as an example.”

 

Mr. Ernaut asked if Incline Village’s sales tax would increase to 8.5 percent if Washoe County chose not to relieve those residents of the obligations to RTC bonds and costs attributed to A.B. 104 of the 66th Session.  In Mr. Jabara’s opinion, the answer was “no.”  Mr. Jabara said the proponents were presenting information simply to show that the county was financially feasible.  In fact, he noted the initial operating budget would be established by a duly-elected Board of County Commissioners.  Those members would decide what services would be funded.  He reiterated that the figures were “designed to only answer one question:  Is the county, is the school district, feasible, yes or no?”  Mr. Ernaut repeated, “I’m just going to say that I cannot answer, nor can anyone on this panel answer, whether that is feasible if we don’t agree on the basic assumptions by which you have created this budget.  I don’t know how much more basic I can be with that statement.”

 

A discussion ensued between Assemblyman Ernaut and Ms. Evert regarding the beginning indebtedness of Tahoe County.  Mr. Ernaut noted the total of outstanding debt was approximately $38 million.  He said any future capital improvements would require additional taxes.  But Ms. Evert explained the budgets included “pay-as-you-go” percentages.

 

Assemblywoman Freeman asked if the witnesses were assuming A.B. 291 would pass, thereby allowing the proposed county to raise its sales tax percentage.  (Assembly Bill 291, if passed, would authorize the imposition of certain taxes for certain projects related to infrastructure [BDR 32-1485].)

 

Mr. Jabara responded no assumptions had been made regarding A.B. 291.  However, he commented if the measure was enacted into law, the Tahoe County Commission probably would not use funds for flood control or other infrastructure related projects defined in the bill.  Rather, the proposal was designed to start with a base sales tax of 6½ percent and add whatever percentage was necessary for mitigation.

 

To further clarify, Mr. Whittemore explained A.B. 291 was enabling legislation.  At this time, the proposal did not include imposing infrastructure-related projects to the sales tax base.

 

Mrs. Freeman reiterated concerns expressed earlier by Senator Shaffer regarding the integrity of Lake Tahoe’s environment and the lake’s water clarity.   She noted her need for security that in the future, the legislature would not face the dilemma that poor management of the area had detrimentally affected the Lake’s environment.  She stressed the legislators had serious concerns about those issues.

 

Mr. Whittemore said the TCC had not planned to alter environmental ordinances.  Further, the proposed budget was designed to allow for additional marketing as well as redevelopment programs which would attract tourists.

 

Referring to earlier comments about voter approval, Mrs. Freeman asked which voters would decide if Tahoe County should be created.  Mr. Whittemore responded it would be those citizens residing within the proposed boundaries.

 

Assemblywoman Freeman requested clarification as to the manner proposed for jail and library facilities.  Ms. Evert explained a jail facility existed at the south end of the Lake with the capacity to house approximately 30 inmates.  The facility generally had between 10 and 14 inmates.  Rather than construct a new facility at the north end, the budget assumed persons arrested would be transported to the South Shore.  Regarding the library, Ms. Evert said there were two in existence, one at each end of the Lake.  Those facilities would remain with the current services.

 

Receiving affirmation that those libraries were county facilities, Mrs. Freeman inquired as to whether agreements had been proposed with the originating entities regarding reimbursement for costs expended.  Mr. Jabara said the TCC expected those facilities would be transferred at no cost to the new county as the residents in that area had contributed towards the original expenses.  Also, Mr. Jabara noted precedent for such transfers was established in Chapter 266 of Nevada Revised Statutes (NRS), “General Law for Incorporation of Cities and Towns.”  According to him, when cities and towns were created, county facilities within the new city limits were transferred without compensation.

 

Senator Raggio noted the expectation for school facilities was the same as county-owned property, to which Mr. Jabara concurred.  He told Senator Raggio that the TCC had not anticipated the use of services or facilities from adjoining counties.  However, Ms. Evert said the budget included contracts with the state for environmental and health services.

 

Senator Raggio explained the purpose for the questions posed during this hearing stemmed from problems experienced by other counties with a similar population.  He said, “these questions are not designed to harass you, they are designed because we are the ones who ultimately have to deal with the problems.”

 

Turning to Tab B, Senator Raggio asked for clarification of the budget information.  He commented it was difficult to determine what tax increases the residents of the proposed county could expect because of the way the budget was prepared.  Ms. Evert referred him to Schedule 1, located behind Tab A of the report, which contained the combined tax rates for the current fiscal year.  He said the members needed to see the 6-year projection for all taxes, such as county ad valorem, roads, school districts and so on.

 

Senator Adler, referring to page 3 of Tab A, commented that the budget assumed a guaranteed status for the new county.  Ms. Krolicki said Incline Village generated approximately $2 million in sales tax but received $2.5 million, which paid for services provided by the fire protection district and IVGID.  However, the budget proposed $2 million in SCCRT revenue; therefore, according to Ms. Krolicki, the county would absorb $500,000.

 

Senator Adler explained that Washoe County, as a whole, received 98 percent of sales tax generated, with the balance donated to smaller counties.  Under the proposed budget, Tahoe County would receive more SCCRT revenue than the sales tax it generated.

 

Ms. Krolicki explained Washoe County was “point of origin” county which generated more in sales tax that what it received in SCCRT distributions.  Although Incline Village generated approximately $2 million in SCCRT revenues, the county provided $2.5 million to fund Incline Village’s GIDs.  Therefore, the budget assumed that Incline Village would retain its $2 million in sales tax revenues but would absorb the additional $500,000 provided for GID services.  On the other hand, Douglas County was a guaranteed county.  Fox Consulting totaled the SCCRT revenues received in Douglas County to fund its improvement districts and allocated 21 percent of those monies to the new county.

 

But, Senator Adler remarked the proposal would make Tahoe County a guaranteed county.  He noted there would be a fiscal impact on other counties.  Mr. Whittemore responded that the budget attempted to correct a special circumstance by eliminating any possible mitigation to Washoe County by shifting the impact to Douglas County.  Ms. Evert informed Senator Adler that they would verify the figures and report back to the members at a later date.

 

In answer to an additional question by Senator Adler, Mr. Whittemore noted the Fox Consulting report contained an error on page 4 of Tab A.  He explained the report should reflect that the county would be split between two judicial districts as discussed earlier.

 

Speaker Dini informed the members that he chaired the Legislative Commission’s Subcommittee to Study the Feasibility of Creating a New County to Govern the North Shore Area of Lake Tahoe (1979).  He suggested the proponents review the minutes of those hearings and prepare information for the Douglas County portion of the Lake similar to that requested from residents of the Washoe County during those meetings.

 

Senator Porter thanked the audience for their patience during the question and answer period.  He asked what other options the proponents had if the 69th Legislature failed to act on the proposal.  Mr. Whittemore answered, “If it does not pass, I presume that this legislative body has exercised its judgment in such a way to say that there is some other alternative to address these issues.  I do not believe that there will be nothing done.  If there is nothing done, we have failed in advocating an appropriate response and will go back to the drawing boards.”

 

Senator Porter commended Mr. Whittemore for articulating the problems faced by the Tahoe residents.  Mr. Whittemore said Douglas County representatives had cooperated, and he agreed to work with any entity as directed by the respective houses of the legislature.

 

Lastly, Senator Porter said, “I think what this illustrates is what’s happening nationwide—that as government we can no longer do business as usual.  That we’re expecting more accountability from our public servants and from our governments and . . . I think its very healthy.  It gives us all a chance to review where we are and where we’re going.  And, again, I’d like to commend you, and whatever the resolve on this particular bill, I certainly offer our assistance to resolve your problems in the future.”

 

Assemblyman Hettrick asked for the percentage of TOT that would be allocated to marketing.  Ms. Evert directed him to Tab A which contained spreadsheets with the proposed allocation of room tax revenues.  Responding to another questions by Mr. Hettrick, Ms. Evert confirmed that approximately 50 percent of the funds were allocated to promotion.

 

Assemblyman Hettrick observed that figures provided by the Douglas County Manager, Dan Holler, stated a loss of $6.6 million.  According to Mr. Hettrick, if Mr. Holler’s figures were accurate, Tahoe County would have expenditures of 32 percent more than budgeted.  He asked if property taxes would then be increased accordingly; specifically, he noted that North Shore residents might have to pay approximately $2.977 while South Shore citizens might be increased to $2.67.

 

Mr. Jabara agreed with Assemblyman Hettrick’s estimates, but he stipulated that the TCC requested data from the Department of Taxation to verify Mr. Holler’s numbers.  He reminded the members that the proposed mitigation was to pay Douglas County the full loss for 3 years, two-thirds of the loss during the 4th year, and one-third of the loss during the 5th, and final, year.

 

Mr. Hettrick asked if a contingency was in place should revenues not reach anticipated levels.  Mr. Whittemore said they were investigating a method to eliminate Douglas County’s “over-reliance” on the mitigation funds.  He suggested county representatives determine how to modify the spending behavior and “adjust their budgets” accordingly.  Further, he said, “as the budgets go down, they would have to impose additional fees to have their costs trued up based upon who’s causing the expenses to occur in that county.  Therefore, the mitigation plan, obviously, would require that they change how they operate and how they conduct their business.”

 

Assemblyman Hettrick informed the proponents that the only way the committee could evaluate the plan was for them to review a proposed budget for Douglas County with the assumed spending reductions.  Based on the statutory tax cap, he said it would be difficult for them to determine if Douglas County would be able to raise taxes high enough to continue offering the current level of service without surpassing that cap.  Further, if Douglas County could not increase revenues through appropriate tax increases, the members would need to be assured that the budget could be reduced accordingly.

 

Mr. Whittemore assured him they would work with Douglas County staff to prepare such budgets.

 

Mr. Hettrick, after learning from Mr. Jabara that the county could not be created if the voters rejected the tax proposal, asked if the proponents expected the legislature to enact a measure creating Tahoe County although the voters could reject it later.  Mr. Whittemore suggested the legislation be drafted in such a way that the creation would be dependent upon voter approval.

 

Lastly, Assemblyman Hettrick commented projections developed by the TDFPD revealed no increase in growth was expected.  Yet, Mr. Hettrick noted, the budget assumptions showed an anticipated 4.5 percent increase in assessed valuation each and every year.  Ms. Evert explained she had reviewed the assessed values for the tax years 1992/1993 to 1997/1998.  During that period, the TDFPD’s assessed value averaged a 3.5 percent increase.  On the North Shore during the same time period, the NTFPD averaged a 9.7 percent increase.  Therefore, Ms. Evert “blended” the rate to 4.5 percent for the entire district.

 

Chairman Bache commented representatives of the TRPA were not present.  He asked if the members of TRPA had taken a position on the issue of Tahoe County, and how the creation of the county would affect the compact.  Mr. Jabara said TRPA had not expressed a formal position nor had the matter appeared as an agenda item during TRPA meetings.  Should Tahoe County be created, Mr. Jabara opined changes to the compact would need to be approved by both states, California and Nevada, as well as by Congress.  He noted the county would request one fewer seat than the three existing counties were granted with the last seat to be occupied by a member of the Nevada Legislature, similar to the way California seats were assigned.

 

Assemblyman Amodei, directing his question to Mr. Whittemore, inquired if the inclusion of Carson City’s portion of the Lake was simply to have contiguous boundaries.  Mr. Whittemore responded affirmatively and explained there were no service or revenue requirements nor were there monetary issues which impacted Carson City with respect to the proposed budget.  He said if there were a legal way to create the county without including those residents, the proponents would reconsider.

 

Senator O’Connell thanked the TCC presenters.  She informed Mr. Whittemore she would like to have his backup materials available for staff review.  She invited the speakers from Douglas County to testify.

 

C. Joseph Guild, III, an attorney representing Douglas County, commended the proponents for their presentation.  He noted the issue was complex and the speakers discussed the matter as quickly as they could.  Mr. Guild introduced Jacques Etchegoyhen, Chairman of the Douglas County Commission, and Dan Holler, County Manager (Exhibit D).

 

Mr. Etchegoyhen thanked the committee for the opportunity to speak on behalf of Douglas County.  He noted that Commissioners Donald H. Miner (Vice‑Chairman), Bernard W. Curtis, Kelly D. Kite, and Steve Weissinger were in attendance.  Mr. Etchegoyhen explained his parents taught him to be forthright about his opinions.  Therefore, he admitted he was the commissioner who had become upset during commission meetings that dealt with the separation of the Lake and Valley.  But, he said the reason for his outbursts were “not because I don’t care, its because I do care about Douglas County and Nevada.”

 

Mr. Etchegoyhen noted the commission opposed the creation of Tahoe County.  He said, “We have 133 years of policy and decision making based on one county,” and he urged the members, “to keep out county whole, Lake and Valley, rural and suburban, gaming and ranching.”  According to Mr. Etchegoyhen, the Valley supported the Lake area for over 100 years.  During the last 30 years, economic activity centered around the Lake.  But, he predicted the paradigm would shift again.

 

Further, Mr. Etchegoyhen reported that, according to the 1990 U.S. Census, “a significant majority of permanent employees at Tahoe live in Carson Valley and Carson City . . . . Soon enough, maybe tomorrow, the state shall forever have to support both counties,” he said.  He noted Senator O’Connell served as Chairman to the Legislative Commission’s Subcommittee to Study the Laws of this State Relating to the Distribution Among Local Governments of Revenue from State and Local Taxes (S.C.R. 40 of the 68th Session, File No. 162, Statutes of Nevada 1995).  Mr. Etchegoyhen noted the recommendations which resulted from that interim study were positive, but “the proposal before you today,” he said, ”flies in the face of that work as it perpetuates the subsidy of local government by other local government.”

 

Mr. Etchegoyhen asserted the issue was not about a “parochial problem in Douglas County or about life and death.”  Rather, he opined the discussion during this hearing centered around “the foundation upon which democracy rests—which is a stable, local government.”  He noted actions taken by Congress might affect state and local entities but “what happens out our front and back door affects us a great deal more.”

 

Further, Mr. Etchegoyhen said, “In his book, ‘Democracy in America,’ Alexis de Tocqueville, in 1835, bemoans in his early pages about the tyranny of the majority.  He concludes by writing, more eloquently than I can speak, about how the inherent fairness and equity of democracy takes the breath away and that the only real alternative is tyranny by the few.”

 

Mr. Etchegoyhen advised the members that the “ramifications” of creating a new county could “reverberate throughout this great state of ours.”  He reminded them that although Tahoe was 11 miles from the Carson Valley, there were many communities that were “111 miles from the county seat”.  “And,” he asked, “if new counties, why not new states?”  He opined the argument of “self-determination” could be used for such an event.

 

Continuing, Mr. Etchegoyhen remarked the proponents had not presented a compelling reason to justify the “far-reaching” impacts which the creation of a new county would have on public policy in Nevada “for years to come.”  According to him, the proposal was:

 

·       A poor financial decision;

 

·       Not good public policy; and

 

·       Not in the best interests of the residents of Douglas County.

 

In addition, Mr. Etchegoyhen said the issues discussed could be addressed locally.  He assured the members that solutions were being pursued and implemented.  Mr. Etchegoyhen noted the commission had addressed every concern expressed by the TCC over which they had control.  He explained the commission had implemented a financial plan that would increase the allocation of room tax dollars to promotion from 37 percent to 50 percent over the next 3 years.  “This action,” he remarked,” because of backlash from Valley residents, may be political suicide.  But, if it keeps our county whole, it is a sacrifice I shall gladly make.”

 

Regarding the numbers GIDs in the Tahoe area, Mr. Etchegoyhen said discussions had started to regionalize those district services.  He concluded, “As we near the new millennium, we’ve a new team in Douglas County—one which hungers to attack our problems, not each other.  I ask your help and guidance to do that.”

 

Mr. Guild gave a brief description of his family’s history in the Douglas County area.  His grandfather was a district judge whose district, at one time, included Douglas County.  “I care about the county . . . the whole county . . . . When I come before you, it is with some personal involvement as well,” he said.

 

The opening remarks of Messers. Jabara and Whittemore intrigued Mr. Guild, he remarked, since they promised to provide a compelling case for the creation of the new county.  In particular, those comments interested Mr. Guild because, as an attorney, he felt the members needed “a standard or a burden of proof” to guide them in deliberating the merits of such a county.  According to him, “the civil burden of proof . . . a preponderance of the evidence” should not be considered, and “certainly not the reasonable doubt standard in a criminal case.”  Therefore, Mr. Guild “invented” a “hypothetical standard,” which he termed “substantial, compelling rationale.”  And, as he noted, those were “basically the same words that both Mr. Jabara and Mr. Whittemore used.”

 

To begin his argument, Mr. Guild advised the issue which should be foremost in the members’ minds was whether other governmental entities would be harmed in any way by the creation of Tahoe County.  Mr. Guild said revenue neutrality must be applied to every governmental body, including the State of Nevada, all other counties, and the remaining portion of Douglas County, as well as the school districts and other subdivisions of local governments (such as GIDs and SIDs).  He opined a case for such revenue neutrality had not been made.

 

Mr. Guild noted the budget distributed at this hearing had been made available to Mr. Holler and Mr. Guild approximately 3 hours before the meeting commenced.  He advised the testimony he was about to present, as well as that of Mr. Holler, might not encompass all areas of the proposal and requested an opportunity to present a written analysis at a later date.

 

Referring to Senator Adler’s question regarding the “guaranteed” status, Mr. Guild said Tahoe County would receive approximately $7.6 million in SCCRT revenues while it would generate only $4.4 million; thereby, receiving subsidies over $3 million.  In addition, Mr. Guild commented the proposal did not consider changes to the SCCRT distribution which might occur if S.B. 254 passed and was enacted into law.  (Senate Bill 254 makes various changes to formulas for distribution of certain taxes.  [BDR 32-314])

 

Mr. Guild made the following observations regarding the proposed budget:

 

·       Douglas County could lose approximately $1.5 million in SCCRT distributions; and

 

·       Douglas County would lose nearly $2.2 million in room tax revenues, the combination of which would require a tax increase of 22 cents for the current level of services.

 

·       Debt service related to the KOA Campground at Stateline of approximately $260,000 was not included.

 

·       A portion of the gas tax was allocated to Tahoe County’s general fund, but the NRS specified those funds must be used for road maintenance.  In addition, Douglas County could lose about $80,000 in gas tax revenues.

 

·       No mention was made regarding the RTC taxes collected in both Douglas and Washoe Counties, 4 cents and 9 cents, respectively.

 

·       Washoe County imposed a ¼-cent sales tax, 1-cent motor vehicle privilege tax; a 2.7-cents property tax; and a 10-cent real property transfer tax to as part of the “Fair Share” measure under A.B. 104 of the 66th Session.  Incline Village GID and the NTFPD were budgeted to receive $626,000 of those funds.  The budget did not provide a mechanism to make up for that lost revenue, but a county-wide tax increase would need to be imposed; therefore, the Douglas County residents would be required to pay taxes that they had not paid before the new county was created.

 

According to a brief analysis completed prior to the start of this hearing, Mr. Guild estimated Douglas County could lose about $4 million in the first year.  He said services would need to be “drastically reduced or property taxes would have to be increased . . . a total of 56 cents” just to cover those items mentioned above.  Due to time constraints, Mr. Guild informed the members he had not discussed several other taxes.  However, to cover the entire loss Douglas County would experience, property taxes would have to be increased by almost 95 cents resulting in a total property tax rate of $3.76, 12 cents above the statutory cap.

 

Regarding Tahoe County’s proposed budget, Mr. Guild noted a revenue shortfall of about $728,000 would occur since gas tax revenues could not be allocated to the general fund.  The budget also contained an expenditure overrun of approximately $743,000—and the total of those two items would cause the budget to be out-of-balance by over about $1.5 million in the first year.

 

Mr. Guild opined the members had not been shown a substantial, compelling rationale to create a new county.  He noted the proposal for a sales tax percentage of 8 percent would result in the highest sales tax “west of the Hudson River.”  Further, new taxes for the county, new taxes for the remaining portion of Douglas County, and possible subsidies from the state and other counties eliminated the argument that the creation of Tahoe County was revenue neutral, he said.

 

And, in conclusion, Mr. Guild commented the proponents had not discussed how the new county could impact the numerous laws that would need to be changed as well as the distribution of federal funds for federal programs.  However, he repeated the assurance given by Mr. Whittemore that he would continue to work with the proponents to determine the best way to address the problems discussed by Tahoe residents.

 

Senator Porter addressed the following comments to the boards of county commissioners for both Douglas and Washoe Counties as well as the boards of trustees for the DCSD and WCSD:

 

         “Mr. Guild, you mentioned substantial, compelling rationale, and I know Mr. Whittemore mentioned compelling proof.  I think what we have tonight is both.  That there is a major problem.  And I hope, if nothing else comes out of this hearing is the fact that there are real problems or at least perceived problems which are reality.

 

         “And as I said earlier, we can no longer do business as usual.  But you mentioned that if, in fact, there is to be a new county, you’d like to know in detail, in law, what plans are in place.  I’d like to ask that of the four entities that are here tonight that are under siege by some very unhappy customers.  Because, if we are truly a customer-drive government­­—which, unfortunately, we are not—but, if we were, we would be out of business.  And, again, I don’t live in either county.  I would love to live here.  It’s a great place . . . . You have so much to be proud of.  As a visitor and a guest, I want to reiterate how great it is.  But, I would hope that out of these hearings, that these four entities, if, in fact, we don’t pass legislation—I’m speaking on behalf of your citizens that are for and against it—I think it’s time you look and analyze what’s happening, what’s right, and what’s wrong, and you come up with some compelling rationale as to why you shouldn’t have a new county created and shouldn’t have a new school district created.  Because there’s hundreds of letters that I’m receiving from unhappy customers.”

 

He concluded by saying:

 

         “Perception is reality and apparently there’s a perception of a major problem.  I’m just suggesting that you sit down and work this thing out.  Anything can happen with a new law.  But if it doesn’t, I want to hear from you what you’re going to do to improve your customer service to these individuals that feel disenfranchised.”

 

Senator Adler concurred with Senator Porter and said:

 

         “I think you’ve got some good arguments, but unless this was an optical illusion this afternoon, this room was the most packed I’ve ever seen it.  So that shows there’s some very, very unhappy people living up at Lake Tahoe, and I don’t think we can ignore their concerns.  And I’m sorry that it really had to get to this point where we’re having this meeting and people take off the amount of time that these people did to come down here and express their concerns.  So, there is something terribly wrong that needs to be fixed.  And I don’t think we can ignore that.  Maybe this is not the solution, but I’m convinced there’s a problem. I just have never seen this kind of outpouring from groups.”

 

Senator Adler noted that, like Senator Porter, he had received a substantial amount of mail from concerned citizens.  He commented:

 

         “I think people are concerned about their county services and I think they’re concerned about their children and the education their children receive.  So, I don’t think we can take that lightly.”

 

He noted comments made earlier by Mr. Etchegoyhen were positive but he asked for specific information about the way in which the county commission planned to address issues mentioned during previous testimony.

 

Mr. Etchegoyhen responded the commissioners were seeking guidance to address some of the problems.  He opined the various road districts currently in existence at the Lake resulted from the time when the only road between Carson Valley and the Lake was closed during the winter months until 1964.  “The roots of this, obviously, are in the past, and we’re trying to work toward that,” he informed the members.

 

Mr. Etchegoyhen assured the members that a detailed, specific plan would be formulated and presented at a later date.  But, he requested “I would like to see the concerns of the TCC articulated very clearly because its been a little bit nebulous about what we’re trying to address, but I think we’re getting there.”  He concluded by saying, “I apologize, too, that it had to come to this venue, to get to this point.”

 

Mr. Guild introduced Mr. Holler and explained to the members that Mr. Holler might be able to provide a more specific answer to Senator Adler’s question.

 

Responding to points made by Senators Adler and Porter, Mr. Holler said four issues were brought to the forefront (Exhibit E):

 

1.    Equity in school facilities and programs (although this issue was outside the purview of county government, Mr. Holler noted the district was reviewing Lake needs as they related to capital planning and expenditures);

 

2.    County service levels;

 

3.    Funding for the promotion of tourism;

 

4.    Self-determination and representation.

 

Regarding Issue No. 2 above, Mr. Holler commented residents had not complained about service levels of the sheriff’s department or other forms of public safety; the judicial processes (justices of the peace, district attorney’s office, district courts, and so on); county elected officials; clerk treasurer; assessor; constables; juvenile probation; or community-health activities.

 

The primary complaints dealt with road maintenance and water systems.  The extremely harsh winter of 1996-1997 left many residents frustrated.  Many complained about the condition of Highway 50 and Kingsbury Grade.  Mr. Holler informed the members both roads were owned by the state and maintained by the Nevada Department of Transportation (NDOT).  However, the county answered many phone calls regarding road conditions and had many smaller roads cleared of snow.  The balance of the roads were maintained primarily by GIDs.  Mr. Holler assured the members, “we have initiated some discussion with the district to work at taking over that work from them or at least taking over a major component for them in terms of financial viability.”

 

He noted, consolidating road districts was “a great concept.”  But a question that arose during those discussions concerned the sales tax revenues received by those GIDs from the SCCRT distribution.  Another issue regarding consolidation of GIDs “flies in the face of the self-determination argument,” Mr. Holler explained.  The commission would prefer to have the merger done in a positive manner and not be seen as an order to the residents.

 

Turning to the issue of the water systems, Mr. Holler agreed Douglas County had, in the past, levied a 7-cent water district tax.  He explained the purpose for that tax was for construction and maintenance of water systems and to secure water rights.  He informed the members that, recently, $1 million had been spent or committed to two county-owned systems at Lake Tahoe, which created an entirely different problem to arise with owners of private systems and representatives of GIDs who did not want the funds spent on those systems at the Lake.

 

According to Mr. Holler, the philosophy of the commissioners was to correct one problem and move on to the next as resources and time allowed.  At the time of this hearing, the commission was in the planning its capital improvement needs for water systems and water resources.  He informed the members that water purveyors throughout the county were asked to participate.  He commented, “I think to the extent that the water fund has created some discussion, rightfully so, in terms of its usage, but to say that it hasn’t been used for the Lake is not a correct statement.”

 

Continuing, Mr. Holler explained the county “fought very hard” with the Board for Financing Water Projects to secure grants for water systems at Lake Tahoe.  In fact, he noted, the county specifically assumed responsibility for those systems which had fallen into disrepair in order to access funds available through a grant.  In his opinion, “the board has stepped up to the plate to meet that need.”

 

Regarding the issues of promoting tourism and redevelopment projects, Mr. Holler assured the committee that the Douglas County commissioners were “very aware of the economic activity at Lake Tahoe” as well as its importance to the financial viability to Douglas County.  As a result, the commission allocated a higher percentage of its revenue towards promotion and approved a request for $175,000 to offset the impact on tourism that resulted during the floods in January 1997 and the subsequent closure of Highway 50.  Mr. Holler said a presentation would be heard by the board at its June 12th meeting regarding a redevelopment issue.  “The other question on promotion,” he said, ”becomes what is the payback of those dollars and how much of it is just maintaining your existing level of activity as the market is being changed in terms of attracting vactioners.”

 

Regarding financial feasibility of Tahoe County, Mr. Holler opined the budget contained a $4 million deficiency in the general fund.  According to him, some of the funds allocated to the general fund were statutorily restricted on their usage.  For example, he noted the 5-cent ad valorem tax statutorily designated towards capital improvement projects was included as operating revenue in the Tahoe County budget.  Another example he provided concerned the room tax levied to fund transportation costs.  He noted the NRS required the entire amount to be dedicated to transportation, not just a portion of it.

 

Mr. Holler explained the TCC’s proposal suggested that legislation be enacted to allow general use of room tax revenues.  Conversely, the report claimed that a better funding source, other than room taxes, was being investigated for services such as libraries, parks and recreation, and senior centers.  It was his opinion that the budget allocated room tax dollars to fund all those services, as well as other county services.

 

Regarding the SCCRT and motor vehicle privilege tax distributions, Mr. Holler said second-tier distributions existed under the current formulas and would need to be revised.  Referring to Senator Adler’s comments about the guaranteed status of the new county, Mr. Holler said he had estimated the new county would receive approximately $3.2 million in guaranteed funds while Douglas County currently received $2.5 million.

 

Due to the lateness of the hour, Senator Porter interrupted to suggest that the representatives of the four entities (Douglas County Commission and School Board, and Washoe County Commission and School Board) and those of the TCC meet to determine if a resolution of the problems could be reached.  He asked that the results be given to the chairmen of the Senate and Assembly Committees on Government Affairs no later than Monday, June 9th.

 

Senator O’Connell explained that Mr. Jabara and Mr. Etchegoyhen had met with her prior to the start of this meeting.  She noted both men were willing to work together and expressed confidence they would do so.

 

Senator Porter asked that the record reflect the following:

 

“Washoe School District not being here is an example of the problem.  And I would like to send that message to them.  This is a prime example and they represent 50,000 children.  Its unacceptable they’re not here and this just reinforces why there’s a problem.”

 

Senator Mathews commented the school board usually held its monthly meetings on Tuesdays night which could explain the absence of any board members at this hearing.

 

Senator O’Connell noted representatives from Washoe County were present and had been through the entire meeting.  She invited them to testify and apologized to the Douglas County representatives for disrupting their presentation.

 

Mr. Guild assured the Chairmen that the speakers had discussed the relevant material.  He assured the members Douglas County representatives would work with the proponents to determine a resolution to the problems.

 

Chairman Bache informed Senator Porter that during the 1995 Session, the WCSB took no position on A.B. 322 of the 68th Session, a bill which would have created Ponderosa County.

 

Senator Porter responded:

 

         “I appreciate that they may be neutral, but the fact they’re not here and not present and not hearing the concerns of their constituents is the problem.  And they may have a school board meeting, but they have hundreds of employees that work at that district and I still find it unacceptable.”

 

Senator Adler remarked:

 

“And I’d just like to point out that a good portion of the Douglas County School Board’s in attendance and has been here all afternoon.”

 

Responding to requests by Chairman O’Connell and Assemblywoman Freeman, Mary Henderson, Public Affairs Director, and Katy Simon, Assistant County Manager and Finance Director, approached the witness table.

 

Ms. Henderson explained the Washoe Board of County Commissioners had faced similar legislation many times.  The board was consistently neutral each time, she said.  The most compelling reason for such neutrality was the responsiveness by the board to Lake issues.  Ms. Henderson admitted earlier testimony discussed areas of concern that she had not heard before.  But, she assured the committee those issues could be, and would be, addressed.  “We have a tremendous respect for our citizens at Incline—they’re a very vital part of our county,” she commented.  And if the legislature did not create a separate county, those residents would still be Washoe County taxpayers.

 

Ms. Henderson informed the members that the board of county commissioners held meetings at the Lake.  Also, the board acted as a facilitator with the WCSB.  She opined a similar service could be provided with the RSCVA.

 

According to Ms. Henderson, staff of Washoe County had cooperated fairly and honestly with the TCC by providing analytical and fiscal data.  It was her opinion that the board members preferred not to lose the Lake portion of Washoe County because Valley citizens had expressed “pride in the face that that is a piece of Washoe County, that’s a piece of our history.”

 

One of the comments made during earlier testimony concerned snow removal.  Ms. Henderson noted her surprise at this issue.  As mentioned in testimony provided by the Douglas County representatives, Ms. Henderson informed the members many complaints received by Washoe County during the severity of the storms in January 1997 concerned roads maintained by NDOT.  However, Ms. Henderson explained Washoe County snow removal service was provided on many state highways to assist Washoe residents.

 

Ms. Simon noted her appreciation for the cooperative effort exemplified by the TCC representatives.  She said Washoe County would support and cooperate with any problem-solving efforts the committee deemed appropriate.

 

According to Ms. Simon, she, along with Ms. Henderson, identified three areas of concern discussed at this hearing:

 

1.    Service levels in health and social services - Ms. Simon assured the members she would meet with Washoe County staff to determine the specific problems and the best way to address them;

 

2.    The RSCVA - Ms. Simon noted the issues were not specific to Washoe County as the RSCVA was a separate entity but she concurred with Ms. Henderson that the county might be able to act as facilitator to address the concerns; and

 

3.    Increased assessed valuation in Incline Village - Ms. Simon remarked she would meet with staff to determine if a new methodology could be devised.

 

Further, Ms. Simon said Washoe County staff would work with the TCC on its analyses, and she requested a copy of the budget proposal as she had not yet received one.  Lastly, Ms. Simon stated for the record that Washoe County had “a substantial capital investment in Incline Village in that area of Washoe County which include the library and the books and the technology investments, the justice court, the sheriff’s substation, the snow removal equipment and the roads equipment.”

 

In response to a question by Mrs. Freeman concerning possible losses to the WCSD budget if Tahoe County were created, Ms. Henderson noted her reluctance to answer for the school district.  She commented some estimates revealed a gain to Washoe County based on the distribution formula in the Distributive School Account.  She advised the school district personnel as well as LCB fiscal staff could better answer Mrs. Freeman’s question.

 

Chairman O’Connell invited members of the DCSB to testify.  The following individuals testified:

 

·       Cheri Johnson, President;

 

·       Mary Bennington, Vice President;

 

·       Don Forrester, Member; and

 

·       Pendery Clark, Superintendent.

 

The following data is a brief summary of testimony given from a prepared speech which is attached to these minutes and identified as Exhibit F.  For more information, please see Exhibit F.

 

Ms. Bennington provided background and characteristics of DCSD.

 

·       Total enrollment:  7,301 students.

 

·       Carson Valley students:  6,396.

 

·       Lake students:  905.

 

·       School boundaries encompassed Topaz Lake to Lake Tahoe.

 

·       Twelve school sites included seven elementary schools and five secondary schools.

 

·       Gardnerville Elementary School was the oldest facility dating back to 1909.

 

·       Two elementary schools were constructed in 1996.

 

·       Three of the district’s older sites were at Lake Tahoe.

 

·       C. C. Meneley and Scarselli Elementary Schools were named National Blue Ribbon Schools.

 

·       The district had four Milken Foundation Award winners in the past 5 years, including Marilyn Cook from ZCES and Dennis O’Connor from KMS, both at Lake Tahoe.

 

·       Nevada State Teacher of the Year for 1996 was Jeff Johnston, a science teacher at Pau-Wa-Lu in the Gardnerville Ranchos.

 

·       Douglas County School District was the only district invited by Governor Robert J. Miller to attend the Governor’s Education Summit in December in Las Vegas.

 

·       In 1992, the DCSD passed its largest bond issue with a promise to the taxpayers that the district would not request an additional bond for at least 10 years.

 

·       The bond paid for construction of three new schools as well as major additions at Douglas High School.

 

·       All construction projects were completed on time and within budget.

 

·       The district promised its taxpayers to lower its tax rate by at least ½-cent per year.  The rate for the bond began at 31 cents.  Last year, the rate was lowered to 29 cents, and the district lowered the rate for the upcoming tax year to 22½ cents—a 6½-cent decrease in 1 year.

 

Ms. Bennington noted she resided at the Lake and commended the district for the education provided to her children.  She said, “When I listen to the plans for the new county and district, not once have I heard the Tahoe Citizens Committee address how they plan to improve the education our children receive.  The issue always comes down to control.  Is this worth duplicating all the administration in the school district and the county?”  She concluded by commenting, “I fail to see how this proposal is in the Tahoe taxpayer’s best interest and, most importantly, how this change can improve the education now provided by the Douglas County School District.”

 

Following Ms. Bennington’s remarks, Ms. Johnson discussed accountability and comparability.  She referred to two reports:  A Comparative Study of Douglas County Schools, prepared by Carolyn Hughes Chapman, Ph.D., Associate Professor of Educational Leadership, University of Nevada, Reno (dated March 1997), identified as Exhibit G to these minutes; and Douglas County School District Accountability Report 1995-1996, identified as Exhibit H to these minutes.  Because of the size of Exhibit G, attached to these minutes is a copy of the report’s table of contents.  For more detail, the entire report is on file with the Research Library of the LCB.

 

Ms. Johnson noted the following:

 

·       Douglas County School District students had consistently high test scores.

 

·       Eighth-grade students excelled in CTBS scores, particularly in reading tests in which the one-third of the students scored in the top quartile.

 

·       Approximately 60 percent of the students took the ACT exam.

 

·       Douglas County provided a high level of support services at every facility, which included counselors, reading specialists, computer technicians, library technicians, music and art teachers, and physical education instructors.

 

·       Although the Nevada Plan formula would have allowed 11 teachers at Whittell High School, Douglas County provided additional funding and allotted 14 teachers to the school.

 

·       Students at Whittell High School were able to take college preparatory classes and to receive college credit for certain approved courses.  The district installed “Distance Learning” capabilities as well as interactive video.

 

·       On page 9 of Exhibit G, statistics showed that 88.4 percent of parents district wide scored their children’s schools with an “A” or “B”; 90 percent of the parents of students at KMS and 100 percent of parents at ZCES rated those facilities as an “A” and/or “B.”  Whittell High School was given significantly lower satisfaction rates and those concerns were being addressed by the district.

 

·       The Lake’s schools enjoy low student to counselor ratios.  The Valley elementary schools have 1 counselor for every 844 students, ZCES has 1 counselor for 364 students.  The counselor at the Lake was a licensed school psychologist.

 

·       Legislators in the State of Nevada identified low class sizes as an important component of a quality education.  Therefore, low class sizes in the primary grades were consistent throughout the district.  The students at the Lake were fortunate to experience low class sizes in the upper elementary classes as well.  Whittell High School had small classes as well where English classes averaged 16.5 students and a Physics class had 5 students.  (See Table 12 on page 19 of Exhibit G for more detail.)

 

·       Douglas County School District expenditures per student were consistently higher at the Lake Schools.  In 1995-1996, 12.7 percent of Douglas County students were enrolled at the three Lake schools.  During that same time, the Lake schools received 15.4 percent of the district’s expenditures.  The difference at the high school level was the most significant where the district spent $7,613 per student at Whittell High compared to $5,253 per student at Douglas High, a difference of $2,360.

 

·       In nearly every category of testing given by the district for both state and local tests, the Lake students scored higher.  (See pages 38 and 53 of Exhibit G for more detail.)

 

Mr. Forrester discussed facilities at Lake Tahoe as well as the ramifications to all citizens of Douglas County if Tahoe County were created.

 

Addressing the issue of facilities first, Mr. Forrester said the district owned three facilities at the Lake and nine in the Valley.  In response to concerns from Lake parents, the district created a Lake Tahoe Schools Facilities Task Force comprised of 24 members, most of whom were Lake residents along with Rick Kester, the district’s Business Manager, and Mr. Forrester.  The task force’s goals were to analyze the schools at the Lake and compile a prioritized capital improvement plan for those schools. 

 

The report, presented to the DCSB at its March meeting, showed that the Lake schools were older than the majority of the Valley schools.  It identified items that needed repair or improvement as follows:

 

·       At ZCES, the school needed carpeting, additional kindergarten rooms, sinks and hot water, and other miscellaneous items.

 

·       At KMS, the task force determined that the asphalt had to be replaced around the schools, carpeting had to be replaced, concrete had to be repaired, and the portable music room had to be moved and a new music room built.

 

·       At GWHS, the committee found some major improvements were needed, including a library/research center, additional computer and science laboratories, carpeting, and a multi-use field.

 

When asked to prioritize the most important issue at the Lake, the task force determined the following improvements should be handled in the order in which they appear below:

 

1.    The library/research center at GWHS;

 

2.    Additional classrooms at ZCES; and

 

3.    A new science/computer laboratory at GWHS.

 

Mr. Forrester said on May 21, 1997, the DCSB allocated $1.342 million to the Lake for capital improvements, including the library at GWHS.

 

Mr. Forrester explained the board was responsive to prior requests by Lake residents as indicated by its allocation of over $800,000 to fund upgrades to computer and technology laboratories, music rooms, and networking the schools.  He assured those present the board would continue to be responsive.

 

He turned his attention to the proposed creation of Tahoe County.  According to Mr. Forrester, the proposed budget did not include information regarding staff of the various schools.  He mentioned DCSD employed individuals whose responsibilities were to more than one school, such as gifted and talented teachers, professional development trainers, grounds people, computer technicians, and other classified staff.

 

Mr. Forrester noted DCSD could lose approximately $105 per student with the addition of another county in the Nevada Plan formula.  That figure would total approximately $643,000 district wide.  Further, Mr. Forrester noted Tahoe County could become like Eureka County where an excess of funds over and above the other counties caused a recapture plan to be initiated.

 

Lastly, Mr. Forrester informed the members that although DCSD would lose about 13 percent of its students if Tahoe County were created, it would lose nearly 45 percent of its total assessed valuation.  Should DCSD require a bond in the future, the expense to the remaining taxpayers could double.

 

Ms. Clark testified after Mr. Forrester and began her statements by assuring the members that she, along with the members of the DCSB, considered education “very important.”  She said, “Whenever you’re talking about people’s children, it becomes very emotional, and we take it very seriously.”

 

She noted representatives of the TCC discussed two main issues:

 

1.    Facilities; and

 

2.    Whittell High School, in particular.

 

Ms. Clark noted Mr. Forrester had covered the issue of facilities; therefore, she would discuss GWHS in more depth. 

 

·       Ms. Clark admitted there were problems at GWHS relating to “school leadership and personnel,” and she informed the committee the DCSB was addressing those matters. 

 

·       Regarding honors classes at GWHS, Ms. Clark stressed such courses were offered at the high school and had been offered in past years as well.  She noted all college preparatory courses were available to interested students as well as “alternative classes for students who are not going on to college,” she said.  She referred the members to pages 46 and 47 of Exhibit G.

 

·       The DCSB held meetings in Lake Tahoe on a regular basis and such meetings were conducted at one of the Lake schools.

 

Senator Porter commended the members of the DCSB as well as Ms. Clark for their efforts during hearings of the subcommittee authorized by S.C.R. 30 of the 68th Session.  He commented the board had been active during the 69th Session as well.  He concluded, “I think its an example of a school board that’s trying very hard to make a difference.”

 

Concluding the presentation by the DCSD, Mr. Forrester reiterated his opinion that dividing the county would not be beneficial to the students.  He said the board had been responsive to Lake parents.  Mr. Forrester explained it took time for the board to form committees and obtain results from hearings.  But, he assured the members, “we will continue to listen to their needs—we are not going to ignore them.”

 

Senator Adler noted that earlier comments implied only 11 percent of students from GWHS continued their education by attending college.  He noted the percentage of students who took college entrance examinations was higher than 11 percent.  Ms. Clark responded the low percentage was one graduating class from GWHS.  The year before, GWHS had 96 percent of its students continue with college.  The board anticipated that approximately 80 percent of GWHS graduating students would move on to college.

 

Chairman Bache said he had been informed that DCSD had cut its fine arts programs.  He specifically mentioned the district’s music program and asked if the information he had received was accurate.

 

Ms. Clark explained during the last 2 years, Douglas County completed a pilot implementation program to expand the fine arts.  Art and music classes were split during the school year for elementary students whereas in the past, music was offered for a full school year.  Ms. Clark assured Assemblyman Bache that the district was committed to offering fine arts to its students.

 

Following the school district personnel, Sandy Cable, Executive Director, and Mark Neddenriep, President, Business Council of Douglas County, testified.

 

Ms. Cable commended the TCC proponents “for a very thorough and impressive presentation.”  She noted the council had worked with members of the TCC and had informed the Valley community of the Lake’s concerns.  She said the council’s membership was comprised of both Lake and Valley businesses.

 

Ms. Cable explained the council had been “extremely supportive of addressing those concerns with the former county commission and continue to address the concerns of the TCC with the current county commission.”  She informed the members that the “antagonism of the previous county, or select members of the previous county board of commissioners . . . was not exclusive to Tahoe concerns or Tahoe issues or Tahoe businesses.”

 

Lastly, Ms. Cable assured the members that the council was committed to “making sure that all residents of Douglas County, whether they live at the Lake or at the Valley, have a chance to settle their problems and their differences in an amenable and a well-working manner.”  She introduced Mr. Neddenriep.

 

Mr. Neddenriep explained the Business Council was a non-profit organization which consisted of 45 “leaders in business in Douglas County.”  It received 100 percent of its revenues from dues.  Mr. Neddenriep said, “While every member of the council applauds the efforts and determination of the TCC for bringing to the forefront some of the critical issues facing the Tahoe residents, a majority of the members of the Douglas County Business Council oppose the formation of a new Tahoe County.”  He informed the members that the council published a position statement which was mailed to the committee members (a copy of which was not provided as an exhibit to these minutes).

 

Mr. Neddenriep noted the following:

 

1.    The TCC implied that the Lake schools were not receiving the same quality of education as other district schools.  The DCSD stated that capital projects for the Valley schools were completed and would begin funding improvements on Lake Tahoe schools.

 

2.    The TCC complained that the Douglas County government ignored concerns of Lake residents, especially the request to spend a larger share of room tax on tourism promotion.  The newly-seated commission committed to prioritizing Lake issues immediately; including, but not limited to, a larger share of TOT being allocated to tourism at the Lake.

 

3.    The TCC members estimated that future population trends would create a diluted representation for Lake residents in Douglas County government.  The Lake would continue to have representation by specific action and endorsement as well as continual participation in the election of all commissioners-at-large.  Lake residents had been and would continue to be vocal and influential in all issues.

 

4.    The TCC stressed that TRPA actions were specific to the Lake area and were better addressed by a unified Lake government rather than three separate counties.  With TRPA demanding no growth, Lake residents and businesses would be precluded from growth activities which generate additional revenue for government responsibilities.  The alternative for future revenues would be to increase property or other taxes or create new taxes.  Those taxes work best when spread over a larger population bases.  Energies of Lake residents could be united in response to TRPA without a special county being created.

 

Mr. Neddenriep noted that “a method of forming a super county precludes the ability of the affected population to vote on the issue.”  The Douglas County residents, he said, would not have an opportunity to express their opinions at the ballot box on the issue, one which he called the “most significant issue affecting their lives.”  He reiterated that the newly-seated commissioners were “expressly elected to receive public input and act accordingly.  They have gone on record as prioritizing Lake issues.  They have gone on record that promoting Lake Tahoe is a Douglas County issue.” 

 

And, regarding the school district, Mr. Neddenriep said, “The most sensitive and emotional issue—the education of our children—is always a reason for concern.  The State of Nevada, in its wisdom, has created a district concept which ties the local economy to that of schools.  On this issue, there is no Lake versus Valley point of view.  All parents must work together for the best education we can provide our children.”

 

Dave Bolick, Executive Director, and Roxanne Stangle, President, Carson Valley Chamber of Commerce and Visitors Authority (CVCCVA), testified next.  Mr. Bolick noted his appreciation for the opportunity to present information relative to Tahoe County, and asked Ms. Stangle to present the CVCCVA’s view.

 

Ms. Stangle briefly expressed the opposition of the CVCCVA’s 400 members to the creation of Tahoe County.  She said the CVCCVA supported one county and one school district within Douglas County.  She reminded the members that the cost analyses given during this hearing revealed that the creation of Tahoe County would not be revenue neutral.  On behalf of the CVCCVA, she noted such a division would be beneficial for Douglas County residents.

 

Terry D. Clodt, an employee of South Lake Tahoe and a resident of Douglas County, spoke against Tahoe County.

 

Prior to the start of the meeting, Chairman Bache received a two-page letter from Gary D., Pamela T., Douglas M., and Heather S. Midkiff, residents of Zephyr Cove.  The letter urges the committee’s support for Tahoe County and is included as Exhibit I to these minutes.

 

Chairman O’Connell informed those present that future meetings would be at the call of the chair following receipt of the report on Monday, June 9th.  She thanked the audience for their attendance and patience during the hearing.

 

There being no further business before the committee, Senator O’Connell adjourned the meeting at 8:55 p.m.

 

RESPECTFULLY SUBMITTED:

 

 

 

                                            

Philene Anderson,

Committee Secretary

 

 

APPROVED BY:

 

 

 

                                                                                                                

Assemblyman Douglas Bache,                 Senator Ann O’Connell,

Co-Chairman                                         Co-Chairman

 

 

DATE:                                                   DATE: