Accounting 2017-2020
Accounting Issues
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Posts
Our Village Voice updated their status.
More Financial SHENANIGANS with the Utility Fund
Over the past year, several citizens have expressed concerns that the Board of Trustees is appropriating money for projects for which the District does not have money.
Particular attention was brought to the Board about our Dynamic Duo, Pinkerton and Eick, falsely representing that the Utility Fund had over $12,500,000 in UNRESTRICTED cash reserves. When, in fact, over $9,700,000 was collected over the past six years through large SEWER RATE increases and committed to completing Phase II of the $23,000,000 Effluent Pipeline Project. $2 million was to be set aside annually for more than ten years to finance this project.
According to Board Policy 19.1 and 19.2 the Utility Fund, which is an Enterprise Fund, should always have at least $4,700,000 in working capital. To lower that requirement, our Dynamic Duo decided to substitute the policy for Special Revenue Funds which would require less than half that amount, to soften the blow. Even that maneuver couldn’t solve the problem.
The dilemma is simple, the Board majority at the end of June 2017 had, together with the funds committed to the Pipeline, appropriated $12,993,000 for capital projects when there was only $12,536,210 in reserves to pay for them. As a consequence, the Utility Fund is upside down $457,000 in cash and there isn’t a single dime available for the $4,700,000 required for emergency reserves. To cover the planned expenditures for 2018, the Board majority also allocated $1,000,000 of the annual sewer fees collected for the Pipeline to be used for the construction of other utility fund capital projects.
Sadly, because Chair Wong and Trustees Horan and Morris don’t have a clue or an interest in what’s going on, they continued in June, to authorize another $399,000 for projects and cost over runs to be paid by NONEXISTENT reserves. Add all of this up, and the Utility Fund is short more than $6,500,000. This is not only irresponsible financial management, it is a direct violation of Nevada Law.
What to expect. Only one thing. More Utility Rate hikes next year and many years thereafter…
#Accounting #Utility
Over the past year, several citizens have expressed concerns that the Board of Trustees is appropriating money for projects for which the District does not have money.
Particular attention was brought to the Board about our Dynamic Duo, Pinkerton and Eick, falsely representing that the Utility Fund had over $12,500,000 in UNRESTRICTED cash reserves. When, in fact, over $9,700,000 was collected over the past six years through large SEWER RATE increases and committed to completing Phase II of the $23,000,000 Effluent Pipeline Project. $2 million was to be set aside annually for more than ten years to finance this project.
According to Board Policy 19.1 and 19.2 the Utility Fund, which is an Enterprise Fund, should always have at least $4,700,000 in working capital. To lower that requirement, our Dynamic Duo decided to substitute the policy for Special Revenue Funds which would require less than half that amount, to soften the blow. Even that maneuver couldn’t solve the problem.
The dilemma is simple, the Board majority at the end of June 2017 had, together with the funds committed to the Pipeline, appropriated $12,993,000 for capital projects when there was only $12,536,210 in reserves to pay for them. As a consequence, the Utility Fund is upside down $457,000 in cash and there isn’t a single dime available for the $4,700,000 required for emergency reserves. To cover the planned expenditures for 2018, the Board majority also allocated $1,000,000 of the annual sewer fees collected for the Pipeline to be used for the construction of other utility fund capital projects.
Sadly, because Chair Wong and Trustees Horan and Morris don’t have a clue or an interest in what’s going on, they continued in June, to authorize another $399,000 for projects and cost over runs to be paid by NONEXISTENT reserves. Add all of this up, and the Utility Fund is short more than $6,500,000. This is not only irresponsible financial management, it is a direct violation of Nevada Law.
What to expect. Only one thing. More Utility Rate hikes next year and many years thereafter…
#Accounting #Utility
Nov 07, 2017 9:49:30am
Our Village Voice updated their status.
Improper use of the Recreational Standby Fee and Service Charge assessed on parcel owners.
Incline Village General Improvement District (District) annually charges property owners a Recreational Standby Fee and Service Charge. Approximately 8,200 parcels and dwelling units pay almost $6,000,000 to prop up all of the venues except the beaches. The amount is set annually based on a budget which determines what might be needed each year to cover ALL costs. There is also a Beach Fee of approximately $800,000 to cover All costs for the Beaches
IVGID in order to confuse everyone calls the Recreational Standby Fee and Service Charge a Facility Fee, a Recreational Fee, or an Availability of Service Fee. Let’s call it the FEE
The FEE prior to 2011 would increase or decrease annually based on venue revenues which are largely dependent on weather conditions. In 2011, the Board, wanting your money permanently, decided that the Fee should be SMOOTHED out and remain the same each year. This was a slick idea since the FEE had been dramatically increased in order to repay the bonds to remodel the Champion Golf Course, build a new Chateau and build the new Diamond Peak building. These bonds will be fully repaid within the next year YET THE AMOUNTS CONTINUE TO BE COLLECTED and redirected to spend on something else.
Pinkerton and Eick in 2015 obtained Board approval to change the accounting format from Enterprise to Governmental in order to split the FEE and other revenues into three separate funds: Operations, Capital Projects and Debt Service. Sounded good other than the change was contrary to the requirements under the NRS and accounting principles.
For fiscal years 2016 and 2017 the FEE on average was allocated $2,116,000 for operations, $2,572,000 for capital projects and $1,294,000 for debt service.
For 7 years from 2009 to 2015 drought conditions caused poor ski conditions requiring the FEE to prop up operations. In the past two years Diamond Peak’s revenues skyrocketed and the FEE allocated for operations was NOT NEEDED. With additional revenues there is now $6,326,000 in EXCESS money ABOVE the required $3,994,000 “appropriate level of fund balance”.
$6,326,000 in EXCESS OPERATING MONEY. Enough money to ELIMINATE the operating portion of the FEE for the next three years. But wait, because of “smoothing” the Board on a 3-2 vote decided to continue collecting the same FEE for 2017-2018.
The State of Nevada requires IVGID to disclose a plan for any excess funds. The Board’s own Resolution 1838 states the excess funds are to be used to MAINTAIN recreational activities not build new ones.
The new five year capital plan approved on a 3-2 vote states the EXCESS FUNDS will be transferred from operations to capital projects for Parasol, the Dog Park and the expansion of Diamond Peak. Again, the Board majority chooses to ignore the State requirement and the Board resolution.
So what’s the BIG DEAL? Simple. This Board of Trustees need to wake up and vote to either return the EXCESS FEE or start MAINTAINING existing venues and drop the fantasies of new projects which cannot be done with the EXCESS funds. It is against the law. If they want new projects ask for money from the citizens not take it illegally.
#Accounting
Incline Village General Improvement District (District) annually charges property owners a Recreational Standby Fee and Service Charge. Approximately 8,200 parcels and dwelling units pay almost $6,000,000 to prop up all of the venues except the beaches. The amount is set annually based on a budget which determines what might be needed each year to cover ALL costs. There is also a Beach Fee of approximately $800,000 to cover All costs for the Beaches
IVGID in order to confuse everyone calls the Recreational Standby Fee and Service Charge a Facility Fee, a Recreational Fee, or an Availability of Service Fee. Let’s call it the FEE
The FEE prior to 2011 would increase or decrease annually based on venue revenues which are largely dependent on weather conditions. In 2011, the Board, wanting your money permanently, decided that the Fee should be SMOOTHED out and remain the same each year. This was a slick idea since the FEE had been dramatically increased in order to repay the bonds to remodel the Champion Golf Course, build a new Chateau and build the new Diamond Peak building. These bonds will be fully repaid within the next year YET THE AMOUNTS CONTINUE TO BE COLLECTED and redirected to spend on something else.
Pinkerton and Eick in 2015 obtained Board approval to change the accounting format from Enterprise to Governmental in order to split the FEE and other revenues into three separate funds: Operations, Capital Projects and Debt Service. Sounded good other than the change was contrary to the requirements under the NRS and accounting principles.
For fiscal years 2016 and 2017 the FEE on average was allocated $2,116,000 for operations, $2,572,000 for capital projects and $1,294,000 for debt service.
For 7 years from 2009 to 2015 drought conditions caused poor ski conditions requiring the FEE to prop up operations. In the past two years Diamond Peak’s revenues skyrocketed and the FEE allocated for operations was NOT NEEDED. With additional revenues there is now $6,326,000 in EXCESS money ABOVE the required $3,994,000 “appropriate level of fund balance”.
$6,326,000 in EXCESS OPERATING MONEY. Enough money to ELIMINATE the operating portion of the FEE for the next three years. But wait, because of “smoothing” the Board on a 3-2 vote decided to continue collecting the same FEE for 2017-2018.
The State of Nevada requires IVGID to disclose a plan for any excess funds. The Board’s own Resolution 1838 states the excess funds are to be used to MAINTAIN recreational activities not build new ones.
The new five year capital plan approved on a 3-2 vote states the EXCESS FUNDS will be transferred from operations to capital projects for Parasol, the Dog Park and the expansion of Diamond Peak. Again, the Board majority chooses to ignore the State requirement and the Board resolution.
So what’s the BIG DEAL? Simple. This Board of Trustees need to wake up and vote to either return the EXCESS FEE or start MAINTAINING existing venues and drop the fantasies of new projects which cannot be done with the EXCESS funds. It is against the law. If they want new projects ask for money from the citizens not take it illegally.
#Accounting
Dec 09, 2017 3:02:56pm
Our Village Voice updated their status.
DECEIT AND DENIAL
This is the story of an IVGID employee’s sale of public land designated as open space to private buyers without Board approval or a public process and the subsequent denials of any wrongdoing by the General Manager and Legal Counsel. Since the story has many facets and is still unfolding, we thought it best to report it in three parts. Part 1 is a summary. Part II are the details. Part III (yet to come) provides an analysis of the Denials along with our informed conclusions. We hope you will share your insights, questions, and comments.
Part I – Summary
How can an IVGID employee who is entrusted with the District’s Finances, Technology and Risk Management make false representations to the Board and the County, take actions that invalidate his representations, and violate Nevada law AND NOT be held accountable?
In late December of 2017, the Reno Gazette Journal disclosed that IVGID Director of Finance Eick deceived Washoe County, the IVGID Board and our Citizens. Without seeking Board approval or providing public notice, Mr. Eick in defiance of Nevada Statutes unlawfully sold three parcels of public land designated as OPEN SPACE to private buyers of his choosing. He set the prices, signed the deeds and collected the money. These unbuildable parcels which carried Recreation and Beach privileges were not appraised nor advertised for public bid and the sales were never approved by the Board of Trustees. These parcels were part of 87 “tax delinquent” land parcels IVGID acquired from Washoe County at no cost for the public purpose of open space. In response to these disclosures and a letter from the Washoe County District Attorney, IVGID General Manager Pinkerton and Legal Counsel Guinasso issued a series of denials in the Bonanza, the District’s website and the Reno Gazette. We find these denials unsubstantiated by the known facts and believe that this matter warrants further investigation. Along with many of our citizens we stand with Washoe County Commissioner Berkbigler, IVGID Trustees Dent and Callicrate demanding answers!
Part II – The Details
In the interest of finding and reporting THE FACTS, we have reviewed IVGID and Washoe County Staff Memos, Board Packets and Minutes, IVGID Resolutions and Board Policies, Nevada Statutes, IVGID Comprehensive Annual Financial Reports and Washoe County Tax Assessor Records. Here are the details along with a few pauses for our questions and comments:
All 87 Parcels were zoned as “unbuildable.” Beginning as far back as 1986 Washoe County and other Taxes along with IVGID’s Recreation and Beach Fees were not paid. These delinquencies reached the astronomical sum of $800,000. The majority of these delinquent charges were Recreation and Beach Fees assessed by IVGID. The Washoe County Treasurer held these and other tax delinquent parcels in Trust and provided an opportunity for public entities to secure these parcels at no cost for public purposes as defined under NRS 361.603.
In July of 2012, the IVGID Board of Trustees approved a resolution to acquire 87 Washoe County tax delinquent unbuildable parcels for zero cost for the public purpose of Open Space as defined in NRS 361.603. Director of Finance Eick stated in his Memo to the Board that 69 of the tax delinquent parcels were on the Recreation Fee Roll causing a distortion in the District’s Budget and could not be removed from the Roll until the County transferred the parcels. According to Mr. Eick, IVGID’s primary purpose in acquiring the parcels was to remove them from the Recreation Roll and record the ownership of the parcels in the Community Services Fund.
Along with the Board’s Resolution, Mr. Eick represented to Washoe County that the 87 tax delinquent parcels would be used for the public purpose of Open Space as defined under NRS 361.603. In October of 2012, Washoe County under NRS 361.603(5) waived the $800,000 of delinquent back taxes and fees and transferred these parcels to IVGID for free.
SO, WHERE DID MR. EICK GO ASTRAY?
1. The more than $718,000 of delinquent Recreation and Beach Fees were never disclosed in ANY of the District’s Comprehensive Annual Financial Reports (“CAFR”).
2. In the same year the 87 parcels were acquired, Mr. Eick played fast and loose with his prior representations to the Board and our Citizens. Although he stated that all parcels would be placed in the Community Services Fund he disclosed in Note 4 on page 39 of the 2013 CAFR that only 78 of the Parcels would be held in the Community Services Fund. The remaining 9 parcels were placed in the General Fund as they could be “restored to a form that makes them buildable at some point in the future.” Placing these potentially buildable parcels carrying a higher value into the General Fund, a Fund that has no past financial interest in the parcels, is just plain wrong! Simply stated, Mr. Eick has enabled the General Fund to own land reclaimed for delinquent fees that it is not owed.
3. Playing Bait and Switch with the County, after having stated that the parcels would remain as Open Space he decided to sell them. Note 4 of the same CAFR states that the parcels “could be sold at some future point because they carry the ability to have recreation privileges while remaining unbuildable.” And there is one more EICK lie revealed in this short footnote. Although he stated to the Board and our Citizens that the purpose for acquiring these parcels was to remove them from the Recreation Rolls –opening the door to future sales, translated to putting them back on the Recreation Rolls.
4. In March and July of 2014, Mr. Eick sold two lots. In addition to his failure to consult with the County on selling the parcels designated as Open Space, he also chose to ignore NRS 318.160 which requires Board approval of the sale of public property. Instead, he decided the price and the terms. He determined who the brokers and buyers would be. He further contrived a worksheet with selective years of delinquent Recreation and Beach Fees to reflect his predetermined price. There is no correlation between the actual years and respective interest charges these parcels were delinquent and the calculations Mr. Eick came up with to justify the sales price. There was no public notice or appraisal. There was no disclosure in any of the Board Minutes citing the sale of these two parcels.
5. There is a new twist under Note 4 in the 2014 and 2015 CAFRs. First, the 87 parcels disclosed in the 2013 CAFR disappear in both years and there is no mention of the sale of any parcels. Instead, we learn in the 2014 CAFR that the District acquired 4 tax delinquent parcels which are held in the Community Services Fund. The 2015 CAFR discloses the acquisition of 1 tax delinquent parcel held in the Utility Fund. Any one reading the 2014 and 2015 CAFRs would not have an accurate accounting of the District’s acquisition of tax delinquent parcels.
6. Following the same unilateral decisions made in 2014, Mr. Eick in 2015 sold another lot without consultation or consent of the County and without Board approval or notification. Although, we have subsequently learned that both Mr. Pinkerton and Attorney Guinasso approved this sale before placing a moratorium on selling additional lots.
7. In the 2016 and 2017 CAFRs under Note 4, Mr. Eick states that there are approximately 80 parcels. He seems to have lost count.
8. In the 2016 and 2017 CAFRs under Note 4 Mr. Eick discloses that “these lands are not held for the purpose of income or profit.” This statement would indicate that the parcels would actually be held for the public purpose of open space and no longer be available for future sales. Yet, Mr. Guinasso stated at the December Board Meeting and on the District’s website and in his newspaper opinion piece that new policies would be developed in order to sell the parcels.
#Violations #Misc
This is the story of an IVGID employee’s sale of public land designated as open space to private buyers without Board approval or a public process and the subsequent denials of any wrongdoing by the General Manager and Legal Counsel. Since the story has many facets and is still unfolding, we thought it best to report it in three parts. Part 1 is a summary. Part II are the details. Part III (yet to come) provides an analysis of the Denials along with our informed conclusions. We hope you will share your insights, questions, and comments.
Part I – Summary
How can an IVGID employee who is entrusted with the District’s Finances, Technology and Risk Management make false representations to the Board and the County, take actions that invalidate his representations, and violate Nevada law AND NOT be held accountable?
In late December of 2017, the Reno Gazette Journal disclosed that IVGID Director of Finance Eick deceived Washoe County, the IVGID Board and our Citizens. Without seeking Board approval or providing public notice, Mr. Eick in defiance of Nevada Statutes unlawfully sold three parcels of public land designated as OPEN SPACE to private buyers of his choosing. He set the prices, signed the deeds and collected the money. These unbuildable parcels which carried Recreation and Beach privileges were not appraised nor advertised for public bid and the sales were never approved by the Board of Trustees. These parcels were part of 87 “tax delinquent” land parcels IVGID acquired from Washoe County at no cost for the public purpose of open space. In response to these disclosures and a letter from the Washoe County District Attorney, IVGID General Manager Pinkerton and Legal Counsel Guinasso issued a series of denials in the Bonanza, the District’s website and the Reno Gazette. We find these denials unsubstantiated by the known facts and believe that this matter warrants further investigation. Along with many of our citizens we stand with Washoe County Commissioner Berkbigler, IVGID Trustees Dent and Callicrate demanding answers!
Part II – The Details
In the interest of finding and reporting THE FACTS, we have reviewed IVGID and Washoe County Staff Memos, Board Packets and Minutes, IVGID Resolutions and Board Policies, Nevada Statutes, IVGID Comprehensive Annual Financial Reports and Washoe County Tax Assessor Records. Here are the details along with a few pauses for our questions and comments:
All 87 Parcels were zoned as “unbuildable.” Beginning as far back as 1986 Washoe County and other Taxes along with IVGID’s Recreation and Beach Fees were not paid. These delinquencies reached the astronomical sum of $800,000. The majority of these delinquent charges were Recreation and Beach Fees assessed by IVGID. The Washoe County Treasurer held these and other tax delinquent parcels in Trust and provided an opportunity for public entities to secure these parcels at no cost for public purposes as defined under NRS 361.603.
In July of 2012, the IVGID Board of Trustees approved a resolution to acquire 87 Washoe County tax delinquent unbuildable parcels for zero cost for the public purpose of Open Space as defined in NRS 361.603. Director of Finance Eick stated in his Memo to the Board that 69 of the tax delinquent parcels were on the Recreation Fee Roll causing a distortion in the District’s Budget and could not be removed from the Roll until the County transferred the parcels. According to Mr. Eick, IVGID’s primary purpose in acquiring the parcels was to remove them from the Recreation Roll and record the ownership of the parcels in the Community Services Fund.
Along with the Board’s Resolution, Mr. Eick represented to Washoe County that the 87 tax delinquent parcels would be used for the public purpose of Open Space as defined under NRS 361.603. In October of 2012, Washoe County under NRS 361.603(5) waived the $800,000 of delinquent back taxes and fees and transferred these parcels to IVGID for free.
SO, WHERE DID MR. EICK GO ASTRAY?
1. The more than $718,000 of delinquent Recreation and Beach Fees were never disclosed in ANY of the District’s Comprehensive Annual Financial Reports (“CAFR”).
2. In the same year the 87 parcels were acquired, Mr. Eick played fast and loose with his prior representations to the Board and our Citizens. Although he stated that all parcels would be placed in the Community Services Fund he disclosed in Note 4 on page 39 of the 2013 CAFR that only 78 of the Parcels would be held in the Community Services Fund. The remaining 9 parcels were placed in the General Fund as they could be “restored to a form that makes them buildable at some point in the future.” Placing these potentially buildable parcels carrying a higher value into the General Fund, a Fund that has no past financial interest in the parcels, is just plain wrong! Simply stated, Mr. Eick has enabled the General Fund to own land reclaimed for delinquent fees that it is not owed.
3. Playing Bait and Switch with the County, after having stated that the parcels would remain as Open Space he decided to sell them. Note 4 of the same CAFR states that the parcels “could be sold at some future point because they carry the ability to have recreation privileges while remaining unbuildable.” And there is one more EICK lie revealed in this short footnote. Although he stated to the Board and our Citizens that the purpose for acquiring these parcels was to remove them from the Recreation Rolls –opening the door to future sales, translated to putting them back on the Recreation Rolls.
4. In March and July of 2014, Mr. Eick sold two lots. In addition to his failure to consult with the County on selling the parcels designated as Open Space, he also chose to ignore NRS 318.160 which requires Board approval of the sale of public property. Instead, he decided the price and the terms. He determined who the brokers and buyers would be. He further contrived a worksheet with selective years of delinquent Recreation and Beach Fees to reflect his predetermined price. There is no correlation between the actual years and respective interest charges these parcels were delinquent and the calculations Mr. Eick came up with to justify the sales price. There was no public notice or appraisal. There was no disclosure in any of the Board Minutes citing the sale of these two parcels.
5. There is a new twist under Note 4 in the 2014 and 2015 CAFRs. First, the 87 parcels disclosed in the 2013 CAFR disappear in both years and there is no mention of the sale of any parcels. Instead, we learn in the 2014 CAFR that the District acquired 4 tax delinquent parcels which are held in the Community Services Fund. The 2015 CAFR discloses the acquisition of 1 tax delinquent parcel held in the Utility Fund. Any one reading the 2014 and 2015 CAFRs would not have an accurate accounting of the District’s acquisition of tax delinquent parcels.
6. Following the same unilateral decisions made in 2014, Mr. Eick in 2015 sold another lot without consultation or consent of the County and without Board approval or notification. Although, we have subsequently learned that both Mr. Pinkerton and Attorney Guinasso approved this sale before placing a moratorium on selling additional lots.
7. In the 2016 and 2017 CAFRs under Note 4, Mr. Eick states that there are approximately 80 parcels. He seems to have lost count.
8. In the 2016 and 2017 CAFRs under Note 4 Mr. Eick discloses that “these lands are not held for the purpose of income or profit.” This statement would indicate that the parcels would actually be held for the public purpose of open space and no longer be available for future sales. Yet, Mr. Guinasso stated at the December Board Meeting and on the District’s website and in his newspaper opinion piece that new policies would be developed in order to sell the parcels.
#Violations #Misc
Jan 19, 2018 8:46:07am
Updated Jan 23, 2018 12:28:38pm
Jan 23, 2018 12:28:38pm
 “Cooking the Books” – Manipulating the budget to hide higher costs of a project
Annually, IVGID provides a Capital Improvement Projects report which is UNAUDITED. The report gives the amount spent against each project budget and the amount carried forward to the next year for projects not started or not competed.
For the year ending June 30, 2016, $55,000 was budgeted for an accounting system upgrade. No money was spent but only $53,000 of the budget was carried over into 2017. During 2017 only $4,950 was spent and the project was again carried over into 2018. Simple math would indicate the unspent budget of $48,050 would be carried over into 2018. Instead $100,000 appeared. This, of course, would be impossible since only $48,050 was available to be carried over.
So why was this done? To conceal the estimated higher costs of a project. The accounting system upgrade budgeted for $55,000 is now $100,000 plus the $4,950 already spent. Did anyone approve this budget increase? NO ONE.
In the 2018 budget submitted to the State there is only ONE line item called carryover projects for $159,000 consisting of the $100,000 accounting system upgrade and two other projects. Magically there is now $100,000 listed as a carryover projects which only had a $48,050 remaining budget to carryover. The State requires all carryover projects to re budgeted in the next year.
In the published 2018 budget to citizens all carryover projects are NOT INCLUDED. Anyone reviewing the budget would be unaware that the accounting system upgrade budget was almost doubled and not disclosed.
Again one report to the State and another report to the Citizens. The Board of Trustees does not even realize they only approved the budget to the State and did not approve the budget to Citizens.
There can be no rational or magical accounting to carry over into another year an unspent budget which is substantially larger than the amount originally budgeted. This action was taken to simply hide the higher costs of a project.
This is called “Cooking the Books”.
#Accounting #Budget |
“Cooking the Books” – Manipulating the budget to hide higher costs of a project
Annually, IVGID provides a Capital Improvement Projects report which is UNAUDITED. The report gives the amount spent against each project budget and the amount carried forward to the next year for projects not started or not competed.
For the year ending June 30, 2016, $55,000 was budgeted for an accounting system upgrade. No money was spent but only $53,000 of the budget was carried over into 2017. During 2017 only $4,950 was spent and the project was again carried over into 2018. Simple math would indicate the unspent budget of $48,050 would be carried over into 2018. Instead $100,000 appeared. This, of course, would be impossible since only $48,050 was available to be carried over.
So why was this done? To conceal the estimated higher costs of a project. The accounting system upgrade budgeted for $55,000 is now $100,000 plus the $4,950 already spent. Did anyone approve this budget increase? NO ONE.
In the 2018 budget submitted to the State there is only ONE line item called carryover projects for $159,000 consisting of the $100,000 accounting system upgrade and two other projects. Magically there is now $100,000 listed as a carryover projects which only had a $48,050 remaining budget to carryover. The State requires all carryover projects to re budgeted in the next year.
In the published 2018 budget to citizens all carryover projects are NOT INCLUDED. Anyone reviewing the budget would be unaware that the accounting system upgrade budget was almost doubled and not disclosed.
Again one report to the State and another report to the Citizens. The Board of Trustees does not even realize they only approved the budget to the State and did not approve the budget to Citizens.
There can be no rational or magical accounting to carry over into another year an unspent budget which is substantially larger than the amount originally budgeted. This action was taken to simply hide the higher costs of a project.
This is called “Cooking the Books”.
#Accounting #Budget
Annually, IVGID provides a Capital Improvement Projects report which is UNAUDITED. The report gives the amount spent against each project budget and the amount carried forward to the next year for projects not started or not competed.
For the year ending June 30, 2016, $55,000 was budgeted for an accounting system upgrade. No money was spent but only $53,000 of the budget was carried over into 2017. During 2017 only $4,950 was spent and the project was again carried over into 2018. Simple math would indicate the unspent budget of $48,050 would be carried over into 2018. Instead $100,000 appeared. This, of course, would be impossible since only $48,050 was available to be carried over.
So why was this done? To conceal the estimated higher costs of a project. The accounting system upgrade budgeted for $55,000 is now $100,000 plus the $4,950 already spent. Did anyone approve this budget increase? NO ONE.
In the 2018 budget submitted to the State there is only ONE line item called carryover projects for $159,000 consisting of the $100,000 accounting system upgrade and two other projects. Magically there is now $100,000 listed as a carryover projects which only had a $48,050 remaining budget to carryover. The State requires all carryover projects to re budgeted in the next year.
In the published 2018 budget to citizens all carryover projects are NOT INCLUDED. Anyone reviewing the budget would be unaware that the accounting system upgrade budget was almost doubled and not disclosed.
Again one report to the State and another report to the Citizens. The Board of Trustees does not even realize they only approved the budget to the State and did not approve the budget to Citizens.
There can be no rational or magical accounting to carry over into another year an unspent budget which is substantially larger than the amount originally budgeted. This action was taken to simply hide the higher costs of a project.
This is called “Cooking the Books”.
#Accounting #Budget
Jan 25, 2018 12:04:37pm
Our Village Voice updated their status.
 A robbery using a journal entry has taken place and went unnoticed for several years.
Remember IVGID acquired 87 land parcels from the County and promised to maintain them as open space allowing the County to waive its past due taxes? If you recall, Gerry Eick, a senior staff member, decided to break that promise and sold three parcels because, in his view, promises mean nothing. Instead he justified the sales as a “fiduciary duty” to collect past due Rec and Beach Fees which had been assessed on the parcels. So the contract with the County didn’t matter because it was more important to bring in more money to the District.
The county after discovering the broken promise, notified IVGID to cough up the past due taxes on the three parcels. We assume IVGID will do so but only after Guinasso gets additional legal fees to pad his pockets by convoluting some sort of defense. It appears the majority on the Board wants to sell the remaining parcels after new policies are developed.
Now here’s a twist. All 87 parcels had delinquent Rec and Beach Fees, which could be collected by selling them, and can only be used for Community Service and Beach expenses. Instead Mr. Eick unilaterally decided to place 9 parcels in the General Fund as they could be “restored to a form that makes them buildable at some point in the future.” There is not a logical reason that the General Fund had any claim on those 9 ‘buildable” lots.
Now think about this. What is a buildable lot worth in Incline Village? What we see here is a potentially large sum of sale proceeds being confiscated for use in the General Fund for even more bloated salaries and other administrative goodies as opposed to being used to maintain and care for recreational facilities . Has anyone suggested an appraisal be done to determine the value of these nine lots?
Besides trying to stiff the county out of their taxes , a robbery by the General Fund, with Mr. Eick as the lead bandit, has taken place right under our eyes. Any proceeds from the sale of these nine lots belongs to the Community Services and Beach Funds.
Certain trustees and members of community have cried for a forensic audit on these accounting transactions. Maybe we should have one.
#Accountng #Violations |
Our Village Voice updated their status.
A robbery using a journal entry has taken place and went unnoticed for several years.
Remember IVGID acquired 87 land parcels from the County and promised to maintain them as open space allowing the County to waive its past due taxes? If you recall, Gerry Eick, a senior staff member, decided to break that promise and sold three parcels because, in his view, promises mean nothing. Instead he justified the sales as a “fiduciary duty” to collect past due Rec and Beach Fees which had been assessed on the parcels. So the contract with the County didn’t matter because it was more important to bring in more money to the District.
The county after discovering the broken promise, notified IVGID to cough up the past due taxes on the three parcels. We assume IVGID will do so but only after Guinasso gets additional legal fees to pad his pockets by convoluting some sort of defense. It appears the majority on the Board wants to sell the remaining parcels after new policies are developed.
Now here’s a twist. All 87 parcels had delinquent Rec and Beach Fees, which could be collected by selling them, and can only be used for Community Service and Beach expenses. Instead Mr. Eick unilaterally decided to place 9 parcels in the General Fund as they could be “restored to a form that makes them buildable at some point in the future.” There is not a logical reason that the General Fund had any claim on those 9 ‘buildable” lots.
Now think about this. What is a buildable lot worth in Incline Village? What we see here is a potentially large sum of sale proceeds being confiscated for use in the General Fund for even more bloated salaries and other administrative goodies as opposed to being used to maintain and care for recreational facilities . Has anyone suggested an appraisal be done to determine the value of these nine lots?
Besides trying to stiff the county out of their taxes , a robbery by the General Fund, with Mr. Eick as the lead bandit, has taken place right under our eyes. Any proceeds from the sale of these nine lots belongs to the Community Services and Beach Funds.
Certain trustees and members of community have cried for a forensic audit on these accounting transactions. Maybe we should have one.
#Accountng #Violations
Remember IVGID acquired 87 land parcels from the County and promised to maintain them as open space allowing the County to waive its past due taxes? If you recall, Gerry Eick, a senior staff member, decided to break that promise and sold three parcels because, in his view, promises mean nothing. Instead he justified the sales as a “fiduciary duty” to collect past due Rec and Beach Fees which had been assessed on the parcels. So the contract with the County didn’t matter because it was more important to bring in more money to the District.
The county after discovering the broken promise, notified IVGID to cough up the past due taxes on the three parcels. We assume IVGID will do so but only after Guinasso gets additional legal fees to pad his pockets by convoluting some sort of defense. It appears the majority on the Board wants to sell the remaining parcels after new policies are developed.
Now here’s a twist. All 87 parcels had delinquent Rec and Beach Fees, which could be collected by selling them, and can only be used for Community Service and Beach expenses. Instead Mr. Eick unilaterally decided to place 9 parcels in the General Fund as they could be “restored to a form that makes them buildable at some point in the future.” There is not a logical reason that the General Fund had any claim on those 9 ‘buildable” lots.
Now think about this. What is a buildable lot worth in Incline Village? What we see here is a potentially large sum of sale proceeds being confiscated for use in the General Fund for even more bloated salaries and other administrative goodies as opposed to being used to maintain and care for recreational facilities . Has anyone suggested an appraisal be done to determine the value of these nine lots?
Besides trying to stiff the county out of their taxes , a robbery by the General Fund, with Mr. Eick as the lead bandit, has taken place right under our eyes. Any proceeds from the sale of these nine lots belongs to the Community Services and Beach Funds.
Certain trustees and members of community have cried for a forensic audit on these accounting transactions. Maybe we should have one.
#Accountng #Violations
Mar 06, 2018 9:39:21pm
Our Village Voice updated their status.
TRANSPARENCY IS JUST A TALKING POINT. ACTIONS SPEAK LOUDER THAN WORDS.
Catering – A risky business, which should be watched closely, is tucked away in the Championship Golf Course
Most people know and understand that food and beverage operations are a tough and hard to manage business. IVGID from time to time provided Catering services and found that the service was a money pit, gave up and closed the operations during fiscal year 2014. This decision was appropriate and probably made because there was transparency in financial reporting allowing the Board of Trustees to conclude catering belonged in the private sector.
The Catering service along with rents were always reported in the Facilities Department consisting of the Chateau and Aspen Grove because naturally those two locations are where catering is done. Along came Pinkerton and Catering services was ramped back up in 2015. How is the catering operations doing? No way to tell. For whatever reason where logic could not prevail, the catering is now reported in the Championship Golf Course. Makes sense? Absolutely not. Why would weddings and community events have anything to do with reporting financial activities of the Golf Course? If reported with the Chateau and Aspen Grove we may actually have some transparency. When catering is mixed with the Grille restaurant and merchandise sales of the Golf Course, transparency is gone. So we now have the Chateau and Aspen Grove facility rents for catering in one department and food and beverage sales in another. Who made the decision to mix this up? It wasn’t the Board so we guess Pinkerton. Does the Board care about a lack of transparency? Apparently not.
#Accounting |
May 04, 2018 8:28:31am
 IVGID continues to “Cook the Books”
Over the past two months we reported that the Utility Fund financial condition has been put in shambles and the restricted funds for the Effluent Pipeline Phase II “pipeline” has been raided to take care of other projects.
In early 2017, IVGID staff told the Board of Trustees that $1,000,000 was needed to reconstruct and replace the lining on a wastewater storage basin ” the Pond” which was shut down by the Nevada Division of Environmental Protection (“NDEP”) in 2014 because of wastewater seepage into the ground water. IVGID was to take immediate action and submit a plan to NDEP for the reconstruction and lining of the Pond. No plan was ever submitted and the Pond has laid fallow for over four years.
Of course, the IVGID Staff in order to “butter up” the Board, told them that the Pond reconstruction and lining was part of the pipeline budget and no new funds or additional increases in sewer rates were required. The Pond was NEVER part of the pipeline’s $23,000,000 budget. Thus, another raid on the restricted funds of the pipeline took place.
SO WHAT COOKING IS GOING ON?
On May 23, 2018, IVGID stated in the budget reports that $705,369 had been spent on the Pond lining. We immediately knew something was awry. No contracts were ever issued and no lining was ever installed at the Pond. In addition, construction could not be done until the NDEP approved a plan for the reconstruction and lining.
So what was the $705,369 spent on? We needed to know. After making several public records requests and being stonewalled for 108 days, we finally received 66 invoices from various vendors and contractors which unfortunately totaled only $242,686. A little short, like $462,683. Yet IVGID stated that the invoices submitted completed the records request in its “entirety”.
Remarkably, not a single invoice was for anything remotely related to the Pond. Instead the invoices consisted of two major repair items: replacing 35 air pressure relief valves on the pipeline flowing from Spooner summit down to Carson Valley and consultants employed to inspect the $1.3 million repair of 13 breaks in the pipeline mandated by the NDEP. Both projects were not for installing Pond lining and are also not part of the Phase II pipeline. For mercy sake, there were also charges for replacing a pump on Lakeshore and a pump at the Spooner pump station.
SO WE REMAIN IN SEARCH OF THE ADDITIONAL $462,683 IN MISSING FUNDS. ANYONE WANT TO TAKE A GUESS? IS IT OTHER PROJECTS OR POCKETS?
This accounting and false reporting is getting really bad and you as Utility ratepayers will pay in the end. When one starts to “rob Peter to pay Paul” it is known as FRAUD.
#Accounting #UtilityFund |
Sep 20, 2018 9:38:25pm
Our Village Voice updated their status.
Sharing a post by Sara Schmitz:
Highlights from Lisa Krasner at today’s Community Forum.
————————-
Assemblywoman Lisa Krasner, our District Representative, was at the meeting today. In addition to reviewing the past legislative session, she spoke specifically about the audit being proposed by Callicrate and Schmitz. According to info provided to her (Krasner), it has been about 20 years since IVGID has done a comprehensive audit. IVGID does do an annual audit as required by law and files its annual paperwork with the state; the comprehensive audit would go further than the minimum audit requirements. After speaking with the Legislative Counsel Bureau (the permanent staff of the legislature – lawyers, accountants, admin) she drafted a bill specific to an IVGID audit. Krasner says the Legislative Counsel Bureau was willing to perform the comprehensive audit at no cost to IVGID.
#Accounting
Highlights from Lisa Krasner at today’s Community Forum.
————————-
Assemblywoman Lisa Krasner, our District Representative, was at the meeting today. In addition to reviewing the past legislative session, she spoke specifically about the audit being proposed by Callicrate and Schmitz. According to info provided to her (Krasner), it has been about 20 years since IVGID has done a comprehensive audit. IVGID does do an annual audit as required by law and files its annual paperwork with the state; the comprehensive audit would go further than the minimum audit requirements. After speaking with the Legislative Counsel Bureau (the permanent staff of the legislature – lawyers, accountants, admin) she drafted a bill specific to an IVGID audit. Krasner says the Legislative Counsel Bureau was willing to perform the comprehensive audit at no cost to IVGID.
#Accounting
Oct 19, 2018 8:40:09pm
Our Village Voice updated their status.
THE AUDIT and the TrueBlueFacts hoopla
Much hype has been initiated regarding Tim Callicrate and Sara Schmitz suggestion that the scope of previous audits should be increased providing less reliance on management’s representations and more fact finding on compliance with all of the various rules and regulations.
Suddenly on cue, TrueBlueFacts associates jumped on portraying gigantic costs which would be involved in a “forensic audit” and $1,000,000 was the opening bid based on a purported estimate from Eide Bailly calculated at $50,000 per account with IVGID having 2,500 accounts. Now, simple math, if people at True Blue Facts knew math, would be $12,500,000 based on their statement. Really or Ridiculous? Of course, little attention was paid to the continuation of the statement that “investigators would rule focus only on accounts where evidence points”. But $1,000,000 was established and within 12 days, Peter Morris, an IVGID Trustee, got the bidding up to between $1,000,000 and $2,000,000 and each property owner would have to write a check for $200. Oh no! there goes the Christmas presents. With one week to go before the election, a TrueBlueFacts patriot might have a shot at increasing the price and we could see future audit costs reaching an even higher number.
Eide Bailly currently charges IVGID $55,500 for their ENTIRE audit. How comprehensive do you think the current audit is based on TrueBlueFacts assertions above?
Now we are being quite sarcastic but below is some food for thought on why additional audit requirements are needed.
IVGID revenues are almost $40,000,000 per year.
IVGID processes at least 1,000,000 revenue transactions annually and an unknown amount of expenditure transactions.
IVGID has a lengthy list of ordinances, policies, practices and resolutions which have been adopted over many years with many different requirements to be complied with.
Eide Bailly in the spring of 2017 clearly stated that IVGID had a material Weakness in the Preparation of Financial Statements.
An audit, whatever scope it might be, not only provides assurances that proper accounting and reporting is occurring but is used as a deterrent for any potential malfeasance which could be occurring.
IVGID’s operations, other than utilities, provide excellent opportunities for malfeasance to occur because of an ability to provide “a nod & wink” to allow access to facilities and a large amount of food, beverage, and merchandise which can be shifted improperly and go out the back door. Food and Beverage is always the toughest to control.
The Audit Committee of three Board Members do nothing other than approving engagement of an auditor for the upcoming fiscal year. There is no other function. Unless something is brought to the Committee’s attention which could require a review, the Committee does nothing. These three members make all decisions on the fate of any purported irregularities and do not have to bring anything to the BOT if they don’t want to.
SO WHAT IS MISSING? An expanded audit, an internal auditor who is separate and apart from the management of IVGID and a change of auditors at least every five to seven years.
No estimate of costs can be ascertained until it is determined what should be audited. It most probably would be accomplished over a period of years and the extent would depend on what is found as an audit progresses.
The TRUEBLUEFACT people, primarily Gene Brockman, continue to tout how much oversight exists on the IVGID financials. He states two sources:
The Department of Taxation (“DOT”) is claimed to have oversight. In reality, the DOT relies solely on the auditor to determine the financial health of an entity. The DOT is set up to insure that all of the required State of Nevada budget FORMS and final audit reports are submitted in accordance with state requirements. The DOT does NOT issue any opinion on the fairness or accuracy of the financial statements.
The Government Finance Officers Association is stated as another oversight organization. In truth, it is an association of 19,000 government finance officers from the US and Canada who pass out awards for 8 different programs. In 2016, IVGID obtained an award and received a Certificate of Achievement for Excellent in Financial Reporting. As stated in the award program: ” The goal of the program is not to assess the financial health of participating governments, but rather to ensure that users of their financial statements have the information they need to do so themselves.” Translation: “The body looks good but does it run? We don’t know, you check it out”
Again, TRUEBLUE FACTS is blowing things out of proportion for the sensationalism and does not have a clue what is the real intent of the candidates and the required consensus of other board members to expand our audit requirements.
A simple reason for expanding our audit.
Look at our research on the recent $705,000 stated as being spent on the Utility Fund Waste Water Pond lining. What we actually learned:
1)Nothing was spent on the Pond Lining
2)IVGID then stated the spending was on the Effluent Pipeline Phase II but only accounted for $257,000. None of that money was spent on the Effluent Pipeline Phase II, but on other sections of the pipeline and for repairs of the existing pipeline.
3)The amount of spending was increased to $788,000 when the final report was done
4) We are still waiting for an answer on what the remaining $531,000 was spent for. It has only been 4.5 months and still waiting.
#Accounting
Much hype has been initiated regarding Tim Callicrate and Sara Schmitz suggestion that the scope of previous audits should be increased providing less reliance on management’s representations and more fact finding on compliance with all of the various rules and regulations.
Suddenly on cue, TrueBlueFacts associates jumped on portraying gigantic costs which would be involved in a “forensic audit” and $1,000,000 was the opening bid based on a purported estimate from Eide Bailly calculated at $50,000 per account with IVGID having 2,500 accounts. Now, simple math, if people at True Blue Facts knew math, would be $12,500,000 based on their statement. Really or Ridiculous? Of course, little attention was paid to the continuation of the statement that “investigators would rule focus only on accounts where evidence points”. But $1,000,000 was established and within 12 days, Peter Morris, an IVGID Trustee, got the bidding up to between $1,000,000 and $2,000,000 and each property owner would have to write a check for $200. Oh no! there goes the Christmas presents. With one week to go before the election, a TrueBlueFacts patriot might have a shot at increasing the price and we could see future audit costs reaching an even higher number.
Eide Bailly currently charges IVGID $55,500 for their ENTIRE audit. How comprehensive do you think the current audit is based on TrueBlueFacts assertions above?
Now we are being quite sarcastic but below is some food for thought on why additional audit requirements are needed.
IVGID revenues are almost $40,000,000 per year.
IVGID processes at least 1,000,000 revenue transactions annually and an unknown amount of expenditure transactions.
IVGID has a lengthy list of ordinances, policies, practices and resolutions which have been adopted over many years with many different requirements to be complied with.
Eide Bailly in the spring of 2017 clearly stated that IVGID had a material Weakness in the Preparation of Financial Statements.
An audit, whatever scope it might be, not only provides assurances that proper accounting and reporting is occurring but is used as a deterrent for any potential malfeasance which could be occurring.
IVGID’s operations, other than utilities, provide excellent opportunities for malfeasance to occur because of an ability to provide “a nod & wink” to allow access to facilities and a large amount of food, beverage, and merchandise which can be shifted improperly and go out the back door. Food and Beverage is always the toughest to control.
The Audit Committee of three Board Members do nothing other than approving engagement of an auditor for the upcoming fiscal year. There is no other function. Unless something is brought to the Committee’s attention which could require a review, the Committee does nothing. These three members make all decisions on the fate of any purported irregularities and do not have to bring anything to the BOT if they don’t want to.
SO WHAT IS MISSING? An expanded audit, an internal auditor who is separate and apart from the management of IVGID and a change of auditors at least every five to seven years.
No estimate of costs can be ascertained until it is determined what should be audited. It most probably would be accomplished over a period of years and the extent would depend on what is found as an audit progresses.
The TRUEBLUEFACT people, primarily Gene Brockman, continue to tout how much oversight exists on the IVGID financials. He states two sources:
The Department of Taxation (“DOT”) is claimed to have oversight. In reality, the DOT relies solely on the auditor to determine the financial health of an entity. The DOT is set up to insure that all of the required State of Nevada budget FORMS and final audit reports are submitted in accordance with state requirements. The DOT does NOT issue any opinion on the fairness or accuracy of the financial statements.
The Government Finance Officers Association is stated as another oversight organization. In truth, it is an association of 19,000 government finance officers from the US and Canada who pass out awards for 8 different programs. In 2016, IVGID obtained an award and received a Certificate of Achievement for Excellent in Financial Reporting. As stated in the award program: ” The goal of the program is not to assess the financial health of participating governments, but rather to ensure that users of their financial statements have the information they need to do so themselves.” Translation: “The body looks good but does it run? We don’t know, you check it out”
Again, TRUEBLUE FACTS is blowing things out of proportion for the sensationalism and does not have a clue what is the real intent of the candidates and the required consensus of other board members to expand our audit requirements.
A simple reason for expanding our audit.
Look at our research on the recent $705,000 stated as being spent on the Utility Fund Waste Water Pond lining. What we actually learned:
1)Nothing was spent on the Pond Lining
2)IVGID then stated the spending was on the Effluent Pipeline Phase II but only accounted for $257,000. None of that money was spent on the Effluent Pipeline Phase II, but on other sections of the pipeline and for repairs of the existing pipeline.
3)The amount of spending was increased to $788,000 when the final report was done
4) We are still waiting for an answer on what the remaining $531,000 was spent for. It has only been 4.5 months and still waiting.
#Accounting
Oct 28, 2018 4:21:29pm
Our Village Voice updated their status.
How much “reserves” does IVGID really have?
In a recent post to the Incline Village Politics facebook page, Bruce Simonian stated that IVGID had $30,000,000 in “reserves”. That would be difficult to find in the books since “reserves” is not a term used by IVGID in financial reporting. We assume Bruce is referring to the “Unrestricted Net Position” of $29,423,000 stated in the June 30, 2017 Comprehensive Annual Financial Report. To make things a bit more confusing when reporting the eight governmental Funds, (not the Utility Fund), the word “Fund Balance” is used which is essentially the same as Unrestricted Net Position. So let’s just call these terms “reserves”.
A much better indication of our current “reserves” would be the amount projected at June 30, 2019 reflecting what happened in 2018 and what is budgeted to happen in 2019. Looking backwards is never the best indication of what is or what will be.
So here we go.
According to the budget submitted to the State, the Fund Balances (except the Utility Fund) at the end of June 30, 2019 will only be $12,770,000 consisting of the following (Page 13 of the Budget). This is a far cry from $30 million.
The General Fund $2,325,000
The Community Services Fund $8,913,000
The Beach Fund $1,492,000
The Total being: $12,770,000
Of the $12,770,000 expected at the end of June 30, 2019 a total of $4,900,000 is required by BOT policy to be set aside for emergencies and termed an “Appropriate Level of Fund Balance”
The Utility Fund reports “reserves” in terms of Unrestricted Net Position which as of June 30, 2017 was $12,536,000. During 2018 spending exceeded revenues by $2,343,000 and the budget for 2019 indicates spending will exceed revenues by an additional $1,734,000 leaving only $8,459,000, of which, $8,462,000 should have been set aside for the Effluent Pipeline – Phase II.** SO WE END UP SHORT $3,000. Sadly, the Board Policy for the “Appropriate Level of Working Capital” (another term having substantially the same meaning as Unrestricted Net Position) requires the Utility Fund to have between $4,000,000 to $4,800,000 to be held for emergency repairs on IVGID’s estimated $600,000,000 in water and sewer infrastructure. The Utility Fund as stated above has nothing for emergencies.
Over the past two years, we have argued with IVGID management that the money collected from utility rate payers and set aside for the Effluent Pipeline – Phase II should be Restricted and restraints placed on its use. Instead management and three members of the BOT continued to consider the set aside money as unrestricted funds which could be used for anything. We have now seen what happens when money is redirected to other projects having nothing to do with the Effluent Pipeline – Phase II. Last year $1,000,000 was redirected for Sewer Pump Stations and another $1,000,000 initially redirected for lining the Wastewater Pond was then redirected again for other purposes. After 5 months, IVGID has not disclosed the full extent of what the $788,000 of the $1,000,000 was actually spent on. They have provided us invoices for only $257,000. We await support for the $531,000 balance. What could it be? We will eventually see what happens with utility rates when construction of the Effluent Pipeline Phase II is started.
**data for Utility Fund was obtained from Form 4404LGF page 31. Acquisition of capital assets and carryover projects for 2018 adjusted for actual amounts reported on October 5, 2018.
#Accounting
In a recent post to the Incline Village Politics facebook page, Bruce Simonian stated that IVGID had $30,000,000 in “reserves”. That would be difficult to find in the books since “reserves” is not a term used by IVGID in financial reporting. We assume Bruce is referring to the “Unrestricted Net Position” of $29,423,000 stated in the June 30, 2017 Comprehensive Annual Financial Report. To make things a bit more confusing when reporting the eight governmental Funds, (not the Utility Fund), the word “Fund Balance” is used which is essentially the same as Unrestricted Net Position. So let’s just call these terms “reserves”.
A much better indication of our current “reserves” would be the amount projected at June 30, 2019 reflecting what happened in 2018 and what is budgeted to happen in 2019. Looking backwards is never the best indication of what is or what will be.
So here we go.
According to the budget submitted to the State, the Fund Balances (except the Utility Fund) at the end of June 30, 2019 will only be $12,770,000 consisting of the following (Page 13 of the Budget). This is a far cry from $30 million.
The General Fund $2,325,000
The Community Services Fund $8,913,000
The Beach Fund $1,492,000
The Total being: $12,770,000
Of the $12,770,000 expected at the end of June 30, 2019 a total of $4,900,000 is required by BOT policy to be set aside for emergencies and termed an “Appropriate Level of Fund Balance”
The Utility Fund reports “reserves” in terms of Unrestricted Net Position which as of June 30, 2017 was $12,536,000. During 2018 spending exceeded revenues by $2,343,000 and the budget for 2019 indicates spending will exceed revenues by an additional $1,734,000 leaving only $8,459,000, of which, $8,462,000 should have been set aside for the Effluent Pipeline – Phase II.** SO WE END UP SHORT $3,000. Sadly, the Board Policy for the “Appropriate Level of Working Capital” (another term having substantially the same meaning as Unrestricted Net Position) requires the Utility Fund to have between $4,000,000 to $4,800,000 to be held for emergency repairs on IVGID’s estimated $600,000,000 in water and sewer infrastructure. The Utility Fund as stated above has nothing for emergencies.
Over the past two years, we have argued with IVGID management that the money collected from utility rate payers and set aside for the Effluent Pipeline – Phase II should be Restricted and restraints placed on its use. Instead management and three members of the BOT continued to consider the set aside money as unrestricted funds which could be used for anything. We have now seen what happens when money is redirected to other projects having nothing to do with the Effluent Pipeline – Phase II. Last year $1,000,000 was redirected for Sewer Pump Stations and another $1,000,000 initially redirected for lining the Wastewater Pond was then redirected again for other purposes. After 5 months, IVGID has not disclosed the full extent of what the $788,000 of the $1,000,000 was actually spent on. They have provided us invoices for only $257,000. We await support for the $531,000 balance. What could it be? We will eventually see what happens with utility rates when construction of the Effluent Pipeline Phase II is started.
**data for Utility Fund was obtained from Form 4404LGF page 31. Acquisition of capital assets and carryover projects for 2018 adjusted for actual amounts reported on October 5, 2018.
#Accounting
Oct 30, 2018 9:58:26am
Our Village Voice updated their status.
Incline Village General Improvement District
Necessity for Separate Funds
A short review of 2018-2019 Budget
IVGID has five categories of funds which have different activities and reports different sources of Revenues and related Expenditures. We thought a short review of each fund’s activities and a summary of the 2019 fiscal year budget might be appropriate.
The Utility Fund
This fund primarily accounts for the Water and Sewer systems. The majority of Revenues are generated from monthly customer charges which are set annually by the Board of Trustees along with available State and Federal Grants for facility upgrades. For fiscal year 2019 the anticipated revenues from the annual utility rate study consists of two parts: $7.0 million in user fees plus $400,000 in other revenues to cover operating expenses and $4.9 million collected from customers for investments in the infrastructure, equipment and principal and interest payments on outstanding debt. Trash collection is outsourced to Waste Management which bills customers directly. The Utility Fund receives an unknown amount of revenues from the Waste Management Franchise Agreement and incurs an unknown amount of expenses.
Operating Expenses, including interest but excluding depreciation, are budgeted at $7.6 million. This is $200,000 more in operating expenses than the District’s combined operating revenues of $7.4 million. Not Good.
Of the $4.9 million in revenues for investments in infrastructure, $2,000,000 is supposed to be set aside and restricted for the future effluent pipeline – Phase II; $500,000 is for payments on debt; $460,000 is for equipment purchases. This budgeting leaves only $1.8 million for repairs and replacement of all other utility fund infrastructure. An additional $1.8 million is scheduled for infrastructure investments which will be drawn from the emergency working capital. This will deplete the emergency funds in their entirety and will also raid $644,000 from the set aside money for the effluent pipeline-Phase II. To replenish the emergency working capital and replace the money taken from the effluent pipeline set aside, the District will have to increase future customer rates in order to collect the $4.6 to $ 5.5 million of overspending.
Over the past several years, The District has repurposed money from the Effluent Pipeline – Phase II set aside to do certain projects which: 1) have nothing to do with Phase II of the pipeline; 2) Involves repair work on the existing pipeline for continued use until the new 6 miles of pipeline is installed; 3) Incurs costs associated with the design, environmental studies and tests on the existing pipeline to determine estimated remaining life. The latter is required to determine the feasibility of co-locating the Phase II pipeline within the planned Bike Path sponsored by the Tahoe Transportation District (“TTD”). There could be considerable savings if the co-location takes place. As such, the District has decided to use the restricted funds to study the pipeline co-location and start “counting chickens (savings) before they hatch.” The amount of savings cannot be determined until such time as the environmental study is completed and a contract is executed with TTD stating each party’s rights and obligations. So far we have seen close to $5,000,000 spent on repairing the aging pipeline, studying the pipeline co- location possibilities and doing other unrelated projects. All of this stalling and spending, we are told, could “save” up to $7,000,000 of the projected $23 million cost for Phase II.
We have said it before and we will say it again – the Utility Fund is courting big financial trouble and needs our Board’s immediate attention.
The Community Services Funds
These three funds are the District’s largest and include all of the recreational venues except the beaches. Revenues can vary up or down primarily driven by attendance at Diamond Peak. Historically, the other venues have not had large variances from the budget. Revenues for 2019 are expected to be derived from $15 million in user fees and concession sales and $5.8 million from the annual Recreation Fee. The Recreation Fee is allocated into three parts: $1.8 million to support operations; $3.6 million for capital projects; and the remaining $400,000 for payments on outstanding debt.
Expenses are budgeted at $17.4 million including a $500,000 contingency. Salaries and Benefits are 50%. Planned capital expenditures are $9.5 million, of which $3.6 million will be paid from our annual Rec Fees; $1.7 million from Grants and $4.2 million from accumulated reserves. During the past three years, a major increase in reserves was achieved from higher than expected attendance at Diamond Peak.
Reserves at the end of 2019 are expected to be $8.9 million of which $4.2 million must be retained for emergencies. The remaining $4.7 million is planned for future capital projects over the next five years.
The Beach Funds
There are three funds which account for the beaches Revenues for 2019 are budgeted at $2.3 million. 42% comes from the annual $125 Beach Fee and the remainder from the way the District accounts for punch card transactions, along with guest entry fees and concessions. Expenditures for operations and capital projects consume all of the revenues. Salaries and benefits are 44% of the expenditures.
The Internal Services Fund
There is $3.6 million in planned revenues generated by reimbursements from the other funds for the salaries and benefits of the engineering, building services and fleet maintenance staff. Additional expenses, which are also reimbursed by our other funds, are workmen compensation costs and other supplies and services. The fund is expected to break even each year.
The General Fund
Revenues for 2019 consist of $3.4 million from property taxes and a share of state and county consolidated taxes. The amount of taxes we collect are limited by county and state regulations. Unlike our annual Recreation and Beach Fees our Board cannot increase or decrease these taxes. Another $1.2 million is collected from the other funds for reimbursements of salaries and other overhead expenses.There is $4.1 million in expenditures for salaries and other services to manage the District. Salaries and benefits make up 65% and another $440,000 is budgeted for capital projects.
We hope this short review will help everyone have a better understanding of how the District finances are pulled together.
#Accounting
Necessity for Separate Funds
A short review of 2018-2019 Budget
IVGID has five categories of funds which have different activities and reports different sources of Revenues and related Expenditures. We thought a short review of each fund’s activities and a summary of the 2019 fiscal year budget might be appropriate.
The Utility Fund
This fund primarily accounts for the Water and Sewer systems. The majority of Revenues are generated from monthly customer charges which are set annually by the Board of Trustees along with available State and Federal Grants for facility upgrades. For fiscal year 2019 the anticipated revenues from the annual utility rate study consists of two parts: $7.0 million in user fees plus $400,000 in other revenues to cover operating expenses and $4.9 million collected from customers for investments in the infrastructure, equipment and principal and interest payments on outstanding debt. Trash collection is outsourced to Waste Management which bills customers directly. The Utility Fund receives an unknown amount of revenues from the Waste Management Franchise Agreement and incurs an unknown amount of expenses.
Operating Expenses, including interest but excluding depreciation, are budgeted at $7.6 million. This is $200,000 more in operating expenses than the District’s combined operating revenues of $7.4 million. Not Good.
Of the $4.9 million in revenues for investments in infrastructure, $2,000,000 is supposed to be set aside and restricted for the future effluent pipeline – Phase II; $500,000 is for payments on debt; $460,000 is for equipment purchases. This budgeting leaves only $1.8 million for repairs and replacement of all other utility fund infrastructure. An additional $1.8 million is scheduled for infrastructure investments which will be drawn from the emergency working capital. This will deplete the emergency funds in their entirety and will also raid $644,000 from the set aside money for the effluent pipeline-Phase II. To replenish the emergency working capital and replace the money taken from the effluent pipeline set aside, the District will have to increase future customer rates in order to collect the $4.6 to $ 5.5 million of overspending.
Over the past several years, The District has repurposed money from the Effluent Pipeline – Phase II set aside to do certain projects which: 1) have nothing to do with Phase II of the pipeline; 2) Involves repair work on the existing pipeline for continued use until the new 6 miles of pipeline is installed; 3) Incurs costs associated with the design, environmental studies and tests on the existing pipeline to determine estimated remaining life. The latter is required to determine the feasibility of co-locating the Phase II pipeline within the planned Bike Path sponsored by the Tahoe Transportation District (“TTD”). There could be considerable savings if the co-location takes place. As such, the District has decided to use the restricted funds to study the pipeline co-location and start “counting chickens (savings) before they hatch.” The amount of savings cannot be determined until such time as the environmental study is completed and a contract is executed with TTD stating each party’s rights and obligations. So far we have seen close to $5,000,000 spent on repairing the aging pipeline, studying the pipeline co- location possibilities and doing other unrelated projects. All of this stalling and spending, we are told, could “save” up to $7,000,000 of the projected $23 million cost for Phase II.
We have said it before and we will say it again – the Utility Fund is courting big financial trouble and needs our Board’s immediate attention.
The Community Services Funds
These three funds are the District’s largest and include all of the recreational venues except the beaches. Revenues can vary up or down primarily driven by attendance at Diamond Peak. Historically, the other venues have not had large variances from the budget. Revenues for 2019 are expected to be derived from $15 million in user fees and concession sales and $5.8 million from the annual Recreation Fee. The Recreation Fee is allocated into three parts: $1.8 million to support operations; $3.6 million for capital projects; and the remaining $400,000 for payments on outstanding debt.
Expenses are budgeted at $17.4 million including a $500,000 contingency. Salaries and Benefits are 50%. Planned capital expenditures are $9.5 million, of which $3.6 million will be paid from our annual Rec Fees; $1.7 million from Grants and $4.2 million from accumulated reserves. During the past three years, a major increase in reserves was achieved from higher than expected attendance at Diamond Peak.
Reserves at the end of 2019 are expected to be $8.9 million of which $4.2 million must be retained for emergencies. The remaining $4.7 million is planned for future capital projects over the next five years.
The Beach Funds
There are three funds which account for the beaches Revenues for 2019 are budgeted at $2.3 million. 42% comes from the annual $125 Beach Fee and the remainder from the way the District accounts for punch card transactions, along with guest entry fees and concessions. Expenditures for operations and capital projects consume all of the revenues. Salaries and benefits are 44% of the expenditures.
The Internal Services Fund
There is $3.6 million in planned revenues generated by reimbursements from the other funds for the salaries and benefits of the engineering, building services and fleet maintenance staff. Additional expenses, which are also reimbursed by our other funds, are workmen compensation costs and other supplies and services. The fund is expected to break even each year.
The General Fund
Revenues for 2019 consist of $3.4 million from property taxes and a share of state and county consolidated taxes. The amount of taxes we collect are limited by county and state regulations. Unlike our annual Recreation and Beach Fees our Board cannot increase or decrease these taxes. Another $1.2 million is collected from the other funds for reimbursements of salaries and other overhead expenses.There is $4.1 million in expenditures for salaries and other services to manage the District. Salaries and benefits make up 65% and another $440,000 is budgeted for capital projects.
We hope this short review will help everyone have a better understanding of how the District finances are pulled together.
#Accounting
Dec 02, 2018 10:38:21am
Our Village Voice updated their status.
The Mountain Golf Course Clubhouse – A rushed attempt at a Rehab without an honest accounting of estimated costs and necessary funding.
On August 11, 2018, a fire erupted in a storage room at the Mountain Golf Course Clubhouse. The kitchen and dining area was shut down but golf continued and food and beverage was sold from the pro shop. An insurance claim was made and GM Pinkerton expects a check of between $250,000 and $400,000 will be received. On November 9, 2018, Mr. Pinkerton issued a $41,000 contract to Smith Design Group to produce concept and working drawings on a rehab of the interior, expanding the outside deck to provide more seating and providing better ADA access. The interior renovation would relocate the pro shop downstairs, remove kitchen equipment in favor of a “grab and go” service and convert the upstairs to an office for a Pro and storage area. Upgrading the restrooms was not part of the design. More seating for a “grab and go” Really!
Some Board members knew nothing about the contract because Pinkerton believed issuing the contract was within his authority and Board approval was not required. He has that authority providing there is a budget for the contract. There was no budget. He believes the entire budget for all of the recreational venues is just one big pot of money which he can use for anything if he keeps contracts for purchases or projects less than $50,000. As such, he believes he can cancel or delay any budgeted item and use the money elsewhere. The Board needs to know nothing. We don’t see anything anywhere in the Board Policies or Practices giving him that authority. We ask Trustee Peter Morris to show us where to look.
On December 12, 2018, concept drawings were presented to the Board for consideration. Pinkerton’s main objective was an urgent but feeble attempt to get the plans out to bid in January, 2019 so construction could commence in the early spring and the building would be open for the start of the golf season in May, 2019. A herculean task which could never be achieved. Pinkerton stated the architects estimate was $900,000 and if $400,000 in insurance proceeds was received, the remaining $500,000 could be obtained by using some of the 2018/2019 Capital Projects Budget for the Mountain Golf Course if certain projects or purchases were cancelled or delayed. Tim Callicrate felt the Board should consider the new construction options in the 2012 and 2014 consultant reports and do both the Clubhouse and Maintenance building at the same time. He felt the insurance proceed should be firmed up first and believes operations for the upcoming season could continue without much disruption. The two consultant reports were part of the Master Plan presented to the Board on July 24, 2018. Has Pinkerton now discarded the reports?
Chairman Wong, in order to push through the rehab, stressed the point that three years ago the Clubhouse replacement was voted as a “priority” and because of that priority Pinkerton’s rehab needs to be done. The replacement or rehab was never a priority. She seems to have forgotten that in February 2017, the BOT decided to “Slow” the Clubhouse replacement and only move forward on the Maintenance building electric cart charging upgrade and the Clubhouse ADA compliance. According to the latest five year capital plan only $95,000 is budgeted for the “Slow” plan and not scheduled to be spent until 2022/2023. So the approved Slow plan has been planned to be real, real slow. Amazing how priorities can change. But because of a fire, we now have a “Rush Rush” Clubhouse rehab and no Maintenance Building upgrade.
The Board gave the go ahead to continue with the plan.
After considerable research and public records requests, we found that Pinkerton lied to the Board. The architect’s estimate was $1,150,000 not $900,000. The budget for 2018/2019 Capital Projects does not even have $500,000 needed for the rehab. The budget is only $403,263 consisting of $150,300 for new projects and $255,963 for projects carried over and funds appropriated in previous years. The budget includes $110,200 for repairing the Clubhouse roof and painting the exterior which we believe must be done before any rehab is completed. Neither item was in the architect’s estimate. Amazingly this month the Board approved $125,000 for a contract and other costs to complete the ADA access at the two golf course bathrooms. So if we start with the $406,000 budget and subtract the three items above plus the unbudgeted $41,000 design contract only $130,000 would be left. That is a far cry from Pinkerton stating he can cancel or delay projects to come up with the $500,000 needed. Based on facts the rehab will be at least $1,200,000 for design and construction not the $900,000 he stated. After deducting $400,000 in insurance proceeds, at least $800,000 is needed not $500,000. A misstatement of 60%. Do we need this lying? If he wanted to proceed with the rehab in this fiscal year he needed to be honest and tell the Board and the Public the total cost estimates and where the $800,000 would actually come from.
So now what is happening? At the February 6th, 2019 meeting, Pinkerton gave a report that the insurance claim was not firmed up and moving forward on the “rush rush” project may be postponed but he is proceeding with getting final plans to the County for review. He now is recommending painting and carpeting the interior and then proceeding with the rehab in the fall. Tim Callicrate again stated that this is nothing more than putting lipstick on a “you know what”. That would be a PIG. He wants a debate on the broader approach of new construction recommended by the consultants.
We think this rushed rehab should be stopped immediately. A proper discussion before the public should focus on why the five options for a new Clubhouse and a new maintenance building recommended by the consultants have been completely ignored. A survey of the citizens conducted by the same consultants indicated that a majority want a new clubhouse not an old rehabbed one. What right does Pinkerton have to unilaterally decide to rehab the building and chuck the consultants recommendations overboard?
The Board should also review the reason why the Mountain Golf Course operations have failed to meet the consultants projections of a breakeven by 2018. For this fiscal year a subsidy of $517,000 will be needed from the Recreation Fee assessed to parcel owners. The subsidy was increased by 17% over 2017. WE ARE GOING IN THE WRONG DIRECTION AND THE REASONS SHOULD BE GIVEN before we jump into a rehab.
Within the next week another report on Our Village Voice will review the 2013/2014 Master Plan and what the citizens actually wanted, the continuing dismal operations, the endless increasing subsidy and the fake revenues recorded to boost revenues.
#MasterPlans #Accounting
On August 11, 2018, a fire erupted in a storage room at the Mountain Golf Course Clubhouse. The kitchen and dining area was shut down but golf continued and food and beverage was sold from the pro shop. An insurance claim was made and GM Pinkerton expects a check of between $250,000 and $400,000 will be received. On November 9, 2018, Mr. Pinkerton issued a $41,000 contract to Smith Design Group to produce concept and working drawings on a rehab of the interior, expanding the outside deck to provide more seating and providing better ADA access. The interior renovation would relocate the pro shop downstairs, remove kitchen equipment in favor of a “grab and go” service and convert the upstairs to an office for a Pro and storage area. Upgrading the restrooms was not part of the design. More seating for a “grab and go” Really!
Some Board members knew nothing about the contract because Pinkerton believed issuing the contract was within his authority and Board approval was not required. He has that authority providing there is a budget for the contract. There was no budget. He believes the entire budget for all of the recreational venues is just one big pot of money which he can use for anything if he keeps contracts for purchases or projects less than $50,000. As such, he believes he can cancel or delay any budgeted item and use the money elsewhere. The Board needs to know nothing. We don’t see anything anywhere in the Board Policies or Practices giving him that authority. We ask Trustee Peter Morris to show us where to look.
On December 12, 2018, concept drawings were presented to the Board for consideration. Pinkerton’s main objective was an urgent but feeble attempt to get the plans out to bid in January, 2019 so construction could commence in the early spring and the building would be open for the start of the golf season in May, 2019. A herculean task which could never be achieved. Pinkerton stated the architects estimate was $900,000 and if $400,000 in insurance proceeds was received, the remaining $500,000 could be obtained by using some of the 2018/2019 Capital Projects Budget for the Mountain Golf Course if certain projects or purchases were cancelled or delayed. Tim Callicrate felt the Board should consider the new construction options in the 2012 and 2014 consultant reports and do both the Clubhouse and Maintenance building at the same time. He felt the insurance proceed should be firmed up first and believes operations for the upcoming season could continue without much disruption. The two consultant reports were part of the Master Plan presented to the Board on July 24, 2018. Has Pinkerton now discarded the reports?
Chairman Wong, in order to push through the rehab, stressed the point that three years ago the Clubhouse replacement was voted as a “priority” and because of that priority Pinkerton’s rehab needs to be done. The replacement or rehab was never a priority. She seems to have forgotten that in February 2017, the BOT decided to “Slow” the Clubhouse replacement and only move forward on the Maintenance building electric cart charging upgrade and the Clubhouse ADA compliance. According to the latest five year capital plan only $95,000 is budgeted for the “Slow” plan and not scheduled to be spent until 2022/2023. So the approved Slow plan has been planned to be real, real slow. Amazing how priorities can change. But because of a fire, we now have a “Rush Rush” Clubhouse rehab and no Maintenance Building upgrade.
The Board gave the go ahead to continue with the plan.
After considerable research and public records requests, we found that Pinkerton lied to the Board. The architect’s estimate was $1,150,000 not $900,000. The budget for 2018/2019 Capital Projects does not even have $500,000 needed for the rehab. The budget is only $403,263 consisting of $150,300 for new projects and $255,963 for projects carried over and funds appropriated in previous years. The budget includes $110,200 for repairing the Clubhouse roof and painting the exterior which we believe must be done before any rehab is completed. Neither item was in the architect’s estimate. Amazingly this month the Board approved $125,000 for a contract and other costs to complete the ADA access at the two golf course bathrooms. So if we start with the $406,000 budget and subtract the three items above plus the unbudgeted $41,000 design contract only $130,000 would be left. That is a far cry from Pinkerton stating he can cancel or delay projects to come up with the $500,000 needed. Based on facts the rehab will be at least $1,200,000 for design and construction not the $900,000 he stated. After deducting $400,000 in insurance proceeds, at least $800,000 is needed not $500,000. A misstatement of 60%. Do we need this lying? If he wanted to proceed with the rehab in this fiscal year he needed to be honest and tell the Board and the Public the total cost estimates and where the $800,000 would actually come from.
So now what is happening? At the February 6th, 2019 meeting, Pinkerton gave a report that the insurance claim was not firmed up and moving forward on the “rush rush” project may be postponed but he is proceeding with getting final plans to the County for review. He now is recommending painting and carpeting the interior and then proceeding with the rehab in the fall. Tim Callicrate again stated that this is nothing more than putting lipstick on a “you know what”. That would be a PIG. He wants a debate on the broader approach of new construction recommended by the consultants.
We think this rushed rehab should be stopped immediately. A proper discussion before the public should focus on why the five options for a new Clubhouse and a new maintenance building recommended by the consultants have been completely ignored. A survey of the citizens conducted by the same consultants indicated that a majority want a new clubhouse not an old rehabbed one. What right does Pinkerton have to unilaterally decide to rehab the building and chuck the consultants recommendations overboard?
The Board should also review the reason why the Mountain Golf Course operations have failed to meet the consultants projections of a breakeven by 2018. For this fiscal year a subsidy of $517,000 will be needed from the Recreation Fee assessed to parcel owners. The subsidy was increased by 17% over 2017. WE ARE GOING IN THE WRONG DIRECTION AND THE REASONS SHOULD BE GIVEN before we jump into a rehab.
Within the next week another report on Our Village Voice will review the 2013/2014 Master Plan and what the citizens actually wanted, the continuing dismal operations, the endless increasing subsidy and the fake revenues recorded to boost revenues.
#MasterPlans #Accounting
Feb 18, 2019 9:51:24am
Our Village Voice updated their status.
 Budgets, Rec and Beach Fees and a “Cock and Bull” story that is priceless
Two of the most important duties our Board of Trustees are required to do is pass a one year budget and pass a Resolution assessing an annual Recreational Standby Fee and a Beach Fee (“Fees”). These Fees are used to make up any shortfall in revenues necessary to cover operating expenses, debt service and capital project expenditures at the various recreational venues. A public hearing was held on May 24, 2018 where the Board was to review, discuss and possibly approve both the budget and the resolution assessing the Fees. The Fees amount to almost $6 million per year.
Many years ago, it was decided that a schedule should be included with the Resolution indicating how much of the Fees are needed for EACH recreational venues and planned to be used for operations, debt service and capital project expenditures. For example, the Championship Golf Course requires $98 of support out of the $830 in annual Fees and so on.
Of course, one would assume, that the Fees allocated to each venue in the Resolution would AGREE with the Budget submitted to the State. NOPE, NOT A CHANCE. For example, the Resolution indicates that $435,130 of the Recreational Standby Fee is required for the Community Services Administration capital projects but the budget provided to the State indicates only $27,000 is required. On the other extreme, the Resolution indicates that Diamond Peak will require $1,855,460 of support from the Recreational Standyby Fee for capital projects but the budget provided to the State indicates $2,662,000 is required. Differences occur in all of the venues going in one direction or another.
Why don’t the amounts agree? There could be many concoctions of the mind but one thought might be that IVGID staff wants the public to believe less support is needed for Diamond Peak as they keep pushing hard to expand summer activities at the venue and who ever looks at the Community Services Administration nor has any idea what it department does.
After Trustees Callicrate and Dent brought this distortion up, Pinkerton and Eick started with a “cock and bull story” which was priceless (see live stream at 2:55.25 to 3:03.14). A “cock and bull story” is defined as “an absurd improbable story presented as the truth”. The litany lasted almost 8 minutes. A series of babbles about five year plans, nonexistent policies, asset replacement summaries, reserves, smoothing, ten year plans and Pinkerton spurting out: “Somehow the money may be needed for a roof so we are setting up reserves”. Really, the money in the budget and the resolution is to be spent in one year. It would be real tough to set up reserves when the money is planned for one year. Knowing that the cock and bull story was not holding water, Eick jumped in and stated that the Staff thinks only in the AGGREGRATE. So as long as the TOTAL amounts for capital projects on one sheet of paper agrees with the TOTAL amount for capital projects on the other sheet of paper we should feel real good about their reporting on what the Fees are to be used for. They seem to think the public doesn’t need to know the real numbers for each venue. Does anyone concur with this?
What was more interesting was Wong, Horan and Morris sat quietly like “bumps on a log” (defined as unmoving, inactive and stupidly silent) and let this inaccurate reporting stand for a vote. The budget and the Resolution was passed 3-2 with Callicrate and Dent voting no.
Why have a Budget indicating the Fees required by venue and have a Resolution allocating the Fees by venue if both numbers do not agree. The information means nothing? These guys running the District are manipulators and the three Board Members Wong, Morris and Horan run cover for the manipulators. Any person with common sense would not vote for these distortions. Not good for you or us. This is no way to run a railroad.
#Accounting |
Budgets, Rec and Beach Fees and a “Cock and Bull” story that is priceless
Two of the most important duties our Board of Trustees are required to do is pass a one year budget and pass a Resolution assessing an annual Recreational Standby Fee and a Beach Fee (“Fees”). These Fees are used to make up any shortfall in revenues necessary to cover operating expenses, debt service and capital project expenditures at the various recreational venues. A public hearing was held on May 24, 2018 where the Board was to review, discuss and possibly approve both the budget and the resolution assessing the Fees. The Fees amount to almost $6 million per year.
Many years ago, it was decided that a schedule should be included with the Resolution indicating how much of the Fees are needed for EACH recreational venues and planned to be used for operations, debt service and capital project expenditures. For example, the Championship Golf Course requires $98 of support out of the $830 in annual Fees and so on.
Of course, one would assume, that the Fees allocated to each venue in the Resolution would AGREE with the Budget submitted to the State. NOPE, NOT A CHANCE. For example, the Resolution indicates that $435,130 of the Recreational Standby Fee is required for the Community Services Administration capital projects but the budget provided to the State indicates only $27,000 is required. On the other extreme, the Resolution indicates that Diamond Peak will require $1,855,460 of support from the Recreational Standyby Fee for capital projects but the budget provided to the State indicates $2,662,000 is required. Differences occur in all of the venues going in one direction or another.
Why don’t the amounts agree? There could be many concoctions of the mind but one thought might be that IVGID staff wants the public to believe less support is needed for Diamond Peak as they keep pushing hard to expand summer activities at the venue and who ever looks at the Community Services Administration nor has any idea what it department does.
After Trustees Callicrate and Dent brought this distortion up, Pinkerton and Eick started with a “cock and bull story” which was priceless (see live stream at 2:55.25 to 3:03.14). A “cock and bull story” is defined as “an absurd improbable story presented as the truth”. The litany lasted almost 8 minutes. A series of babbles about five year plans, nonexistent policies, asset replacement summaries, reserves, smoothing, ten year plans and Pinkerton spurting out: “Somehow the money may be needed for a roof so we are setting up reserves”. Really, the money in the budget and the resolution is to be spent in one year. It would be real tough to set up reserves when the money is planned for one year. Knowing that the cock and bull story was not holding water, Eick jumped in and stated that the Staff thinks only in the AGGREGRATE. So as long as the TOTAL amounts for capital projects on one sheet of paper agrees with the TOTAL amount for capital projects on the other sheet of paper we should feel real good about their reporting on what the Fees are to be used for. They seem to think the public doesn’t need to know the real numbers for each venue. Does anyone concur with this?
What was more interesting was Wong, Horan and Morris sat quietly like “bumps on a log” (defined as unmoving, inactive and stupidly silent) and let this inaccurate reporting stand for a vote. The budget and the Resolution was passed 3-2 with Callicrate and Dent voting no.
Why have a Budget indicating the Fees required by venue and have a Resolution allocating the Fees by venue if both numbers do not agree. The information means nothing? These guys running the District are manipulators and the three Board Members Wong, Morris and Horan run cover for the manipulators. Any person with common sense would not vote for these distortions. Not good for you or us. This is no way to run a railroad.
#Accounting
Two of the most important duties our Board of Trustees are required to do is pass a one year budget and pass a Resolution assessing an annual Recreational Standby Fee and a Beach Fee (“Fees”). These Fees are used to make up any shortfall in revenues necessary to cover operating expenses, debt service and capital project expenditures at the various recreational venues. A public hearing was held on May 24, 2018 where the Board was to review, discuss and possibly approve both the budget and the resolution assessing the Fees. The Fees amount to almost $6 million per year.
Many years ago, it was decided that a schedule should be included with the Resolution indicating how much of the Fees are needed for EACH recreational venues and planned to be used for operations, debt service and capital project expenditures. For example, the Championship Golf Course requires $98 of support out of the $830 in annual Fees and so on.
Of course, one would assume, that the Fees allocated to each venue in the Resolution would AGREE with the Budget submitted to the State. NOPE, NOT A CHANCE. For example, the Resolution indicates that $435,130 of the Recreational Standby Fee is required for the Community Services Administration capital projects but the budget provided to the State indicates only $27,000 is required. On the other extreme, the Resolution indicates that Diamond Peak will require $1,855,460 of support from the Recreational Standyby Fee for capital projects but the budget provided to the State indicates $2,662,000 is required. Differences occur in all of the venues going in one direction or another.
Why don’t the amounts agree? There could be many concoctions of the mind but one thought might be that IVGID staff wants the public to believe less support is needed for Diamond Peak as they keep pushing hard to expand summer activities at the venue and who ever looks at the Community Services Administration nor has any idea what it department does.
After Trustees Callicrate and Dent brought this distortion up, Pinkerton and Eick started with a “cock and bull story” which was priceless (see live stream at 2:55.25 to 3:03.14). A “cock and bull story” is defined as “an absurd improbable story presented as the truth”. The litany lasted almost 8 minutes. A series of babbles about five year plans, nonexistent policies, asset replacement summaries, reserves, smoothing, ten year plans and Pinkerton spurting out: “Somehow the money may be needed for a roof so we are setting up reserves”. Really, the money in the budget and the resolution is to be spent in one year. It would be real tough to set up reserves when the money is planned for one year. Knowing that the cock and bull story was not holding water, Eick jumped in and stated that the Staff thinks only in the AGGREGRATE. So as long as the TOTAL amounts for capital projects on one sheet of paper agrees with the TOTAL amount for capital projects on the other sheet of paper we should feel real good about their reporting on what the Fees are to be used for. They seem to think the public doesn’t need to know the real numbers for each venue. Does anyone concur with this?
What was more interesting was Wong, Horan and Morris sat quietly like “bumps on a log” (defined as unmoving, inactive and stupidly silent) and let this inaccurate reporting stand for a vote. The budget and the Resolution was passed 3-2 with Callicrate and Dent voting no.
Why have a Budget indicating the Fees required by venue and have a Resolution allocating the Fees by venue if both numbers do not agree. The information means nothing? These guys running the District are manipulators and the three Board Members Wong, Morris and Horan run cover for the manipulators. Any person with common sense would not vote for these distortions. Not good for you or us. This is no way to run a railroad.
#Accounting
Mar 06, 2019 7:02:30am
Our Village Voice updated their status.
Consistency – A bedrock of accounting reports. None at IVGID. WHERE IS WONG?
Any Certified Public Accountant (“CPA”) , which would include Kendra Wong, should know that consistency in accounting and reporting of financial information is important, really important. The consistency principle states that, once you adopt an accounting principle or method, continue to follow it consistently in future accounting periods. Wong may have been asleep in the accounting class when consistency was taught or she was lucky that a consistency question was not part of her CPA exam. Based on her voting actions with IVGID, she is either oblivious to the common principle or she does not care.
Almost immediately after Pinkerton arrived on the IVGID shores in 2014, he decided the reporting of IVGIDs financial activities should be changed. Enterprise accounting was out and Government accounting was in. Enterprise accounting had been used by IVGID since its inception and was consistent from year to year. The lame excuse for the change provided in the June 30, 2015 audited financial statements was: “The District has changed it approach to the pricing of services and in particular recognizes that the use of the facility fee to provide resources for capital expenditures and debt service cannot be displayed in a readily understandable fashion for its constituents.” Now if anyone can figure what approach in pricing was changed let us know.
Pinkerton decided to change consistency. The Board of Trustees (Wong being part, Callicrate not) approved a resolution to create government funds for Community Services and Beaches to account for and report operations in a separate Special Revenues Fund, capital projects in a separate fund and debt service in a separate fund. Two funds became six. So three years go by with a lack of consistency but we may be having consistency in the future.
OOPS not so fast here. The TENATIVE budget for the upcoming fiscal year 2019/2020 will be presented tonight and states that operations, capital projects and debt service will only be accounted for in the special revenue fund and the capital projects and debt service funds have been “deactivated”, thus negating the change in accounting made in 2015. The Board of Trustees and the public have not been apprised of this change. The 2015 Board resolution adopting the six funds for specific purposes should have been unwound before the budget is presented offering another change in accounting and reporting. Chairman Wong has a duty to require a new resolution be adopted before any budget with new accounting and reporting criteria is presented. Expect Wong, Horan and Morris to approve the budget and violate the existing resolution.
At this stage we won’t bore our readers with why the first change in accounting made in 2015 was inappropriate, but one thing just sticks out. Before the change was ever made, IVGID wanted the Department of Taxation and the Auditor to bless the change. No one blessed anything. The auditors representative was quite confused stating, at a Board meeting, that the Rec and Beach fee was a TAX but later withdrew the statement and decided the Rec and Beach Fee was an imposed non exchange transaction. Premise for drawing that conclusion? Unknown. Once residents pay the annual Rec and Beach Fee residents receive Picture Passes and Punch Cards which are exchanged for lower user rates at the recreational venues. This sounds like, looks like, and feels like an exchange so it probably is an exchange. After we wrote several letters to the Board on the issue of exchange and non exchange transactions, the auditor reviewed the letters, produced a report, IVGID paid $4,200, and then IVGID claimed it did not have a copy of the report. We may never know the auditors stance on the subject but we will keep trying to find out.
SO LETS BE CLEAR, THERE IS NO CONSISTENCY. THREE DIFFERENT PRSENTATIONS OF ACCOUNTING AND REPORTING IN FOUR YEARS. BAD STUFF.
Auditors are especially concerned that their clients follow the consistency principle, so that the results reported from period to period are comparable. This means that some audit activities will include discussions of consistency issues with the management team. An auditor may refuse to provide an opinion on a client’s financial statements if there are clear and unwarranted violations of the principle.
WHERE IS WONG?
#Accounting
Any Certified Public Accountant (“CPA”) , which would include Kendra Wong, should know that consistency in accounting and reporting of financial information is important, really important. The consistency principle states that, once you adopt an accounting principle or method, continue to follow it consistently in future accounting periods. Wong may have been asleep in the accounting class when consistency was taught or she was lucky that a consistency question was not part of her CPA exam. Based on her voting actions with IVGID, she is either oblivious to the common principle or she does not care.
Almost immediately after Pinkerton arrived on the IVGID shores in 2014, he decided the reporting of IVGIDs financial activities should be changed. Enterprise accounting was out and Government accounting was in. Enterprise accounting had been used by IVGID since its inception and was consistent from year to year. The lame excuse for the change provided in the June 30, 2015 audited financial statements was: “The District has changed it approach to the pricing of services and in particular recognizes that the use of the facility fee to provide resources for capital expenditures and debt service cannot be displayed in a readily understandable fashion for its constituents.” Now if anyone can figure what approach in pricing was changed let us know.
Pinkerton decided to change consistency. The Board of Trustees (Wong being part, Callicrate not) approved a resolution to create government funds for Community Services and Beaches to account for and report operations in a separate Special Revenues Fund, capital projects in a separate fund and debt service in a separate fund. Two funds became six. So three years go by with a lack of consistency but we may be having consistency in the future.
OOPS not so fast here. The TENATIVE budget for the upcoming fiscal year 2019/2020 will be presented tonight and states that operations, capital projects and debt service will only be accounted for in the special revenue fund and the capital projects and debt service funds have been “deactivated”, thus negating the change in accounting made in 2015. The Board of Trustees and the public have not been apprised of this change. The 2015 Board resolution adopting the six funds for specific purposes should have been unwound before the budget is presented offering another change in accounting and reporting. Chairman Wong has a duty to require a new resolution be adopted before any budget with new accounting and reporting criteria is presented. Expect Wong, Horan and Morris to approve the budget and violate the existing resolution.
At this stage we won’t bore our readers with why the first change in accounting made in 2015 was inappropriate, but one thing just sticks out. Before the change was ever made, IVGID wanted the Department of Taxation and the Auditor to bless the change. No one blessed anything. The auditors representative was quite confused stating, at a Board meeting, that the Rec and Beach fee was a TAX but later withdrew the statement and decided the Rec and Beach Fee was an imposed non exchange transaction. Premise for drawing that conclusion? Unknown. Once residents pay the annual Rec and Beach Fee residents receive Picture Passes and Punch Cards which are exchanged for lower user rates at the recreational venues. This sounds like, looks like, and feels like an exchange so it probably is an exchange. After we wrote several letters to the Board on the issue of exchange and non exchange transactions, the auditor reviewed the letters, produced a report, IVGID paid $4,200, and then IVGID claimed it did not have a copy of the report. We may never know the auditors stance on the subject but we will keep trying to find out.
SO LETS BE CLEAR, THERE IS NO CONSISTENCY. THREE DIFFERENT PRSENTATIONS OF ACCOUNTING AND REPORTING IN FOUR YEARS. BAD STUFF.
Auditors are especially concerned that their clients follow the consistency principle, so that the results reported from period to period are comparable. This means that some audit activities will include discussions of consistency issues with the management team. An auditor may refuse to provide an opinion on a client’s financial statements if there are clear and unwarranted violations of the principle.
WHERE IS WONG?
#Accounting
Apr 10, 2019 7:51:03am
Our Village Voice updated their status.
Director of Finance Eick’s $1,100,000 Mistake and the Board Majority’s Vote to Cover It Up
On Wednesday, September 25, 2019 the Board of Trustees was required to vote on correcting a grave accounting error which violated the law and distorted the District’s 2018 audited financial statements and its fiscal year 2019 and 2020 budgets. Fortunately, the error did not involve money going out the back door and into someone’s bank account. It was simply an attempt to circumvent the rules. It could be considered a mistake and reasonable people can forgive mistakes. But, admitting a mistake takes integrity.
The issue was simple. In 2013, IVGID ended self-insuring worker compensation claims and had a $1,250,000 reserve set aside for potential claims. In 2018, it was determined that all these reserves were no longer needed after all remaining claims were transferred to the District’s new insurance carrier. Nevada law requires all unused reserves be transferred to the General Fund. Instead of following this Statute, over the last two years, $1,100,000 was transferred to other funds, in violation of the law. Citizens recognized this mistake and notified the Department of Taxation (“DOT”) along with IVGID Audit Committee members Horan, Wong and Morris. Citizens requested the mistake be rectified. The DOT demanded that Mr. Eick correct the violation and required a vote by the Board at a public meeting. After all, we are talking about $1,100,000 of public money and an indisputable violation of Nevada law.
In response, Mr. Eick delivered a convoluted Board agenda item for the Board’s approval. It consisted of a 120 word sentence which no citizen could possibly understand. Not even a single Trustee. Trustee Dent asked for the item to be pulled from the agenda and rewritten to comply with the Open Meeting Law’s requirement for clear and complete language. This would avoid another Open Meeting Law violation and allow the citizens and the Board an opportunity to understand the agenda item when it was brought back at the next Board meeting. Chair Wong would not entertain removing the item and kept it on the evening’s agenda.
For 36 minutes, which seemed like hours, it became exceedingly clear that the Trustees had absolutely no idea of what they were actually being asked to approve. Eick and Morris played an interesting game of verbal ping pong. Trustee Dent tried to get answers on the reason previous transfers had to be reversed, new transfers made and the timing for the transfers changed both retroactively and in the future. NOT ONCE did Eick give any of the Trustees a straight answer. NOT ONCE did he admit he made a mistake when he convinced the Board in 2018 to unanimously approve the transfer of these reserves to the wrong funds. NOT ONCE did he own up to making a mistake that violated the law which he did not choose to correct, until he was caught.
As expected, Audit Committee Chair Horan and his fellow members Wong and Morris, who are charged with oversight, provided none. Instead, they sprung into action providing cover for Eick’s elaborate cover-up. Horan praised Eick for all of his good work. Wong claimed “the crux of the matter is the Department of Taxation changed its mind” and then stated “the illegal transfers were estimates.” Really! To top it off, Morris said the agenda item was unclear and it was a “black eye” on the District but let’s quickly put this behind us and move on.
The three partners in another IVGID crime voted on an agenda item that made every effort to obscure its meaning and bought in to the cover up. Trustees Dent and Callicrate, who stated their opposition at the out start, voted against the motions. An open meeting law violation has occurred and no doubt a complaint will be filed with the Attorney General. This will transpire despite the denial of the young lawyer seated as a placemat for Guinasso beside Chair Wong. He made the determination that the 120 word sentence was clear and complete. For those of you who missed seeing Agenda Item H-3, here it is:
“Review, discuss, and authorize a Prior Period Adjustment to Opening Net Position of the IVGID Comprehensive Annual Financial Report for June 30, 2019 for $800,000 for a Transfer Authorized by the Board of Trustees May 9, 2018 and to reflect the full effect of the original transfer as completed during the fiscal year ending June 30, 2019, and to reflect a $300,000 Transfer from the Workers Compensation Fund to the General Fund for the Fiscal Year Ending June 30, 2019, with the full effect of the original transfer authorized May 9, 2018 from the General Fund to the Utility Fund, Community Services Special Revenue Fund and the Beach Special Revenue Fund and to be included in the fiscal year ending June 30, 2020.”
Eick needs to resign and these three Pinkerton and Eick patriots should actually begin taking their fiduciary responsibilities seriously. Trust is fine, but without its partner Verify, these Trustees are not doing their job.
As for Guinasso, the attorney we pay $144,000 a year to ensure that the District complies with Nevada law –apparently, he must have made a mistake too, when he allowed the Board to approve the impermissible transfers in 2018 and 2019. We think it’s also time for him to go…
#Accounting #Violations
On Wednesday, September 25, 2019 the Board of Trustees was required to vote on correcting a grave accounting error which violated the law and distorted the District’s 2018 audited financial statements and its fiscal year 2019 and 2020 budgets. Fortunately, the error did not involve money going out the back door and into someone’s bank account. It was simply an attempt to circumvent the rules. It could be considered a mistake and reasonable people can forgive mistakes. But, admitting a mistake takes integrity.
The issue was simple. In 2013, IVGID ended self-insuring worker compensation claims and had a $1,250,000 reserve set aside for potential claims. In 2018, it was determined that all these reserves were no longer needed after all remaining claims were transferred to the District’s new insurance carrier. Nevada law requires all unused reserves be transferred to the General Fund. Instead of following this Statute, over the last two years, $1,100,000 was transferred to other funds, in violation of the law. Citizens recognized this mistake and notified the Department of Taxation (“DOT”) along with IVGID Audit Committee members Horan, Wong and Morris. Citizens requested the mistake be rectified. The DOT demanded that Mr. Eick correct the violation and required a vote by the Board at a public meeting. After all, we are talking about $1,100,000 of public money and an indisputable violation of Nevada law.
In response, Mr. Eick delivered a convoluted Board agenda item for the Board’s approval. It consisted of a 120 word sentence which no citizen could possibly understand. Not even a single Trustee. Trustee Dent asked for the item to be pulled from the agenda and rewritten to comply with the Open Meeting Law’s requirement for clear and complete language. This would avoid another Open Meeting Law violation and allow the citizens and the Board an opportunity to understand the agenda item when it was brought back at the next Board meeting. Chair Wong would not entertain removing the item and kept it on the evening’s agenda.
For 36 minutes, which seemed like hours, it became exceedingly clear that the Trustees had absolutely no idea of what they were actually being asked to approve. Eick and Morris played an interesting game of verbal ping pong. Trustee Dent tried to get answers on the reason previous transfers had to be reversed, new transfers made and the timing for the transfers changed both retroactively and in the future. NOT ONCE did Eick give any of the Trustees a straight answer. NOT ONCE did he admit he made a mistake when he convinced the Board in 2018 to unanimously approve the transfer of these reserves to the wrong funds. NOT ONCE did he own up to making a mistake that violated the law which he did not choose to correct, until he was caught.
As expected, Audit Committee Chair Horan and his fellow members Wong and Morris, who are charged with oversight, provided none. Instead, they sprung into action providing cover for Eick’s elaborate cover-up. Horan praised Eick for all of his good work. Wong claimed “the crux of the matter is the Department of Taxation changed its mind” and then stated “the illegal transfers were estimates.” Really! To top it off, Morris said the agenda item was unclear and it was a “black eye” on the District but let’s quickly put this behind us and move on.
The three partners in another IVGID crime voted on an agenda item that made every effort to obscure its meaning and bought in to the cover up. Trustees Dent and Callicrate, who stated their opposition at the out start, voted against the motions. An open meeting law violation has occurred and no doubt a complaint will be filed with the Attorney General. This will transpire despite the denial of the young lawyer seated as a placemat for Guinasso beside Chair Wong. He made the determination that the 120 word sentence was clear and complete. For those of you who missed seeing Agenda Item H-3, here it is:
“Review, discuss, and authorize a Prior Period Adjustment to Opening Net Position of the IVGID Comprehensive Annual Financial Report for June 30, 2019 for $800,000 for a Transfer Authorized by the Board of Trustees May 9, 2018 and to reflect the full effect of the original transfer as completed during the fiscal year ending June 30, 2019, and to reflect a $300,000 Transfer from the Workers Compensation Fund to the General Fund for the Fiscal Year Ending June 30, 2019, with the full effect of the original transfer authorized May 9, 2018 from the General Fund to the Utility Fund, Community Services Special Revenue Fund and the Beach Special Revenue Fund and to be included in the fiscal year ending June 30, 2020.”
Eick needs to resign and these three Pinkerton and Eick patriots should actually begin taking their fiduciary responsibilities seriously. Trust is fine, but without its partner Verify, these Trustees are not doing their job.
As for Guinasso, the attorney we pay $144,000 a year to ensure that the District complies with Nevada law –apparently, he must have made a mistake too, when he allowed the Board to approve the impermissible transfers in 2018 and 2019. We think it’s also time for him to go…
#Accounting #Violations
Sep 26, 2019 9:13:29pm
Our Village Voice updated their status.
Does IVGID’s Board of Trustees allow violation of the laws and their own policies by limiting our auditors’ efforts?
We just read with great trepidation the Tahoe Daily Tribune’s Staff report posted on the newspaper’s website highlighting the agenda items on IVGID’s upcoming Board meeting. With regard to the District’s Comprehensive Annual Financial Report for the fiscal year June 30, 2019, which will be presented to the Board of Trustees for approval, the article draws attention to a singular statement in the report made by IVGID’s auditor, Eide Bailly:
“ … nothing came to our attention that caused us to believe that the district failed to comply with the specific requirements of Nevada Revised Statutes cited below,” the letter said, referring to NRS 354.6215, which addresses the limitation on the use of reserves.
However, our audit was not directed primarily toward obtaining knowledge of such noncompliance,” the letter continued.”.
Got that? Feel good about that? Now what about this:
At the same time on November 18, 2019, the same date as the auditor’s report, IVGID’s Director of Finance Gerry W. Eick and Lori A. Pommerenck, IVGID’s Controller, provided a management representation letter to the auditor which excluded their acknowledgement and responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements. They also failed to acknowledge they have reviewed, approved and taken responsibility for the financial statements and related notes. These acknowledgements had been in previous representation letters to the auditor for many years.
It should be noted that the representation letter sent to the auditor was never reviewed by the Board of Trustee audit committee.
Do you actually believe IVGID has a clean audit when neither the independent auditor nor IVGID management takes responsibility for the District’s compliance with laws and regulations? Apparently, exercising oversight of the District’s accounting and reporting of our public money is of no concern to this Board of Trustees. We have reported various non compliance issues for several years and this Board has done NOTHING to correct them. Year after year they continue to ignore their statutory responsibility for proper governance.
Who runs the District? Not the Board of Trustees. Does this allow for corruption?
#Accounting
We just read with great trepidation the Tahoe Daily Tribune’s Staff report posted on the newspaper’s website highlighting the agenda items on IVGID’s upcoming Board meeting. With regard to the District’s Comprehensive Annual Financial Report for the fiscal year June 30, 2019, which will be presented to the Board of Trustees for approval, the article draws attention to a singular statement in the report made by IVGID’s auditor, Eide Bailly:
“ … nothing came to our attention that caused us to believe that the district failed to comply with the specific requirements of Nevada Revised Statutes cited below,” the letter said, referring to NRS 354.6215, which addresses the limitation on the use of reserves.
However, our audit was not directed primarily toward obtaining knowledge of such noncompliance,” the letter continued.”.
Got that? Feel good about that? Now what about this:
At the same time on November 18, 2019, the same date as the auditor’s report, IVGID’s Director of Finance Gerry W. Eick and Lori A. Pommerenck, IVGID’s Controller, provided a management representation letter to the auditor which excluded their acknowledgement and responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements. They also failed to acknowledge they have reviewed, approved and taken responsibility for the financial statements and related notes. These acknowledgements had been in previous representation letters to the auditor for many years.
It should be noted that the representation letter sent to the auditor was never reviewed by the Board of Trustee audit committee.
Do you actually believe IVGID has a clean audit when neither the independent auditor nor IVGID management takes responsibility for the District’s compliance with laws and regulations? Apparently, exercising oversight of the District’s accounting and reporting of our public money is of no concern to this Board of Trustees. We have reported various non compliance issues for several years and this Board has done NOTHING to correct them. Year after year they continue to ignore their statutory responsibility for proper governance.
Who runs the District? Not the Board of Trustees. Does this allow for corruption?
#Accounting
Dec 10, 2019 7:34:46pm
Our Village Voice updated their status.
IVGID upper management kept breaking The Rules at Your Expense
On May 22, 2018, The Board of Trustees approved Resolution 1865 which set forth the amount of Recreation and Beach Facility Fees which property owners would be assessed for fiscal year 2019. These funds were specifically collected and allocated for operations, capital projects and debt service. In 2015, the Board of Trustees established three separate funds for Community Services and the Beaches to insure that the Facility Fees would be allocated in the manner described in each annual Resolution so stakeholders could see how their money is being spent.
For fiscal year ending June 30, 2019, the allocation of the Facility Fees for all Community Services and Beach recreational venues were established as:
– ……………………………….. Community ……………… Beaches
– ……………………………….. Services
-Operations ……………….. $ 1,765,150 ………………. $659,260
-Capital Projects …………. $3,612,400 ………………. $302,484
-Debt Service……………….$ 410,500 …………………. $ 7,756
–
-Total …………………………. $5,788,050……………….. $969,500
The Comprehensive Annual Financial Report (CAFR) for fiscal year 2019 which was required to be sent to the Department of Taxation, but was not approved by Trustees Dent, Callicrate and Schmitz, shows that the Facility Fees were actually allocated in different amounts. Director of Finance Eick decided, on his own, that the Facility Fees would be allocated to provide an additional $1,219,000 and $116,000 to fund Community Services and Beach OPERATIONS at the expense of lesser amounts for capital projects and debt service. The Board of Trustees never approved this and Trustees Wong and Morris, members of the old Audit Committee, did nothing. So capital projects starve as operations get fat
.
Why does this matter?
The Board of Trustees decides how the Facility Fees must be spent and property owners expect that their money will be spent for the purpose they are collected. But Eick, without any oversight, decides what he wants. So instead of close to $4,000,000 being allocated and actually spent on capital projects, a portion of the money is diverted to pay unknown and unbudgeted operating expenses now or in the future. A slush fund has effectively been built up to fuel higher operating expenses while important capital projects sit in the “planning stages.”
Ironically, in fiscal year 2019, Diamond Peak actual operations exceeded the original budget expectations by $2,386,000. So the $1,765,150 of the Community Services Facility Fee allocated by the Board for operating short falls was NEVER required let alone allowing Eick to add another $1,300,000 to the operating coffers. Did anyone get a refund? Not a chance. How about using the funds for capital projects our community has prioritized?
Eick also decided, on his own, to close down the capital project and debt service funds and collect all the money from user fees and the facility fees in the operating funds effective July 1, 2019. This is the ultimate lack of transparency which firmly contradicts the Board Resolution establishing the funds in 2015. How did he do it? Easy, he just got three votes from Wong, Horan and Morris to approve the 2019/2020 budget and made no mention of the need to amend the Resolution. This, of course, holds no water but so what. Horan is now gone and we will see if the budget will be restated.
As a result of Eick “cooking the books,” the operating fund at June 30, 2019 for Community Services has a balance of $13,333,853.This EXCEEDS the Board mandated appropriate level of fund balance by a staggering $9,102,000. The operating fund for the Beaches is also sitting on $1,810,000 when only $481,000 should be the appropriate amount. We need a new Burnt Cedar Pool and a new Incline Beach building.
Eick is out the door, but still hanging around and being paid as a “consultant.” The new Trustee Audit Committee of Schmitz, Dent and Callicrate will be tasked with cleaning up this mess and hopefully bring some order to this lousy accounting which has occurred for several years. We have asked them to fix this one man financial train wreck.
#Accounting
On May 22, 2018, The Board of Trustees approved Resolution 1865 which set forth the amount of Recreation and Beach Facility Fees which property owners would be assessed for fiscal year 2019. These funds were specifically collected and allocated for operations, capital projects and debt service. In 2015, the Board of Trustees established three separate funds for Community Services and the Beaches to insure that the Facility Fees would be allocated in the manner described in each annual Resolution so stakeholders could see how their money is being spent.
For fiscal year ending June 30, 2019, the allocation of the Facility Fees for all Community Services and Beach recreational venues were established as:
– ……………………………….. Community ……………… Beaches
– ……………………………….. Services
-Operations ……………….. $ 1,765,150 ………………. $659,260
-Capital Projects …………. $3,612,400 ………………. $302,484
-Debt Service……………….$ 410,500 …………………. $ 7,756
–
-Total …………………………. $5,788,050……………….. $969,500
The Comprehensive Annual Financial Report (CAFR) for fiscal year 2019 which was required to be sent to the Department of Taxation, but was not approved by Trustees Dent, Callicrate and Schmitz, shows that the Facility Fees were actually allocated in different amounts. Director of Finance Eick decided, on his own, that the Facility Fees would be allocated to provide an additional $1,219,000 and $116,000 to fund Community Services and Beach OPERATIONS at the expense of lesser amounts for capital projects and debt service. The Board of Trustees never approved this and Trustees Wong and Morris, members of the old Audit Committee, did nothing. So capital projects starve as operations get fat
.
Why does this matter?
The Board of Trustees decides how the Facility Fees must be spent and property owners expect that their money will be spent for the purpose they are collected. But Eick, without any oversight, decides what he wants. So instead of close to $4,000,000 being allocated and actually spent on capital projects, a portion of the money is diverted to pay unknown and unbudgeted operating expenses now or in the future. A slush fund has effectively been built up to fuel higher operating expenses while important capital projects sit in the “planning stages.”
Ironically, in fiscal year 2019, Diamond Peak actual operations exceeded the original budget expectations by $2,386,000. So the $1,765,150 of the Community Services Facility Fee allocated by the Board for operating short falls was NEVER required let alone allowing Eick to add another $1,300,000 to the operating coffers. Did anyone get a refund? Not a chance. How about using the funds for capital projects our community has prioritized?
Eick also decided, on his own, to close down the capital project and debt service funds and collect all the money from user fees and the facility fees in the operating funds effective July 1, 2019. This is the ultimate lack of transparency which firmly contradicts the Board Resolution establishing the funds in 2015. How did he do it? Easy, he just got three votes from Wong, Horan and Morris to approve the 2019/2020 budget and made no mention of the need to amend the Resolution. This, of course, holds no water but so what. Horan is now gone and we will see if the budget will be restated.
As a result of Eick “cooking the books,” the operating fund at June 30, 2019 for Community Services has a balance of $13,333,853.This EXCEEDS the Board mandated appropriate level of fund balance by a staggering $9,102,000. The operating fund for the Beaches is also sitting on $1,810,000 when only $481,000 should be the appropriate amount. We need a new Burnt Cedar Pool and a new Incline Beach building.
Eick is out the door, but still hanging around and being paid as a “consultant.” The new Trustee Audit Committee of Schmitz, Dent and Callicrate will be tasked with cleaning up this mess and hopefully bring some order to this lousy accounting which has occurred for several years. We have asked them to fix this one man financial train wreck.
#Accounting
Feb 15, 2020 10:11:30pm
Our Village Voice updated their status.
Is it fair to keep our combined IVGID Annual Recreation and Beach Facility Fees at $830 for the upcoming 2021 Fiscal Year?
Since February, the Board of Trustees has been deliberating on whether the Recreation and Beach Facility Fees should be reduced in the upcoming budget for the new fiscal year beginning on July 1, 2020. The Fees currently total $830.00 per dwelling unit and add up to more than $6.7 million collected annually. Under Nevada law, IVGID can assess these Fees as a Recreational Standby Service Charge and Availability of Use Fee to prop up any shortfalls necessary to cover all the costs of operations, capital projects and debt service for our recreational and beach venues. These annual fees that IVGID collects are in addition to the portion of property and c-taxes IVGID receives from Washoe County and the additional property tax on parcel owners IVGID independently assesses. Those taxes of $3.5 million are chewed up to pay for a hefty administration.
Now, we are the first to say that accurately predicting the future is impossible and with the current pandemic wreaking havoc on our health and safety, forecasting how we will safely operate our venues and project revenues in an uncertain economic environment has become much more difficult. But a budget must be done.
There are several good and fair reasons for reducing the more than $6.7 million the District is collecting in annual Rec and Beach Fees:
1) Since 2015, Diamond Peak’s financial performance has been outstanding. This was due to good snow years, a vibrant economy and good pricing. As a result, the Rec Fee assessed to support operations for ALL of the Recreational venues was NEVER NEEDED and an overwhelming amount of Cash has been piled up far exceeding Board Policy. According to the tentative 2021 budget, at the end of the new fiscal year, the amount of CASH IN EXCESS of reserve requirements of $5.5 million will be a staggering $11.5 million including the General Fund.
2) Over the past five years, Diamond Peak revenues have exceeded budgets by $12.1 million or 30% over projections. We believe management should reassess the ultra-conservative revenue forecasts for Diamond Peak and begin to budget revenues at a higher level. We understand weather forecasting isn’t always predictable, but understating expected revenues in order to justify assessing money from our Rec fee to support operations that is not needed, is just not right. Revenues last winter, even with the early closing because of the pandemic, exceeded the budget by over $800,000.
3) Services at the venues are planned to be reduced, so logically the subsidy should be reduced. Incline Village/Crystal Bay property owners should not be required to pay the same annual fees to get less.
4) Trustee Dent pointed out that 3 of the 5 capital project priorities for the Community Services Fund and Beach Fund established in 2018 have been budgeted and addressed: the Dog Park will be privately funded; the remodeling of the Tennis Center and Mountain Golf Clubhouse. The remaining two priorities are at the Beaches — to replace the Burnt Cedar Pool and the Incline Beach Building. These require only $6 million (which we believe to be an excessive cost estimate). Nevertheless, with surplus cash piling up in the Community Services Fund, there is no need for a dollar more of a Rec Fee to be collected for operations, budgeted capital projects or debt service. For the Beach Fee, an accurate accounting for actual revenues without fictitious revenues provided by unlawful “punch card utilization” transfers as well as identifiable and justified expenses must be determined to calculate a fair Fee that provides the required operation and prioritized capital project support.
5) Previous Boards promised residents that after Bonds were paid off, the money collected to service the debt would no longer be collected and the Fees would be reduced. That never happened as Pinkerton and his band of cronies wanted every dime they could get their hands on.
6) The “elephant in the room” is the pandemic’s effect on Revenues over the coming fiscal year. IVGID’s worst case scenario suggests $2.7 million could be dropped because of low attendance at the Golf Courses and Diamond Peak. Who knows what those outcomes will be? But again, assuming staff’s worst case scenario, the stack of Cash would remain in excess of required reserves.
7) And, what about our pocket books being emptied over the past three months? Maybe we could all use a break.
We think Trustees Callicrate, Dent and Schmitz are on the right track suggesting that the total Fees be lowered. How much, if any, will be decided over the next two weeks?
As expected, Trustee Wong wants no change. You give, she spends. She wants money to drum up more litigation, waste money on lawyers and lobbyists, and further expand the size of government. Trustee Morris, believe it or not, wants to borrow money to fund the two Beach projects. He seems to forget that money borrowed has to be repaid. He loves to use other people’s money. Thank our lucky stars he will be gone in January.
Let’s see what happens. We will know after the Board approves the final budget at their meeting scheduled for May 27, 2020.
#Accounting
Since February, the Board of Trustees has been deliberating on whether the Recreation and Beach Facility Fees should be reduced in the upcoming budget for the new fiscal year beginning on July 1, 2020. The Fees currently total $830.00 per dwelling unit and add up to more than $6.7 million collected annually. Under Nevada law, IVGID can assess these Fees as a Recreational Standby Service Charge and Availability of Use Fee to prop up any shortfalls necessary to cover all the costs of operations, capital projects and debt service for our recreational and beach venues. These annual fees that IVGID collects are in addition to the portion of property and c-taxes IVGID receives from Washoe County and the additional property tax on parcel owners IVGID independently assesses. Those taxes of $3.5 million are chewed up to pay for a hefty administration.
Now, we are the first to say that accurately predicting the future is impossible and with the current pandemic wreaking havoc on our health and safety, forecasting how we will safely operate our venues and project revenues in an uncertain economic environment has become much more difficult. But a budget must be done.
There are several good and fair reasons for reducing the more than $6.7 million the District is collecting in annual Rec and Beach Fees:
1) Since 2015, Diamond Peak’s financial performance has been outstanding. This was due to good snow years, a vibrant economy and good pricing. As a result, the Rec Fee assessed to support operations for ALL of the Recreational venues was NEVER NEEDED and an overwhelming amount of Cash has been piled up far exceeding Board Policy. According to the tentative 2021 budget, at the end of the new fiscal year, the amount of CASH IN EXCESS of reserve requirements of $5.5 million will be a staggering $11.5 million including the General Fund.
2) Over the past five years, Diamond Peak revenues have exceeded budgets by $12.1 million or 30% over projections. We believe management should reassess the ultra-conservative revenue forecasts for Diamond Peak and begin to budget revenues at a higher level. We understand weather forecasting isn’t always predictable, but understating expected revenues in order to justify assessing money from our Rec fee to support operations that is not needed, is just not right. Revenues last winter, even with the early closing because of the pandemic, exceeded the budget by over $800,000.
3) Services at the venues are planned to be reduced, so logically the subsidy should be reduced. Incline Village/Crystal Bay property owners should not be required to pay the same annual fees to get less.
4) Trustee Dent pointed out that 3 of the 5 capital project priorities for the Community Services Fund and Beach Fund established in 2018 have been budgeted and addressed: the Dog Park will be privately funded; the remodeling of the Tennis Center and Mountain Golf Clubhouse. The remaining two priorities are at the Beaches — to replace the Burnt Cedar Pool and the Incline Beach Building. These require only $6 million (which we believe to be an excessive cost estimate). Nevertheless, with surplus cash piling up in the Community Services Fund, there is no need for a dollar more of a Rec Fee to be collected for operations, budgeted capital projects or debt service. For the Beach Fee, an accurate accounting for actual revenues without fictitious revenues provided by unlawful “punch card utilization” transfers as well as identifiable and justified expenses must be determined to calculate a fair Fee that provides the required operation and prioritized capital project support.
5) Previous Boards promised residents that after Bonds were paid off, the money collected to service the debt would no longer be collected and the Fees would be reduced. That never happened as Pinkerton and his band of cronies wanted every dime they could get their hands on.
6) The “elephant in the room” is the pandemic’s effect on Revenues over the coming fiscal year. IVGID’s worst case scenario suggests $2.7 million could be dropped because of low attendance at the Golf Courses and Diamond Peak. Who knows what those outcomes will be? But again, assuming staff’s worst case scenario, the stack of Cash would remain in excess of required reserves.
7) And, what about our pocket books being emptied over the past three months? Maybe we could all use a break.
We think Trustees Callicrate, Dent and Schmitz are on the right track suggesting that the total Fees be lowered. How much, if any, will be decided over the next two weeks?
As expected, Trustee Wong wants no change. You give, she spends. She wants money to drum up more litigation, waste money on lawyers and lobbyists, and further expand the size of government. Trustee Morris, believe it or not, wants to borrow money to fund the two Beach projects. He seems to forget that money borrowed has to be repaid. He loves to use other people’s money. Thank our lucky stars he will be gone in January.
Let’s see what happens. We will know after the Board approves the final budget at their meeting scheduled for May 27, 2020.
#Accounting
May 12, 2020 6:56:29pm
Our Village Voice updated their status.
“Manipulators” in the IVGID accounting and finance departments keep misreporting data.
We have stated several times, that the IVGID Board of Trustees is allowing an accumulation of money far and above the appropriate levels required by their own Board Policies. At every Board meeting since early May, citizens spoke out that the excess accumulation which at June 30, 2020 was over $14 million must be committed to something, anything. Just commit it. Now anyone could have guessed, as the IVGID staff continues to subvert information, the actual fund balances at June 30, 2020, was $3.9 million MORE than estimated five weeks earlier. So the excess slush funds grew s to $17.9 million.
In May, the Board did allocate for fiscal year 2020-2021, $5.6 million for capital projects and $1.4 million for a mandated refund of property taxes to owners which was over charged in prior years. The EXCESSE slush now sits at $10.6 million hanging around uncommitted.
So those “Manipulators'” cannot seem to figure out how to estimate 5 weeks of revenues and expenses between May and June, when most recreational venues were closed. As a result IVGID ends up with an additional $3.9 million not known until last week. We are not talking about “chicken feed” here.
During the spring budget deliberations, Trustees Dent and Schmitz wanted a portion of the Facility Fees, paid by property owner, to be REFUNDED since most recreation venues were closed and services were not being provided. Throughout the summer, delay after delay came forth from IVGID staff and they finally suggested to the Board, that a measly $500,000 refund should be made but never informed the Board that an additional $3.9 million was found under a pillow somewhere in the Manipulators offices. A refund never happened and delay after delay was spent on deliberating how to deliver to each property owner this dynamic $65.00 per dwelling unit.
The Board of Trustees cannot make reasonable decisions on any matter when the BOOKS of IVGID are so distorted and reporting is so bad.
At several past Board Meetings, General Manager, Indra Winquest, promised to bring forth a spending plan for all of the excess money. Each board meeting he delayed a proposal until the next board meeting. At the last meeting he stated spending the excess money won’t be on the agenda until after the election.
We hope that Trustees Dent and Schmitz will bring this up at the Board meeting on October 28, 2020 and ask that this staggering $10.9 million slush fund be either refunded or committed to something useful.
Dent and Schmitz do not make the Board agendas. The Chairman and GM decide. When the GM makes a statement that committing excess funds will be on a future agenda, but is not, there is not much Trustees can do about it. The agenda was set. Promises by the GM should not be made just to be broken.
#Accounting
We have stated several times, that the IVGID Board of Trustees is allowing an accumulation of money far and above the appropriate levels required by their own Board Policies. At every Board meeting since early May, citizens spoke out that the excess accumulation which at June 30, 2020 was over $14 million must be committed to something, anything. Just commit it. Now anyone could have guessed, as the IVGID staff continues to subvert information, the actual fund balances at June 30, 2020, was $3.9 million MORE than estimated five weeks earlier. So the excess slush funds grew s to $17.9 million.
In May, the Board did allocate for fiscal year 2020-2021, $5.6 million for capital projects and $1.4 million for a mandated refund of property taxes to owners which was over charged in prior years. The EXCESSE slush now sits at $10.6 million hanging around uncommitted.
So those “Manipulators'” cannot seem to figure out how to estimate 5 weeks of revenues and expenses between May and June, when most recreational venues were closed. As a result IVGID ends up with an additional $3.9 million not known until last week. We are not talking about “chicken feed” here.
During the spring budget deliberations, Trustees Dent and Schmitz wanted a portion of the Facility Fees, paid by property owner, to be REFUNDED since most recreation venues were closed and services were not being provided. Throughout the summer, delay after delay came forth from IVGID staff and they finally suggested to the Board, that a measly $500,000 refund should be made but never informed the Board that an additional $3.9 million was found under a pillow somewhere in the Manipulators offices. A refund never happened and delay after delay was spent on deliberating how to deliver to each property owner this dynamic $65.00 per dwelling unit.
The Board of Trustees cannot make reasonable decisions on any matter when the BOOKS of IVGID are so distorted and reporting is so bad.
At several past Board Meetings, General Manager, Indra Winquest, promised to bring forth a spending plan for all of the excess money. Each board meeting he delayed a proposal until the next board meeting. At the last meeting he stated spending the excess money won’t be on the agenda until after the election.
We hope that Trustees Dent and Schmitz will bring this up at the Board meeting on October 28, 2020 and ask that this staggering $10.9 million slush fund be either refunded or committed to something useful.
Dent and Schmitz do not make the Board agendas. The Chairman and GM decide. When the GM makes a statement that committing excess funds will be on a future agenda, but is not, there is not much Trustees can do about it. The agenda was set. Promises by the GM should not be made just to be broken.
#Accounting
Oct 21, 2020 11:57:39am