At the Board meeting October 12, 2022, resident Linda Smith spoke eloquently of the need for the IVGID Board to provide oversight and be fiduciaries.  The term fiduciary is from Roman law, and means a person invested with rights and powers to be exercised for the benefit of another person.

But is the Trustee told that is their job? What is in the IVGID  Trustee Handbook?  We read the handbook and learned: there is NO JOB DESCRIPTION.  Yet, a trustee is arguably one of the most important jobs at IVGID.

Newly elected trustees Ray Tulloch and David Noble will take office in January. They join Sara Schmitz, Matthew Dent, and Michaela Tonking.  

So how do the Trustees learn about their responsibilities?  Sometimes training is provided – by IVGID management. In 1999, Trustees attended a workshop.    [click to see the  WORKSHOP AGENDA – PDF download.] 

Although the training includes “monitoring results” as a responsibility, residents have repeatedly stated in public meetings that IVGID managers are not held accountable.

And the  Trustee Handbook and training agenda never mention the words oversight or fiduciary. Or Dillon’s Rule, which is a foundational tenet (main principles) for local government in Nevada. Dillon’s Rule is like the game “Mother, may I”  with the Nevada legislature as the Mother. The local government is ONLY able to do what the law specifically says it can do. For anything else, the local government must go to the state  legislature, and ask for legislation to be passed.  Thirty-one (31) states in the US are Dillon’s Rule and not Home Rule.  [see graphic below: Dillon’s Rule in Nevada law].

Yet, the job title “Trustee” implies fiduciary responsibilities. And oversight would be part of those responsibilities ?

Is providing oversight  expecting too much of our trustees? They are part-time, and paid only $9,000 a year, but are to attend about  28  public meetings per year. These meetings often last for 4 or more hours. Yes, the meetings could be made more efficient – but that is another article. Plus there are the unknown hours (if any) spent in 1-on-1 meetings with the General Manager or staff. Then Trustees must prepare for public meetings by reading packets that are often 300-500 pages. Trustees must also  respond to residents’ concerns, etc.

In 2017 legislative hearings, Douglas County District Attorney Mark Jackson stated that once a General Improvement District is created, it receives “no oversight”. Nevada is not the only state in this position. Other states that have reported a “lack of oversight” in special districts include NY, CA, TX, WY, WA, UT, FL, AL, CO, KY. Nevada has no commission or Office of the Inspector General to audit GIDs. Yet in Nevada they are 30% of all local government.

Trustees are overwhelmed by the areas which they must provide oversight. A list is incorporated and consists of over 1,100 pages. This does not include the Nevada Revised Statutes.   [Click for a larger image.]

If the Trustees cannot provide oversight, what changes should be made?

1. The addition of an internal audit function. At over $40 million revenue per year, IVGID’s revenue  is larger than half of the counties in Nevada. Yet IVGID  has no internal audit function. The day-to-day responsibilities of government internal auditors are to safeguard resources against fraud, waste, and abuse; promote accuracy and reliability in accounting; and evaluate compliance with laws, regulations, policies and procedures. (Remember that 1,100+ page list of policies & procedures? That’s where internal audit comes in.) This function could be outsourced rather than staffed by employees; Carson City uses this approach.  The internal audit function must report to the Audit Committee not to the General Manager, as it is critical the function be independent. Obviously, the Audit Committee must continue, or the internal auditor would have to report to the Board. The job position for one internal auditor has been included in past IVGID budgets, but it has never been filled. The last three years of IVGID’s audited financial statements have indicated that  there are  material weaknesses in financial reporting and internal controls which would indicate that an internal auditor is necessary.

2. The legal counsel should report to the Board, not the General Manager. “No one can serve two masters”.  If the General Manager needs a legal opinion, an opinion can be sought through the Nevada Attorney General.  Although NRS 252.160 requires the County District Attorney to render legal opinions to  county, township and district officers free of charge, it is possible there might be bias in the opinion.

3. The Board needs to enact a Whistleblower Ordinance, as required since 2019 by Nevada law (NRS 281.635). The past Audit Committee sought approval of a policy which was tabled by the Trustees.

4. The Board needs to set measurable objectives for departments (i.e. Golf, Skiing, Tennis  and recreational programs. – not just the GM – and then measure results.

With these four changes, the trustees would be better situated to deliver what residents expect. And wouldn’t that be a change for the better?

The author, J. Gumz, is a long-time resident and property owner of Incline Village and a registered voter. Cliff Dobler, also a long-time resident and property owner of Incline Village, and a registered voter, contributed to this article.

IVGID Trustee Handbook