With a term used by Commissioner Kevin Phillips as ?new money,? some $1,874,000 received by Lincoln County has created a unique situation.
During the Commission meeting March 3, the money given to the County to settle allegations of underreporting of contractual obligations, was discussed as to what to do with it.
District Attorney Daniel Hooge stated the money is a one-time payment of an agreement worked out by Ashley Hall and Associates on behalf of the County and the U.S. Air Force for underreporting revenues on contractual obligations since the year 2000.
In negotiations with Ashley Hall & Associates, the Air Force is agreeing that, although without intent, they did underreport the taxable value of the facilities, equipment, or personal property.
The uniqueness of the situation is not receiving the money, but rather it was not delivered with instructions as to how to use it. Was the payment intended to be apportioned out because it was payment in lieu of taxes? Or simply a lump sum of unpaid money from the reevaluation of lands in the County the Air Force uses?
Hooge explained the situation is unique because Lincoln County does not bill the contractors directly. The Air Force leases out to contractors office space and facilities which can be billed as possessory interest, beneficial interest, or beneficial use tax on government owned facilities pursuant to NRS 361.157 and 361.159. Other counties in Nevada bill the contractors directly, but because of the sensitive nature of the Air Force Base in Lincoln County, billing is not permitted, because the County is not supposed know the contractors even exist, nor to bill them.
Treasurer Shawn Frehner said she needed some clarification from the Commission as to how to proceed.
Apparently, as Ashley Hall learned, the contracts between the County and the Air Force were not revised, and as the value of the land increased over the years, the amount of tax money that should have been paid was not, and as negotiated in 2012 by Hall, the Air Force was willing to make a $1.8 million one-time settlement payment.
However, when the payment was received, the Air Force did not specify it was for an ad velorum tax or not.? Frehner said, if it is determined to be for ad velorum tax, ?then that money has to be apportioned. But, an argument is that the money is a Payment in Lieu of Taxes which does not have to be apportioned.? She added, ?If we had a decision on what the money was, then I would know how to distribute it.?
Hooge said is it a unique situation with good arguments on both sides, ?because it is like receiving money as Payment in Lieu of Taxes from the contractor, but at the same time it is really not, because it is a contractual agreement with the federal government (Air Force) directly instead of payment in lieu of taxes.?
He said the final decision is not with the Commission board, but with the Treasurer, and Frehner said she needs clarification in understanding what course to follow ?to distribute it correctly.?
This is the ?new money? Commissioner Phillips spoke of, that in his opinion, is not a property use tax, and he would like to see the money placed in the Capital Improvements Fund.
Discussion was held about whether or not to seek an opinion from the state Attorney General or a more definitive declaratory judgment from the 7th Judicial District Court in Ely.
Commissioners eventually felt a more definitive answer would come from the District Court and voted 4-1 to follow that route. Commissioner Donohue felt the money should be apportioned instead of held in the Capital Improvement Fund.
Jason Bleak, speaking on behalf of the Grover C. Dils Hospital District, and Nykki Holton, County Schools Superintendent, said they would like to see the money apportioned, so they would be able to get a piece of the pie, instead of the money going into county coffers.
However, after hearing the decision of the board, Bleak said he felt more comfortable in knowing that whatever does happen, he would still be able to, at a later time come to the board with requests for Capital improvement projects, if necessary.
Phillips said he was delighted the County was able to be ?haggling over new money we have, rather than money we don?t have.?