Monday morning’s early meeting of the County Commissioners saw a handful of residents in attendance ready to voice their opinion on the declaratory action filed with the state regarding the receipt of $1.8 million from the Air Force, including Nykki Holton, County School Superintendent, and Grover C. Dils Administrator/CEO Jason Bleak.
County Treasurer Shawn Frehner spoke first on the item regarding the action, saying that it was not her intention for the declaratory action to be viewed as an “adversarial” action. The state has looked at as more of a lawsuit. Since the repercussions of the action, with the aggressiveness the state has taken on pursuing Lincoln County, Frehner felt it was, in her opinion, not “the best thing for the county.” She recommended the commissioners withdraw the declaratory action.
It was portrayed that the state’s solution for the situation was to include all funds for the 2013 tax year, and be apportioned the same as all other tax revenues collected.
However District Attorney Daniel Hooge reiterated that the state can only go back for one fiscal year to collect monies they think are incorrectly recorded. The county assessor could go back only three years. Because the contract for the Air Force to pay the County based on numbers provided by the Air Force, Hooge felt the county, not the state, should be able to collect the money.
The contract agreement Ashley Hall and Associates drafted between the County and the Air Force states that the money is to, “forever release, acquit and forever discharge the Air Force from any and all claim or claims for the alleged underreporting of the taxable value,” for facilities, equipment and services provided at the base.
Hooge filed an injunction for a cease and desist order last Thursday, asking the court to stop the state’s administrative action they were taking with the county, with rumors of subpoenas and threats of an audit.
School Superintendent Holton spoke to the commissioners, explaining that the declaratory action filed with the Seventh Judicial District Court proposed more fines and legal fees to the school for representation during the ruling. Hooge is also the attorney for the school district, and as such, would not be able to represent both.
“It costs me money. It all costs me money,” Holton said, asking that commissioners withdraw their declaratory action. She also stated, “I represent a lot of people. I’m the biggest employer [in the county].”
Bleak, being represented by attorney Dylan Frehner, suggested to, “move away from a declaratory action and move to apportion.” He said the hospital gives away care for free, and, “it’s not comfortable to ask the county for money.” Bleak felt, “It should be apportioned so our board can decide what to do with it.”
Much of the concern of how to break down the money involved trying to produce figures to see how much of the money would be considered as tax money for the year, as opposed to how much for fees and leg work was used in order to properly apportion it.
Commissioner Paul Donohue said, “We’re not negotiating that it’s apportioned taxes. We’re negotiating what’s taxes, fees,” and should be able to work out within local entities what the amounts are.
Commissioner Kevin Phillips disagreed, stating NRS 361.157 2b, says it’s a form of possessory tax, and was never treated as Payment In Lieu of Taxes (PILT) funds, and that, “I think we’re throwing in the towel too soon.”
Phillips and Hooge took the opinion that one of the major reasons this issue needed to go before a judge for a ruling was to determine how the county should view and apportion the money. Phillips said no other county or state anywhere has a deal like this, with a secretive military base, which was a reason to see a code or ruling put into place for the judgment.
Donohue commented, “There is a secretive nature, whether we like it or not.”
Commissioner Paul Mathews said, “I think Dan’s points are valid. We don’t have a hidden agenda, we just want to do what’s right for the county.”
The Commissioners ruled on a 3 to 1 vote to dismiss the declaratory action filed by Lincoln County. Commissioners Higbee, Mathews and Donohue voted in favor of dropping the action. Phillips voted against the motion.
Commissioner Adam Katschke was absent for the special meeting.
Afterwards, Hooge told the record, “The State and the Assessor feel that it was improper for the County Commission to hire a consultant and to negotiate with the Air Force.” However, he asked why the Commission had to do it in the first place.
Last year’s receipt of $750,000 was an increased to the normal assessed value that was being given. Multiply that by the 12 years the county wasn’t receiving $750,000, and that totals to $9 million for the underreported years from 2000 to 2012. Hooge said that would have been roughly $2 million for the school district and nearly $1 million for the hospital.
Neither the Assessor nor the State assessed the property for those years. Legally, if the Assessor cannot assess, it falls on the state’s responsibilities to pursue. Although the Air Force restricts anyone from assessing the property and will not provide the county with a list of private contractors, whether or not it was possible for the Assessor to do the job, The Commission just proved it was possible. It just required some effort,” said Hooge.