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Spring Creek Association
Follow-up Questions to Municipalities Meeting on June 15th
“Can a town charge sales tax and receive the proceeds?”
The town can receive proceeds of sales tax through a consolidated tax (C-tax) distribution. This was demonstrated in the report with the provision of the Sheriff service via interlocal agreement with the Elko County Sheriff and the C-tax received to cover the cost of the agreement. Pages 25 and 26 in the report explain the provisions for the consolidated tax distribution according to Nevada Revised Statutes (NRS).
The sales tax rate in a County is comprised of the statewide minimum tax rate plus option and/or special and local acts. Option, and special and local act, taxes are County specific based on legislation and voter approved measures for specific purposes. The statewide minimum rate includes: 2.00% to the State General Fund (NRS 372), 2.60% Local School Support Tax (NRS 374); 0.50% Basic City-County Relief Tax (NRS 377); and 1.75% Supplemental City-County Relief Tax (NRS 377). The Basic City-County Relief Tax and the Supplemental City-County Relief Tax are both included in the consolidated tax and deposited into the Local Government Tax Distribution Account.
The governing body of a newly created (after July 1, 1998) local government or special district may request the Nevada Tax Commission to direct the Executive Director to allocate from the Local Government Tax Distribution Account if it provides police protection and at least two of the following services: fire protection; construction, maintenance and repair of roads; or parks and recreation (NRS 360.740). Per NRS 360.740 8(d), police protection is defined as: employment by the local government or special district, of at least three persons, on a permanent and full‐time basis, whose functions specifically include routine patrol, investigations, enforcement of traffic laws, and investigation of vehicle crashes. The amount distributed is only for the amount required for the new government’s provision of a service that was provided by another local government before creation of the new government. In the Town scenario, this results in no net gain because the amount of consolidated tax received only covers the cost of the interlocal agreement with the Elko County Sheriff to provide police services.
The Incorporation Committee of the Spring Creek Association recognizes that the Spring Creek community has reached a crossroads. Spring Creek’s population has grown so that it now rivals neighboring Elko, and the population that first settled the area has changed demographically so that what it needs and values now has evolved from the rural and outdoors focused group that initially became residents. Additionally, issues such as adequate police, fire, water and other services have increasingly been seen as lacking. Finally, the amenities that brought the initial residents to Spring Creek have fallen into varying states of disrepair and are of decreased importance to a growing segment of the area’s residents.
How to address this expanding number of concerns means looking at the future goals and needs of this community and how best to achieve meaningful results. The Incorporation Committee sees its purpose as both educational as well as ultimately suggesting a course of action that will settle the following questions:
What is the vision for what Spring Creek will be in five, ten and twenty years?
What are the needs of the Spring Creek residents, both owners and renters, and businesses now and in the future?
What would make Spring Creek a place businesses, owners, and renters would want to call home?
What would be the best governmental structure to accomplish these needs?
What are the financial implications of each of the governmental alternatives that might be utilized?
The Incorporation Committee sees a need for research, planning and implementation on the part of the Spring Creek Association board and citizens for this community. If nothing is done, Spring Creek will continue to move from problem to problem and crisis to crisis, always reacting rather than seizing control of its own future.
The community meeting for the final reports for the municipalities’ assessment was held in June. The board will need to decide next steps in regards to becoming another entity at this board meeting. There are several points I have been thinking since the results came out including having a review of our assessment fees and having a 10 year plan to get us to a sustainable level for income to keep the operations running at a decent level of service. Also, I have been researching contract cities (a few outside of Denver and in Washington State) who have a limited number of employees and run their towns on contracts to reduce costs. A major reason we are not able to get taxes is because of the change in legislation which grandfathered in towns like Jackpot so I am also curious if there is a way to change legislation although that may be a long shot. Additional questions and answers are posted from the meeting on our website.
The SCA desires to engage HEC to perform additional research and analysis of:
1. The operation of the SCA through minimal staff with all services and equipment being
provided through contracts;
2. The charging of SCA annual assessments based on home valuation;
3. The exploration of possible legislative changes that would allow greater consolidated
tax receipts for a new entity, with case studies of Fernley and West Wendover (and
4. Annexation of Spring Creek into the City of Elko;
5. Other economically feasible options, such as disposal of SCA recreation facilities or
operation of SCA recreation facilities on a concessionaire basis.