By Cody Wagner
Editor’s Note: Cody has been a resident of Fernley for most of his life and is the Chair of the Fernley Community Foundation. The opinions expressed in this article do not necessarily reflect the views of the Fernley Reporter, the Fernley Community Foundation, or the City of Fernley.
With this month’s takes, I have intended to pursue more of what I originally had in mind when volunteering to write these articles – particularly, trying to better educate Fernley residents, so let’s jump right into it. Since my last article, we learned that Lyon County has filed a lawsuit against the City of Fernley’s Redevelopment Plan, citing several objections including the percentage of land area that qualifies as improved in the Redevelopment Area, how North Lyon County Fire District and the Fernley Pool District are excluded from contributing to the Redevelopment Agency, and that the Redevelopment Agency will place an “unprecedented burden” on local government. This news conjured many emotions for me, as it has for other Fernley residents. I have had multiple conversations with people around town who either do not understand what is going on or wanted to offer me their opinion on it all. For the record, I am certainly not an expert on Redevelopment Agencies or the laws that surround them, and my opinion probably matters very little on the future of this Plan and Agency. There are people who devote their professional careers to such endeavors, so I defer the legal aspects surrounding this topic to them. However, I have read through the full Redevelopment Plan for the City of Fernley, as well as the NRS statutes regarding Redevelopment, so I supposed I am slightly more familiar with the topic than the average citizen.
Ultimately, I try to support any efforts that will make Fernley a better place to live, and I certainly think this Redevelopment Plan qualifies. The first thing to understand is that Redevelopment is NOT the same thing as development. There has been lots of confusion and fear-mongering around the ideas of homes being destroyed and families being displaced. This is simply false. Redevelopment does not change zoning or create any more political power than is already in the government’s authority around eminent domain. Redevelopment’s purpose is absolutely not to displace homes but to improve neighborhoods and infrastructure by reinvesting in our community. I would think anyone living in Fernley believes we need that.
Redevelopment actually boils down to an even simpler concept for me: keeping our tax dollars we already pay in Fernley. It uses the idea of tax incremental financing, which basically takes increases in property taxes over time due to rising property values and reinvests them in the area from which the property taxes were paid. For the record regarding taxation, I know the idea seems scary and many do not trust any form of government with any tax dollars whatsoever. As a small business owner, I certainly have my own frustrations, as taxes have been the difference in my businesses being profitable or not over the course of certain years. I also was raised in a family of educators, with my dad serving as a teacher in the Lyon County School District for over 20 years, so I do respect tax dollars when used appropriately in fields such as education, national defense, and basic human services and appreciate Lyon County School District’s important role in my upbringing. No matter what end of the political spectrum you fall, there are two ideals with taxation I think almost everyone can support. One is transparency by our government, no matter what level, when using tax dollars. The second is that our taxes are used as efficiently as possible and proportional to the services which are provided to the people paying those taxes. And this is where Redevelopment and helping to educate Fernley is important with respect to Lyon County’s lawsuit.
Two of the largest tax pools that the citizens of Fernley contribute to are property taxes and the State’s Consolidated Tax (or C-TAX for short). I plan to write plenty more on C-TAX in upcoming months, but I’ll just offer a brief explanation for now. This C-TAX pool distributed just under $1.5 billion for the last fiscal year to many different entities around the State, including Lyon County, the City of Fernley, and North Lyon County Fire Protection District (NLCFPD). The C-TAX pool comes from several different sources, but a majority of it (approximately 84%) comes from portions of sales tax revenue. Every time you buy any sort of good for which sales taxes are collected in the State of Nevada, you are contributing to this fund. Additional taxes and fees from cigarette sales, liquor sales, and DMV transactions also go into this fund.
For the purpose of this article, there are several important facts surrounding this C-TAX distribution I would like to emphasize, and we will leave some of the more complicated details to later articles. First, the per capita C-TAX distribution based on census-estimated population for the total amount that all entities within Lyon County receive is dead last in our State and has been for a while. For the ‘17-‘18 fiscal year, our County’s total allocation of $17.7 million divided by the estimated County population of 54,122 is approximately $328 per resident, while the State’s average was $496 per resident. Secondly, the portion of this C-TAX going directly to Lyon County’s operating budget for the ‘17-‘18 fiscal year was $15.7 million and has been increasing by approximately $1 million per year with the State’s solid economy. Lastly, the City of Fernley received just shy of $165,000 during this same time period and has been increasing at a rate of just $10,000 per year. NLCFPD’s C-TAX distribution has been similar to the City’s. The details of the C-Tax allocation can be found at https://tax.nv.gov/Publications/Consolidated_Tax_Distribution_(CTX)/
Lyon County does provide valuable services to the City of Fernley, specifically law enforcement, which is paramount in the current Consolidated Tax statutes. However, our City and NLCFPD proportionally provide much more: fire, streets, and parks (three of the qualifications for allocations in NRS 360.720). Fernley is currently approximately 40 percent of our County’s population, so it is reasonable to expect that Fernley contributes approximately 40 percent of the County’s $17.7 million in C-TAX, or approximately $7.1 million, and should receive approximately $7.1 million in benefits to the citizens and businesses that provided those tax dollars. It is difficult to say how much of the County’s public safety budget is dedicated to Fernley, but there are 112 full time equivalent public safety employees, so let’s just estimate that 45 (approximately 40 percent) of those are what we pay for through C-TAX directly benefiting Fernley. If we make guestimates and assume that each employee is worth $100,000 (salary plus benefits), which is likely exaggerated, and add a contingency of an additional $500,000 for other expenses, we get a very approximate estimation of the County providing $5 million in law enforcement services directly to Fernley. Even if 100 percent of that cost was compensated through C-TAX, that would mean $5 million is returned to Fernley through law enforcement, plus about $335,000 for the combined City of Fernley and NLCFPD distributions, bringing us a very approximate total of $5.335 million coming back into our City. This gives the conclusion that Fernley is a net exporter of C-TAX in the amount of just under $2 million, and that is being as favorable to the County’s law enforcement budget as we can be.
Next, we can look at property taxes, which are a little bit easier to understand. For every $100 of assessed value, we pay $3.6085 in property taxes. That is split into $0.9287 to the County, $0.6713 to the City of Fernley, $0.7500 to the Lyon County School District Operating Budget, $0.5867 to the Lyon County School District Bond Debt, $0.3018 to the Fire District, $0.2000 to the Pool District, and $0.1700 to the State of Nevada. Lyon County’s budget shows actual property tax revenue for the previous fiscal year of $11.6 million. The City of Fernley shows property tax revenue for the same time period of $2.4 million. This would suggest that approximately $3.3 million of the $11.6 million in property taxes at the County level came from Fernley residents, or about 28 percent. Keep in mind that we have already assumed in the previous paragraphs that the County’s most costly expense in the City of Fernley, law enforcement, is completely covered by C-TAX. The County does provide other important services to Fernley, such as operation of the Senior Center and Human Services. But it becomes difficult to believe that these additional services are even close to being proportional to the property taxes paid directly to our County by residents of Fernley. The bottom line is that tax dollars are flowing out of Fernley much more quickly than they are flowing in, probably to a greater extent than any other incorporated City in the State of Nevada.
All of this brings us to Redevelopment and the lawsuit. As stated before, I believe that Redevelopment serves mainly to keep our property taxes local, somewhat making up for the injustices calculated above in C-TAX and property taxes. Incremental increases in taxes from properties in the Redevelopment Area would be paid to the Redevelopment Agency instead of four entities: Lyon County, City of Fernley, School District Operating Fund (not Bond Debt), and the State of Nevada. Other recipients of property taxes would be unaffected, such as NLCFPD and the Pool District. The one glaring issue with this proposal in my eyes is taking future funding away from our School District’s Operating Fund. However, there are ways to return future revenues from the Redevelopment Agency back to our School District, an idea in which I am in full favor. But Redevelopment does offer tremendous leverage for the City of Fernley in the discussion with our County about revenue, which outweighs any negatives in my opinion.
The final point to be made is that lawsuits, especially those filed between governmental entities, typically result in a huge waste of tax dollars. And the City of Fernley certainly is not completely innocent in this regard. A lawsuit filed by our City several years ago against the State regarding the Consolidated Tax distribution formulas, however merited the argument might have been, ultimately resulted in the loss of hundreds of thousands of dollars for our City and no real progress. It was extremely disappointing to see four out of five Lyon County Commissioners, including the two who represent parts of Fernley, vote to continue the County’s lawsuit, while Commissioner Ken Gray deserves our appreciation for the single vote against this madness. There is no winning for any taxpayer if this whole thing ends up in court except for the outside legal counsel who will be paid hundreds of dollars per hour to represent each side. My hope is that County Manager Jeff Page speaks the truth in his final quote in the Mason Valley News when he said, “It is my hope that we can work hand in hand with the City and develop a collaborative solution.” And as the author of all of this, it is my hope that this collaborative solution can include solutions to the Consolidated Tax and property tax injustices that Fernley residents have been subjected to for years, and that all of Lyon County can work together in developing a strategy to show how much the Consolidated Tax distribution system hurts everyone in our County, and not just the City of Fernley. I apologize for the length of that discussion, but it is necessary for Fernley to understand. Now, on to the better subjects to write about…
After writing about Fernley graduate Tyler Roemer being picked up by the Raiders last month, fellow Fernley alumnus Shane Kelso was drafted in the 24th round by the Los Angeles Angels out of Oklahoma Baptist College in the Major League Baseball draft. It is truly remarkable for two Fernley graduates to embark on professional athletic careers in such a short time span. Reports had Shane throwing in the low 90’s, so the sky seems to be the limit for this young man. Good luck Shane!
The 4th of July volunteers again pulled off one of the best attended events of the year in Fernley. Through my vendor setup, I talked to multiple people from outside our City and even outside of Nevada who came into town just for this day of fun. And again, the fireworks show gives lots for Fernley to be proud of on the great holiday. Nice job!
The Rotary Club of Fernley hosted their first wine walk around the Old Downtown area (if you can really call it a downtown). It was the first event I can remember like that in Fernley, and I think it has a ton of potential. The crowd wasn’t quite what it was for the event on the 4th, but with the right marketing and promotion, a wine walk type of fundraiser definitely could become a staple of Fernley. Proceeds from this last wine walk went to their Relay for Life team. Way to go Rotary!
Fernley Things to Do
Missing in Nevada, hosted by Nevada Veterans Coalition
Friday, July 12th: Main St. Procession: 1:15 pm, Services: 2–3 p.m.
Northern Nevada Veterans Memorial Cemetery
One of the most worthwhile and moving events that happens in Fernley, Nevada Veterans Coalition will provide full honors for 15 veterans who served our country and never received their due recognition. This is truly a fantastic service provided by this group and open to the public.
Fernley Relay for Life
Saturday, July 13th – Sunday, July 14th
Another fantastic volunteer-led event with plenty of activities planned to promote the fight against cancer. Every year, this group does a great job with this event. And congratulations to Councilwoman McKay, who looks like she currently has the most money raised at more than $4,000.
Fernley Adult Softball, Out-of-Town Park
This was the only organization to reach out to me in my offer to highlight events. Again, they are volunteer-run and started play in June with nine teams registered. This is a great way for people new to town to meet others. Plus, legend has it that they have some of the cheapest beer prices in town for spectators. Follow their Fernley Adult Softball Facebook page for more information.
If you have events that you would like to be highlighted or issues you would like to see me discuss, please email me at email@example.com. I will never guarantee content, but I will try to cover things that I feel are important for Fernley.