COMMENTARY: The hidden threat of the Badlands case

The Las Vegas City Council needs to follow the law. That failure is at the heart of its Badlands taking — and the mismanagement continues.

Rule 1: The government can’t just take your stuff. In the case of Badlands, the city long ago gave permission for the land to be developed. That permission is a legal right that runs with the land, under law. In the Badlands case, the city took that right away, and court after court has ruled the same way on the case.

Rule 2: Follow government accounting standards, which include a complex set of rules about when a city should recognize a liability. As a retired CPA, I am familiar with these rules and the glazed look they create on the faces of people I explain them to. The important thing is they must be applied to all situations.

At a May 21 public meeting, city officials announced they are recognizing a small portion of the Badlands costs — only $60 million. This will come out of the city’s savings accounts, used to replace capital assets that wear out.

But this is just the tip of the iceberg.

The Badlands cases covered multiple property tax accounts, forcing the owner to file separate lawsuits against the city for each account. The lawsuits are identical except for the parcel number. Therefore, accounting rules would require they be treated the same. It looks as if the total award will run somewhere around $500 million. Until the May 21 meeting, the city had avoided budgeting for this cost of bad government by claiming it is not certain, for absolute sure, that it would lose all the cases.

City officials spent $6 million on various outside law firms to secure opinions that agreed with their thoughts. But the Nevada Supreme Court has finally ruled that the city was wrong in all the suits. Which brings us back around to government accounting standards.

There is no longer any doubt that city will have to pay for what it took — with interest as well — and that the total will come to at least $500 million. It is, therefore, incorrect for the city to recognize only one-tenth of its loss — much less identify how it is going to pay for its bad behavior.

The bankruptcy of a city is always a stark reminder that competent government is not automatic. Bankruptcy hidden by a city breaking financial reporting rules to put off bad news until after an election borders on fraud, in my opinion.

Bob Beers served on the Las Vegas City Council from 2012-2017. He also served in the Nevada Legislature from 1998-2008.