Stateline Area to Vote on Cityhood : Rolling the Incorporation Dice at Tahoe

A move to incorporate what one proponent calls “the richest little city in America” is stirring controversy along the eastern shore of picturesque Lake Tahoe.

Registered voters within a 12-mile stretch along the lakefront have collected more than enough signatures to place the incorporation issue on the ballot here next spring. Petitions with 1,037 signatures were turned into the Douglas County clerk’s office this week. Only 664 are needed to place the measure on the ballot.

The new city would be called Lake Tahoe and include an estimated 6,500 residents, much of the unincorporated community of Stateline and four major casinos. It is the casinos and the taxes on their gambling revenue, of course, that lead Donald Wrinkle, 66, a leader in the drive for incorporation, to refer to the town’s grandiose potential for income, perhaps in a jab at nearby Reno, which calls itself “The Biggest Little City in the World.”

Casino operators, who opposed an earlier incorporation drive, are cautious in their commentary on the latest effort. But they also are nervous about dealing with a potential new taxing agency.

Mike Van Wagenen, 42, executive director of the South Tahoe Gaming Alliance, said the Committee for an Informed Citizenry has been organized by the four major casinos at Stateline to consider the issue.

The committee, said Van Wagenen, has hired Arthur Young & Associates to study the feasibility of a new city.

Meanwhile, Jeffrey K. Rahbeck, an attorney for the casinos, hints that the state Legislature could be approached about the possibility of legislation excluding the casinos from the proposed city limits.

The South Tahoe Gaming Alliance and attorney Rahbeck represent Harrah’s Tahoe, Harvey’s, Caesars Tahoe and the High Sierra, all of which are within a block of the California border at the south end of the proposed city.

The city borders would extend from Spooner Summit on the north to Stateline and include the communities of Round Hill, Zephyr Cove and Glenbrook. It would extend five miles inland from the lake.

“Figures from the state show the new city would receive $1,333,000 in tax revenues, including $650,000 from gaming taxes and $335,000 in sales taxes that now go to Douglas County,” noted Caroline Fiene, 44, a leading proponent.

“If we find we need more money to run the city, the City Council would have the power to impose an additional annual sales tax up to 4% of the casino’s gross revenues, bringing in as much as another $3 million.”

Fiene, a housewife; Wrinkle, a retired high school principal from Coalinga, Calif.; Ellsworth Chappell, 75, a retired justice of the peace, and savings and loan executive Bill Bigham, 53, head the incorporation effort.

“The majority of revenues for Douglas County are generated by the casinos up here at the lake but most of the revenues are spent down below in Carson Valley where the biggest part of the county’s population lives. We get short-changed,” Fiene said.

Douglas County, population 25,200, presently does not include any incorporated cities.

“If a new city is created, the county government will lose $1,333,000. It will hurt. However, the county will be saving a big part of that revenue by no longer having to provide services to the lakeside residents in the new city,” noted County Manager Bruce Adams.

“The casinos are the biggest industry in the county,” Adams said. “Most of the employees of the casino live in Carson Valley. The casinos affect the well-being of residents throughout Douglas County, not just those who live up at the lake.”

“It is a very emotional proposal,” said Kathleen Farrell, 38, executive director of the Chamber of Commerce at Stateline. “A year ago the board of directors of the chamber voted on the issue. It was a 7-7 tie with the president, Brad Spires, director of sales for Caesars Tahoe, casting the deciding vote. He voted not to endorse the new city.”