By Susan Voyles, Reno Gazette-Journal

The North Lake Tahoe Fire Protection District has saved half of the $6.5 million owed as its share of $43 million tax refunds being paid to Incline Village residents.

But it may have to ask residents for a property tax increase — the very people who benefit from the tax refunds — or cut services to make up the rest in fiscal 2012.

Lawyers for the fire district as well as the Incline Village General Improvement District and the Washoe County School District are working behind the scenes to see if a deal can be cut over interest costs owed over the county’s long, unsuccessful legal battle against issuing the refunds, officials said.

North Tahoe Fire Chief Mike Brown expects the fire district board on Dec. 21 to consider its legal options. He said it’s not fair for the district to be liable for almost $1 million in interest costs, given the board had no role in the county’s handling of the Incline property values issue.

“We wholeheartedly agree we have to pay the money back,” Brown said. “Our biggest question is on interest. From day one, we have had no say on this.”

By a 3-2 vote, the Washoe County Commission in late August ordered the county treasurer to take property taxes from all the other entities that benefitted from the overpayment of taxes as the tax refund checks are written. The $43 million total includes $6.2 million in interest, set by law at 6 percent a year.

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