The city of Reno, Nevada is in a financial tough spot. The city mishandled short-term loans that were supposed to be paid back in one year. The city's failure to comprehend the terms, however, means these loans could be stretched out over 10 years.
Reno stuck with loans
NV lent a lot of money in short term loans to Reno, Nevada. Over $8 million was lent. The streets department, sewer department and general fund for the city were intended to be supported with the loans. The state expected to have the money repaid within a year. The city did not know that the money had to be paid back while the year came to an end and the state anticipated its money. This is called an “incorrect interpretation of current law.”
Ensuring loans get re-written
To be able to manage the $8 million debt to the state of Nevada, Reno officials try to get the loans re-written. The one year obligation has now been stretched. The debt will be paid in 10 years instead. More interest can be paid by the city for the loans from the state. The state could have to hold them longer too. It might hurt the state for a while. Another $8 million can have to be cut out of the budget.
Nobody attempting to figure out what occurred
Though the city of Reno misread the rules regarding this loan, there can be no exploration. Dino DiCianno is a Nevada Taxation Director. He said surely it is a “technical violation of state laws.”. Though it is a legal violation, the state won’t be investigating the city officials. Instead, the state is going to review and approve the re-writing of the loans into a 10-year debt. The responsibility for missing loan payments is shared with the state and city even though the state should be reviewing city budgets. There could be no exploration into who "misinterpreted" the state law specifically.
Information from
RGJ
rgj.com/article/20110218/NEWS/110218036/1321/Reno-financial-hanky-panky-likely-to-be-handled-without-investigation–taxation-department-says
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