The city of Reno, NV, has found itself in a tough situation. The city received $8 million from the state of NV. The short-term loan was due to be paid back in 365 days. The state of NV is taking the legal mistake in stride and won’t investigate the city. Instead, the state is stretching the payments out over 10 years. Article resource – Reno's mishandling of short term loans going uninvestigated by MoneyBlogNewz.
Reno stuck with loans
Nevada lent a lot of money in short term loans to Reno, Nevada. Over $8 million was lent. There were specific places the loan was designed to go. The streets department, sewer department and general fund for the city were designed to be supported by this. The state expected to have the money repaid within a year. The state was ready to get the money back when the year was up. Reno didn't know it was designed to be repaid though. There is a phrase used to describe this. It’s an “incorrect interpretation of current law.”
Making sure financial loans get re-written
In order to manage the $8 million debt to the state of NV, Reno officials are trying to get the loans re-written. The one year obligation has now been stretched. The debt could be paid in 10 years instead. The city will be required to pay more interest on the money, and the state will hold the loans over time. The state could have to cut another $8 million out of the yearly spending budget for a while.
Where the money went won't be investigated
Though the city of Reno misread the rules concerning this loan, there will be no exploration. Dino DiCianno is a NV Taxation Director. He said it is definitely a “technical violation of state laws.”. Being a legal violation doesn't change anything. The state nevertheless will not be investigating. The state is going to work with Reno. The 10-year loan can be approved by the state. The state is responsible for reviewing each city’s budget, so the responsibility for missing the loan payments is shared. Who, exactly, shares the responsibility for “misinterpreting” the state law will not be investigated.
Articles cited
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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