Nevada not investigating Reno's monetary problems

The city of Reno, Nevada, has found itself in a tough situation. The city mishandled short-term loans which were intended to be paid back in one year. The city claims that they misunderstood the terms of the loan. The state is taking the misstep in stride and offering to help the city stretch out the debt. Resource for this article – Reno's mishandling of short term loans going uninvestigated by MoneyBlogNewz.

Short term installment loans in Reno

The state of NV provided more than $8 million in short-term loans to the city of Reno, Nev. The streets department, sewer department and general fund for the city were designed to be supported with the loans. The state expected to have the money paid back within a year. The city did not know the money had to be repaid while the year came to an end and the state anticipated its money. There’s a phrase used to describe this. It’s an “incorrect interpretation of current law.”

Making sure financial loans get re-written

To be able to handle 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 could be required to pay more interest on the money, and the state will hold the loans over time. The state may have to cut another $8 million out of the yearly budget for a while.

Where the money went will not be investigated

Reno made a mistake when looking incorrectly at the loan rules. There will not be an exploration done though. Nevada Taxation Director Dino DiCianno has said that this mishandling is a “technical violation of state laws.”. Though it is a legal violation, the state won’t be looking into the city officials. The state will simply approve the re-writing of the 10 year loan instead. 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 investigation 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