NV not looking into Reno's financial missteps

The city of Reno, Nevada, has found itself in a tough situation. The city mishandled short-term loans that were supposed to be repaid in one year. The city's failure to understand the terms, however, means these loans could be stretched out over 10 years.

Reno’s short-term loans

The city of Reno, NV was given over $8 million in short term installment loans from Nevada. The streets department, sewer department and general fund for the city were designed to be supported with the loans. In a year, the money was intended to be repaid to the state. The city didn't know that the money had to be paid back while the year came to an end and the state anticipated its money. City officials are calling this an “incorrect interpretation of current law.”

Financial loans in Reno change

In order to manage the $8 million debt to the state of NV, Reno officials are attempting to get the loans re-written. The one year obligation has now been stretched. The debt will 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. In the short term, this is another $8 million worth of money the state will have to cut out of its yearly budget.

No investigation into funding mismanagement

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.”. City officials won't be investigated by the state, even if it’s a violation legally. The state is going to work with Reno. The 10-year loan will be approved by the state. City budgets are designed to be reviewed by the state. Nevertheless, the loan payment getting missed is something that should have been noticed by both the city and state. The person who made the mistake is unknown. This won't be investigated.

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