by
Dennis Myers
DEBT City offiCials bet on the Come
As a going concern, the business produces profit and cash flow to repay a loan without betting on the come. In terms of poker, a come hand is a hand that needs to improve with a draw. Betting on the come simply means that you’re betting on a hand that you don’t yet have. You expect it to materialize when you draw a card. —Accounting, Finance and Presentation for Small Business by R. Blake Hendrix
The Reno City Council was in a 10-minute break. After making a phone call, Councilmember Jenny Brekhus sought out city finance director Robert Chisel and chatted for a few moments. Soon they were laughing. It probably took the edge off the tough questions Brekhus had needed to ask Chisel during the meeting, particularly during agenda item G2, the latest patch on the financing for the Reno railroad trench that had been built at the behest of downtown casinos. One of her questions: “Have you ever seen bond documents like that?” The council at that Aug. 14 meeting was dealing with what amounted to the second re-financing of the bonds for the huge project of lowering the railroad tracks through Reno into a trench, a project launched with some shadowy
maneuvers in 1998 and completed in 2005. Trains now run through the trench, but no one can say when the bonds will be paid off. And that is unfortunate, because at one time, everything was—please excuse this verbiage—right on track. “If you look at the original financing package for the train trench, it was done,” Brekhus said in an interview. “It was set. And they went to the credit markets, and Goldman Sachs, [for] an instrument that kind of takes money out. … It was almost like, you know, you had your house paid for, and they re-fi’d it, basically. That’s what happened with the trench.” She wasn’t describing the original trench bonds, nor was she describing the new trench bonds that were at issue at the August 14 meeting where she questioned Chisel. She was describing a second set of
bonds that created problems that had to be solved with the third set. “And that’s not these [current] bonds here,” she said. “These bonds were to get out of that instrument that was the re-fi.”
Pleasing the downtown For decades, there had been debate in Reno about doing something about the groundlevel railroad tracks. Originally, they ran parallel to—and created—Reno’s main street, Commercial Row. But as the city evolved, Virginia Street became the main street. Instead of running alongside the main street, the tracks now crossed it. For much of the city’s history the railroad was its lifeline, bringing tourists and divorce
“enTrenCHeD DeBTs” continued on page 14
OPINION
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NEWS
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GREEN
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FEATURE STORY
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ARTS&CULTURE
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ART OF THE STATE
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FOODFINDS
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FILM
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MUSICBEAT
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NIGHTCLUBS/CASINOS
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THIS WEEK
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MISCELLANY
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AUGUST 29, 2013
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RN&R
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