How the events center may push our city into default
l3wis 
Letters to the Editor • DATE April 13, 2012
By Dan Daily, Sioux Falls, SD. Whistle Blower and Constitutional Democracy Advocate in a city with Marxist Leaders
Readers and Bloggers:
I used to submit letters to the Argus. Pre 1994 (Home Rule & Munson) they were sometimes printed. After, it was rare and they were much modified. I sometimes read a Jonathan Ellis article when someone leaves a newspaper behind. Someday, Gannett will discover the Argus is a propaganda machine not unlike channel 16. It will be the end.
I’m sure this letter would never make it into the Argus. Here goes.
The city of Reno NV is suing Goldman Sachs. They issued bonds portrayed as safe that became toxic. Reno, known as the biggest little city in America, is the size of Sioux Falls. They were to build a $110mil events center that inflated into $300mil. The securities somehow became more associated with distressed redevelopment debt (parking garages and such), a sophisticated pyramid scheme. Falling revenues forced the city to dramatically cut staff by a third. For Sioux Falls, cut the third that lives outside city limits. The suit alleges misrepresentations and omissions. Reno hired a private firm with lead attorney named Peiffer (interesting parallel). Goldman eventually told Reno to issue $330mil high risk ‘Auction Rate Securities’ that ultimately fizzled. A councilwoman stated ‘they knew these were bad and they sold them to our city anyway’. Auction Rate Securities have low interest but depend upon financial institutions to keep the pyramid rising. Fundamentally, it’s like lending you more on your house than it’s worth with little or no credit qualification. Reno has ‘Trench Debt’ and penalties with no ground broken for an events center. There’s a $47mil forbearance and $8mil penalties. Reno faces default forcing bankruptcy.
Source:Â Reno Gazette Journal – April 12, 2012
