City Manager Jan Blase’s recommendation to the Neosho City Council to approve a $1 million “anticipatory” loan reminds us of this old saying:
“When you find yourself standing in a hole, quit digging.”
Blase acknowledged Tuesday that he “did not communicate very well” with either the City Council or the city staff when he used a state loan reserved for airport hangars to pay the city’s bills.
His solution to the problem, in our view, only stands to make Neosho’s financial situation worse.
Blase plans to ask the City Council to ask the council next week to authorize the assumption of a $1 million “tax anticipation note,” or loan, to alleviate the city’s “cash-flow shortage.” That note would be repaid in two years through a mixture of the city’s settlement money from a lawsuit filed by companies over taxation of cellular phones; the money the city receives from the state and railroad companies for closing some railroad crossings to vehicular traffic; and future sales tax revenue.
The Missouri Department of Transportation Commission, which provided the $895,100 loan to the city in February 2008, on Monday sent Blase a letter stating that the Department of Transportation intends to review “all city records as they pertain to” the loan.
The city never put the $895,100 hangar loan into a separate restricted fund, but instead put it in a general fund that it uses to finance its operations. About $100,000 has been expended for site plans and designs for the work, but the hangars themselves have not been built, and there is no timetable for when they will be.
Meanwhile, City Councilwoman Heather Bowers on Tuesday plans to ask the City Council to authorize a state audit. If the council declines, she said, she will push for an audit via the petition route.
This does not sound like a town that should be borrowing a million dollars.
We would also caution the City Council not to use closed door sessions under the exemption of “personnel” if it intends to talk about the city’s financial woes. That’s illegal. The council met behind closed on Nov. 21 and emerged with the decision to investigate whether the council has been fully informed of the city’s financial condition in recent months. That does not sound a discussion exempted under the law.
The city manager’s lack of communication with his council does not in turn give the council an excuse to withhold information from the residents of the town.
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