By Derek Spellman

dspellman@joplinglobe.com

NEOSHO, Mo. — City Manager Jan Blase on Friday acknowledged the city used a state loan provided to Neosho solely for the construction of new airport hangars to “make payroll and pay our bills.”

He had told the Globe earlier in the week while being interviewed on another matter that the city was sometimes “scrambling” to make payroll.

The City Council, meanwhile, is to meet in emergency session this morning to discuss the “hiring, firing, disciplining, or promoting” of an employee, although council members have declined to say which employee the meeting concerns.

‘Morally obligated’

Precisely how much of the $895,100 loan from the Missouri Department of Transportation has been used on the city’s operations is difficult to tell. The city did not put that loan into its separate restricted fund, but instead put it in a general fund that it uses to finance its operations. It received the money in early 2008, and although about $100,000 has been expended for site plans and designs for the work, the hangars themselves have not been built and there is no timetable for when they will be.

Records obtained from the city clerk’s office by the Globe showed the city had a total of almost $592,140 in its eight bank accounts as of late Friday afternoon.

But Cheryl Mosby, a former city finance director, told the Globe that anything less than $795,100 in those accounts would signal that the loan money was used for other purposes, although she also said it was difficult to know precisely how much since the loan money has been intermingled for some time.

Mosby has also questioned why the loan was not put into a restricted fund if it was provided to the city with a specific purpose and with specific restrictions.

A copy of the contract between the city and MoDOT shows that the $895,100 State Transportation Assistance Revolving Fund (STAR) loan states that the city’s use of the loan shall be “specifically for the two-phase hangar project at the Hugh Robinson Memorial Airport.”

The city earlier this year approved a budget that called for layoffs and pay cuts for city employees.

“I felt morally obligated to make payroll and pay our bills,” Blaze told the Globe on Friday, when asked why the money was used for operations.

He initially said he thought the move was legal, although when later pressed about how that could be possible when the city’s contract with MoDOT required it to be used for the hangars, he said he was “no lawyer” and that he had “no other opinion other than it was the right thing to do.”

He said he “temporarily borrowed from that loan money.”