By Greg Grisolano
Globe Staff Writer
NEOSHO, Mo. —
Neosho City Council members will wait until after Tuesday’s tax election to gather for their regular meeting, the city’s mayor said on Friday.
The council will meet at 7 p.m. Thursday, Aug. 5, at the Neosho Civic Center, rather than at 7 p.m. Tuesday in council chambers.
Mayor Richard Davidson said that before the council begins to decide how to budget for the next fiscal year, it needs the results of the vote of the people on its request for authority to assess a property tax of up to $1 per $100 of assessed valuation on all real estate and personal property.
The levy is being sought to buoy the town, which officials say is in such a financial crisis that it could go under without additional revenue. The measure requires a simple majority to pass.
“Regardless of what happens on Tuesday, the council is going to have a number of things to work on in August,” Davidson said. “If the property tax does pass, we need time to prepare for a public hearing and setting a tax levy. If it doesn’t pass, we wanted to give city management a chance to work through some Plan B options and give us a productive meeting either way.”
Officials now see the $1 levy proposal as a last-ditch effort to avoid making drastic cuts to town services. The city has to close a projected shortfall exceeding $1 million for the next fiscal year, which will start Oct. 1.
For a $100,000 home, residents would be looking at a yearly tax bill of $190, at a $1 levy. For a $100,000 business, owners would pay $320 per year at the $1 rate. A $1 levy could bring the city $1.15 million annually, after delinquencies and fees, by the 2011 fiscal year, according to a cash-flow analysis report generated in May for the city by an accounting firm.
Davidson said the council is starting the budget work “probably two to four weeks earlier” than it did last year. He attributed the early start to making certain the council had adequate time to prepare the budget.
“It’s a little earlier than it was last year, but it’s probably not as early as I would have liked to have had it,” he said. “I’d have liked to start it in mid-July.”
City officials have stated that the property tax is necessary to generate revenue to support the city’s general fund, specifically its police and fire departments.
In 1997, the town traded its property tax for a sales tax. The proceeds of the sales tax have been cut significantly by the recession.
Former City Manager Jan Blase acknowledged last year that the city had used a state loan reserved for the construction of airplane hangars to make payroll and pay city bills. He and former city Finance Director Bob Blackwood later acknowledged that the city had borrowed from multiple restricted funds to keep city operations in business.
The grand total “borrowed” from other funds ultimately amounted to $1.8 million.
The city had to take out a loan of $1.3 million this year to stave off insolvency. Blase and Blackwood had already been fired over the city’s financial situation.
Both Blase and Blackwood face misdemeanor charges in connection with the financial situation. Blase has filed suit against the city alleging wrongful termination.
Option no more
City officials had been advised that the council, on its own, could reinstate a 42-cent levy associated with the previous property tax. Officials saw that as an option if the proposed levy were to fail on Tuesday, but now the timing needed for that plan appears to be in doubt, and is no longer on the table.
