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.”

Asked if the city attorney, Steve Hays, weighed in on the legality of such borrowing, Blase said: “I didn’t involve the city attorney in my decision, no.”

Efforts to obtain comment from both Hays and MoDOT late Friday were unsuccessful.

Council

Mosby on Tuesday night had asked the council about where the STAR loan money was and that she had asked the council previously. She said she submitted a written request for that information last month and has yet to receive a response, although she acknowledged that query was part of a larger set of document requests.

City Councilman Richard Davidson — who initiated the call for this morning’s emergency council meeting — said he, too, had previously asked about the use of the STAR loan money and the status of the hangar plans, including during a budget session earlier this year. He said he kept “getting mixed answers.”

The Globe on Friday morning filed an open-records request for city financial information and for a copy of the STAR loan contract.

Even as of Friday night, Davidson said, he still had not received any formal correspondence, e-mails or comments from Blase advising the council of the use of the loan money.

Asked if he thought Blase should have told the council, he replied, “I think any significant financial issues related to the city should be conveyed to the council, absolutely.”

Mayor Jeff Werneke said he only learned of the severity of the city’s cash flow issues and of the use of the loan money in the past few days. He said he understood that Blase has already contacted MoDOT about the use of loan money, although he referred questions about that response to Blase.

Efforts to obtain comment from Blase subsequent to his earlier conversation with the Globe on Friday were unsuccessful.

Werneke rejected arguments that the use of the loan money was improper or illegal, citing clean findings from the city’s most recent audit.

Challenge

“This is not a situation of a misuse of any funds,” he said, later noting, “I would challenge anyone to say we haven’t followed through on this STAR loan.”

He said the city still plans to build the hangars, and that it has completed other projects with MoDOT, and has a built a “history of following through on these kinds of things.”

Asked if he thought Blase should have advised the council on the STAR loan use, he replied, “I can’t really comment on that.”

Asked if he thought the council should have taken more financial oversight, Werneke said historically the City Council’s role has been limited to reviews of the budgets and of the bills the city pays each month.

“I don’t think any council member now or probably in the recent past has been faced with this” type of issue, he said.

Asked if he still had confidence in Blase, Werneke said he wanted to take a “big picture” view of the city manager’s performance. He went on to cite the successful passage of several ballot measures to address long-festering problems with city infrastructure and the millions of dollars in grants that have flowed into the city in recent years.

“There are a lot of successes,” he said.

Yet City Councilwoman Heather Bowers, who was elected to the council in April along with Davidson, had publicly called for the firing of Blase even before the STAR loan revelation for what she considers poor oversight and performance.

“We are so far off from the safeguards in the charter that it’s pretty financially dangerous,” she said, contending that the city does not follow one requirement, for example, calling for the city manager to maintain an inventory of city property and equipment.

Both Davidson and Bowers have alluded to the requirements of the city manager’s position in the city charter, which mandates the manager “see that the provisions of all franchises, leases, contracts, permits and privileges granted by the city are fully observed.”

Neither Davidson, Bowers, nor Werneke though would comment on the subject of this morning’s council meeting, which largely is to take place in closed session. The direct employees of the council consist of the city manager, city clerk and the city attorney.

Blase told the Globe on Friday that he did not plan to attend the meeting.

“I’ve not been invited,” he said.



Meeting time

The Neosho City Council will meet at 11 a.m. today in its chambers at City Hall. The council is scheduled to go into closed session.