By Derek Spellman
dspellman@joplinglobe.com
NEOSHO, Mo. — City Manager Jan 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.
He also said the city will need to borrow $1 million to alleviate a “cash-flow shortage.”
Blase took responsibility for a “lack of communication” on the issue of the airport loan, although he rejected any notion that the lapse breached either the city charter or the city’s ordinances detailing the duties of the city manager’s position.
The charter requires the city manager to ensure that the provisions of all contracts are observed and to keep the council “advised on the needs of the city.” An ordinance requires the manager to keep the council “advised as to the financial conditions and needs of the city.”
The City Council met behind closed doors Saturday to discuss a personnel matter. Mayor Jeff Werneke declined to give specifics. He did say that more information was needed regarding the level of communication to the council about the finances before the council could determine if any disciplinary action should be taken against any employees.
Motions to fire
Councilwoman Heather Bowers said she twice moved to fire Blase during the closed session, and that both motions failed. Bowers said some council members want to gather more information before deciding on any disciplinary action.
Blase said he has provided the council with quarterly financial reports, and that he thought that information satisfied both the charter and the city codes.
Asked if he is concerned about his job, Blase said that if he were “always concerned with my job,” he would not be “acting in the best interests of the people of Neosho.” He had previously defended the use of the hangar loan to make payroll and pay city bills as a moral obligation.
Blase told the Globe last week that the city was sometimes “scrambling” to make payroll.
City Finance Director Bob Blackwood on Tuesday said the city’s general revenue fund — which pays for all city operations except for the golf course, and water and sewer service — is “in the hole” and “will be in the hole for a while.” He said he had not calculated specific amounts as of Tuesday morning.
The general revenue fund has been borrowing from the water and sewer fund for the past five or six months, and perhaps the past seven, he said. That borrowing is legal, he said.
“It was not taken, it was borrowed,” Blackwood said.
Asked if the city is “living on the edge” financially, he replied, “The city is living on the edge financially, and has been living on the edge financially for a while.”
But Blackwood said many cities face the same situation, and that Neosho’s can be attributed wholly to the recession.
He said he is “not the least bit concerned” about the city’s ability to make payroll and pay its bills, although he acknowledged there will likely be months when the finances will be extremely “tight.”
Blase on Tuesday said he would 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.
“I believe it’s a solid plan,” he said.
Without that loan, he said, the city “would be extremely short of cash.”
More borrowing
Cheryl Mosby, former city finance director who has publicly questioned the city’s finances, said that new note would be one more loan the city would have to repay.
The city already has borrowed from the state loan for airport hangars to meet expenses, she said, while the general revenue fund has been borrowing from the water and sewer fund to do the same.
Blase said he believes the city will be able to repay those loans with the plan he has put forward and with the cuts already made earlier this year. Those cuts entailed layoffs, pay reductions and a general decrease in expenses.
“I believe that would be the case if sales tax doesn’t decrease any more,” he said.
