By Derek Spellman

dspellman@joplinglobe.com

NEOSHO, Mo. — Separate proposals calling for the cash-tight city of Neosho to issue a total of $1.25 million in special bonds will come before the city council Tuesday night, while city staff continue work on a larger financial plan that could propose further cuts.

The council during its Dec. 15 meeting gave tentative approval to a plan issuing $825,000 in bonds to pay the cost of designs for planned improvements to the city’s water system. The same meeting also saw the council reprimand City Manager Jan Blase for mismanagement of city funds and direct him to craft a plan to recover and balance those funds.

The $825,000 proposal will advance to the council for a final vote Tuesday, along with a separate proposal enabling the city to issue $425,000 in bonds to front the costs of transportation improvements that include the paving of La-Z-Boy Drive.

Both items are the main topics on a lean council agenda for Tuesday.

Blase in November acknowledged he used a state loan earmarked for the construction of new airport hangars to finance city operations, specifically to make payroll and pay city bills, amid a sales tax slump. City officials later said the city’s general revenue fund also had borrowed from its funds for water and sewer, from some hotel/motel tax and from tax increment financing revenue, later culminating in the council directive to devise a plan to repay those funds.

Blase, asked last week (Dec. 30) about the larger financial plan to be presented to the council later this month (January), said, “It’s simply cutting expenses and waiting until revenues exceed expenditures” and for funds to accumulate, although he did not give specifics about how expenses could be cut, only that the plan would likely offer a number of options.

“I’m still mulling those over,” he said when asked what options could be offered.

‘Nothing left to cut’

Neosho Mayor Jeff Werneke had told the Globe last month that the pending financial plan, which also would address funding for the hangar construction, could not and would not assume passage of a property tax measure. He did say if the city had to make cuts or borrow more money for that plan, then it had to.

Last week the mayor told the Globe that specifics of the plan are still to be determined, although he expected it would call for “a little bit of everything,” and that cuts could account for some, but not all, of the repayment plan. Werneke declined to comment in detail, saying that, he, too, awaited the details.

He did say the plan would take “a very conservative” approach to sales tax revenue projections. This year’s budget assumes that revenue will be flat.

That budget, passed a few months ago, included layoffs and pay cuts for city employees. City officials said they had already cut all other costs as much as they could before then.

“All the fluff is gone from the 2010 city budget,” Blase wrote in a November newsletter, later adding, “Services have been cut as much as can be without affecting our police and fire operations. There is nothing left to cut.”

Future

The two bond proposals to come before the council Tuesday are to be repaid with a mixture of loan money that will be provided once the city’s water projects enter the state revolving loan fund program, and from other state money that is to reimburse the city for the La-Z-Boy Drive work and planned railroad “quiet zone” improvements.

City officials have said the city needs to issue bonds for those projects because it needs to pay costs up front, before reimbursement.

City Councilwoman Heather Bowers was the lone dissenter when it came to tentatively approving the $825,000 bond proposal last month. She told the Globe that she plans to vote “no” on that proposal and the second bond proposal on Tuesday.

“I expect better planning,” she said last week, questioning why the transportation improvements could not be delayed.

Both of last month’s regular council meetings drew standing-room only crowds and occasional heckling of Blase.

More information

At the Dec. 15 meeting, Werneke appealed for time for the city to create conduits for more financial information to flow both to city staff and the public. Those measures are to include a regular financial bulletin and an internal financial committee.

“I ask that the council and city manager are given the opportunity to know the situation inside and out, and prepare an action plan rather than continually defending past actions and explaining other’s media exploits,” he had told the crowd.

The mayor last week said the city likely would be putting out more financial information later this month, once Blase’s repayment plan is complete.

“The main driving focus is getting the council the plan,” which, he said, would form the basis of the first bulletin.

Blase had previously said that a reinstated property tax was among options that city staff could pose to the council as a future ballot measure, although more recently he said it remained to be seen if staff would present that option. Blase has warned about the volatility of sales tax revenue, and the risks of relying solely on it.

Last month, after an audit of the city’s use of the airport hangar money, officials with the city and the Missouri Department of Transportation announced they had agreed to a timetable for construction of the airport hangars. The work is to start later this year and to be complete by October 2011.

Blase previously said he used the hangar loan money largely because of an ethical obligation to make payroll and pay city bills. He also said city staff had accomplished more than 80 percent of the goals outlined in Neosho’s long-range plan in just a few years, including downtown revitalization and improvements to city infrastructure.

“This does not come without stretching the budget,” he wrote in the November newsletter, later adding that the city had committed to many of those projects before the national economic downturn.



Go and do

The Neosho City Council will meet at 7 p.m. Tuesday in its chambers at City Hall.