By Greg Grisolano
ggrisolano@joplinglobe.com
NEOSHO, Mo. — The Neosho City Council unanimously approved up to a $10,000 contract with a Joplin accounting firm to help untangle the city’s finances.
Mayor Jeff Werneke said the council met in special session Friday afternoon to complete an agreement with the firm of BKD.
“Basically it’s to get caught up,” Werneke said. “It’s not that the people we have there aren’t qualified, but when you pluck 50 percent of your work force out of there, especially in a time when we’re focused on financials, it’s a helping hand.”
Accounting tangle
The City Council is enlisting another accounting firm in the short term to verify both the numbers and the assumptions behind a financial plan proposed last month by City Manager Jan Blase, who has been suspended with pay pending final council steps to fire him. The council already has OK’d the firing of the town’s finance director, Bob Blackwood. Blase and Blackwood also face misdemeanor charges of official misconduct.
In the proposed plan, Blase had called for an additional $300,000 in spending cuts this year and additional borrowing of up to $1.625 million for the cash-strapped city, as part of a broader scheme to “avoid insolvency.”
The mayor had told the Globe last month that, barring an infusion of additional money, the city likely would be unable to make upcoming April and May debt service payments totaling $850,000.
Neosho Mayor Pro Tem Richard Davidson said the contract does not ask BKD to do any forensic auditing or investigative work.
“We’re asking them to review and validate the cash balances of the city and how those cash balances will contribute to debt service payments we have for the next three to six months,” he said.
The BKD contract is capped at $10,000 — meaning if the firm wants to spend more than that amount, it must meet with the council to get approval to extend services. The contract also has three “tiers” so that depending on what level of service is required, the price could fluctuate between $125 to $340 per hour.
Davidson and Werneke both said the money to pay BKD would come from the city’s general fund.
Base line
“The financial recovery of Neosho hinges on us understanding where we are today,” Davidson said. “This money is a necessary expense so we can proceed forward with getting out of this crisis.”
Werneke said representatives from BKD estimated the cost to reconcile bank statements would be in the $150 range, and that it would take 30 to 40 hours to reconcile the books from Oct. 1, 2009, to the present. The cost would be between $4,500 to $6,000.
He said work is expected to begin either Monday or Tuesday of next week.
Blase and Blackwood were charged with misdemeanor official misconduct Wednesday after allegedly transferring earmarked hotel and motel tax revenue into a fund for general city operations.
A charge of official misconduct is a class A misdemeanor, punishable by up to one year in prison or a $1,000 fine. Blackwood and Blase have declined to comment about the charges.
Blase did not return a message left on his cell phone Friday seeking comment on the council’s decision to hire BKD.
Blase in November 2009 said the city used a state loan earmarked for construction of new airplane hangars to make payroll and pay city bills. The next month, he and Blackwood said the city’s general fund had also borrowed from the city’s water and sewer fund, its hotel and motel tax fund, and a portion of the city’s sales tax revenue owed to the city’s tax increment financing fund.
State audit
A group of residents earlier this week obtained the necessary number of signatures on a petition to trigger a state audit of the town’s books.
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