Neosho panel to take up question of more debt

Mar 2, 2010 — The Joplin Globe

Derek Spellman

Mar. 2, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- NEOSHO, Mo. -- A proposal authorizing cash-strapped Neosho to borrow $1.3 million will come before the City Council tonight.

In January, then-City Manager Jan Blase said the city would need to borrow that sum to absorb cost overruns and other additional costs surrounding the expansion and renovation of The Civic, the city auditorium. The city's general fund, which finances all operations except the golf course and water and sewer service, had absorbed those costs.

Tonight's proposal would allow the city to issue $1.3 million in certificates of participation, one of several forms of debt that cities can take on with only a vote of the council, to repay the general fund. The certificates ultimately would be repaid by revenue from a quarter-cent sales tax approved by voters several years ago to finance capital and operational costs at The Civic, according to Mayor Jeff Werneke.

Werneke said the general fund would need an infusion of money in order to make upcoming payments on pre-existing debts.

In early January, the council approved a proposal calling for $825,000 in special obligation bonds to finance the cost of engineering designs for planned improvements in the water system. It tentatively approved a separate proposal to issue $425,000 in such bonds for the paving of La-Z-Boy Drive and for railroad "quiet zone" projects.

Both of those bonds would be repaid via reimbursement from outside sources within the next two years. The city would use proceeds from the state revolving loan fund to repay the bonds for the water system engineering, and use reimbursements from the state and railroad companies for the transportation bonds.

Werneke said the city likely would not to have borrow any more money for the current fiscal year, assuming approval of both the $425,000 for the transportation projects and the $1.3 million for The Civic.

"With conservative estimates, that should be enough," he said.

The current fiscal year ends Sept. 30.

The work on the auditorium was authorized by voters several years ago in a ballot measure that called for a quarter-cent sales tax to finance capital projects and maintenance costs for the auditorium and the senior center.

The city issued $2.8 million in bonds for the actual work at the auditorium. Total costs exceeded $4 million. That sum included costs beyond the actual work on the building, including engineering designs drawn up years earlier as well as the city's acquisition of the former First Baptist Church building next to the auditorium. The city purchased that property for about $290,000.

The council also is scheduled to go into closed session tonight, and Werneke said the panel likely would discuss a replacement for Blase. The council placed Blase on paid suspension effective Jan. 26, pending final steps to fire him. It fired him last week.

Blase last year had acknowledged that the city's general fund borrowed from a state loan earmarked for construction of new airport hangars, and from hotel-motel tax revenue, water and sewer money, and sales taxes due the city's tax increment financing fund.

The borrowing of the hotel-motel tax revenue formed the basis of misdemeanor charges of official misconduct filed almost a month ago against Blase and former city Finance Director Bob Blackwood. The two men pleaded not guilty to those charges Monday.

Meeting

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

Newstex ID: KRTB-0368-42498164