Globe Takes Aim At Neosho’s Council Vote

Below is an article from today’s Joplin Globe.  It is a very interesting read.

My views of the issue were posted on my blog yesterday.

— By Derek Spellman
dspellman@joplinglobe.com

NEOSHO, Mo. — With the town potentially facing insolvency, the Neosho City Council narrowly voted to borrow an additional $1.3 million to replenish the city’s general fund.

By a 3-2 vote Tuesday night, the council tentatively approved a measure enabling the city to issue $1.3 million in certificates of participation to reimburse the general fund for previous cost overruns and other costs surrounding the expansion and renovation of The Civic, the city auditorium. The general fund finances all city operations, except for the golf course, and water and sewer service.

The vote

Mayor Jeff Werneke, Mayor Pro Tem Richard Davidson and Councilman Warren Langland voted in favor of the proposal. Matt Persinger and Heather Bowers opposed it.

“I have my own personal reasons,” Persinger said of his vote after the meeting. He declined to share those reasons or comment further to the Globe.

The city had 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 work on The Civic was one of a number of projects in recent years that former City Manager Jan Blase said had either incurred overruns, exceeded their original cost estimates or posed unforeseen costs, putting a strain on the city’s coffers. Critics have contended that the projects showed a pattern of overspending and lax oversight.

Bowers said she voted against Tuesday’s measure as a criticism of those spending practices.  “I’m not going to condone what they did on their spending,” she said.  “I don’t think they have explored all options,” she said when asked what else the cash-strapped city should do. When pressed, she conceded that she could not suggest any other specific options for the city to consider.

Werneke said that barring the infusion of additional money, the city would be unable to meet two upcoming debt service payments totaling almost $850,000. The first of those payments is due next month. The next payment is due in May, leaving the city little time and no other options.

Even with swift and drastic cuts, those reductions would not generate enough cash in time to make the debt payments, the mayor said Wednesday in a phone interview.

“In the short term, it’s something that’s got to happen,” Werneke said of the borrowing.

A special committee is forming that is to make recommendations about the city’s long-term financial outlook, including whether the city should resurrect a property tax.

‘Gravity’

As for the narrowness of Tuesday’s council vote, the mayor said: “It concerns me that maybe the rest of the council doesn’t understand the gravity of the situation.”

The council is to take up the measure for second and third reading next week in a special meeting. The council actually passed the measure on first reading March 2, but City Attorney Steve Hays said incorrect language in the legal description meant the council had to take it up again for a first reading Tuesday.

Certificates of participation are one of several forms of debt that cities can take on with only a vote of the council. The certificates would be repaid over the next 10 years by revenue from a quarter-cent sales tax previously approved by voters to finance capital and operational costs at The Civic and the senior center.

The discussion of certificates Tuesday night was not without controversy. During the debate about whether the city should issue certificates to cover The Civic’s additional costs, Bowers accused Werneke of buying certificates issued years earlier in connection with a spec building constructed by the city.

“That is absolutely not true,” Werneke told her Tuesday night.

In a phone interview Wednesday, Bowers acknowledged that she had no direct evidence that Werneke purchased any certificates. She said she based her comment on what she had heard from others and from online postings. She said she should have framed the issue as a question, not a statement.

“I see that now,” she said Wednesday.

Werneke said even a baseless accusation causes harm.  “How many people remember the retraction?” he said Wednesday.