An informational meeting about a proposed property tax for Neosho became heated Monday night.
Mayor Pro Tem Tom Workman, filling in for Mayor Richard Davidson who was out of town, spent some time on the hot-seat as local residents grilled him for two and a half hours about the $1 per $100 of assessed valuation tax levy on real and personal property ballot question being put before Neosho voters on Aug. 3.
City officials have said that if the tax doesn’t pass, serious cuts will have to be made in the general revenue fund — the only account with non-designated monies — which mostly pays for police and fire service. Without the property tax, payroll reductions would have to be made in those areas to make up the difference on what the city owes in debt payments due this spring. The personnel cuts would also be used to pay back money inappropriately borrowed from earmarked funds by previous administrative officials to pay the city’s bills, and to keep the city solvent with a balanced budget by Oct. 1, as required by state law. Based on current sales tax revenue, the city is projecting a $1.2 million shortfall next fiscal year.
During the meeting, local resident Oren Raulston voiced his opposition to a sign campaign supporting the tax, claiming it was misleading. He waved around a yellow cardboard sign he said someone had placed near his yard without his permission that read “Fire Fighters. Protecting you every day. Vote Yes. Support Your Public Safety.” The sign was paid for by the Missouri State Council of Fire Fighters, a political action committee.
“This doesn’t say anything about the lies and deception about the money that was spent in other places and wasn’t supposed to be,” Raulston said.
Workman agreed that overspending by city management, and approved by city council, was a major cause of the city’s financial troubles. But, he added, it’s out of the general revenue fund, which covers police and fire, that the money is going to have be paid back.
“This tax is to bail out the lying people who cheated us — tell it like it is!” Raulston cried.
“I am telling you like it is,” Workman said. “This is a tax to pay back the restricted funds because it’s going to have to. The general fund cannot afford to pay back the restricted funds by itself. If we do not have a property tax, the general fund is still required to pay these funds back. And doing that would result in a loss of services that come out of the general revenue.”
Tempers flared later, however, after Raulston echoed his earlier call for city officials to “just tell us the truth.”
“Nobody in this room thinks we don’t have to have this dollar,” Raulston said. “I know it, you know it, reality says we have to have it. But just tell us the truth. This is to bail out the lies. They’re lying to us today (holding up the sign.)”
“That sign is not a lie,” spoke up Neosho City Clerk Nora Houdyshell. “If we don’t get this property tax our firemen are going to lose their jobs.”
“But they’re not going to get any new fire trucks are they?” Raulston said. “This sign doesn’t say anything about what (former city manager Jan) Blase done to us.”
“If a fire truck sits in a station it’s no good if you don’t have personnel to operate it,” interjected Neosho Fire Chief Greg Hickman, who recently agreed to resign in exchange for saving firefighter jobs.
Neosho resident J.C. Herrell complained, along with others at the meeting, that local residents are already taxed enough, especially after having approved a $8.4 million sewer bond last year, which Herrell claimed voters were “scared into.” Using expressive, unprintable, language, Herrell said he was angry that senior citizens were going to be forced to pay the extra property tax costs out of their Social Security income and claimed that many were going to have to choose between paying their new taxes and buying medicine.
Adding to that, local resident Betty Wingo later wondered aloud how if city sales tax revenue is down because people are unemployed and can’t afford to spend, how they were supposed to pay for a new property tax.
Referencing what he said was the city’s fiscal year 2008 budget, Herrell wanted to know what happened to the $3.2 million worth of unrestricted, or “rainy day,” reserve funds that were available that year.
Workman said the reserves were largely depleted in gradual cost overruns on capital improvement projects, namely construction of the South Street overpass and the renovation of The Civic. Those over-expenditures were brought before the sitting city council at that time in the form of change orders that were then approved. Four of the five council members who approved the cost overruns have already been ousted from office by voters.
Later, Herrell expressed frustration that “no one seems to know” how much was still owed on various specific projects. Interim Neosho city manager Harlan Moore commented that he did know what what was owed but that he didn’t have the figures in front of him and couldn’t recall specific numbers offhand. Herrell told him that’s what he was hired for.
“That is an unfair statement, sir,” Moore replied and said Herrell could stop by his office the next morning to see the dollar numbers.
Herrell also asked why the city was asking voters to approve the property tax before next fiscal year’s budget was even available to look at.
“Because I can tell you right now that without the influx of that (property tax revenue) we are going to cut $1.2 million dollars from general revenue,” Workman said, basing that off a cash flow analysis performed last spring.
“Cut it!” Herrell yelled. “Sell something. Don’t tell me you don’t have assets. The city should get off its butt, find out what you have and sell it.”
Workman said the problem with selling assets was that almost everything worth selling is under debt, meaning if the property sold for less than what is owed the city would have to immediately pay the difference out of the general revenue fund — which is where the fiscal problems are to begin with. Moore later speculated that this would probably be the case with the city golf course in particular, to the tune of perhaps $1 million. Also, according to Moore, the city’s general revenue fund only subsidizes the golf course in the amount of between $35,000-$50,000 per year, meaning that’s all that would be saved by selling it.
Rural Neosho resident Steve Roark agreed with Herrell that it was “wrong” to ask for a property tax in the amount being asked for without first seeing next year’s budget, which Moore said won’t be ready until mid-August at the very earliest.
“It is a scare tactic when you don’t give people specific amounts and numbers about what is going to be cut,” Roark said.
“All I can tell you is we do have to cut $1.2 million from the budget by Oct. 1,” Workman replied.
The city council has to set a tax levy by Sept. 1. If the $1 property tax vote fails on Aug. 3, it would be another year before it could come up again for a vote, Workman said, too late to cover the shortfalls predicted for next year and which then would have to largely be covered out of the general revenue fund.
Should the $1 property tax fail at the polls, the city council could levy a 42-cent tax on real property only — the highest it’s allowed by state law based on Neosho’s assessed valuation — which will generate $375,000. That leaves $825,000 left to make up. The Missouri Attorney General’s office is supposed to look into the legality of the levy. The issue is still tangled in red tape, however, and there remains a question of whether or not a decision will be handed down by the Sept. 1 deadline.
Roark also questioned if home insurance rates would actually go up if fire service was reduced.
Workman said his insurance agent told him that his own insurance would increase by $150 per year if the city went up one point in its ISO rating, which is currently at 5. The higher the rating, the more property owners usually pay in insurance. Assistant Neosho Fire Chief Mike Eads indicated that the ISO rating would likely change for the worse if fire service was reduced, based on the fact that the city “barely” rated a 5 as it was and that recommendations made 11 years ago that the city hire nine more firefighters and one training officer, buy another ladder truck and build a third fire station have not completely been met.
Several people in the audience asked at difference times during the meeting what safeguards would be in place to ensure the city didn’t fall back into financial pits should it get back on its feet.
Workman said the new administration is providing the new city council with financial statements every month, that council members are personally keeping an eye and checking up on city fiances and that the “rubber stamp” to OK checks with at city hall has been thrown away.
It was suggested during the meeting that the city should publish in the newspaper a list of checks written that month, outlining to whom the checks were written and in what amount.
One audience member wanted to know if the Aug. 3 ballot language would provide that the $1 levy only be in place for one year. Workman said no. It is up to the city council to decide the levy amount each year. If the $1 levy passes, that would be the tax ceiling for future councils. Workman noted, however, that his vote as a councilman would be to lower the $1 levy once the city gets back on its feet and predicted that that’s what the council as a body would probably do.
“If sales tax goes up and the economy improves, it has to balance out,” Workman said.
Moore said the property tax is more of “a barometer” for the sales tax. When the sales tax goes up, the property tax should go down, he said.
“You’re going to give a politician a dollar a year levy and they’re going to cut it back?” one audience member scoffed.
“That falls back to what you want to see in services once the money gets paid back,” Workman said.
Roark asked if it was possible to make other payroll cuts out of the general revenue fund without having to take it out of police and fire.
Workman said that since the other city departments are supported by their own designated sales tax, the only positions left to cut were at city hall.
He said even if everyone there was laid off, it would only be “a drop in the bucket” of what’s needed to make up the difference, should the $1 levy be turned down by voters.
Neosho has already laid off 20 employees, or about one-fifth of its payroll, since last year. Of those, Workman, the former city parks manager, was one of them. Those employees that are left have taken a 3.75 percent pay cut.
“Ain’t nobody in the world more mad than I am,” Workman said. “I spent 18 years with the city and had it jerked out from under me in 15 minutes. I am very disappointed. But we’re at this point. We don’t want to lay people off but we hate to ask the people of Neosho for a property tax. What do we do?...By law we have to balance the budget, but service cuts aren’t the way way want to balance it. We are all invested in Neosho. I’ve been here all my life and want to continue to live here.
“This is my home. I don’t want to leave. I don’t want to see services cut. I don’t want to see the city in a financial bind. But we’re here. If you had told me six months ago I was going to be up here begging for a property tax I would have said you were crazy. But this is my home. And if I have to step up and do what I don’t want to do to keep this thing maintained, then that’s a personal choice. You have to do what you have to do.”
Neosho, Mo. —
