Could city avoid taking out loan?

Published 12:00 am Thursday, March 3, 2016

On the bright side, at least Natchez aldermen are talking to one another about the city’s finances.

Unfortunately the solution to what seems to be an ongoing stream of questions about the city’s matching fund requirements for various grant-funded projects was simple — let’s borrow some more money.

City aldermen have balked in recent months when city department heads came forth seeking large sums of money to pay for projects that were in the works. It appears the city agreed to take on the project and accept the terms of the grant funding — which Natchez Mayor Butch Brown loves to refer to as “other people’s money” — but then forgot two key things.

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First, most grants require matching funds — or at least in-kind services. Those matching funds must come from the city’s checking account.

Second, in many cases the contractors working on projects seek to get paid as the work is completed, meaning the city often must “front” the payment and later be reimbursed by the grant’s source.

The city is an enormous entity that should have significant cash flow coming in from taxes — particularly this time of year. Continuing to have to go to the bank and borrow money for seemingly routine operations — street maintenance, for example — just seems like the city is pushing its fiscal limits too much.

The city agreed to obtain a $400,000 line of credit Tuesday. That’s a drop in the bucket to the city’s multi-million-dollar budget. If the city were a person, the line of credit would be the equivalent of borrowing a couple of hundred bucks from a friend. It certainly seems that being more prudent and patient could avoid the loan.

Again, we’re glad the aldermen are talking finances, but we hope they’ll talk about making their ends meet before additional debt is added.