NATCHEZ — The City of Natchez could potentially be getting none of the $250,000 generated in a recent financial transaction that proved to be less profitable than the city and financial advisers originally thought.

Tony Gaylor of Chambers & Gaylor, who is the city’s outside legal counsel for the city’s swap transaction with Malachi Financial Products, appeared before the Natchez Board of Aldermen at its Tuesday meeting to inform the board that the recent transaction generated the city’s target of $250,000.

Gaylor said, however, that because of a recent shift in the market, the transaction did not generate enough to cover the fees without the city paying its legal fees from the $250,000.

Gaylor asked that his $15,000 in legal fees and Natchez City Attorney Everett Sanders’ $5,000 in legal fees be paid from the $250,000.

The original interest-rate swap transaction was executed in 2006 when Malachi Financial Products refinanced the 1999 bond the city issued to build the Natchez Convention Center.

Malachi’s Chief Executive Officer Porter Bingham told aldermen in February the city would pay approximately $50,000 in advisory fees.

The Bank of New York is the lead agency in the swap, and New York-based Rice Financial Products is also involved in the swap.

Michael Murray of Rice Financial Products told the aldermen in February that the modification to the transaction would allow the city to lock in its current interest rate savings for a three or four-year period. He said the city could get the potential $300,000 lump sum payment up front, instead of over the usual payments the city gets every six months.

Ward 1 Alderwoman Joyce Arceneaux-Mathis made the motion at the board’s Feb. 28 meeting to approve the swap modification and set the city’s floor amount at $250,000.

Gaylor asked the board Tuesday night for a motion to confirm the receipt of the $250,000 generated from the transaction and then a motion to pay the legal fees from the $250,000.

Gaylor said the transaction had to be approved by the Mississippi Development Bank, which he said took several weeks causing the transaction to be in the market longer and subject to the market shift.

“That was the risk associated with the transaction, the longer it takes to finish it, there is an opportunity that that window will close,” Gaylor said.

Ward 3 Alderman Bob Pollard said since the aldermen voted for the transaction based on the understanding the city would get at least $250,000, he would not vote for anything that caused the city to get anything less.

Mathis said she was pleased with the work that Malachi had done on the transaction and made Gaylor’s requested motion to confirm the receipt of the $250,000.

Mayor Jake Middleton broke a 3-3 tie on the board voting against the motion. Mathis, Ward 2 Alderman James “Rickey” Gray and Ward 4 Alderman Ernest “Tony” Fields voted for the motion.

Pollard, Ward 5 Alderman Mark Fortenbery and Ward 6 Alderman Dan Dillard voted against the motion.

Gaylor explained to the aldermen that they had not voted to pay the $20,000 in legal fees but had only essentially voted not to accept the $250,000, which he said they had already voted to do in February.

Gaylor, a Natchez native, said he came to the board in an effort to keep the aldermen informed of the details of the transaction. He said the board already authorized Middleton and City Clerk Donnie Holloway to receive the final papers and execute the transaction.

“I came back to give you more information regarding this transaction so that you could be fully informed and fiscally responsible with all the funds that come into this city,” he said.

Gray said he did not understand why the aldermen would not want the $230,000 it would get after legal fees, even if it was not as much as they originally thought the city would get.

“As bad as we need money… I can’t believe a city wouldn’t want $200,000, and I just think this board needs to be real careful what kind of message we send when we do business because we need to be fair across the board,” he said.

Gray, Mathis and Fields all voiced concerns that they believed that the other aldermen’s reasoning for voting against accepting the $250,000 was racially-motivated.

“I’m sick of this,” Gray said. “We can’t move forward in this community because we have to look at this man and judge him by the color of his skin.”

Mathis and Fields expressed their appreciation to Gaylor for his work, and Mathis said she suggested Gaylor take his work somewhere it would be appreciated.

“Because obviously this city doesn’t appreciate it,” she said.

Dillard said the board did not have adequate time to review the documents Gaylor presented to them shortly before the vote. Dillard asked to be excused from the meeting and said the other aldermen’s accusations of discrimination were “nonsense.”

Dillard returned to the meeting before it was over.

Dillard said after the meeting he is not against receiving the $250,000 for the transaction, he said he was only upset Gaylor did not present the information prior to the meeting.

“The accusation that I voted for it because Mr. Gaylor is of a different ethnicity than myself is ridiculous,” he said. “I had five minutes to review a very complex transaction that took him three months to put together,” Dillard said.

Dillard said he would be interested in bringing up the transaction to the board for reconsideration after he further reviewed it.

Under Robert’s Rules of Order, one of the aldermen that voted against the initial motion would have to make the motion for reconsideration.

In other news from the meeting:

•Warren Guidry of Waste Management presented Keep Natchez-Adams County Beautiful, the Master Gardeners and the Natchez-Adams County Community Alliance with a check for a $5,000 grant for the downtown tree-planting beautification project.

•The board met in executive session to discuss litigation regarding Worley Brown LLC.