Borrowing more money seems unwise
Published 12:05 am Thursday, December 11, 2014
The City of Natchez must get its own financial affairs in order before seeking to borrow more money backed by taxpayers.
In Natchez’s latest plan, city leaders are attempting to bundle several issues into a single package in hopes of making the pill go down smoothly.
Sinking $4.5 million into an expansion of the Natchez Convention Center, the premise of the plan suggests, is a wise move for Natchez. That may be true, but the point gets lost in the plan’s other “legs.”
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The expansion would be funded by two relatively small sales tax increases — one on lodging and another on restaurants.
So the city seeks to borrow more and raise taxes all in one swoop.
City finances have been a joke for years. At present the independent auditor is still unable to complete last year’s audit because of shoddy bookkeeping.
City leaders are constantly worrying over how to fund maintenance of the existing city buildings. Is making one larger going to help those ongoing issues?
The real issue, however, is years of poor fiscal management in the city.
Twice the city has reworked the convention center’s original $12 million bond. The ridiculously complicated processes have slowed the repayment of the debt. In more than 15 years of payments, the city has only managed to whittle $3 million off the debt.
In 2015, the repayment schedule of the original bond accelerates, meaning the city must fork out more cash — fast.
Rather than trimming expenses and using the proceeds from the city’s annual lease payment with Magnolia Bluff Casino to help pay off the debt, the city’s solution is to borrow more money and make the building bigger.
That doesn’t seem logical or wise.