Natchez aldermen ready to discuss finances

Published 12:10 am Tuesday, January 13, 2015

NATCHEZ The Natchez Board of Aldermen will review a variety of financial matters today and Wednesday, including its delayed audit and restructuring of bond payments for the Natchez Convention Center.

The board will meet today at the City’s Council Chambers on Pearl Street with a finance committee meeting 9:30 a.m. and regular meeting at 11 a.m.

The board announced plans Monday to recess today’s meeting and reconvene that meeting at 4 p.m. Wednesday with Demery Grubbs, the city’s financial adviser.

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On the agenda for that meeting are discussions regarding the restructuring of bonds for the Natchez Convention Center and a possible increase in taxes to cover an expansion of the facility.

The board decided last month to meet with Grubbs before voting on the matter.

Brown said he hopes the board takes action on the matter Wednesday with or without the proposed expansion.

“Whether we include the convention center expansion in that or not is besides the point right now,” Brown said. “We must restructure our debt so we can meet our bond payments.”

Under the current structure bond, the convention center debt should be paid in full by 2024.

The $12 million bond was issued in 1999 to build and furnish the convention center, as well as renovate the Natchez Community Center and Natchez City Auditorium.

The city refinanced a portion of the bond through an interest rate swap transaction executed in 2006 with Malachi Financial Products in an effort to save a projected $1.5 million over the subsequent 18 years.

The payment for the refinanced bonds will increase to nearly $1 million this year and average approximately that until the bond retires in 2024.

One of the proposed plans Brown presented to the board included restructuring the current bond on the convention center to add 10 years and nearly $4.5 million to pay for an expansion of the convention center and fees associated with the project.

To fund the expansion, the city is proposing an increase to the current 3-percent lodging tax, which will be increased by 1 percent to a total of 4 percent, and the 1.5-percent restaurant tax, which will be increased by 0.5 percent to a total of 2 percent.

A 1-percent increase to room tax would bring $166,000 to the project, while a 0.5-percent increase to the restaurant tax would bring $243,000 — for a total of approximately $400,000 in additional annual revenue would come from to support the expansion of the convention center.

The increased taxes would eventually require legislative action, but first needs approval by the aldermen.

“If the board votes in favor of the expansion, we need to start figuring out how we can get this through the Legislature,” Brown said. “These are all things we need to start looking at now.”

Brown said the matter would have been handled today during the board’s regularly monthly meeting, but a conflict arose with Grubb’s schedule, pushing the meeting to Wednesday.

During its meeting today, the board expect to hear from auditor Deanne Tanksley.

Tanksley, who works with the Gillon Group the firm contracted to provide the city’s annual independent audit, is expected to present the board with its 2012-13 audit, which was due June 30.

State law requires the city have the audit for a given fiscal year completed within nine months of the close of the year, but city officials have blamed the state of the city’s bookkeeping for the delay.

Tanksley provided the aldermen with a draft of the audit in December and said the final version was “substantially complete” but wasn’t ready for the board.

Brown said Tanksley is expected to present the full audit report today and answer questions from board members on the presentation.