VIDALIA — The Vidalia Board of Aldermen voted Tuesday to enter a cooperative agreement with a hotel development group that will essentially use tax funds generated by the hotel itself to help underwrite the project.

The agreement ratified Tuesday is between the City of Vidalia, a 7-acre development district on the riverfront the board created in June and the Desai Hotel Group.

While the members of the Vidalia board are also the controlling board of the economic development district and it is still considered part of the city, it is also a legally separate entity. The district levies its own taxes, but taxes levied by the City of Vidalia’s also apply within its boundaries.

The Desai Group has plans to build two hotels on the riverfront, an 87-room extended-stay hotel and a 120-room traditional full-service hotel. The Desai Group operates the Holiday Inn on Canal Street in Natchez.

The agreement adopted Tuesday will allow the district to use tax dollars generated within the district to pay off any bonds taken out to build infrastructure needed for the development or to reimburse the developer, Vidalia’s bond attorney Jason Akers said.

“This (structure) is an act that was originally enacted in early 2000s by the legislature, and this provides municipalities such as Vidalia the opportunity to say to a developer, ‘We know you need a little help, but we don’t have the funds ourselves, but this agreement can help us all get aligned,’” Akers said.

The total construction budget for the hotels is approximately $22 million, he said, and the hotels are expected to produce between $5 and $6 million annually.

“Your city sales tax gets a benefit, plus your utility costs,” Akers said. “Even though the developer himself is going to benefit from those additional taxes, the town is going to benefit as well.”

The arrangement will not result in new or higher taxes for existing Vidalia businesses or residents, Mayor Hyram Copeland said, and it will not cost the city anything.

“The city is not going to have a burden in any of these projects,” he said.

In other news:

4The city opened bids for 10 radar-controlled flashing beacons.

“We are going to install these beacons at the schools within the city limits except Vidalia Junior High School because it is on a state highway and not a local road,” City Grant Coordinator Teresa Dennis said.

“(The beacons) let people know they are going too fast in the school zone, and it will also allow the police department to monitor them and collect data as to how fast people are going. It is to make all of our traffic aware of how fast they are going.”

The board took the bids — ranging from approximately $36,000 to approximately $56,000 — under advisement.

4Vidalia City Accountant Ashley Anderson said the city has adopted a new policy to address a concern listed in its 2014 fiscal year audit.

The audit did not have any findings of material weakness, but the legislative auditor’s office faulted the city administration for “not giving the town council accurate and timely financial data.”

Anderson said the issue was because she had been emailing the monthly finance reports to the aldermen’s personal email addresses.

“I was sending them out, and (the aldermen) were getting them, and some were reading them and some weren’t,” she said. “(The auditor) said, ‘We can’t know if they’re getting those reports or not when you do it like that.’”

The aldermen will now have to pick up a copy of the reports from Anderson’s office by the 20th of each month and sign a paper saying they had received the reports, she said.

The city was also noted for having errors in bank accounts and general fund expenditures that exceeded the state-allowed 5 percent variance from the number presented in the budget.

Anderson said the errors in bank accounts were for accounts that traced back to former City Manager Ken Walker’s tenure, and the city is working to reconcile all of those issues. Walker left the job in September 2012, and shortly after his departure a series of errors in city bookkeeping were discovered.

The budget variance — 7 percent — came after the state auditor made adjustments to the audit, Anderson said.

“We had no idea when we adopted our revised budget the auditors were going to make those adjustments that would take us just past the allowed variance,” she said.

“Last year, our variance was right at 4 percent.”