Editor’s Note: This story previously misidentified the group that the city is an ongoing lawsuit with. The group is Roundstone Developers LLC. The story now contains the correct information. 

NATCHEZ — The Natchez Board of Aldermen couldn’t avoid the $229,220 elephant in the room Tuesday — the unexpected rise in employee insurance costs for the 2015-2016 fiscal year.

Since becoming self-insured in October 2013, the city has been budgeting the incorrect number for employee health insurance costs, Natchez Mayor Butch Brown said.

When the city was self insured through Blue Cross Blue Shield, approximately $222 was budgeted per employee per month.

However, when the city changed insurance providers in 2013 that monthly cost rose to $588.

“When the clerk started working on the budget each year, he continued putting the insurance cost at $222,” Brown said. “He didn’t use the actual cost, which was $588.”

Now that projected monthly insurance costs have risen to $652, Brown said the city has to crunch numbers and find funds to cover the spike — which totaled will be approximately $229,220.

Brown said a possible solution to the problem — which needs to be resolved before the city’s 2015-2016 budget is due Sept. 15 — is seeking federal reimbursement from city departments that are federally funded, such as the Natchez Transit System and the Senior Citizens’ Multipurpose Center.

Because those departments are federally funded, Brown said the city might be able to recover insurance reimbursements it was missing out on because of the incorrect $222 budgeted number.

“If you’re paying out $588 and saying you’re only doing $222, you got a $365 deficit per month per employee,” he said. “It’s an expense difference.”

Brown said he is currently working to recover those reimbursements from the 2013-2014 fiscal year, and then resubmit reimbursements requests for the 2015-2015 fiscal year using the correct budget number.

The city just now discovering the budgeting problem, Brown said, has left aldermen scratching their heads.

“We still have more questions than answers at this point,” Ward 6 Alderman Dan Dillard said. “What I’m trying to understand is how the city miscalculated, or entered in the wrong number for employee insurance, for so long.”

In an effort to get some answers, Dillard made a motion for the board to appoint three members — Ward 1 Alderwoman Joyce Arceneaux-Mathis, Ward 2 Alderman Rickey Gray and Ward 3 Alderwoman Sarah Carter Smith — to a “fact-finding commission.”

“We’re still in the fact-finding mode,” Dillard said.

“We’re trying to figure out how this happened, and how we will do better with it going forward.”

Dillard also went as far as to suggest the city temporarily freeze all expenditures until the board better understands how it will deal with budgeting for increased insurance costs.

Brown said freezing wasn’t an option.

“I don’t think we need to shoot ourselves in the foot every time we identify a problem,” Brown said.

In an attempt to cut costs, however, the city did unanimously vote to suspend the second round of street paving, which was budgeted for $350,000.

Brown said even though the city is in a bind with making up the different for insurance costs, it would be able to submit a budget by Sept. 15, and adopt it by Oct. 1 — the start of the 2015-2016 fiscal year.

“The board has lost confidence in our books,” Brown said after the meeting. “There is money in the bank, though — it’s just not in the general fund.”

Brown said other funds are located in restricted city accounts created by the board for other city expenditures.

Anytime money is transferred from a restricted fund to the general fund, Brown said the board must first approve that action.

In other city news:

-During the board’s finance committee meeting, Teresa Busby, vice president of Copiah-Lincoln Community College Natchez, requested the board allocate $5,000 in its 2015-2016 budget to support the annual Natchez Literary and Cinema Celebration.

Busby said this year’s celebration would focus on celebrating the city’s tricentennial year — its 300th birthday.

The allocation was tabled until the board’s Sept. 29 meeting.

-In an executive session, the board discussed the potential lease of a downtown public property, leasing the Margaret Martin Performing Arts Center, an update on ongoing litigation with Roundstone Development LLC. — a group known for using state and federal credits to fund the restoration of abandoned or aging properties into affordable housing.

The board also discussed potential litigation with a city contractor.

-The board awarded a $10,894 bid to Natchez-based Rosetta Construction Services for the installation of a sanitary sewer system at Jack Wait Park, located on St. Catherine Street.

Community Development Director James Johnston said the low bid was from Natchez-based JH Gordons Plumbing. That bid was disqualified, Johnston said, because it did not include electrical work, which is required for the project.

The project will be paid for through My Brother’s Keeper, a nonprofit organization designed to enhance the health of minorities. No local match from the city is required.

-The board voted unanimously to grant landmark site designation for three acres of land near Natchez High School, known as the beanfield.

Local Historian Smokye Joe Frank said the three-acre site once housed a French colonial homestead.

The site, Frank said, represents centuries of land cultivation.

-Natchez Fire Chief Aaron Wesley requested the city look into purchasing smoke alarms for residents.

Wesley said a recent death on 8 Davis Court could have been prevented if the homeowner had a smoke alarm.

“Smoke alarms account for saving lives, and we don’t have enough,” Wesley said.

The board took Wesley’s request under advisement.

-Brown broke a split vote to approve the city’s monthly docket, which details all city expenditures.

Arceneaux-Mathis, Gray and Dillard voted against docket approval. Smith, Ward 4 Alderman Tony Fields and Ward 5 Alderman Mark Fortenbery voted for approval.

Going forward, Fortenbery requested Assistant City Clerk Wendy McClain explain the docket to the board during meetings instead of Natchez City Clerk Donnie Holloway.

“We are asking so many questions because we are responsible for this (the docket),” Fortenbery said. “But there has been so much coming up this past week that has been blowing my mind.”

City Attorney Hyde Carby said the city clerk’s office has the ability to designate McClain as the point person for answering questions about the docket.

Aldermen voted in August 2014 to amend the city’s charter to make the city clerk’s position appointed rather than elected.

When Holloway’s clerk term ends in June 2016, Brown said it is his hope that McClain would be appointed to fill Holloway’s shoes as Natchez city clerk.