City of Natchez OKs $300,000 tax-anticipation loan
Published 12:04 am Tuesday, October 13, 2015
NATCHEZ — Natchez Mayor Butch Brown had to cast the tie-breaking vote Monday that would allow the city clerk to take out another loan to make payroll.
The 4-3 vote came after City Clerk Donnie Holloway asked the board of aldermen Monday night for guidance on where to find the $300,000 necessary to make payroll, retirement benefits, health insurance and FICA payments.
The Monday meeting was about to end when Holloway approached Brown and whispered in his ear, with Brown then turning to the aldermen and saying Holloway had a request to make.
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It was the third such request in three months, though it is the first to fall within the current fiscal year. Previous requests included $250,000 at the end of September and $350,000 at the end of August.
The September request was met by an interfund loan from the city’s casino lease fund — meaning the city essentially shuffled its own cash — and aldermen asked Holloway if that money had been restored to the casino fund.
Holloway said the money had not been repaid yet.
“I am just asking for directions,” he said.
Alderman Dan Dillard made a motion to take out a tax-anticipation loan, which he said is structured for cities to find funding while tax revenue is not coming in. By law, the loan has to be paid back by mid-March, he said.
“The only cost incurred is the interest you pay on it,” Dillard said.
When Alderwoman Sarah Smith said she thought tax-anticipation loans had high interest rates, Dillard said interest on the last loan the city took out was 2 percent.
The current budget has a tax-anticipation loan built into it, Dillard said.
Holloway said the budget has up to $1 million in tax-anticipation loan built in, but when he suggested the board allow him to take out the full $1 million, the board members balked.
When the matter came to a vote, Dillard and aldermen Tony Fields and Ricky Gray voted in favor of the loan.
Smith and aldermen Mark Fortenbery and Joyce Arceneaux-Mathis voted against the proposal.
After a moment’s hesitation, Brown broke the vote, saying, “I am going to pay my people.”