By John Mott Coffey, with News Mississippi affiliate WQNZ
NATCHEZ, Miss.–The Natchez Board of Aldermen on Tuesday put off a decision on whether to support a hotel-restaurant sales tax increase to finance an expansion of the city’s convention center and to also help pay debts still owed from its original construction 12 years ago.
As city officials struggle to correct Natchez’ mistake-ridden financial accounts and even agree on whether to pay its bills, aldermen said they need more time to decide on backing the tax increase that Mayor Butch Brown said is needed.
“The city is in deep financial straits in the general fund, and we need debt restructuring,” Brown said.
The Natchez Convention Center opened in 2002. However, the city has been falling behind in adequately repaying the money it borrowed through bonds for its construction, Brown said. The city, he said, stills owes about $9.6 million of the original $12 million received for building the facility.
“That’s not good money management,” he said. “We need to clean up our act, and we need a good cohesive board to deal with reality.”
A debt-restructuring plan would allow the city to borrow money at lower interest rate than the old debt terms and would allow a longer period of time to repay the money, Brown said.
Aldermen expressed support for expanding the convention center to bring more visitors to Natchez. However, they said more information is needed on the city’s overall finances before they can support the proposition.
“I’m trying to size up how big the problem is,” said Alderman Dan Dillard, who got the board Tuesday to formally request outside financial help.
The board voted to ask the state auditor to look into the city’s financial bookkeeping. The board also wants its financial advisor Demery Grubbs to meet with city officials to discuss Natchez’ debt situation.
“I’m trying to reach out to all the resources available to us,” Dillard said.
The proposed convention center tax increase calls for the restaurant sales tax to rise from 1.5 percent to 2 percent while the hotel sales tax would go from 3 percent to 4 percent. This would generate about $400,000 a year, said convention center General Manager Walter Tipton.
The restaurant sales tax increase paid by diners, Brown said, “would equate to two-and-a-half cents per $6 dollars spent on for food and beverage.”
“It’s a nominal increase. The (hotel and restaurant) industry has not objected to it in either form,” he said. “That increase, coupled with the restructuring plan, will pay to serve the debt service. It would restructure the debt to make it more affordable. It would also add to the tourism aspects of our community at the convention center.”
The plan is to add space about half the size of the facility’s existing main exhibition hall to extend out to the Franklin Street side where there is currently green space and parking. The addition would have a second floor for more meeting rooms like the existing structure.
With the state Legislature beginning its 2015 session in January, Brown is pushing for the board to formally ask state legislators to file the bill required for such a local tax increase.
While the mayor said he’ll try to Grubbs to meet with the board as soon as possible, he also wants a bill filed quickly to give state lawmakers time to pass it within the next three months.
“The urgency is a simple piece of legislation,” Brown said. “This is not so much a financial matter as it is a legislative matter.”
However, financial matters are weighing heavy on the Board of Aldermen. It couldn’t even agree Tuesday to pay the city’s bills in a 3-3 vote. Brown had to break the tie in favor of paying this month’s charges for goods and services the city has bought.
Board members against paying the bills continue to question expenditures presented to them by City Clerk Donnie Holloway.
They’re also concerned about Natchez’ accounting department led by Holloway that’s been hampered by sloppy bookkeeping, poorly trained workers, a large turnover of employees. “Significant errors,” unrecorded financial activities and overdrawn accounts are among the problems the city’s outside accountant found in trying to audit the city’s records for the fiscal year that ended September 2013. Deanne Tanksley said she can’t render an opinion on whether the city’s financial numbers are accurate.