NATCHEZ — For the first time in nearly a decade, the City of Natchez completed a fiscal year without taking out a tax-anticipation loan to cover expenses.

But city leaders are taking little time to celebrate. Tough days are still ahead, they said.

City Clerk Donnie Holloway said Thursday the city had enough funds to cover end of the month payroll, but not by a lot.

“We made it through payroll, and that was my biggest concern,” Holloway said.

The city’s general fund balance on Oct. 1 was $118,354.70, Holloway said Friday.

A July board of aldermen vote gave the city the authority to borrow $650,000 this year, but the loan was ultimately avoided.

Mayor Jake Middleton said a few strategic moves and a little bit of luck kept the city’s funds above water through the end of the budget year.

“We’ve been working on this for quite sometime,” Middleton said. “I gave some suggestions on what I thought we could do, and the finance committee kept a close eye on the budget the entire year.”

Middleton said layoffs, a hiring freeze and a decision to privatize grass cutting at the city’s parks really paid off.

“Those were not easy decisions, but it helped get us through a lean time,” Middleton said.

Alderman “Ernest” Tony Fields said decisions made months ago were beginning to pay off the way the board had hoped.

“All the tough decisions and creative things we had to do got us to this point,” Fields said. “Layoffs and certainly not creating new positions have helped, and having fewer department heads and spreading duties out to several people has really helped out.”

Middleton also cited little fluctuations in fuel prices during the year and vigilant work by department heads to shave budgets during the year as saving graces.

“Every time I met with department heads, I said ‘If you don’t need to spend it right now, don’t,’” Middleton said. “They really listened to that.”

Fields said increases in sales tax revenues in the past few months have helped.

“We were also fortunate over the summer to have several reunions here, and that really gave us a boost,” Fields said. “The streets have been full of visitors recently, and that helps this city tremendously.”

Sales tax revenues have been on the rise each month since February. Before that time, the city saw steady declines in sales tax collections.

With one loan-free year under their belts, it is up to current city leaders to start a new trend, they acknowledged.

But that won’t be easy Alderman Mike Fortenbery said.

“It’s going to be very tough, honestly,” Fortenbery said. “If we can keep making the necessary improvements and watch the money that is spent and not just spend it because we have it, we can hopefully make it though this (fiscal) year, too.”

The board approved a $32 million budget on Sept. 14.

Fields said the current board of aldermen is committed to breaking the borrowing trend. He said that wasn’t the case with past boards.

“I think boards in the past didn’t keep as close an eye on the budget,” Fields said. “We didn’t have a choice when the economy went down hill.

“We need to keep to the game plan and not rest on this victory.”

Middleton said the next year looks bright, but nothing is certain.

Middleton said if the Roth Hill casino project is able to get moving, that will be another attraction to the city.

The city is also exploring the idea of privatizing more grass cutting to save money and free up resources for the city’s public works department.

He also said calendars at the Natchez Convention Center, City Auditorium and Community Center are filling up.

“People come down here, spend their money, fill up our hotels and restaurants and really enjoy Natchez,” he said. “If we didn’t have that convention center, this city could be in deep trouble.”

In fiscal year 2008-2009, the city borrowed $500,000 and used some interest earned off a $500,000 certificate of deposit from the sale of the pecan factory land to condo developers in 2006.

In fiscal year 2007-2008, the city borrowed $1.3 million in tax anticipation loan funds.

Tax anticipation loans are common options for cities and towns that need cash to cover costs or undertake a construction project.

According to Deanne Tanksley, a certified accountant with The Gillon Group, PLCC, this legal right is only exercised when needed.

“The city would never take them out unless they have to,” said Tanksley, who is overseeing the city’s 2009 audit. “This is a longtime practice, and it’s not unusual in most municipalities we work with.”

The City of Natchez has borrowed and repaid $4.2 million, costing taxpayers $48,524.66 in interest over seven years, Donnie Holloway said.

The city has borrowed more money than Mississippi towns of a similar size.

The City of McComb borrowed $1 million this fiscal year, said McComb City Clerk Jeannette Butler.

“We had to meet payroll, and pay our bills and pay our vendors,” Butler said. “Plus, our board has really put its foot down on laying anybody off. (The board) wanted people to continue working.”

In addition, Butler said McComb has experienced a shortfall of $118,000 in sales tax revenues this fiscal year.

Holloway also cited payroll, insurance expenses and declining sales tax revenues as reasons for previous borrowing.

Other towns, like Greenwood, Brookhaven and Oxford have not borrowed money in recent years.

“I’ve been here for 17 years, and we’ve never taken out a loan,” Brookhaven City Clerk Michael Jinks said.

Greenwood Mayor Carolyn McAdams said her city has been fortunate not to borrow money due to a reserve account.

Patrick Dendy, technical assistance director at the Mississippi Office of the State Auditor, said comparing Natchez to other town its size unfair, since each town has a unique set of budget challenges.

“I really wouldn’t necessarily read into why Natchez has borrowed money for seven consecutive years,” Dendy said. “Nobody’s really flush with money.”