VIDALIA — The City of Vidalia received a $3.8 million royalty payment last week from the Sidney A. Murray Hydroelectric Plant, which includes two quarterly payments that were deferred last year.

Mayor Hyram Copeland said the payment, along with cost-cutting measures across all departments, have put the city back in “sound financial shape.”

“We went through three natural disasters and still managed to pay our bills,” Copeland said. “Everything is getting back up to date, and I’m proud to say we’re in good, strong financial shape.”

Because of low levels on the Mississippi River last year, the hydroelectric fund — one of four of the city’s main sources of revenues — provided $1.8 million less in revenue, according to an annual audit report.

The low levels affect the amount of power the Sidney A. Murray Hydroelectric Station can produce.

The station, located 40 miles south of Vidalia, generates power dependent upon the height difference of the Mississippi and Atchafalaya rivers and the amount of diversion flow from the Mississippi and Red rivers.

Vidalia receives royalties from the hydro station that change each year depending on the total power produced by the plant that year.

Last year, two quarterly payments were deferred because the plant was unable to produce a sufficient amount of power to cover the royalties owed to the city.

Under the contract between the Louisiana Hydroelectric Partnership and the city, the partnership can defer paying royalties until the river gets high enough for the plant to once again make a profit.

Copeland said the majority of the recent payment would be put into the city’s reserve fund. The city maintains a reserve fund that fluctuates between $2.5 million and $4 million depending on how much the city receives in royalties.

“We’re going to put $3 million of that into the reserve fund and build that back up for when we need it, because that’s what it’s supposed to be for,” Copeland said. “Even with that, we’re still looking at cost-cutting measures, apart from what we’ve already done.”

Copeland said the city has saved $100,000 in utility costs at the Vidalia Conference and Convention Center by implementing a new utility program as well as cutting the city’s payroll by 40 percent.

“You’re going to see a dramatic difference in the way we budget for this year compared to last year,” Copeland said. “We’re sitting down with each department head and each alderman that’s assigned to that particular department and analyzing each and every expense.”

The city terminated 14 employees in August and another 19 in February.

Copeland said the cost-cutting measures the city has taken, as well as a sales tax fund reaching nearly $2.1 million, should prevent future layoffs.

“We’ve gone through that process, and we’re not going to be cutting any more employees,” Copeland said. “We now have a sound financial footing, and we’re taking the steps to make sure we stay there.”