NATCHEZ — The City of Natchez plans to borrow approximately $166,000 to cover expenses for payroll and bills this month.

The emergency loan is a change from the city’s original plan to ask Magnolia Bluffs Casino to pay in advance the $250,000 in remaining lease payments for the year or take out a three-month loan for the expenses. That plan was outlined at an aldermen budget meeting last week.

On Friday, Interim City Clerk Melissa Hawk said since the city’s current cash flow problem stems from money tied up as reimbursable grant funds, the city applied for the emergency expenditure loan based on the grant funding’s pending reimbursement.

With reimbursable grant funding, the city has to spend the money first and is later reimbursed, Hawk said, which can tie up money the city needs to pay bills.

The city does not need the full $250,000 loan for which it had previously planned, Hawk said, because the casino’s September lease payment of $83,333 has been received.

Casino President Kevin Preston said he told the city he would pay the year’s remaining lease funds in advance, but expressed disappointment in the current state of the city’s finances.

“From my perspective, I wanted to be able to funnel some of the money to the projects we gave money for,” Preston said. “To me, it’s unfortunate the way all the money the casino has given has been spent.”

Specifically, Preston said he is concerned money the casino gave for a YMCA or its annual community development payment of $225,000 has been used for purposes it was not intended or lumped into the city’s general fund.

“While some things may be good, when it goes into the general fund, I think it’s hard to tell,” he said.

Ward 6 Alderman Dan Dillard, who has for years been the most vocal critic of the city’s accounting and bookkeeping practices, said Preston has a valid argument.

“I think he has an argument in that the city should at least be able to present where these monies were spent as they were specified in the agreement,” he said.

Dillard said off the top of his head, he thinks part of the $1 million for a YMCA, recreation center or civil rights museum as outlined in the city’s lease with the casino has been used for the sprinkler system at the Duncan Park golf course, which was $100,000, Duncan Park concession stands, $24,000, and improvements at Jack Waite Park, $60,000.

“But it’s been hard to keep up with it, even for someone like me, who has tried to stay on top of it from one city clerk to the next to the next, from one accountant to another accountant to another,” Dillard said, referring to turnover that has plagued the office in recent years.

The community development fund is supposed to have a commission that makes recommendations on how the annual payment is spent per the casino lease.

However, Dillard said the fund was used by the city under former Mayor Butch Brown for grant-matching funds for “community-minded” projects, such as the renovation of the colonnades, senior center and downtown railroad depot.

“The problem is that the previous city clerk (Donnie Holloway) dumped all the (casino) money into one pot, and it’s hard to determine which monies were going where,” Dillard said. “But I am comfortable that the (community development funds) were used for community-minded projects and not dumped into the general fund to cover administrative overexpenditures. But we’ll have to go back and try to sort all that out.”

The aldermen have learned, Dillard said, to now ask questions about from what accounts matching funds will be budgeted and ensure those funds are budgeted ahead of time. The aldermen have expressed concern throughout the recent budgeting process that the city overcommitted to grants requiring matches and tied up the city’s cash flow.

Dillard said with the addition of Hawk to the city clerk’s office, he is confident the city is on the right track to finally get an understanding of its finances.

Preston said he, too, is confident in the city’s new administration.

“I do think that (Mayor) Darryl (Grennell) and the new administration will turn this around,” he said.