NATCHEZ — The City of Natchez has borrowed $350,000 of its $400,000 tax-anticipation loan since December to help cover payroll expenses.

City Clerk Donnie Holloway said the city originally budgeted for the $400,000 tax-anticipation loan, but he said the city will not need the additional $50,000.

The Natchez Board of Aldermen approved taking out the loan for this fiscal year in early October.

The city received the loan, which is distributed in chunks as needed, from Trustmark National Bank at a 1.84 percent interest rate.

Holloway said the loan is needed to meet financial obligations until the city receives ad valorem taxes.

“This is a slow time for us,” he said. “So we need some extra money to cover expenses until we can get some funds in.”

The loan, Holloway said, is used solely to cover the city’s payroll for employees. He said $255,000 is paid out for payroll twice a month.

The city is required to pay the loan back by March 15. Holloway said the city will have no trouble paying the loan back on time and might pay it back before the deadline.

Holloway said last year’s loan was paid back in February, and he said the city has never missed the deadline.

Mayor Jake Middleton and the current board of aldermen have repeatedly said it is their goal to decrease the city’s reliance on tax-anticipation loans, a practice started years ago.

In fiscal year 2007-2008, the city borrowed $1.3 million in tax-anticipation loan funds. In fiscal year 2008-2009, the city borrowed $500,000. The city did not take out a loan for fiscal year 2009-2010 but borrowed $375,000 for the 2010-2011 fiscal year.

“(The amount) is going down,” Holloway said. “Hopefully, we won’t have to borrow any money next year. That’s our goal.”

Holloway said he believes added revenue from projects on the horizon such as the proposed Magnolia Bluffs Casino will help tremendously with the city’s effort to avoid a tax-anticipation loan next fiscal year.