NATCHEZ — The City of Natchez has repaid the $350,000 it borrowed in December in the form of a tax-anticipation loan to help cover payroll expenses.

The city paid a total of $351,600 back to Trustmark National Bank with the loan’s 1.84 percent interest rate. The repayment was not due until Thursday, but Natchez City Clerk Donnie Holloway said the city finished paying the loan back on March 6.

The city originally budgeted for a $400,000 tax loan this fiscal year, but Holloway said the city ended up not needing the additional $50,000.

The Natchez Board of Aldermen approved taking out the loan in early October, the first month of the fiscal year.

The loan, Holloway said, is distributed in chunks as needed and used only to cover the city’s payroll for employees until the city begins receiving ad valorem taxes. He said $255,000 is paid out for payroll twice a month.

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.

Holloway said the city is planning ahead now to help avoid taking out a tax-anticipation loan next fiscal year. He said the city notified department heads to cut unnecessary spending, in hopes of saving money for next fiscal year.

Holloway a chunk of money will also be freed up for next fiscal year because the city will finish repaying bonds for a few city projects this fiscal year, including the street sweeper that was purchased in 2007 for $125,000 and the urban renewal bonds for the courthouse.

The city will pay back a total $10,000 in interest for the street sweeper. Holloway said the city will make its last annual payments of $27,000 this fiscal year.

The payment of the courthouse bonds will total $1.5 million, which Holloway said was spread out in $140,000 annual payments over 10 years.

Holloway said he hopes tightening up department spending and the bond repayment will assist the city in avoiding a tax-anticipation loan next fiscal year.

“The ultimate goal is to be able to cover our expenses without the loan,” he said. “Hopefully we won’t have to take one out next year.”