NATCHEZ — The City of Natchez apparently does not have a $1.5 million deficit as officials reported earlier this week.

In an email to Mayor Butch Brown, the Natchez aldermen and City Clerk Donnie Holloway, the city’s independent auditor, Deanne Tanksley of The Gillon Group, said she found issues with the city’s fund 111, a Natchez Water Works operations fund.

Tanksley said she discovered the budget report included this fund, but was only reporting expenses and not revenues.  Expenses in that fund to date are a little more than $1 million.

“That is the bulk of the deficit you saw on the bottom of your report of $1.5 million,” Tanksley told officials in the email. “So you were looking at a bad number.”

The numbers have since been corrected, Mayor Brown said, and the city is also investigating other accounts where it has found errors.

At Tuesday’s board of aldermen meeting, The Natchez Board of Aldermen discussed the deficit after Ward 6 Alderman Dan Dillard brought it up while reviewing a monthly budget report presented to the board at its Tuesday meeting.

City Clerk Donnie Holloway attributed the deficit to lower than expected ad valorem tax revenue and increased payroll expenses.

Holloway said ad valorem tax revenue is less than the city anticipated.

Holloway also pointed out the city’s payroll costs are nearly $400,000 more than they were last year.

Holloway said after the meeting the city’s annual payroll costs increased to $7.13 million in the current fiscal year from $6.76 million in the 2012-2013 fiscal year. The city has 266 full-time and part-time employees.

Brown said he knew Tuesday the city did not have a deficit. He thinks the city may even have a surplus once the books are straightened out.

“I know in my mind what kind of financial shape the city is in,” Brown said. “I knew the numbers we were using were wrong.”

Ward 3 Alderwoman Sarah Smith has asked for simpler and accurate budget reports to make understanding the city’s financial position easier for the aldermen. Smith said she was relieved to hear the city does not have a $1.5 million deficit.

“Absolutely, I am relieved, and I am anxious to be given an exact figure so we can know the status of the finances,” she said.

Smith said she understands that residents may be distrustful of the city’s financial reporting.

“People feel like (the reporting) is not accurate, and this certainly doesn’t help,” she said. “I don’t think there is anything dishonest going on. I just think we need better reports.”

City Clerk Donnie Holloway, who oversees the city’s financial accounting, did not return calls seeking comment.