NATCHEZ — Despite efforts to avoid borrowing money, the city has taken out $375,000 in tax-anticipation loans in recent months, apparently unbeknownst to the board of aldermen.

City Clerk Donnie Holloway said at Tuesday’s Natchez Board of Aldermen meeting that the city took out $200,000 on Oct. 14 and $175,000 on Nov. 23 from its credit line at Trustmark Bank.

The loans were used to cover payroll and other daily operation costs until enough property and sales tax arrive to pay the loans back, Holloway said.

Alderman Dan Dillard questioned Holloway on why the decision to take out the loans was never brought to the board for a vote.

“This is $375,000 borrowed without authorization,” Dillard said.

Holloway said a July board of aldermen vote gave the city the authority to borrow $650,000 this year. He said he did not know the board required approval to actually draw out the loans from the credit that was made available.

Dillard said the board must be consulted when loans are retrieved in order keep tabs on the city’s finances.

“We’re trying to get a hold of our financial approval, otherwise (the board) can’t account for this money,” Dillard said.

Holloway agreed to bring all future loan transactions to the board for approval.

Some property taxes have already started to come into the city’s bank account, Holloway said, so he said he hopes the city can avoid taking out another loan.

“We just had payroll go out and didn’t have to pull (out any loans), so hopefully we can have a pretty good figure (in December),” Holloway said.

Holloway said the current administration has been intentional in avoiding borrowing money, but the loans could not be avoided.

Holloway said the amount that was borrowed was much less than has been borrowed in the past.

In fiscal year 2008-2009, the city borrowed $500,000 and used some interest earned off a $500,000 certificate of deposit from the sale of the pecan factory land to condo developers in 2006.

In fiscal year 2007-2008, the city borrowed $1.3 million in tax-anticipation loan funds.

“When this administration came in office, the goal was to hopefully not have to go into tax-anticipation loan,” Holloway said.

He said the administration has at least reduced the amount borrowed in effort to stop the trend.

In past years, loans were taken out in much earlier pay periods when tax revenues were months away from covering the costs.

“We are working really hard to (reduce borrowing), and we’re working in that direction,” he said.

Holloway said the bulk of property taxes will arrive in February and March, but they will gradually arrive until that time.

He said the $375,000 will be paid back and interest halted as soon as enough taxes are collected to pay back the loan.

Loan payments are due March 15, but Holloway said he expects the city to be able to pay back the loans well before the bank’s deadline.