NATCHEZ — Eleven days into the new fiscal year, the Natchez Board of Aldermen authorized a $1 million tax-anticipation loan.

The loan was approved at the board’s Tuesday meeting and allows the city to cover expenses until tax revenue comes in later in the fiscal year. The loan must be repaid with interest by March 15.

The loan came after City Clerk Melissa Hawk cautioned the aldermen during their finance meeting that the city would be operating on “an extremely tight” budget this year. Hawk was officially hired as city clerk by the aldermen Tuesday after serving as interim clerk since early August.

Hawk said the city would need to curtail expenditures in the departments and ensure that funding is in place before any capital improvement projects move forward.

Hawk warned city officials that expenses needed to be cut in the budgeting process, during which the city grappled with balancing a budget with what started as a $750,000 deficit. Hawk was able to trim the deficit by cutting some costs, but after final adjustments, the aldermen ultimately decided to dedicate $763,000 of its annual $1 million lease payment from Magnolia Bluffs Casino to cover the shortfall.

The city also recently took out a $166,000 loan, not a tax-anticipation loan, to cover expenses at the end of the 2015-2016 fiscal year, which ended Sept. 30.

An audit of the city’s 2014-2015 fiscal year shows the city overspent its budget by approximately $1 million. During a brief break before the aldermen’s regular meeting, Hawk said the it appears the city overspent by approximately the same amount in the 2015-2016 fiscal year, though she noted that the books have not been closed yet.

During the finance meeting, Ward 1 Alderwoman Joyce Arceneaux-Mathis noted, as she has previously, that at least some of the overspending is attributed to the city not budgeting enough to cover employee health insurance costs. Arceneaux-Mathis said she thinks that overage totaled approximately $900,000 for possibly two fiscal years.

Arceneaux-Mathis asked Community Development Director James Johnston’s insight since he apparently is familiar with the health insurance budgeting issues.

Johnston said basically that the city has increased expenses and has had stagnant and even declining revenue.

“I’m assuming that you would have to either raise taxes or cut expenses,” he said.

Ward 6 Alderman Dan Dillard said the board of aldermen needs to figure out from where the increased expenditures are originating.

“I’ll tell you where they’re not coming from, they’re not coming from the three largest departments,” Dillard said, noting that police, fire and public works budgets came in last year either under budget or close to balanced.

“I think we’re going to have to find the time to meet together, look at this end-of-the-year report and compare it to what we budgeted … and we’re going to have to make adjustments. … Quite honestly, Mr. Mayor, the administration is going to have to keep a tight rein on these things, because it will get away from us fast.”

For years, the city clerk’s office has been plagued by staff turnover and questions of proper financial accountability.

The problems and the quest for a solution led aldermen to change the city clerk’s position from an elected one to an appointed one, a change that went into effect earlier this year.

The city is also currently undergoing a forensic audit to obtain an in-depth look at its finances.

Audit reports in recent years have noted weaknesses in the city’s bookkeeping, and the city’s independent governmental auditor noted recently that the city was behind many months in reconciling its bank accounts. Progress has since been made on reconciling the accounts, but the work has not been completed.

At Tuesday’s meeting, the board authorized at the request of Mayor Darryl Grennell the opening of a new bank account to be used for the current fiscal year.

The purpose, Grennell said, was a fresh start to the bookkeeping for this fiscal year, which will be the first full fiscal year under the new administration. Grennell said the new account would prevent the city’s current fiscal year from being impacted by the overdue reconciliations of the current accounts.