NATCHEZ — After today’s payday, the City of Natchez will have only $7,000 left in the general fund.

City Clerk Donnie Holloway asked the board of aldermen for approval Tuesday night to borrow $500,000, but his request was not approved.

The proposed loan would cover payroll and insurance expenses until December, he said.

But without loan approval, Holloway can only sit and wait to make his request again at the Aug. 11 board meeting. At that meeting, he’ll be prepared with interest rate quotes from local banks.

The next payday will be Aug. 15, and the city will be squeaking by the skin of its teeth if the motion is passed during the Aug. 11 meeting, Holloway said.

If the board denies his request to borrow money again, then the city has nowhere else to turn.

“There’s no other department that has any money,” he said. Interfund loans or transfers won’t be possible, he said.

New money won’t come into the city’s general fund until Aug. 15, when sales tax dollars from the month of June arrive.

The next major bump to the bottom line will come in December, when ad valorem taxes start coming.

“If we can hold our own and cut our spending, I’m trying to get (the $500,000 loan) to carry us to the first of the year,” he said.

Holloway originally asked aldermen to borrow $1.1 million in May to cover costs until the end of the fiscal year in October. The board approved a $500,000 loan then, but did not support the $1.1 million request.

Last Thursday during a city work session, Holloway told the board he would be asking for more money.

Holloway and Mayor Jake Middleton said they were surprised by Tuesday night’s lack of action on the loan.

Another motion absent from Tuesday night’s meeting was one the board had previously discussed that would increase the employee’s health care costs and save the city up to $300,000 annually.

The board agreed on the increases for city employees, but no one made a motion to enact the change because Holloway said the city is looking at another insurance company that could possibly yield more savings.

Middleton said Wednesday he wanted to point out that the city is not broke.

City officials are only using an existing line of credit to fill the gap until the end of the year.

“We’re not out of money,” he said. “We’re borrowing this money until revenues come in.”

Middleton said he remains steadfast in his goal to eliminate city debt by the end of his administration, three years from now.

Holloway said city began borrowing money years ago and has let the problem snowball.

“This hole we’ve been digging started years ago,” he said.

In the 2003-2004 fiscal year, the city borrowed $550,000.

In the 2004-2005 fiscal year, it borrowed $650,000.

In 2005-2006 and 2006-2007, $600,000 was borrowed each year.

All loans were tax anticipation loans to be paid back with the city’s tax revenue from the upcoming year.

Holloway said he credits the city’s year-after-year borrowing to new hires and pay increases.

Hires and pay increases are continuous expenditures, he said.

Middleton said change is coming.

“If we have to lay off people, we will,” he said. “We’re trying to work it to where we don’t have to.”

All in all, he said the city has approximately $900,000 in debt that’s been building up over the years, and he feels confident he and the board can eliminate it by the end of his administration.

“If you can get rid of that debt in three years, you’ve done a hell of a job,” he said.