Audit and sales-tax reports show city reliant on utility fund as mill closure threatens local revenue

The Natchitoches City Council on Feb. 24 received an audit and sales-tax update showing the city’s general fund is running a deficit while the utility fund has posted a surplus that has been covering municipal expenses.

The audit presentation, delivered by Jessica Bridal of Thomas Cunningham Broadway & TCBT, covered the city’s fiscal year through May 31, 2024. Bridal told the council: “I’m here to present the audit report as of 05/31/2024.” She said public safety accounted for the largest share of general-fund expenditures — about 60 percent — and that transfers from the utility fund were a major revenue source supporting general operations.

Why it matters: city officials said the planned closure of the Red River paper mill (referred to in discussion as IP) could reduce ad valorem and sales taxes. That would increase pressure on the general fund and heighten reliance on utility transfers unless other revenue sources change.

Bridal summarized utility-fund results and said revenues for the utility fund had decreased by $7,500,000, with costs decreasing by a similar amount; she said “the gross profit has actually increased even though the revenues decreased and the rates increased.” She explained the change was driven by PCA (fuel-cost pass-through) charges. Bridal also reported that the utility fund recorded a profit of $2,800,000 while the general fund showed a deficit of $1,200,000.

Council members asked how many mill employees lived inside city limits; a city official said about 202 employees lived in the city, while others were in the parish or beyond. City staff said it could be several months — roughly eight months, per discussion — before the full economic effects on sales and local spending were visible.

City finance staffer Clarissa Brown Smith presented sales-tax results for January and early fiscal-year figures. Brown Smith said January collections were about $1.3–$1.4 million and that calendar-year January collections were up 3.3 percent (about $45,000) compared with the prior year. On a fiscal-year basis (starting in June), she said collections were up 4.4 percent, an increase of roughly $417,000 year to date.

Brown Smith also noted some smaller revenue categories were down: TIF district collections were slightly lower (about $7,000 less than the same month last year), and combined economic development district (EDD) collections fell from about $73,000 in the same month last year to about $64,000 this January. She cautioned seasonal factors and recent retail closures could affect those numbers.

Budget action: the council introduced a budget-amendment ordinance (Ordinance 5 of 2025) to cover unexpected health-care claims. Council discussion said the city is self-insured and that claims were exceeding premiums by about $1,500,000; the ordinance seeks a $650,000 transfer with the remainder expected to be covered by stop-loss insurance. The ordinance was introduced and will return for a vote at a future meeting.

The mayor and council members repeatedly tied the finances to local economic changes, including retailer closings and the paper-mill situation, and urged monitoring revenue trends over the coming months.

Ending: Finance staff distributed full audit copies to council members and said they would be available for follow-up questions; the budget amendment was introduced for future action and city staff signaled they would continue monitoring impacts from the mill closure and retail shifts.