Port Gibson paid $11,500 for $150K operation loan

Published 11:57 am Tuesday, June 28, 2011

Initial bills paid when Port Gibson received a $150,000 emergency infusion of funds June 17 included more than $11,500 charged by advisers to secure the loan, documents show.

The draw is the first of a possible $500,000 emergency bailout loan from Concordia Bank of Vidalia, La.

Paul Winfield, Vicksburg’s mayor who also is city attorney in Port Gibson, billed the financially troubled city $3,000 for his services as note counsel, invoices show. The fee is in addition to the $30,000 annual salary Winfield receives for serving as Port Gibson’s attorney.

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The city also was billed $3,505 by the Jackson legal firm Watkins, Ludlam, Winter and Stennis, and $5,000 by financial adviser Edward Norwood, documents show.

Port Gibson aldermen unanimously approved the note June 6. Funds can be drawn at unspecified intervals, and should the city borrow the full $500,000, the $11,500 in fees will represent 2.3 percent of the total borrowed.

In addition, Concordia is charging the city 3.5 percent interest, accruing from the date of each advance. Principal and interest can be repaid at any time without penalty, with a repayment deadline of March 15, 2012.

Port Gibson Mayor Fred Reeves, who has opposed borrowing to pay routine expenses, said it was not clear why a law firm and a financial adviser, in addition to extra services by the city attorney, were required to secure the note.

Winfield said getting the emergency funds required such professional services as legal and financial research, attending extra meetings and determining tax consequences.

“As a board attorney, your regular duties are to attend board meetings, give basic legal advice, draft contracts and prepare resolutions for board meetings,” he said. “Those deals are not normal, typical services.”

Norwood’s “financial advisory services” were invoiced by the Comer Capital Group of Jackson. When reached Monday for details about his services, Norwood’s cell phone cut off and he did not return a second call and message.

Reeves said Norwood’s contract with the city calls for him to provide “necessary financial service” including “advice and recommendations to the city concerning bond issues and other debt obligations.”

The Watkins, Ludlam, Winter and Stennis invoice notes $3,000 for professional services, plus estimated copying, printing, scanning and phone costs of $505.

Out of the initial $150,000 draw, the city used $50,000 to meet payroll and insurance expenses and make state retirement payments, documents show.

“I’m not sure who all got paid because others can sign checks,” Reeves said.

A garbage collection account appears to have been made current, he said, because trash pickup had resumed for the bin behind City Hall where garbage had piled up and fallen to the ground over the last month. “We got all kinds of complaints,” Reeves said.

He did not know if the city’s utility bill with Entergy had been paid. The city owed Entergy about $33,000 in May, he said previously. The city had struggled to pay its electric bill over the last six months, and some street lights had been shut off during the winter.

In May, Port Gibson aldermen attempted to execute an illegal tax anticipation loan that was vetoed by Reeves. Aldermen then passed an override to the veto but were denied a loan by Trustmark Bank. The loan from Concordia Bank was secured under the new “emergency note” terminology.

The city has borrowed to meet operating expenses in previous years, including 2008 and 2010. Winfield said many municipalities in the state are in similar straits and that Port Gibson residents deserve city services despite the difficulties providing them.