The City of Vicksburg during its regular meeting of the Board of Mayor and Alderman (BOMA) Friday approved an amendment to the routine agenda authorizing the transfer of $1.5 million from the city’s water and gas pool cash account to its reserve account.

Mayor George Flaggs Jr. said he wanted to use the opportunity to explain why the reserve account had dropped as low as $61,000 at one point in the fiscal year.

“Sixty-one thousand dollars was in the reserve,” Flaggs said. “It’s out on Facebook that we were down to $61,000 (in the reserve account). You’re halfway right.”

Flaggs said the funds were originally moved from the reserve account into the water and gas account in order should it be needed for projects such as infrastructure, with the intention of returning the money to the reserve account following a period of expected low cash flow.

“What we was doing and what we thought we was doing is we were leaving that money in the regular (water and gas) account so that we could have some collateral,” Flaggs said. “We’re told that from October to February we have a lower cash flow in the bank. So, (Director of Accounting) Doug (Whittington) came to me and we talked about it and we moved the money over for collateral. Didn’t spend it; didn’t intend to spend it; wasn’t going to spend it, and we’re not going to spend it, because we’re moving it back.”

Later in the day, Flaggs clarified saying, “Collateral was the wrong word. It was just as a precaution. That’s what I should have said,” adding “we never spent one cent of that $1.5 million.”

Ward 2 Alderman Alex Monsour said it’s common practice for municipalities to shore up accounts prior to the upcoming low-tax collection period and the city chose to move reserve funds rather than pay extra banking fees.

“It’s just good business,” Monsour said. “It’s commonplace for counties and municipalities to take out a revenue anticipation loan from the bank to shore up the accounts in case something happens. But that comes with origination fees and interest fees. It’s good business and it saves the city money. We just moved it from one account to the other in case something happened.”

Friday’s amendment was approved along with the consent agenda and comes five months from the December 23, unanimous decision by BOMA to borrow the funds from the reserve account.