Benton Harbor City Commissioners are being asked to declare a financial emergency and move $450,000 of city income money into the general fund so the city can pay its bills.
Speaking at this week’s meeting of the Benton Harbor Economic Development Committee, City Manager Alex Little told members, including Commissioner Duane Seats, he’s offering a resolution to commissioners.
“That’s what the resolution is asking that we do is that we deem it an emergency and transfer $450,000 from the income tax fund to the general fund,” Little said.
“What is the emergency?” asked Commissioner Seats.
“The emergency is the need to pay the city’s bills and we don’t have the cash flow right right now to do it,” Little said.
Little said since the city approved its budget for the year, insurance and litigation costs have gone up, leaving it without sufficient funds to meet ongoing expenses. Those include water plant needs, police bills, utility work, and insurance, among other things.
The city income tax was created as a way to generate money for street repairs. However, City Clerk Tiffany Moore said at Wednesday’s meeting the language used to create the income tax fund also allows the city commission to transfer money out of it for other purposes in the event of an emergency.
Little said he’s proposing a transfer, and not a loan, meaning the money won’t be paid back to the income tax fund anytime soon. He told the committee that Benton Harbor “being in the hole is nothing new.”
