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City manager says Benton Harbor seeking $1 million loan as hiring freezes continue
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Summary
City manager told the committee Benton Harbor is pursuing a $1,000,000 borrowing package and must show cost controls; the administration cited a recurring $2 million annual utility deficit since 2016, ARPA funds that temporarily masked problems, and a freeze on many hires and travel.
The city manager told the communications and public relations committee that Benton Harbor is seeking a $1,000,000 loan through the Michigan Treasury and the Municipal Finance Authority and that the financing package will require the city to present measures to reduce costs and increase revenues. ‘‘The nature and reason for the freeze is the fact that the city is in a dire financial position at this point,’’ the city manager said.
Officials said a structural problem in the utility fund has produced an approximate $2,000,000 annual deficit since February 2016 that the general fund had been balancing in recent years. The manager said the city had relied in part on roughly $10,000,000 in ARPA funds that ‘‘made everything look different,’’ and now the underlying deficits have returned as ARPA reserves have been spent.
As part of the response, the city will freeze many nonessential hires, review travel requests and postpone some staff evaluations until July to conserve cash and document cost‑control steps requested by the lender. The manager clarified that some positions will still be filled where necessary; for example a recent public‑works vacancy will be filled, and seasonal parking attendants are planned to support a new downtown paid‑parking program.
On the paid‑parking plan the manager said the city expects to hire about four seasonal attendants at roughly $15 an hour to staff downtown and park lots from May 1 through about Oct. 1; those positions would be seasonal and without benefits. Officials said revenue projections and cost estimates for parking are being developed and will be included in the financial package.
Commissioners and residents asked whether public‑safety hires were affected; the manager said the city is not planning layoffs but may freeze vacancies in police or other departments until the financing plan is finalized. The meeting did not produce a vote; staff said they will continue to develop the materials the lender requires.
