An emergency transfer of $800,000 could be made from the city of Benton Harbor’s income tax fund into the general fund following a Wednesday meeting of the city Personnel and Finance Committee.

City Manager Alex Little has requested the transfer, warning the city can’t pay its bills right now due to legal expenses, a shortfall in the utilities fund, and issues with the water system.

The city income tax was approved by voters in 2017 as a way to raise funds for street, sidewalk, and alley repairs, but the ballot language also allowed for the money to be used for emergencies. Speaking to the committee Wednesday, Commissioner Ron Singleton said the income tax puts the city in a position to respond to its current shortfall without falling behind and needing to borrow money at the risk of state intervention, as once happened.

“Fortunately this time, when you got a situation like that, you have some funds for yourself,” Singleton said.”

Singleton said that’s better than having to borrow money from a metaphorical loan shark.

Little addressed the committee, saying a big problem has been the massive loss of water customers since Benton Township broke away from the city’s system in 2011. He said the city is still recovering from that.

“It was beyond the city’s control,” Little said. “The city didn’t do this. The emergency managers did this.”

Little also noted in recent years, an influx of federal funds have helped the city to bridge the gap in its budget, but that’s now all gone. He said the city will get back on track, but it will take some time, suggesting this won’t be the last income tax money transfer.

The city just made an emergency transfer of $450,000 in income tax money to the general fund back in March. That was the first time such a transfer of income tax money was ever made by the city since the tax was created.

The full city commission could consider this new transfer at its next meeting.