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Benton Harbor emergency manager predicting budget surplus on the horizon

Benton Harbor City Hall front steps
Lindsey Smith
Michigan Radio
Benton Harbor City Hall

Benton Harbor’s new emergency manager says the city is on track to eliminate its structural deficit within a year. The city's finances have been under state control for more than three years.

Emergency Manager Tony Saunders started in February after the state ended the previous manager's contractat the city commission’s request.

“Things have been moving very quickly. The goal when we first got here was to try to kind of rip off the band-aid,” Saunders said.

“We got most of the difficult decisions done within the first three months and now we’re kind of fine tuning things and reducing the expected deficit kind of day by day,” he added.

Saunders says he’s cut more than a million dollars from the budget. There have been 18 layoffs, some positions have been consolidated, and some city buildings have been closed. City workers have also agreed to concessions in wages and pensions. Changes to health care benefits put the biggest dent in the budget, saving $654,000.

Meanwhile voters approved a new operating millage to bring in much-needed revenue.

Saunders will host a budget hearing on Tuesday.

The surplus he’s expecting by the end of fiscal year 2013-14 depends in part on an emergency loan from the state. He says he’s likely to request about $2.6 million dollars. Those are long term loans where municipalities and schools can pay the state back over 30 years in most cases.

Saunders says the City of Benton Harbor would set up a revenue stream dedicated to the loan and plans to start paying it back earlier than required by the terms.

Elected city leaders are exploring a new source of revenue; a city income tax. But Saunders says he’s not considering it at this time and has “no opinion that I’m going to share” on the potential tax.

“I don’t see any reason, if all the i’s are dotted and the t’s are crossed, that this could be the last fiscal year where they’ll have an emergency manager,” Saunders said.

But Benton Harbor’s former emergency manager said the same thing more than a year ago.

Unlike the previous emergency manager, Saunders says he hasn’t had any big issues with the community.

“The citizens have been extremely supportive, which honestly has been a little bit of a surprise. They’ve been great. I couldn’t have asked for better constituents,” Saunders said, “As well as the commissioners. They’ve been great partners in this as well.”

Lindsey Smith helps lead the station'sAmplify Team. She previously served as Michigan Public's Morning News Editor, Investigative Reporter and West Michigan Reporter.
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