Benton Harbor Seeks $1M Loan to Stabilize Finances

City Manager says high-cost expenses have strained city's budget, loan would help cover obligations for next 2 years.

Apr. 18, 2026 at 6:00pm

Got story updates? Submit your updates here. ›

An abstract illustration featuring bold, overlapping shapes in shades of blue, yellow, and red, conveying the concept of a city government seeking financial stability through a loan.A geometric illustration captures the city of Benton Harbor's efforts to secure a loan and stabilize its municipal finances.Benton Harbor Today

The city of Benton Harbor, Michigan is preparing to seek a $1 million loan to help stabilize its finances over the next 24 months. City Manager Alex Little told the Personnel and Finance Committee that several high-cost expenses, including required water plant work, legal bills from the city's water crisis, and the clawback of federal funds, have left the city with deficient funds. The loan would be secured by intercepting a portion of the city's state shared revenue payments.

Why it matters

Benton Harbor has faced financial challenges in the past, including the appointment of an emergency manager in 2013-2014. This loan would help the city avoid a similar situation where it is unable to cover basic obligations like payroll and bills. The city's financial stability is crucial for providing essential services to residents.

The details

According to City Manager Alex Little, the $1 million loan would be packaged and handled by the Michigan Municipal Finance Authority, which would work with lenders to secure the funds. The loan payments would be automatically deducted from the city's state shared revenue payments every two months. Little said this mechanism ensures the loan will be repaid, even if the city were to fall behind on its obligations in the future.

  • The city is preparing to seek the $1 million loan in the coming weeks.

The players

Alex Little

The city manager of Benton Harbor, Michigan who is leading the effort to secure a $1 million loan to stabilize the city's finances.

Michigan Department of Treasury

The state agency that Little has been in discussions with regarding the potential loan for Benton Harbor.

Michigan Municipal Finance Authority

The organization that would package and handle the $1 million loan for Benton Harbor, working with lenders to secure the funds.

Got photos? Submit your photos here. ›

What they’re saying

“We're looking at doing is borrowing a million dollars, which would be packaged and handled by the municipal finance authority that would, in essence, talk with various lenders to get a buyer to take it.”

— Alex Little, City Manager

“The loan is being secured by the fact that they will intercept part of the state shared revenue. You heard a mention a few minutes ago, state shared revenue you get every two months. They would intercept and hold a part of that, each distribution, and hold it in escrow to be used to pay off this loan.”

— Alex Little, City Manager

“If we get to a point where suddenly we're not able to pay bills and not able to make payroll, we're back to where we were when they sent somebody in here back in 2013, 2014.”

— Alex Little, City Manager

What’s next

The Benton Harbor Personnel and Finance Committee took no immediate vote on the proposed $1 million loan, but City Manager Alex Little said the city is preparing to seek the loan in the coming weeks.

The takeaway

This loan represents a critical step for Benton Harbor to stabilize its finances and avoid a repeat of the 2013-2014 financial crisis that led to the appointment of an emergency manager. By securing the loan through the state's revenue sharing program, the city can ensure the payments are made even if future budget challenges arise.