City manager outlines draft $1M Treasury/MFA loan as commissioners raise questions about joint wastewater bond

City manager presented a draft loan package worked with Treasury and the Municipal Finance Authority that would allow the city to borrow against future state revenue‑sharing to cover short‑term cash shortfalls. The packet included draft resolutions and required documentation, and staff said funds could be available in early July if the commission acted promptly on the timeline staff described.

Why it matters: The package aims to provide near‑term liquidity so the city can meet payroll, vendor claims and grant match requirements without interruption. Staff described steps where the state would intercept a portion of payments to an escrow account to secure the loan repayment.

City manager said the loan structure would allow borrowing up to roughly one‑half of the prior year’s revenue‑sharing stream and that Treasury would withhold a portion of those distributions to a secured account; the city would then receive the balance. Staff said the packet was large and earlier materials (housing commission documents) had consumed staff time. Finance manager confirmed the schedule: staff needs to finalize and submit the budget materials by mid‑June to keep the July disbursement timetable intact.

Separately, staff presented a resolution to issue joint wastewater revenue bonds for the Benton Harbor–St. Joseph wastewater treatment plant; staff estimated the bond package at around $20 million and said commissioners could expect a roughly 2.5% increase in charges starting July 1 to cover the debt service. Commissioners requested time to review the bond counsel materials and the expected resident cost per unit, and asked for clarity on what local out‑of‑pocket costs would be required.

Next steps: Staff will circulate the loan draft for commissioner review, answer questions about interest and repayment structure and provide a clearer estimate of household impacts from the joint wastewater bond before any action scheduled for mid‑June.