Some of it, if not all of it, should be set aside for a rainy day fund. Remember last year when we were warned that property tax caps would cause revenue shortfalls? If that is the case, then the city doesn't need to find a new project to blow its wad on.
I've also been hearing for the past two years that the recession is either ending or is over. Property values and tax revenues may go back up, and they may go down. The mayor might hope for the former, but he would be wise to prepare for the later.