COVID-19 financial impact: Lansing implements voluntary furloughs for some city workers

LANSING — The city will offer voluntary furloughs to more than 100 workers in an effort to partially stem financial bleeding from the coronavirus pandemic.

City workers represented by the United Auto Workers and Teamsters 214 unions have agreed to the plan, Lansing Mayor Andy Schor said Monday, adding that he hopes Teamsters 243 will sign on. Those unions represent workers in departments including Public Service, Parks & Recreation and Planning & Neighborhood Development.

Non-bargaining workers and staff in the mayor's office also may volunteer to take the furloughs.

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The city's latest projections, presented to City Council on Monday, show the pandemic could cost Lansing nearly $12.5 million in revenue during the fiscal year that begins July 1.

The city does not have a savings estimate from the furloughs because that figure will depend on how many people volunteer, Schor said. 

The mayor said city services will continue despite the furloughs. although the delivery of those services may be "slowed."

"When you call about a pothole it might not be fixed in 48 hours," the mayor said, referencing what Lansing has previously touted as its average response time for pothole patching. 

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"We're hoping that voluntary will be enough, but everything is on the table," Schor said, indicating the city could proceed to involuntary furloughs or layoffs.

The state provides up to $362 in weekly unemployment benefits, but under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act people who lose their jobs can get up to $600 more a week through the end of July.

For some Michiganders, $962 a week is more than they were making prior to being laid off or furloughed.

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But the mayor said pay is not the sole factor motivating people to chose furloughs.

"It’s not financial for everybody," Schor said. "For some people it’s child care. ... For some people it's being immunocompromised and not wanting to come back to work."

Lansing's furloughs could begin as soon as this week and will continue through July 31, Lansing spokeswoman Valerie Marchand said. The city will cover health care for its employees during that time period, according to the mayor.

Administrators presented the council with $7.1 million in spending cuts Monday. That still leaves a gap of about $5 million and Schor's administration has proposed drawing upon Lansing's already-dwindling reserve funds to plug the hole.

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City Council must approve a budget for the coming fiscal year on May 18, although it's likely they will amend that budget in coming months.

The $7.1 million in savings presented Monday includes $700,000 expected to be saved next fiscal year due to a temporary freeze on hiring and non-essential spending. Schor ordered the freeze in April.

Other suggestions include saving $200,000 by cutting the city's subsidy to the Lansing Entertainment and Public Facilities Authority, which oversees events and entertainment venues on the city's behalf, slashing $80,000 in spending on staff training and travel and eliminating the Fourth of July celebration to save $20,000.

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Because of the COVID-19 outbreak, Lansing has pushed back this year's income tax deadline to July 31, which means that revenue will be coming in three months later than originally anticipated.  

Council members agreed earlier this month to let the city borrow money by selling bonds in case Lansing is unable to make payroll due to a cash-flow holdup.

Lansing has been operating under a local state of emergency since March while continuing to pay its employees. Essential staff, such as police and fire, have been reporting to work in-person while those deemed non-essential have been working from home. 

Contact reporter Sarah Lehr at slehr@lsj.com. Follow her on Twitter @SarahGLehr.