DETROIT – The Detroit Land Bank Authority (DLBA) is preparing to terminate and lay off employees due to budget cuts amid the coronavirus (COVID-19) pandemic.
The DLBA announced Wednesday that it will terminate 50% of its contracted employees and lay off 20% of its full-time employees effective April 24. Senior executives with salaries above $125,000 will also receive a temporary 5% reduction in their pay, officials said.
With the COVID-19 outbreak in full effect in Detroit, the DLBA anticipates a $5.8 million “budget shortfall” due to a reduced city subsidy and decrease in property sales.
According to officials, the city of Detroit is facing a $348 million deficit through the 2021 fiscal year. With this deficit, the DLB expects its city subsidy to be reduced both during the current fiscal year and the next. The new fiscal year begins on July 1.
The DLBA also cites significant decreases in people buying and selling homes amid the COVID-19 pandemic.
Officials say house sales under DLBA programs have decreased by 30% in April alone, and are expected to continue trending downward. The DLBA is also projecting a 50% decline in sale closings.
To offset the budget shortfall, the DLBA is freezing salaries and wages of current employees in addition to the layoffs and terminations. Officials say full-time employees that are laid off will retain their health insurance coverage through April 30. The DLBA will also cover the cost of health care premiums under COBRA from May 1-July 31 for full-time employees experiencing layoffs, officials said.
“These cuts are painful. This is not a decision we wanted to make, but we need to protect the viability of the organization to further our mission," said DLBA Executive Director Saskia Thompson. “I’m very grateful to every member of our team for their hard work and dedication to the City of Detroit. Their tireless effort to improve city neighborhoods has continued despite the challenges of this global coronavirus pandemic. It’s difficult to have to let anyone go, especially under these circumstances.”