Niles lays off city employees in wake of COVID-19
NILES — Like many citizens and businesses, the city of Niles had to make financial decisions it did not anticipate before the COVID-19 pandemic resulted in heavy mandates put in place.
On Friday, 10 employees of the city of Niles received notifications that they had been laid off and relieved of their positions. The 10 positions included three full-time and seven part-time employees from the police department, building department, history center and from the administration.
“The city was put in a pretty awkward position with anticipated reduced revenues from the state of Michigan,” said City Administrator Ric Huff.
The city receives around $1.5 million annually from the state of Michigan from revenue sharing. Revenue sharing involves the sales tax generated in the state. The state returns the sales taxes generated for municipalities to use. Retail sales have been greatly impacted by social distancing protocols and business closure mandates to help prevent the spread of COVID-19. Sales taxes generated have been less than originally expected.
“[The state] is expecting a short-term impact of 50 percent of that number,” Huff said.
This translates to the city working with roughly $700,000 less of anticipated funding from state revenue sharing.
“Economists are claiming that this will be an abrupt financial impact to the communities, and that we should start recovering rather quickly,” Huff said. “In the meantime, we have to account for this reduced revenue that we were planning to receive this year.”
Huff said he is continuing to learn more about the economic situation, spending much of Monday in webinars with the Michigan Department of the Treasury. The uncertainty reaches to the state level.
“If you look at the overall market, how many businesses have closed and how many people have file for unemployment, we are estimating what the reductions are going to be,” Huff said. “We just keep hoping week to week that we get better data. As it is right now, this is what we think we need to do right in this scenario.”
Still, Huff hoped that things may turn around.
“In the best-case scenario, we would be putting people back to work, and not laying more people off,” he said.