Lansing treasurer will take over as city's chief restructuring officer

LANSING — A game of musical chairs continues among Lansing's top financial officials with the city's treasurer set to take the reins as chief restructuring officer.

Judy Kehler, hired by Mayor Andy Schor as treasurer in April 2019, is set to start the new role July 14 following the resignation of Chief Restructuring Officer Shelbi Frayer.

Frayer cited a desire to spend more time with family and to pursue personal endeavors when she put in her notice with the city.

More: Top Lansing finance officer to leave, leaving director position vacant for second time in a year

Lansing hired Frayer in August 2019 for the newly-created CRO, also referred to as a Chief Strategy Officer, position. She was tasked with taking a high-level look at Lansing's finances, identifying inefficiencies and helping the city manage more than $700 million in unfunded pension and retiree health care costs expected to come due over the next several decades.

In addition to working as CRO, Frayer had been working as Lansing's interim finance director since September 2019 when the former director Angela Bennett resigned under pressure. Officials later disclosed Lansing had been facing a $7.4 million shortfall, partly due to $2.5 million in late fees owed to the Internal Revenue Service. 

Related: Former Lansing finance director defends oversight, says shortfall didn't result from carelessness

Schor has said he still plans to hire someone who will serve as finance director on a permanent basis. In the meantime, Budget Director Jake Brower will be working as interim finance director. 

Cheryl Fox, Lansing's deputy treasurer, will take over as interim treasurer overseeing tax collection in the city. 

More: Proposed committee would study cutting Lansing police budget in half

The shuffling of staff comes during a time of financial pain for the city. Reserve funds, the city's financial cushion against lean times, are below recommended levels. And, because of the coronavirus pandemic. Lansing slashed nearly $13 million from its previously proposed budget in the current fiscal year.

More: Activists call for Lansing to defund police; Where do City Council members stand?

After Frayer announced her resignation, the Lansing Regional Chamber of Commerce released a public statement urging Schor to "move quickly" to find a new CRO.

"It is time to begin implementing necessary cost savings measures," the chamber said in a statement. "Business leaders have growing concerns with the unfunded liabilities, declining tax revenue and an uncertain economic future."

Related: Lansing's budget includes nearly $13 million in cuts to programs, reserves

Kehler has over 20 years of experience in budgeting, finance and executive management, according to the city. She previously worked as a director of corporate partnerships for the National Public Radio member station WKAR and served as treasurer in the administration of former Lansing Mayor David Hollister in the 1990s.

As treasurer, Kehler's annual salary was $104,000 and she'll make $134,000 as CRO, which is the same as Frayer's most-recent salary in that position.

More: Lansing firefighter files second racial discrimation lawsuit against the city 

In another staffing change, Schor promoted Nicholas Tate this summer from chief administrative officer to deputy mayor for operations and chief of staff. He previously earned $97,850 and will get a raise to $108,400 annually. 

Tate's new role includes management of mayoral staff and department staff and resolving day-to-day issues related to finance, labor, human resources, according to the city. 

More: Lansing City Council declares racism a public health crisis, tables anti-racism fund

Samantha Harkins will continue to serve in another deputy mayor role. Her position, now called deputy mayor policy initiatives and executive assistant to the mayor, is distinct from Tate's because it involves "nurturing local partnerships and projects, legislative work and strategic economic and community development projects," according to a Lansing news release.

In April, Schor ordered a freeze on non-essential spending, hiring and promotions to counter financial bleeding from pandemic-related shutdowns. That executive order — which bars promotions within the city and specifies that new positions may not be created unless they are critical to health, safety and welfare — remains in effect.

Tate's promotion is allowed because the mayor may grant exemptions to the executive order, Marchand said. The order states positions may be created or filled to "produce budgetary savings, protect existing city revenue or secure additional city revenue." 

Contact reporter Sarah Lehr at (517) 377-1056 or slehr@lsj.com. Follow her on Twitter @SarahGLehr.