Fraud? Foresight? Lansing’s vacancy factor explained

Issue surfaces in the primary race for mayor

On its surface, the Lansing government’s “vacancy factor” seems simple.

In a city with around 1,000 full-time employees, some positions will be vacant at any given point. Employees retire, accept new jobs or are fired. Highly specialized positions may not attract qualified applicants.

It is impossible to know exactly when a position will be filled, so the city can’t simply take vacancies off the payroll. Instead, it budgets a “vacancy factor,” or an estimate of yearly vacancy savings based on historical data, so a realistic budget can still contain the necessary funds. The vacancy factor for the 2026 fiscal year is $1.5 million, the same as 2025.

This seemingly simple budget line has been in Lansing’s budget since before Mayor Andy Schor took office. But it has become an issue in a city election without many hot-button topics, fueled largely by grassroots mayoral challenger Brett Brockschmidt.

Brockschmidt, a former accountant, claimed in a June 6 Facebook post that the Schor administration is intentionally leaving positions vacant in order to reallocate vacancy factor funds to cover up deficit spending.

Individual vacancies have also caught public attention, based on the city’s quarterly vacancy factor report. Thirty-three Lansing Police Department vacancies stand out in the latest report, which covers three months ending March 31. With public safety the third most important issue on voters’ minds, according to a Lansing Regional Chamber-PAC poll, that feels like a lot. Some vacancies date back years, with an electrical technician role in the wastewater treatment plant role funded but vacant since 2006.

“I’ve never seen anyone try to do something so blatant,” Brockschmidt said in an interview. “I’ve done a lot of forensic accounting, and they usually do a better job of hiding things. I have never seen anything so blatant as to tack something on the back of a budget, saying, ‘Hey, we don’t have any intention of spending this money, so we’re going to add it back.’”

Mayoral candidate David Ellis called open vacancies “unnecessary spending” in a Facebook post. In response to a City Pulse questionnaire, he said the vacancies were a black-and-white issue and that money should be spent on what it is budgeted for without fail. In response to the same question, mayoral candidate Kelsea Hector said she would conduct a vacancy audit if elected.

But city strategist Jake Brower, who presents information on vacancies to the City Council during budget reviews, said the vacancy factor was actually much lower under Schor than it has historically been.

“The furthest back our budgets are posted on the city’s finance webpage is 2008, in which the vacancy factor was budgeted at $1.8 million,” he said.

That’s a $300,000 decline — and even more when the 2008 figure is adjusted for inflation, which is $2.6 million. While the vacancy factor has fluctuated under  Schor and former Mayor Virg Bernero, the current $1.5 million amount under Schor is not exceptionally high.

Brower also said Schor proposed a budget estimating vacancy savings per department rather than as a lump sum in 2022, which City Council did not adopt.

At the crux of Brockschmidt’s critique is that the vacancy-factor savings are budgeted for at the beginning of the fiscal year, implying the city has no intention of filling those positions. He called it blatant fraud. Brower said vacancy savings are consistently reported over the course of a fiscal year and compared to estimated savings.

“If it appears the vacancy factor is off track at any point in the year, the administration can propose a budget amendment making necessary adjustments to add or subtract from the vacant factor,” he said.

Per his role in city government, Brower is not allowed to involve himself in political matters and spoke only to provide information about the city’s accounting processes.

Schor said in a statement that “the vacancy factor is a common budgeting tactic used by nearly every large municipal and state government budget office in the country,” though it may not always be called the vacancy factor.

That’s accurate up to a point: Vacancy  savings are consistently budgeted across municipal governments, though ways of doing so differ.

Brockschmidt said, “I’ll leave it up to you to look at any other city’s budget and see if they’re doing the same.”

Doing so is difficult because Lansing’s choice to offer a breakdown of vacant positions per department, with exact vacancy savings per role, is uncommonly transparent. Some other U.S. cities do budget a lump sum “vacancy factor,” though, including Anchorage, Alaska, and San Diego, California.

Lansing is also not alone in struggling to fill positions. The problem is national, the National League of Cities found in a study that showed local government employment declined by about 300,000 employees nationwide in the two years after COVID-19 shutdowns began in March 2020.

As for the individual vacancies, Schor said the issue was far from simple.

“Most positions are collectively bargained and cannot be removed without input and approval of the collective bargaining units,” he said.

Police staffing is in a “strong position” right now, Schor said. He said the vacancies — 33 in a department of 261 — were due to both expected retirements and unexpected ones in 2020. But with a complicated hiring process including reading and writing tests, physical agility tests, background checks, psychological tests and a 17-week academy, bringing on new hires can take years, hence the continued impact of the 2020 departures.

Certain positions, such as the “Maintenance Worker 400” role in the Public Service Department, are nearly always posted despite many hires — 10 in the last year, he said. The Public Service Department is large with so many responsibilities that it is always hiring.

And in a piece of news that should please everyone, Schor said the 2006 vacancy has finally been filled.

“That job initially opened during the economic downturn, and the city was on a hiring freeze. It’s also a highly specialized job and is difficult to fill,” he said. “It had been posted many times over the years but no applicants met the qualifications. More recently, we were able to look at that job and the needs of the position and work to reclassify it. Because of that, it has now been filled.”

— LEO V. KAPLAN