Mayor Aaron Stephens and Council member Lisa Babcock will now begin negotiating behind closed doors with City Manager George Lahanas to extend his contract, which expires at the end of June 2021.
Mayor Stephens opened his discussion on the topic at last night’s Council meeting by stating that he had put the issue on the agenda in consultation with Babcock.
“We wanted to talk about today so it is not a shock to folks as we come to some agreement,” Stephens said.
It was Stephens who made the motion to appoint himself and Babcock as negotiators with Lahanas. Michigan’s Open Meetings Act allows for two Council members to meet with the City Manager behind closed doors. It also allows for the negotiations to happen in public.
Council elected for private negotiations.
In her own brief remarks, Babcock indicated less certainty about an extension, saying she saw the vote last night as “the beginning of a conversation. That’s what I’m terming it as.”
Stephens, Babcock, and Gregg indicated no plans for review of Lahanas’ performance before a vote on an extension.
The closed-door negotiations will begin just several weeks after Ruth Beier and Mark Meadows resigned from Council because of Stephens, Babcock, and Jessy Gregg voting to terminate City Attorney Tom Yeadon’s contract as of October 1. (Yeadon’s contract required advance notice of termination.)
In the contentious conversation surrounding Yeadon’s contract and the resignations, Beier warned that the remaining Council members were “coming for” Lahanas next.
Gregg told ELi the next day that this was untrue, and Stephens praised Lahanas at last night’s City Council meeting.
Stephens made clear from the outset of yesterday’s discussion that his desire is to extend Lahanas’ contract.
He added, “I do support our city manager, and I want to see continuity and some stability going forward. And I think he has done a great job.”
Babcock said that she was not “unhappy with Mr. Lahanas.”
Gregg made no comments on the matter other than saying “I’m fine with it.”
Stephens voted to renew Lahanas’ contract in 2019, stating that Lahanas “has served the city incredibly well.” (Stephens is the only member of Council remaining from that time.) But Stephens voiced his concern and frustration that Beier had changed some of the contract language just several hours before the vote.
That Council (which included Stephens, Beier, Meadows, Erik Altmann, and Shanna Draheim) unanimously approved Lahanas’ new contract, which bumped his base salary from $143,000 to $167,000.
That made him the fourth highest paid employee in the Greater Lansing area, trailing only three physicians who run a network of publicly-funded clinics, as reported by the Lansing City Pulse.
At the time of the contract’s approval, Lansing Mayor Andy Schor (who runs Lansing’s government) and Meridian Township Manager Frank Walsh (who runs the township) each made about $130,000.
But Beier said the Council’s negotiators with Lahanas compared Lahanas’ proposed salary to those offered in “similarly sized college towns and positions,” not those in the region.
Lahanas’s contract includes many benefits beyond his base salary, including a $300/month guaranteed car allowance, professional development support, a cell phone (with the contract paid), a computer, his home internet paid by the City, the equivalent of 10.5% of his salary paid into his retirement by the City, life insurance worth three times his salary, health insurance, five additional years of health insurance for his family if he retires at 60, and dental insurance.
Council can also give him a 3 percent bonus (about $5,000) every year if it so pleases. Even without that bonus, his contract is worth over $200,000 per year.
As ELi has covered, Lahanas has had his share of controversies while working first as Director of Human Relations and later as City Manager, including issues related to health and safety violations at City facilities, the firing of whistleblower Troy Williams (who later received a settlement), Lahanas’ violation of Michigan’s Campaign Finance Act, and inequities in the city’s workforce.
He has also garnered frequent praise from City Councils for big redevelopment projects and his work getting voters to pass a 12-year income tax measure to try to deal with the City’s financial crisis caused by massive pension debt.
MSU’s top administrators are currently being subject to a 7 percent pay cut to deal with budgetary shortfalls and expected dramatic decline of state support, and MSU is making other significant cuts in its workforce and their compensation.
While Michigan municipalities are also expected to be hard-hit by state budget cuts, there has been no discussion of cutting Lahanas’ or others’ salaries in East Lansing, and in fact there has been almost no detailed discussion of budget-cutting in the face of the pandemic, even as East Lansing’s revenues are plummeting in terms of the parking system, income tax, library income, and more.
Last night’s meeting was held primarily to deal with two vacancies on Council. Stephens did not want to wait until those two new members were named to vote on negotiations over a contract extension for Lahanas, although he noted the extension vote itself will happen after the two new members are seated in office.