Council Renews Lahanas’ Contract with Salary Bump

East Lansing’s City Council voted unanimously last night to renew City Manager George Lahanas’s contract through June 2021, raising his base salary from about $143,000 to $167,000, with the raise retroactive to the beginning of this year. The five members of Council all praised Lahanas for his work.

In the view of Council Member Ruth Beier, the raise was motivated by both fairness and a desire to keep Lahanas in East Lansing. Shanna Draheim saw the new contract as much better for the City than the last, a sentiment shared by Mark Meadows.

Meadows called “invalid” the criticisms of Lahanas on the issues of the City Attorney’s retaining wall and the wastewater treatment plant health and safety violations. Erik Altmann praised Lahanas, including for his work getting the income tax passed, suggesting the moment was “celebratory.”

Aaron Stephens objected to having seen changes to the voted-on version only hours before the vote. The contract approved by Council last night was different in several significant respects from the draft released to the public on Friday afternoon. As members of Council noted, it also contained significant changes from the contract that was in effect until last night’s vote.

According to discussion at the meeting, Beier and Altmann took the lead in closed-door negotiations with Lahanas at Meadows’s request, with Draheim providing input that was incorporated over the weekend.

What was noted about the new contract:

In discussing the contract, Beier explained that $6,000 that had been provided in deferred compensation was moved into salary, making the package amount “more transparent.” She indicated that this meant the raise for Lahanas came to about 12.5% in effect, not the apparent 20%.

Draheim wanted it noted to the public that a new bonus built into the new contract – worth up to an additional 3% of Lahanas’s base salary ($5,000 or more per year) – will happen only if a majority of Council wants to give him that bonus. (If that bonus is given, it takes Lahanas’s effective raise to 17%.)

Beier also said that the auto allowance in Friday’s draft was wrong and is now set to be the same amount ($3,600 per year) as the previous contract. She also indicated a change in the clause regarding health insurance for Lahanas and his family if he retires before he’s eligible for Medicare; it now specifies he must be retired from the City of East Lansing (not any future employer) and that the plan will be subordinate to any other insurance he has.

About the raise:

Beier explained the raise by saying that it brought Lahanas more into the range she found to be comparable nationally to other managers of college towns about this size. She did not find it appropriate to compare Lahanas’s salary to Mayor Andy Schor of Lansing or Meridian Township Manager Frank Walsh, who each earn about $130,000 per year.

Beier also said Lahanas was due a raise because he’s been City Manager for seven years, so he’s more experienced than when he started the job. She said that in real dollars, his salary had been increasing at less than 1% per year.

Lahanas has had “excellent reviews” from Council, according to Beier. She said he had been willing to work for less than he was worth “because he realized the city was nearly bankrupt.”

Referring to measures taken to manage the City’s financial crisis, including passage of the income tax, Beier added, “At this point, we are not rich by any means and we’re not talking about doing anything insane. But we have enough wiggle room to put him back within the [expected] range in a reasonable place.”

In her comments on the matter, Beier said that she wants to keep Lahanas and she believes this package will make that possible. She noted that he was a finalist in 2017 for the position of City Manager of Auburn, Alabama, suggesting he might move if not given a good package by East Lansing. (She did not mention that he was not offered the job in Auburn.)

Beier said she has learned much from Lahanas and said that he works tirelessly, including nights and weekends, to keep the City functioning.

Draheim said she found a real benefit of this contract that it is “tightened up” from the previous contract. Draheim also said that she appreciated the reduction in what the contract offers in terms of severance pay – 12 months’ pay and benefits but ending if Lahanas finds gainful employment elsewhere. Council also now only has to give him 30 days’ notice of termination, instead of 90.

Speaking relatively briefly on the matter, Stephens said Lahanas “has served the city incredibly well” but objected to Beier coming forward with a new version of the contract just hours before the vote. He called the situation “disingenuous” and questioned “the level of trust.” He said he supported the contract, “but that [approach] can’t happen again.”

Altmann added to Beier’s suggestions that a nationwide comparison of City Manager positions supports a higher salary for Lahanas. He said Lahanas does “a nearly impossible job and he does it really well.” He said the job was especially challenging because it involves “keeping five coequal bosses [on Council] happy.”

Lahanas, according to Altmann, “negotiates with patience and grace, and I don’t know why his head doesn’t explode.” Altmann said he was happy “to be able to pay him what he’s worth,” and added, “I’m delighted we’re in a position to be able to do that largely in response to his efforts on the [income] tax proposal, which got us where we are.” 

Meadows said he was much happier with this contract than the previous one, which he said had “tremendous ambiguities” about things like what might happen upon a termination. He called the revision “a huge improvement,” and said the “gold parachute” of the last contract “is not so golden anymore.” He felt the contract serves the people of the City much better than the last.

Meadows referred to an article in ELi which covered the controversies of Lahanas’s tenure, calling criticism of Lahanas “invalid.” On the retaining wall case, Meadows said Lahanas “didn’t have anything to do with it” and said “the buck stops here,” with Council, “not in the City Manager’s office, not in the City Attorney’s office it stops here.”

Regarding the health and safety problems at the wastewater treatment plant, again, Meadows said, Lahanas “did not have anything to do with what happened here.” He reiterated that Council is responsible.

“He’s done a great job as City Manager,” Meadows concluded, adding, “I’m very happy he’s going to continue to work with us.”

Lahanas gives thanks:

Lahanas thanked Council and his staff and said it was “really an honor to serve such a fine community.”

In his comments earlier in the evening, Lahanas noted the passing of his predecessor, Ted Staton, who died yesterday of cancer. Lahanas said he had learned much from having Staton as a mentor.