Stephens and Draheim Rebuffed in Attempt to Open Applications for City Attorney

Above: City Attorney Tom Yeadon, left, and City Hall.

Following a contentious discussion, East Lansing’s City Council split 3-2 last night over extending City Attorney Tom Yeadon’s contract for another year without putting out a Request for Proposals (RFP) to see what other applicants might cost and bring to the job. Council Members Erik Altmann, Ruth Beier, and Mark Meadows voted in favor of the extension and against calling for applications, while Shanna Draheim and Aaron Stephens voted the opposite.

The discussion included sharp differences of opinion about whether complaints made about Yeadon’s performance amounted to “rumors and innuendo” or legitimate concerns, and whether it was appropriate to discuss possible problems with Yeadon’s work in a public forum.

Yeadon’s contact was set to expire at the end of this month and City Council had made no provision for dealing with the matter before last night. Meadows said the Council had taken no action “not because we were not monitoring this but because there was so much else on the table, it sort of escaped us.” Meadows wanted to extend the contract another year.

But Council Member Aaron Stephens sought a different route – extending the contract a year but only while also putting out an RFP on January 1 with a decision made by May 1, 2019, about who would be City Attorney. Council Member Shanna Draheim said she would prefer a shorter extension and faster RFP process, but seconded Stephens’ motion.

Below, from left: Meadows, Beier, Stephens, Draheim, and Altmann.

Stephens noted he shared many of “the values” of Yeadon. He gave as an example that when reporters came seeking the names of individuals making sexual assault complaints, Yeadon refused to turn those over.

But, Stephens said, concerns had been brought up both by members of the community and Council, and he thought Council should do its “due diligence.” Stephens said it was the job of City Council, especially while having to make cuts to City services, to evaluate options.

Draheim agreed: “We are the stewards of City resources,” she said, “and as such, I think we need to undertake good due diligence that ensures we are providing the best, most efficient, highest quality services in the city… I think it’s good to go out for bid…it is good business practice.”

Draheim pointed out that the last RFP process for City Attorney took only 45 days. This occurred in 2016 and apparently marked the first time in East Lansing’s history that City Council issued an RFP for the job. Yeadon is part of the McGinty law firm which has been consistently been the source of the City’s attorneys since the 1960s.

Altmann saw that continuity as a good thing, saying, “I am not supporting an RFP. We are not going out for a mowing contract at the soccer complex. I think that City Attorney is the kind of job that requires an awful lot of expertise and institutional knowledge, and I think to set up this position as one where we go for an RFP every two or three years just loses sight of the fact that what we actually want to do is prevent errors. If you want more errors, then hire somebody new, somebody who doesn’t know the institutional history — that’s a good way to introduce lots of errors.”

Criticisms against the City Attorney on various issues:

Yeadon has come under fire for a number of issues, including with regard to the Center City District project legal agreements. Yeadon failed to catch that the development agreement had the wrong number for the 49-year-lease payments from the developers to the City, an error that would have cost the City millions had it not been caught by citizen Jay Brant and pointed out by him before Council voted.

Below: The Center City District construction site.

City Council also had to later amend the Center City District agreement because it included a financial performance guarantee that involved a contractor who was not a party to the agreement, and because it was lacking a key penalty provision regarding performance by the developer – a provision Council had been told would be in the agreement. (These issues were brought forward by ELi.)

Last night’s consent agenda included a vaguely-titled item #26 which also appears to indicate a recent error by Yeadon. A linked memo from Yeadon on the issue reveals that in the run-up to the November 2018 income tax vote, Yeadon misadvised Council about what it could legally do with regard to exemptions. Council will now have to take up the matter of exemptions on July 17, only two weeks before citizens vote on a new income tax proposal.

Over the years, Yeadon has come under fire for other matters, including his role in what the Lansing State Journal called “the bureaucratic collapse of St. Anne Lofts." The term was a reference to a redevelopment project (shown below during construction) that involved Yeadon advising a previous Council that they could approve development applications made in the name of a corporation that no longer existed.

Yeadon has been the source of criticism by some citizens for years with regard to a matter involving the City’s use of $150,000 in public funds to rebuild a sidewalk and retaining wall adjacent to the City Attorney’s private office property on Abbot Road.

In that matter, one citizen finally brought a whistleblower suit and was joined by the U.S. Department of Justice in claiming the City had misused $134,330 in federal Housing and Urban Development (HUD) funds to benefit the City Attorneys. (The rest of the cost of the $150,000 project came from East Lansing taxpayers.)

The retaining wall required legal easements from Yeadon and his partners to the City, to allow the City to build and maintain the wall. Yeadon acted on both sides of those easements, as property owner on one side and as City Attorney advising the Council on the other, without any disclosure in writing that he was the property owner.

Last year, the City settled that whistleblower case for $20,000 and had to publicly admit failure to manage the conflict of interest involving Yeadon. Last night’s Council agenda included an amendment for the City’s 2018 budget: “The public works function requires an additional $134,330 related to the HUD repayment for a sidewalk project.” In other words, the City now has to pay HUD back for improperly-used funds in the retaining wall case. Council made no mention of that pay-back in their discussions last night.

Finance Director Jill Feldpausch tells ELi that, after the City pays back the money, HUD will give the City the same amount of funds to use on an allowable project. Council has not asked the City Attorneys to reimburse the City for part or all of the $150,000 in City funds spent on the project.

Disagreements at Council about whether to do an RFP now:

At last night’s meeting, Altmann said that “the legal landscape” hasn’t changed since the last RFP in 2016, so he saw no reason to believe there was “going to be a brand-new firm” that would give a better value. He said calling for an RFP is “costly in terms of time and morale.”

City employees, said Altmann, are “in a fishbowl” and are subject to much criticism. “What we can do is we can try to give them a measure of security and we can try to have their backs,” said Altmann. He referred to those making complaints about Yeadon as “people hunting for scalps, people who want to pull puppet strings.”

Beier expressed “sympathy” for the idea of an RFP. She said she supported the last RFP and also the idea of looking into an in-house attorney “that does not have any conflict of interest.” Since that time, she said, “the issue of the retaining wall came up, which was an issue for me.”

Below: The City Attorneys' private offices and the retaining wall at the center of the fraud suit.

But, Beier said, she has not yet sat down with Yeadon to allow him to explain “what he was thinking,” and she wanted to do that before calling for an RFP. She also said she wanted to tell Yeadon that he should be sure to tell her if he thinks she is doing something wrong. “I have not asked him to do that. I would like that from an attorney,” she said.

Beier said she might support an RFP “sometime later in the summer.” For now, she supported the year-long contract extension and did not support an RFP.

Draheim said that if Yeadon was the best person for the job, he would win out in the RFP. But Beier said it was unreasonable to ask “someone to invest their career and have it reevaluated every 3 years.” She said doing an RFP every three years, as Draheim suggested was reasonable, “would be too demoralizing for someone” asked to be City Attorney.

Stephens took issue particularly with Altmann’s remarks, saying he was “not trying to be a puppet of random interests.” Stephens said he believes that, “after issues that have been brought up this year, it’s irresponsible not to respond at least with a process.”

“This is our duty,” concluded Stephens.

But Meadows answered he thought his duty was “to sit down with the employee, tell them what the problem is, and find out from their standpoint whether this has any validity. We’re being asked, I think, to decide now whether we would want to do an RFP based on what really is in essence rumor and innuendo.”

Said Meadows, “The place to do that [evaluation] with an employee is in a private conversation, not in an RFP, which is essentially saying we are heading in another direction.” He said he was happy with the responsiveness of Yeadon and with how much the firm has been billing, and that he was concerned another firm might over-charge.

Meadows suggested that Council has been having mini-performance reviews with Yeadon when Council goes into closed session to discuss litigation. Council has not been indicating in minutes what goes on in the discussions of closed sessions, stating only that they are discussing “litigation.”

Altmann ended the discussion before the vote by saying about the City Manager and City Attorney, “If you don’t like what they’re doing, blame us. If you’re bound and determined to get a scalp, go for ours. That is the fair thing to do.”

Earlier in the meeting, Council voted 5-0 to extend City Manager George Lahanas’s contract through June 30, 2019, representing a five-month extension. Meadows said he wanted the income tax vote to play out before Council takes on a full review of Lahanas’s job.