Big Raise for Lahanas? Plus Bonuses?

The East Lansing City Council is considering giving City Manager George Lahanas a two-year contract extension, a 20% raise bringing his base salary to $167,000, new bonuses worth $5,000 or more per year, a thousand dollars more a year for his car allowance, an extra $3,000 in retirement benefits every year, plus a guarantee of five years of health insurance for him and his family when he retires “to bridge the time between work and Medicare eligibility.”

Council will likely vote tomorrow night, February 12, on the deal. The matter showed up as a surprise on this week’s Council agenda, with no other notice to the public through the City’s usual communication lines.

The raise for Lahanas would be backdated to January 1, 2019. That’s also the date the City began instituting a new income tax to deal with the City’s financial crisis.

Council has previously praised Lahanas for his work on the financial crisis and in the push to get the income tax passed. Council Members have also expressed appreciation for Lahanas’ work on big redevelopment in the City.

But his tenure as City Manager, which began in 2012, has not been without controversy. In 2016, the State of Michigan ruled that Lahanas had violated the Campaign Finance Act in using public resources to encourage “yes” votes on an East Lansing ballot initiative.

Lahanas has also drawn criticism for the role he played in the case of federal funds meant to support projects for low-income people being improperly used to pay for a sidewalk and private retaining wall adjoining the City Attorney’s private property. Lahanas defended what happened in the project in which $150,000 in public funds were used, saying the City Attorney did not benefit and that the project benefitted “low or moderate income persons who would regularly travel on Abbot Road,” next to the City Attorney’s private property.

In the job he held before becoming City Manager, Director of Human Resources for the City, Lahanas took no action on a 2007 report showing that the City’s wastewater treatment plant was riddled with dangerous asbestos. In 2014, this inaction came back to haunt the City when a mercury spill at the plant led to safety investigations showing also the asbestos problems.

Investigations by MIOSHA and the Michigan DEQ led to fines and findings that the City had failed to train and protect workers. Workers at the plant sued, leading to a $200,000 legal bill to the City’s taxpayers. Lahanas claimed workers were never harmed by the mercury or asbestos, but the workers’ attorney said Lahanas lied about this, and showed ELi documentation seeming to support his contention. Previous investigation by ELi showed Lahanas misrepresented to Council what happened with the mercury spill.

Last year, the Michigan Court of Appeals ruled against the workers in the lawsuit, finding that they could not prove the City intentionally set out to harm them. The judges in the case called the state of unpreparedness at the plant “stunning,” saying that state agencies “rightly cited and fined East Lansing for not having in place an emergency plan to handle such spills, not informing employees of the spill, and not properly cleaning the spill.”

In 2017, Lahanas was looking for jobs elsewhere, something that became apparent when he ranked as a finalist in one search. He was not offered that job. He has declined to say whether he continues to look for other jobs.

If passed as proposed in a draft contract, the raise for Lahanas, from about $140,000 to $167,000 would easily secure Lahanas’s already-existing stance as the highest paid top municipal manager in the region. Frank Walsh, Township Manager for Meridian Charter Township, earns about $130,000 a year. According to the Lansing State Journal, Lansing Mayor Andy Schor (who functions as that city’s manager) makes $128,400 a year.

East Lansing’s population is about 49,000, including about 20,000 permanent residents according to the City. Meridian’s population is about 43,000, and Lansing’s about 117,000.

Responding to questions from ELi, Council Member Ruth Beier said, “We did not use nearby comparables” for the salary. “We used comparables for similarly sized college towns and positions.” She says she will explain more before she votes tomorrow night.

The rest of Council and Lahanas declined to answer questions from ELi in advance of the meeting and likely vote.

According to the City Charter, the City Council hires and fires two people: the City Manager and the City Attorney. Council has not said when it will reconsider the City Attorney's contract.

ELi has made Lahanas’s existing contract available here, and the draft new contract available here.