Chelsea Council Alters Controversial Amendment to City Manager’s Contract

By Doug Marrin, STN Reporter

At its July 6, 2021, meeting, the Chelsea City Council negotiated an amendment to the City’s contract with City Manager John Hanifan.

The proposed amendments to Mr. Hanifan’s current contract were:

1. An extension of his contract by two years to June 30, 2025.
2. Revising the severance pay from nine months to twenty-four months.

The increased severance payout was a sticking point for some in the community who voiced their disapproval of the move during public comments. Of the people who spoke, seven expressed opposition to the severance amendment, with some alleging the deal was done in secret. Others stated it was irresponsible on the part of city leadership. All who spoke felt twenty-four months was too much. All who questioned the contract extension also expressed strong support for the work Mr. Hanifan has done as City Manager.

When it came time for the Council to discuss the proposed amendments, Mayor Johnson was firm in clarifying the process.

“We held Mr. Hanifan’s review, as we always do, at our last meeting in closed session,” the Mayor told the room. “As with the last several years, he has received stellar reviews across the board.”

“We do everything in public,” emphasized Johnson. “I do not have the opportunity or the ability to negotiate anyone’s contract. Let me be very, very clear about that. It’s been suggested that I have negotiated with Mr. Hanifan and am presenting the result.”

Johnson continued her clarification with, “This is Mr. Hanifan’s open negotiation tonight. This is his opportunity to make a request for a change in his contract. We do this in public.”

Mayor Johnson then asked Mr. Hanifan if he would like to comment on the proposed contract amendments. The City Manager began by thanking those who spoke for their kind words about the work he has been doing. He then explained his reasoning behind the 24-month severance package.

“I’m getting to the point in my career where I have one last decision to make, and that’s to either finish my job and move on to retirement here,” said Hanifan. “For people in my profession, and you can look it up, it is a buyer’s market. And as an employee, I don’t say that to be threatening. That’s the reality.”

Hanifan emphasized that he is committed to Chelsea, but the only bargaining chip he has is to “go work somewhere else when it comes to contract negotiations.”

Mayor Johnson added some thoughts for consideration regarding the contract requests. Her first thought was to provide stability for Chelsea. “The City is in the best physical and financial shape it has been during my tenure, and I’ve served the City now for ten years.”

The Mayor also noted Mr. Hanifan’s impressive skill set in terms of his diverse knowledge. “You have to be familiar with the law, roads, water, and sewage,” said Johnson. “In this particular case, the City has a public power agency … a whole other job is understanding the public power agency.”

The Mayor told the Council that it would take two people to replace Hanifan, and she sees the amendments as cost savings in retaining him.

Councilmember Albertson recalled the Great Recession of 2008, the year after Hanifan was hired as City Manager. “During that Great Recession, this city did not suffer one degree of loss in our General Fund. Not one dollar was lost,” she said. “The reason for that was because of the superior fiscal management of our City Manager. We are one of the few municipalities in the entire State of Michigan that can make that claim during that really awful time.”

Albertson made another point in support of the amendment. “Have you any idea what the learning curve would be for somebody new coming into this community? How many years would the learning curve be? Mr. Hanifan has brought us into the twenty-first century. To say he is worthy is an understatement.”

Albertson then referenced her years on the Council and pushed back hard against talk of a deal being made in secret. “I take extremely strong exception to the reference of making a deal behind the scenes. When I came onto the City Council, that was exactly what was going on, and I’m the one that put a stop to it.”

Councilmember Feeney reiterated a point Mayor Johnson had made earlier regarding the grants Hanifan procures for the City. Feeney pointed out how these grants enhance the quality of life for residents. “The City Manager actually pays for himself,” said Feeney.

Later in the discussion, when the Council was in the nuts and bolts of the severance package, Feeney suggested changing it from twenty-four months to four weeks per year of service. The idea was amenable to all at the table. Hanifan has been with the City for 14 years.

The Council approved an amendment that extends the current contract to June 30, 2025. The City shall provide one month for every year of service as severance pay to Mr. Hanifan for any form of discharge or request for termination that’s without cause.