The Atherton City Council is preparing to abandon its plan to have former interim city manager John Danielson conduct the search for a new manager because of a state agency's delay in signing off on his contract as an independent contractor.
The council will meet Tuesday, Feb. 28, at 2 p.m. to vote on a recommendation to budget up to $17,000 to hire an executive firm to recruit a permanent manager, which the town has been without since October 2010.
Approval of the action would allow the town "to move forward by hiring a different recruiter in order not to stall the process," Interim City Manager Theresa DellaSanta wrote in a staff report.
When Mr. Danielson, the former city manager of Elk Grove, was hired as interim manager in January 2011, one of his major tasks was to find his replacement.
Because he was collecting a pension from the California Public Employees Retirement System (CalPERS), his tenure in Atherton was limited to a specified number of hours, and only one year in duration. If he worked beyond that period, he would forfeit his pension, according to state law.
The town paid him $15,000 per month for working a maximum of about 36 hours per week.
By the end of December, the process to find a permanent manager had yet to be started, but town officials believed CalPERS would approve an extension of the contract. By mid-January, however, the state agency ruled that Mr. Danielson must resign or stop receiving his pension. He resigned, effective Jan. 19, and Ms. DellaSanta, the town's deputy city clerk, was appointed interim city manager.
Meanwhile, the council last month approved a contract, carefully crafted by City Attorney Bill Conners to pass muster with CalPERS, to hire Mr. Danielson as a consultant to recruit a new manager and to advise the new interim manager, as needed. Mr. Danielson's new contract included monthly pay of $12,000 -- $5,000 for his recruitment services and $7,000 for advising the interim manager.
In the staff report, Ms. DellaSanta said that CalPERS contacted the town last week and said its review of Mr. Danielson's contract could take up to two more months. "There is nothing in the law that requires the Town to submit contracts to CalPERS for review, but the Town did so voluntarily," she said.
Although town officials believe the contract complies with the law governing public employee pensioners, she and Mr. Danielson "felt it was appropriate" to end the delay and ask the council to shift course so that the town could more quickly hire a new manager, she said.
Also on the Feb. 28 special meeting agenda, the council will discuss the city manager recruitment process and establish a timeline for hiring a manager.
The meeting will be held in the Town Council Chambers, 94 Ashfield Road, in the Town Center.