Mayor Bill Widmer said the town's attorney advised the council that Mr. Danielson's contract can be continued with no official council action while the town awaits word from the state's public employee retirement agency as to whether the agency will exempt Mr. Danielson from a crucial rule. That rule prohibits Mr. Danielson, the retired city manager of Elk Grove, from working for a single employer for more than one year if he is to receive his pension.
The council sent a letter to the California Public Employees' Retirement System (CalPERS) in December asking for the exemption, and the agency has 60 days to respond to the request. The letter requested that CalPERS allow Mr. Danielson to work up to 960 more hours over the course of the next 12 months, if necessary, and still receive his pension.
The exemption is needed, the letter states, to allow Mr. Danielson to finish "a reformation of the Town's operations in a way that will hopefully lead us from the brink of financial catastrophe. ... It would be a substantial blow to this work in progress if he were forced to leave at the present time."
Mayor Widmer said that, once the council has heard from CalPERS, "we may write a new contract for a specified period of time while we're deciding what to do as far as a search (for a permanent town manager), or we may have a month-to-month (contract)."
One of Mr. Danielson's key tasks as interim town manager was to find a permanent manager. After being named to the interim position, he told the Almanac that his "target time" to complete that task was "somewhere within six months." But before that happens, he said, "I'm hoping we can take care of some of the more difficult things so that when the city manager is hired, we have some things in place."
He was alluding to another critical job the council directed him to accomplish during his tenure: fix the structural budgetary deficit that threatened to leave the town nearly $900,000 in the red that year.
"We have to address the (town's) fiscal shortfall — there's not the luxury of waiting," he said at the time. "We'll be looking for efficiencies," considering options that include contracting out some services, Mr. Danielson said.
Much of Mr. Danielson's year on the job involved restructuring how the town operates, with the layoff of 13 of the town's 16 general employees and the outsourcing of the building and public works departments.
Mr. Danielson did not return the Almanac's phone calls seeking comment, and it is unknown whether he will return his salary from the town, or not receive his pension for the period he was paid, if CalPERS rejects the town's appeal for an exemption to the pension restriction.