The City Council voted Jan. 18 to extend Mr. Danielson's contract until Jan. 3, 2013, at the same monthly salary of $15,000.
A state Public Employees Retirement System (CalPERS) rule prohibits a retired public worker from collecting a pension after working a specified number of hours up to one year for another public agency — a threshold Mr. Danielson, a retired city manager, has crossed during the past year.
The council sent a letter to CalPERS asking for an exemption to that rule, but the agency has not yet responded.
Mr. Danielson has not returned the Almanac's phone calls for comment as to whether he will return the town's money, or forego his pension, if CalPERS rejects the appeal for an exemption.
Mr. Danielson asked the council for authority to spend up to $25,000 for a recruitment firm to find the town's permanent manager. At the urging of Councilwoman Kathy McKeithen, the council rejected the idea of hiring a firm — at least for now.
Ms. McKeithen said the council has had better luck in recent years when it conducted its own search for a town manager and a town attorney, rather than hiring a search firm. She convinced the council majority to go that route.
The council voted 4-1, with Mayor Bill Widmer dissenting, to authorize spending of up to $10,000 to launch its own recruitment effort. Mr. Widmer could not be reached for comment.
That direction may change, however, if CalPERS rejects the town's request, and Mr. Danielson decides to resign. When Mr. Danielson was hired in January of 2011, one of his key duties was to help the town recruit a permanent manager.