CalPERS VS The City of Fullerton
The Fullerton City Council met behind closed doors on December 2, 2025, to discuss a little-known state enforcement case. The California Public Employees’ Retirement System (CalPERS), which oversees the state’s public pension system, has determined that Fullerton illegally employed several retirees in permanent, long-term positions. If CalPERS’s findings are upheld, the city could face significant financial liabilities—including repayment of pension benefits, backdated employer contributions, penalties, and legal expenses—at a time when Fullerton’s budget deficit is already worsening.
California law allows CalPERS retirees to return to public service, but only in limited situations. Retired annuitants may work no more than 960 hours per fiscal year, must fill short-term or emergency vacancies, cannot receive benefits, and cannot perform duties comparable to those of a permanent employee. Violations typically require the retiree to be reinstated into CalPERS and the agency to pay all missed contributions and potential penalties.
The roots of the issue stretch back to April 27, 2021, when the City Council voted to fire City Manager Ken Domer, with Councilmembers Zahra and Silva opposed. Domer, who had served as City Manager since 2017, was widely respected by staff and community stakeholders. His abrupt removal, just months after Councilmembers Fred Jung and Nick Dunlap took office, shocked City Hall. Several senior employees resigned shortly afterward, describing the firing as unnecessary and destabilizing.
That year saw 50 staff resignations, the highest since 2016. In 2022, when Eric Levitt was appointed City Manager, resignations surged again to 83, the highest on record. The instability not only drove employees away but also made it exceptionally difficult to attract qualified applicants for department-head positions. Instead of addressing these difficulties, the City increasingly relied on retirees to fill key leadership roles.
According to the CalPERS determination, Fullerton employed four retirees in roles central to city operations: Eddie Manfro, Gregory Pfost, Jeff Collier, and Cindy Collins. Their assignments collectively covered City Manager, Deputy City Manager, Director of Parks and Recreation, Director of Community and Economic Development, and Director of Human Resources. It is highly unusual for CalPERS to issue an enforcement action involving multiple retirees across different departments at once. That pattern suggests systemic rather than isolated violations.
Current City Manager Eddie Manfro illustrates the problem. Manfro retired in 2020 and was hired by Fullerton in April 2022 as Human Resources Director under a temporary exemption “until recruitment for a permanent director could be completed.” Three years later, no recruitment had occurred, and Manfro was still running the department. After Levitt resigned, Manfro was elevated to Interim City Manager.
His interim employment agreement contained no reference to his retiree status, and payroll records show that Manfro was not reinstated as an active CalPERS employee until 2025. No contributions appear in 2024 or earlier, indicating that reinstatement occurred only recently. Reinstatement typically happens when a retiree has been performing work inconsistent with state rules, making its appearance here highly significant.
The CalPERS case could impose substantial costs. Comparable enforcement actions have resulted in six-figure liabilities for missed employer contributions alone. Additional penalties and legal expenses could further strain Fullerton’s budget, which has grown from a modest shortfall in 2022 to a projected $9 million deficit by 2028. Cuts to parks, public safety, library hours, and road maintenance are already expected if revenues do not improve.
The City Council has chosen to appeal the CalPERS determination. But publicly available evidence suggests the violations were long-standing, structural, and avoidable.
This is a developing story. Upcoming articles will examine the details of the CalPERS findings, the financial implications, and what the case reveals about years of instability inside City Hall. But one conclusion is already clear: Fullerton is in trouble.
Methodology:
“The City of Fullerton’s closed session agenda listed an appeal described as “In the Matter of the Appeal of Post Retirement Employment of Eddie R. Manfro, Cindy J. Collins, Gregory J. Pfost and Jeffrey W. Collier, Respondents and City of Fullerton, Respondent,” accompanied by an Office of Administrative Hearings (OAH) case number.Upon review, this did not appear to be a typical administrative appeal. The Office of Administrative Hearings serves as a venue for disputes involving state agencies, including CalPERS, which oversees compliance with California’s post-retirement employment laws.Because the agenda item referenced an appeal, this indicated that an adverse determination had already been issued against the City, regarding the post-retirement employment of the 4 individuals.
The employees referenced in the appeal were identified through publicly available records and confirmed to be retired CalPERS members.
To understand the nature of the violations, applicable CalPERS post-retirement employment rules and Government Code provisions were reviewed.
City Council minutes and staff reports regarding the hiring of Eddie Manfro were then examined. These records indicate that Mr. Manfro was hired into a full-time executive role following his retirement.
Payroll records obtained through prior Public Records requests show that pension contributions associated with this employment were not made until 2025, approximately three years after his hiring.
Taken together, these records indicate noncompliance with CalPERS post-retirement employment requirements, which formed the basis of the determination referenced in the City’s closed session agenda.
In summary: there was no disclosure of any information from within closed session. The appeal stated the nature of the violation, the parties involved, and its existence confirmed that an adverse determination had been made. All other informational gaps were filled in with publicly available records”
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Wow thank you for this report. I wondered what was going on.
I knew there was something wrong when CM Domer was fired without cause or explanation by then council majority of Jung, Dunlap and Whitaker. That firing of an excellent city manager cost the city a bundle since Domer’s contract mandated full severance if fired without cause and at the same time the city had to pay the interim city manager’s salary. Then the council voted to hire the unemployed unqualified Danley as interim city manager. Oddly he was put forward as the only candidate for the top position and further put the city in disarray. The city lost a lot of very qualified employees at that time and the hiring of temp workers began. (At least Collier, Pfost, and Manfro had some experience.) But overall, what a series of incompetent decisions and tremendous waste of our money directed by the council majority which I wish would resign. And where was our city attorney while all this illegal stuff was happening?
Excellent article and very well-written. Thank you for digging into this shedding light on it. I wonder how the Dir of Human Resources, of all people, allowed themselves to commit this error.
“ Domer, who had served as City Manager since 2017, was widely respected by staff and community stakeholders.” This the same CM who unilaterally closed a public street without council approval, tried to literally sell city hall to developers, and was in charge when the city wasted a million dollars suing two bloggers who revealed embarrassing information about employees (are they ones who respected him)? How did blowing a million bucks on a fruitless and anti-press lawsuit serve the city’s budget deficit, which city hall, under Domer, only tried to meaningfully address by trying to pass the Measure S tax increase, resoundingly rejected by voters?
Where is the author’s evidence that he was widely respected?
Good story on the CalPERS lawsuit. Too bad it is needlessly tinged with unsubstantiated opinions.
Do your own checking it’s widely known Domer was much better liked than the council who fired him. But that termination cost the city FAR more money than what he spent on your “absurdities”.
Though the city lawsuit against the FFFF blog was a waste of money in my opinion – it was not Domer’s decision and it was not a press freedom case.
In that case the blogger was given the key to the city drop box with files that could be opened by anyone receiving that key. REALLY careless of the city. The blogger opened his own file and then logged out and logged back in using VPN to try to disguise his presence. Then he opened and downloaded the city attorney file that had confidential info in it . The blogger’s error was in not realizing his actions could be traced back to his work computer despite the use of VPN. That info was revealed by a forensic experts report that tracked the activity back to the bloggers workplace computer.
The only way the city could recover damages from insurance from anyone whose social security numbers or other confidential info were taken was to sue. So they did.
The blogger was given the key so did not hack the dropbox – but he also took things he knew were not meant for him.
How was it not a press freedom case? Part of the suit was to enjoin further publication.
Matt – yes- part of the lawsuit was to stop the publication of attorney confidential information taken from the city attorney’s folder – which in my opinion probably should have been made public – though I was not privy to whatever was in that folder – so don’t know for sure.
It does feel as though our city keeps secret some things that should be made public like this current CalPERS issue.
Fullerton is a terrible city to work for. The city manager and director positions are a revolving door, the pay for line staff is abysmal, and the hatred and disrespect for staff from Jung and Dunlap are palpable.
I would like to know where the author of this piece got their information from? Since this was all handled supposedly “behind closed doors”, who was the source?
I recall not long ago this publication being repulsed by information being used without authorization from city hall.
Care to comment on this?
Ed Response: Brian – I don’t understand your last “recall” sentence. Though you are correct the issue has not been made public by city council – the information about the closed session item was on the agenda and that started our reporter off to find what it was about. He wrote the report from the public information that is available which he explains for those interested at the end of the article under “Methodology.” Stay tuned – there will likely be more on this story.