Fullerton Hit With State Case Over Illegal Hiring of Retired Officials

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.

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