The State Worker

Ex-Vallejo manager’s ironic fight with CalPERS

CalPERS rejected a sweetened pay package for a Vallejo city manager, and a judge agreed, saving $100,000 a year in pension payouts.
CalPERS rejected a sweetened pay package for a Vallejo city manager, and a judge agreed, saving $100,000 a year in pension payouts. Sacramento Bee file

As Vallejo careened toward bankruptcy in 2008, then-city manager Joseph Tanner blamed the town’s fiscal meltdown on high pay and benefits for police and firefighters.

Now Tanner, 66, is on the losing side of an ironic pension fight with CalPERS over whether his retirement should be based on a $300,000 salary that included the cash value of his car allowance and other extras. CalPERS – recently criticized by Gov. Jerry Brown for allowing pay from temporary promotions to count toward pensions – said Tanner was trying to unlawfully pad his pension.

Tanner’s Los Angeles-based attorney, John Jensen, said he doesn’t comment on active litigation. Tanner couldn’t be reached for comment.

But court records indicate that virtually from the moment Vallejo recruited him, Tanner was thinking big-picture pension.

According to Superior Court Judge Shelleyanne Chang’s Jan. 8 final ruling, Tanner earned $170,000 per year as Pacifica’s city manager when a recruiter approached him in 2006 about the Vallejo job.

He wanted a “substantially higher salary than Vallejo was offering for the position,” Chang wrote in her decision, “at least $300,000” that could be counted toward his CalPERS retirement. Vallejo paid its former city manager $198,000 per year.

The two sides agreed that Tanner would start as “interim” city manager earning $216,000 per year plus extras: car allowance, deferred compensation, a leave allowance and more. The contract provided that the roughly $90,000 in extras would “convert” to “base salary” when Tanner became permanent city manager. He started work Jan. 8, 2007.

The city forwarded the agreement to CalPERS for review. The fund sent back a Jan. 26, 2007, letter that said the law excludes the extras from pension calculations.

CalPERS “educates” employers about pension law and “most of the time they agree with us,” CalPERS spokeswoman Rosanna Westmoreland said.

“When shown the letter,” Chang wrote, “(Tanner) told Vallejo staff to ‘fix it.’ ”

In March 2007, the City Council approved a contract that gave Tanner an annual $305,844 salary. The conversion terms were gone.

As Vallejo slumped into bankruptcy, Tanner was out front criticizing public safety pay and benefits for contributing to the city’s financial straits. He resigned in 2009, filed for his CalPERS retirement and claimed it should be based on the second contract.

CalPERS didn’t go for it. The higher salary still included the excluded extras, even without explicit terms. Tanner’s pensionable salary, the fund said, was more like $247,000.

Chang agreed with CalPERS, saving the retirement fund nearly $100,000 per year in payments.

And Tanner, who for a brief moment was a central figure in the debate over public pay and pensions, will have to make do with his retirement of $216,000 per year.

Call Jon Ortiz, Bee Capitol Bureau, (916) 321-1043. For more columns, go to sacbee.com/stateworker.

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