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Atascadero appeals FEMA inelgibility finding

November 1, 2013

atas city hallAtascadero officials have filed an appeal with the Federal Emergency Management Agency (FEMA) objecting to a demand that the city return $2.7 million in aid related to the 2003 San Simeon Earthquake.

Office of the Inspetor General (OIG) and FEMA investigators determined that the city’s use of $2.7 million was not permitted because of issues with conflicts of interest. The city redevelopment agency, headed by city staff, leased a building to the city to be used as a temporary city hall.

“This transaction was less-than-arms-length because the same city officials with responsibility to manage FEMA’s disaster assistance funding were executive officers of the city’s redevelopment agency, thus creating a conflict of interest,” the OIG report said. “As a result of this overlap, the transaction lacked independence because city officials were able to substantially influence or control the actions associated with the transaction. Costs incurred under less-than-arms-length transactions are eligible for federal disaster assistance funding only on a limited basis.”

In its Sept. 17 appeal, city officials argue that FEMA had approved the lease knowing the situation and as such it was lawful.

“We relied on FEMA’s advice and approval all these years and now face a significant funding decrease because the very same agency that once funded us has now changed its mind,” Mayor Tom O’Malley said in a press release.

In August, city staff moved into the repaired historic city hall building.


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The city officials had the fiduciary responsibility to ensure that requested FEMA funds were utilized as spelled out in the application. The instructions are clear and concise and if there was ever any question regarding any spending issues, the city had the obligation to contact FEMA PRIOR to any expenditure.


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To be eligible for the funds the building had to be restored, as much as possible, to its original design. It is a registered historic building! I agree that that “this one item makes the least sense.” If FEMA prevails I would think fingers should point at the city attorney for giving bad advise.

It appears that the city gets a free pass on the Printery. Some city staff, orchestrated by McKinney, danced circles around the incompetent FEMA employee.


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This was just one scheme the good ole boys hatched after the earthquake. The owner of the bowling alley was going to sue the city for letting him build too close to the creek, which was eroding the ground under the back of the building. McKinney said let’s have the city move our offices in there and then pay off the owner with FEMA money. Kills two birds with one stone! Then they came up with an exorbitant lease payment of $30K a month to get as much FEMA money as possible, even though the building was pretty much worthless. They also had to spend a $million of taxpayer money to fix the erosion problem, and then filtered the whole thing through the RDA to make it look legit. Oh well, all in a days work for the A-town crooks.


The problem the O’Malley crowd has now is: people know about all this. And FEMA folks may even be reading this comment right now! LOL.


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Will O’Malley be going to Indian Wells too? They are really a pair.


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This is the last thing that I would have thought that the city would be called out on. It’s true that FEMA had to know that the RDA was managed by the same executives that run the city. Of all the items that were questioned, this one makes the least sense to me.


BTW, has anyone toured the restored historic city hall? It’s a lovely building but I think all those tiny, dark, circular corridors make for a depressing work environment especially in comparison to the bright, open, remodeled bowling alley. I’m curious what the staff thinks of their new digs.


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