Atascadero filches FEMA funds, youth center rises on tainted land
January 11, 2008
By KAREN VELIE
Jan. 11 2008
Over the past four years, Atascadero city officials conspired to bilk taxpayers out of more than $4 million in disaster aid to construct a replacement youth center under the guise the previous center had been rendered unsafe during the 2003 San Simeon Earthquake.
Last month, the replacement center, constructed on an abandoned sewer site and gasoline depository, opened its doors to the city’s youth.
City Manager Wade McKinney, Councilman George Luna, and Councilman Tom O’Malley have not responded to repeated queries from UncoveredSLO.com.
Asked if he was aware of the youth center deception, Councilman Jerry Clay replied, “I didn’t know if both [buildings] were being used or just what. But it’s pretty neat; we have both facilities now, a community center and a skate park.”
City officials identified the city’s historic Printery Building as the site of the municipal youth center in their application for Federal Emergency Management Agency (FEMA) funds.
In an April 28, 2004, letter to the Governor’s Office of Emergency Services (OES), city staff requested an “improved project” to build a replacement youth center. The city went on to say, “The youth center is currently located in the … Printery Building that was severely damaged during the San Simeon Earthquake,” the state agency acknowledged the city’s claim in a May 12, 2005, letter to FEMA officials.
However, at the time of the quake, the Printery Building, located at 6351 Olmeda Avenue, was not functioning as a youth center, but as a meeting hall for the Freemasons. The city’s youth center then stood approximately a half-mile away, at 5493 Traffic Way.
Even so, eventually aware the Printery Building no longer served as the city’s youth center, prior to doling out funds, FEMA officials apparently opted to sweep the issue under the carpet and allow taxpayers to foot the bill for the city’s third youth center in 10 years, the latest perched on the remains of an ex-sewer plant and petroleum storage area.
Atascadero’s shell game
So how did city officials pull this off? The youth center’s portability, and the malleability of the federal agency, helped make the sleight-of-hand possible.
Youth center number one began to materialize in 1994, when owners of the venerable Printery Building, the Freemasons, donated it to the city – with the agreement that the city would maintain and renovate the building into a youth center.
Three years later, the still-structurally unsound facility opened its doors to the city’s youth. Immediate concerns surfaced regarding the structure’s condition and the cost of improvements. Following an accident in 1999, resulting in a claim against the city, the council opted to find new digs for the city’s after-school programs.
In 2001, the Freemasons asked the city to return the building due to the city’s inability to abide by its contract with the Freemasons, according to the minutes of numerous city council meetings. In August 2003, the city council agreed, with the understanding that developer Kelly Gearhart would be the eventual owner. (Four months later, when the quake hit, the property was in the final days of escrow.)
Shortly after the city’s abandonment of youth center number one, city officials elected to purchase and transform a one-time animal feed storage building into youth center number two. To fund the conversion, officials used state grants and per capita funds awarded to the city in 2001. (Following the quake, the city morphed the non-insulated aluminum building into an indoor skate park.)
Earlier this month, the city opened the doors to the city’s third youth in ten years, a facility already surrounded in controversy, just like its predecessors.
From 1937 through 1983, the site held a sewer treatment plant constructed of both unlined settling ponds and sludge beds which were simply buried on-site when the plant closed. In 1983, a 500-gallon tank of gasoline was added to the land and the production of used oil and gas began. Testing of the soil prior to the start of the youth center’s construction unearthed numerous carcinogens including arsenic, Aroclor 1260, benzopyrene, and indenopyrene, according to the site’s Human Health Risk Assessment prepared by Mearns Consulting.
Atascadero City Clerk Marcia McClure Torgerson—much maligned for her closed door policy on public records—claimed boxes of files regarding the youth center sites and the Printery Building were lost or misplaced due to the 2003 quake.
Nevertheless, numerous city officials and residents—including Gearhart—provided multiple documents regarding the youth center sites. Gearhart claims city officials asked him to hold off on his purchase of the Printery Building while they attempted to procure funds from FEMA by making the allegation that the structure was an active youth center at the time of the quake.
“I was supposed to close escrow in December ,” Gearhart said. “After the quake I met with [City Manager] Wade McKinney, [Community Development Director] Warren Frace, and [Councilwoman] Wendy Scalise. They asked me to hold off on the close of escrow until FEMA was dealt with.”
Gearhart said the city’s youth center—at the time of the quake—was located at 5493 Traffic Way. ”There is no recourse on the city, they can do what ever they want and there is no recourse on them,” Gearhart added.
During the past seven years, the city’s official description of the Printery Building’s usage has alternated between an active youth center and a hazardous, primarily vacant, structure, depending on the date: pre- or post-earthquake.
One pre-quake city staff report notes, “Because the building is an unreinforced masonry structure, the city virtually never used it for youth purposes and seldom used the building for other purposes.”
Following the quake, City Manager McKinney’s concept of the building appears to have changed markedly.
“The Printery Building has served as the City’s Youth Center for many years and was significantly damaged in the 2003 San Simeon Earthquake,” McKinney wrote in a letter to Gearhart on April 20, 2005.
FEMA’s vapid response
Repeated telephone calls to the FEMA hotline regarding Atascadero’s FEMA claims went unanswered. Eventually, a request to speak to a member of the agency’s complaint department was diverted to FEMA’s public relations machine. No other agency officials are authorized to speak to the media.
FEMA Public Relations official Kelly Hudson eventually agreed, after reviewing numerous documents including escrow papers, that funds had been requested by the city under false pretence.
She then claimed FEMA may have funded the project regardless of the discrepancies. She also asked a reporter to drop publication of the issue, as the FEMA official assigned to project was having problems in his personal life.
(Contacted by UncoveredSLO.com earlier this week, Hudson first refuted, then admitted to, previous conversations with a reporter. Hudson said she planned to deny any comments attributed to her.)
FEMA’s public relation machine’s recorded response states, “We take allegations of waste, fraud, and abuse seriously. To report fraud, call the hotline.”
According to the federal Stafford Act and the FEMA Handbook, which govern FEMA, and its public assistance programs, to qualify for disaster funds, a facility must be actively utilized for an eligible purpose at the time of a disaster. If closed down for repairs, disaster aid is available only if a date to reopen has been set. If only a portion of a building is being utilized, then only that portion is eligible for funding.
At the time of the quake, local children frequented a concrete skate park that stood on the Printery Building grounds, though it was slated for relocation following the Printery Building’s impending escrow. Even though the skate park and functioning youth center were undamaged by the quake, FEMA readily handed out funds to replace the alleged Printery Building youth center.
In addition, facilities under contract to be replaced using non-federal funds do not qualify for FEMA dollars, according to the FEMA handbook. In 2001, the city received $547,000 in state grants and per capita funds to transform the hay and feed building into youth center number two. (Councilman Clay claims a portion of the $547,000 in state funds was used to convert youth center number two into an indoor skate park.)
The FEMA handbook also states that buildings primarily used as meeting halls for religious based organizations do not qualify for public assistance funds. At the time of the quake, the Printery Building was primarily functioning as a Freemason meeting hall.
Freemason’s claim to be a fraternity dedicated to the brotherhood of man under the fatherhood of a supreme being, according to http://freemasonry.org. Every Masonic temple has an alter holding a “Volume of the Sacred Law.” In the United States, the volume is usually a Bible.
In the destructive aftermath of fires, earthquakes, tornados and hurricanes, desperate Americans rely on FEMA to help get their lives back in order. But FEMA itself may need to be rescued.
Nationwide, the program is riddled with fraud, abuse, and scandal. Fraudulent FEMA claims over the past few years have cost taxpayers millions of dollars and produced thousands of court cases. In the past five years, according to Justice Department statistics, corruption cases in New Orleans have jumped 452 percent.
It’s been more than a year since FEMA public relations officials first became aware of the Freemason meeting hall’s youth center disguise. Yet FEMA continues to distribute funds to the city.
Gearhart closed escrow on the Printery Building. Youth center number three opened its doors.And the Atascadero City Council awarded City Manager McKinney a merit raise in recognition of his financial prowess.