Connected firms reap big contracts in Atascadero

August 18, 2010

Wade McKinney

By KAREN VELIE

Consultants connected to Atascadero City Manager Wade McKinney have profited handsomely from consulting and bond work for the North County city.

Contracts for the work have often gone to consultants listed as associates of McKinney, according to data available through the California City Manager Association website.

Last month, the Atascadero City Council unanimously agreed to take on a 30 year debt plan to pay for its share of repairs to restore its historic administration building.

The payments will increase over the age of the bonds starting at $800,000 and enlarging to $2 million per year. The city is gambling that redevelopment zone property taxes will increase enough to cover the growing payments.

Consultant Mark Curran of the financial firm Piper Jaffray & Co. put together the $16 million to $16.5 million bond package. Curran and Piper Jaffray are slated to make approximately $250,000 for their work on the bond project.

Piper Jaffray has a long history of stockbroker misconduct and breaches of fiduciary duty with 125 complaints of possible securities fraud, according to the FINRA.

In 2009, a Piper Jaffray stockbroker, who spent two years in federal prison for defrauding his clients, filed a lawsuit against Piper Jaffray claiming that his former employer had made a scapegoat out of him to cover for their illegal business practices.

Marcia Torgerson, assistant to the city manager, said that city employees researched Piper Jaffray before hiring the company and that McKinney’s relationship with Curran did not play into the cities selection process.

Curran and McKinney are both on the board of trustees for the California City Managers Association and comments about their after hour socializing are common on the group’s website.

Former Atascadero mayor Mike Brennler said it appears the city is either ignoring prior misdeeds or not doing the proper research before hiring associates of McKinney.

“I certainly question the relationship between McKinney and Curran and I can’t help but worry that Atascadero is going to get the short end of the stick again,” Brennler said. “Having served on the council and seen certain behaviors among certain executive managers and council members I came to realize that deception and self service was the norm in Atascadero.

Dr. Bill Mathis  is another beneficiary of the city payments for consulting work, a manager’s association board of trustee member as well as social comrade of McKinney. The city had hired Mathis to do performance evaluations on the city manager which have lead to significant increases in McKinney’s compensation package.

Mathis had also been hired to oversee strategic planning as well as numerous other jobs which totaled more than $70,000 in 2007.

Atascadero resident David Broadwater discovered and brought to the council’s attention information that Mathis had been double paid for a $6464.90 consulting job he performed in 2007. Torgerson signed off on the double payment.

After the overpayment became public, the money was returned to the city.

Torgerson contends there was not a conflict of interest in the hiring of either Curran or Mathis.

“The city manager has a professional relationship with Mr. Curran and Mr. Mathis, sees them at meetings from time to time, and there is no conflict of interest,” Torgerson said. “Staff interviewed several firms to provide financial and legal assistance for the bond issuance.”


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20 Comments

  1. lockjawbulldog says:

    And how about the contracts handed out in the building of the ” temporary” City Hall after the earthquake closed the rotunda. Many hundreds of thousands passed out the favorite son contractors and drinking buddies, through circumvention of the competitive advertising- bidding process. The Grand Jury probably missed this one, or doesn’t care but those boys down at the poker clubs have been seen together more than once, arm in arm. And how about the other millions, passed around on various projects around town small and large. Did any one question the construction of that corporation yard, hidden back by the tracks that put mucho dinero into the same hands. And that’s just the tip of the iceberg. Keep an eye out on the upcoming renovation of the old city hall. Another great opportunity for the boys.

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  2. lockjawbulldog says:

    Yes, and lets recall the non competitive process that was used on the construction of the “temporary” City Hall Annex, after the earthquake closed the rotunda. Many hundreds of thousands handed out there! Amazing how the drinking buddies seem to have gotten the majority of the work through some ‘process” other than the required advertisement, and bidding requirements. Funny how those two are seen around town booze in hand! I doubt if the Grand Jury has even heard of this one. Then there was the building of that corporation yard a few years ago. ANOTHER well thought out plan to put MUCHO DINERO int he pockets of the boys down at that bar. And that’s just the tip of the iceberg.

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