FEMA disallows $2.7 million in Atascadero relief funds

July 11, 2013

atas city hallThe Federal Emergency Management Agency (FEMA) is asking the city of Atascadero to return $2.7 million in funding it received illicitly following the 2003 San Simeon Earthquake.

In April 2012, nearly eight years after the San Simeon Earthquake damaged the Printery Building and Atascadero city hall, the Office of the Inspector General (OIG) recommended that FEMA ask the city to return $8 million in relief funds because of issues with conflicts of interest and unsupported requests for monies.

FEMA officials, however, elected to take action on two of the four funding issues mentioned in the report.

OIG investigators found numerous unlawful acts in the city’s use of funds to transform a former bowling alley into a temporary city hall building while the former city hall was slated to be renovated. In addition, city officials blended their redevelopment staff and city staff, creating a conflict of interest, the report says.

“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 addition, FEMA agreed that cost to one project had been overcharged by $1,312.

Atascadero has until Sept. 2 to submit a written appeal that is required to include what federal law, regulation or policy supports its keeping the funding.

Mayor Pro Tem Brian Sturtevant said the Atascadero City Council disagrees with the investigator’s determination and that city plans to file an appeal.

“We are greatly disappointed to learn that FEMA has reversed its long-held commitment to the city for temporary relocation assistance,” Stutevant said. “The city followed the proper channels and relied on the approval received from FEMA. It is unfortunate and frustrating that we are now seeing a reversal of this decision.”


Inline Feedbacks
View all comments


Thanks for the reference to Flim Flam Man. I Googled and YouTubed the movie and really enjoyed the info and video clips

As related to the Kelly Gerhart fiasco and the FEMA fiasco, here are a couple of YouTube clips that explain it pretty well The relevance of the first link/clip starts at about the 8:04 mark and it continues through the 2nd link/clip.

This is pretty much what happened in SLO County, particularly the North County …. and with full cooperation with the politicians and muckity mucks.



Looks like another Stockton in the making, but is this anything new ?

Smiley, that was a great movie. Sad thing is that Wade fled before the residents of Atascadero could catch him and tar and feather him. Now he is out in the Desert making plenty of money to pay those attorney’s that will have to defend him. Now the City of Atascadero just promoted the idiot finance director to the City Manager’s position. Doesn’t anyone realize that she signed the checks wherein funds were misused. She is just as guilty as Wade and now we are all paying here the big bucks. Time to recall the council and fire all top management, since they all were a part of this scheme that we will now have to flip the bill for.

Reminds me of the opening scene from “The Film Flam Man” and George C. Scot is running like hell thru the bushes dragging his suitcase full of snakeoil bottles just before he is caught and tarred and feathered by an angry mob…