Steve Adams files claim against Arroyo Grande

February 14, 2015
Arroyo Grande City Manager Steve Adams

Arroyo Grande City Manager Steve Adams


Less than a month after the Arroyo Grande City Council agreed to pay former city manager Steve Adams a $71,000 settlement, Adams filed a claim of involuntary separation with the city’s insurance carrier.

If the California Joint Powers Insurance Authority approves Adams’ claim, he could receive up to six months’ salary under the city’s executive separation insurance coverage. The claim, which is in addition to the $71,000 settlement already approved by the city, is for approximately $107,000.

If Adams get another job or retires, the monthly payments terminate before the six month period ends.

On Oct. 1, Adams announced his resignation after being the focal point of a summer-long sex scandal. In his letter of resignation, Adams stated that his departure from the city would occur after he participated in the recruitment process for a new city manager.

However, the city council elected to place Adams on paid administrative leave and did not permit him to participate in the selection of a new city manager.

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When the Council came back after closed session where Chuck Hookstran shared the results of the Sintra investigation, THEY SHOULD HAVE TERMINATED FOR CAUSE.

It was too late for their Admin leave. They fired him with the wrong words.

How can so much incompetence reign??


I don’t think this insurance claim is coming out the city of AG’s pockets. (Although it may cause a rate increase.for future similar insurance policies.) The city of AG settled with Adams to (hopefully) avoid any future wrongful termination lawsuits. This insurance was likely known about by those involved (the city counsel members and their legal counsel) the whole time and is a separate payout.

I think the way that CCN wrote this article was pretty unclear and it has caused quite an uproar, when it really isn’t much of anything. It is simply Adams putting in an insurance claim for something that he was insured for.

I am in no way saying that Adams deserves all these payouts, but I think the city will come out ahead in legal costs by settling versus fighting this in court.

Mike Byrd

I’m still trying to understand. If the council had rejected the claim would not the insurance have covered the settlement?


The Tribune article with quotes by Jim Hill seems to explain this better.

Mike Byrd

Maybe I’m trying too hard to equate my private sector experience with the public sector, but it seems to me that the original claim against the city should have been turned over to the insurance carrier. They would have settled for whatever Steve was owed, the city would have saved 70 grand, minus any deductible, and everybody, Steve and the taxpayers alike, would have been dealt with fairly.

Mike Byrd

The city was shafted by its own counsel, pure and simple. I, for one, wasn’t overly upset with the city’s settlement because Steve did a pretty good job for the city for many years (though trying to understand the concept of legal liability for accepting the proffered resignation was a hurdle).

Now we know this was not a settlement and the city attorney knew it, hence no settlement language forgoing future claims. Steve was just sitting back waiting until the city’s check cleared before filing a second claim. This was planned and the city attorney, at best, allowed it to happen or, at worst, was complicit.

The only question remaining for me is, did any or all of the councilmembers know this was coming? I’d like each to go on the public record with their answers.

On another note, if the city council had not offered the “settlement” and Steve had sued, would the city or the insurance carrier have defended the suit and/or been responsible for any resultant award? If the latter, the counsel needlessly flushed 70 grand in local taxpayer money and Steve is walking away with close to twice what he would otherwise have received.


All good points Mike.

I do not believe the new council members were aware of the policy Adams is now seeking to collect on.

Were the three holdover council members aware? They should have been.

Did Carmel know this policy existed, and that Steve would file a claim as soon as the check was cashed for the first claim? ABSOLUTELY!

Who knows how the council would have instructed the city manager to negotiate the first claim had they known Adams would be filing a second? I for one, would like to believe they would not have as generous, had they known they were going to get hit up again.

What next Carmel? Got any other surprises for us? Or have you and Adams exhausted your ways to work the system and rip off the AG residents?


This falls back on the prior council for not handling this matter correctly from the get-go!

The fact that Carmel remains just adds insult to injury. Terminate his contract immediately.

We need to move on from these “nice guys who have done so much good” for our city.

Jorge Estrada

The City of Arroyo Grande needs to see 50 Shades of Grey to learn better contract writing skills.