Jul 11, 2013 7:12 PM by KSBY Staff (KF)

FEMA asks Atascadero to return funds given after earthquake

The Federal Emergency Management Agency, or FEMA, is asking the city of Atascadero to return more than $2.6 million.

FEMA gave the funds eight years ago after the 6.5 magnitude San Simeon earthquake in 2003.

The agency now says it mistakenly allocated too much money to the city.

Atascadero received more than $26 million for recovery efforts, debris removal, and construction. The money from FEMA also helped pay for city offices to be relocated after the earthquake damaged the historic city hall.

Atascadero City Manager Rachelle Rickard says the city paid rent to Atascadero's now-dissolved redevelopment agency. FEMA reimbursed that rent. That is the money FEMA now wants back. Rickard says the city is frustrated. "Any process where you can follow their rules, ask for their advice ahead of time and get permission ahead of time, work through their process and then have someone come back eight years later and say, oops, we were wrong. Give us the money you've already spent. It's the wrong process."

FEMA refused an interview with KSBY, but did say in a statement: "It was determined that the facility lease transaction between the city and the city community relocation agency was not an "arms-length-transaction" as required by federal grant law; and, as a result of the audit, FEMA subsequently de-obligated $2,654,978."
Rickard doesn't agree with FEMA's decision.

"We have two appeals; we plan on appealing very strongly. We disagree with this, we're frustrated with the process," Rickard said.

If neither of the two appeals is successful, the city plans to pursue other options like litigation and mediation.

The grand reopening of the historic city administration building is scheduled for August 20th. It has been closed since the earthquake.



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