October 18, 2023

Please see the below statement from the Clearlake Oaks County Water District in response to current and future press releases:

On July 25, 2023, the  District's Board of Directors approved a settlement with the US Attorney’s Office regarding a payment the District received for disaster relief for the February 2017 floods. At the time of the floods, the District submitted claims to its insurer and applied for aid from FEMA. At all times, the District kept its insurer apprised of the FEMA application and FEMA apprised of the insurance claims. At no time did the District conceal or mislead its insurer or FEMA about the actions it had taken in submitting an insurance claim and FEMA application, and the funds were accounted for and reported in the Districts financial statements at every monthly board meeting.

The insurer and FEMA both paid the District for damages it suffered in the flooding. The District believes it informed FEMA of both payments and was waiting for an audit from FEMA to return the funds. The District kept the funds received from FEMA funds in the Local Agency Investment Fund, an investment fund administered by the California State Treasurer’s office. At no time did any District officers or employees receive or benefit from any FEMA funds.

The settlement does not prevent the District from receiving state or federal funding it is otherwise eligible for, and the District continues to apply for and receive grants to better its system and infrastructure.

When the District was contacted by the US Attorney, it fully cooperated in the investigation and provided the documents requested, provided written responses to questions, and participated in interviews with the US Attorney. The District also offered to return the funds a number of times. The District denies that it fraudulently concealed the funds, or that it used the funds in an illegal manner. However, the District determined it was in the best interests of the District and its customers to settle the matter rather that incurring the time and expense of going to trial.

The District regrets that the situation was resolved in this manner, but appreciates and thanks the US Attorney for their professionalism and diligence during the process.