The city of Fresno will sever ties with the Fresno Arts Council for the distribution of Measure P money to support the arts.

The decision made Tuesday comes after the FBI and the Fresno Police Department began an investigation into an alleged embezzlement of $1.5 million in Measure P funds by a “long time” arts council employee.

That unidentified employee no longer works for the arts council, said Fresno Mayor Jerry Dyer.

Dyer also said that the amount of stolen funds could be even higher.

Fresno City Council President Mike Karbassi said he was “appalled” at the lack of oversight by the arts council.

“You don’t steal $1.5 million overnight. Any nonprofit is required to follow accounting principles. … The fact that for over a long period of time somebody was able to fleece our taxpayers of $1.5 million or more, it’s unacceptable,” Karbassi said.

The Fresno Arts Council did not have a statement prepared for media. An email to Fresno Arts Council executive director Lilia Gonzalez Chavez was not immediately returned.

A forensic investigation into all Measure P arts money will be conducted by the city, elected leaders said in a statement.

The arts grants are funded by the city’s Measure P 3/8ths of a cent sales tax that is primarily for parks.

City May Have to Use Future Measure P Money to Make Artists Whole

While about 82% of the second round of Measure P arts grants have been distributed, many artists await their grants. Dyer estimates about a $1.1 million shortfall in round two money after the city gets the remainder of the money from the arts council.

Any shortfall may have to come from the third round of Measure P arts money.

“It is the City’s intent to utilize future Measure P funding to make those organizations whole who were owed money by the Arts Council,” the city said in a news release. “How that occurs is yet to be determined.”

Dyer said the city can use litigation to pursue any lost money from the arts council.

The city council on Tuesday held a special, closed session meeting about possible litigation following an announcement last week that the FBI and police were investigating misuse of taxpayer money to support independent artists.

Organizations missing funds can call (559) 621-2999 or email expandedarts@fresno.gov to help ensure they get unpaid funds.

Arts Council Wanted Money Early to Make Up for Losses: Dyer

For the first two rounds of arts grants, the arts council received $9.7 million. Dyer said he believed all of that money was distributed. In October 2024, the arts council received $5.7 million for the second cycle of grants.

In October 2025, the arts council requested a third round of money. However, the city denied that request because the council hadn’t justified the expenditures. Dyer said the arts council was planning on using the third round to make up for losses in the second round.

“We’re very thankful that that request was denied. It’s our understanding that there was a desire to utilize round three funding to offset whatever loss occurred in round two,” Dyer said.

Artists Air Their Concerns

On Monday, about 30 local artists met with Measure P recipients to discuss the future of the grants, said Alicia Rodriguez, co-founder of Labyrinth Art Collective.

Fresno City Manager Georgeanne White and councilmember Miguel Arias took questions from attendees, although Rodriguez said the meeting raised more questions than it answered.

As the city figures out what to do with Measure P arts grants, local artists have agreements for funding to support their projects.

Ashley Mireles-Guerrero, owner the Judging by the Cover, said she received grant money to bring authors to her independent bookstore through an event called Fresno Reads.

Artists receive 90% of funding before an event and then get 10% after the event, Mireles-Guerrero said. For her, that means getting reimbursed for the stipends.

“I know there are some projects that are time sensitive that still have not been funded because they’re tied to cultural events or holidays,” said Mireles-Guerrero, who is worried that she won’t be reimbursed.

Mireles-Guerrero added that many proposals were declined by the arts council even though the artists felt their projects matched Measure P guidelines.

Arts Council Forbidden From Handling City Money Again

How the city will distribute money remains unclear. However, the voter-approved Measure P ordinance language requires that the city partner with the Fresno Arts Council or a “successor agency.”

Dyer said the arts council will no longer be allowed to handle city funds. However, the city may include the nonprofit in deciding members for a future commission — if that is the direction the city takes.

Mireles-Guerrero said there needs to be bias training and more transparency regarding grant decisions.

“There’s a lot of people who have ideas on how to do it. The biggest issue is that there needs to be bias training, there needs to be more transparency, there needs to be clear guidelines,” she said. “If there’s somebody who is able to do that, then they’d be the best people for it.”