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Council approves $500,000 appropriation for outside investigation despite reserve concerns
Summary
The council voted 4–1 on Dec. 16 to authorize $500,000 for special legal counsel, a forensic audit and related services tied to an ongoing investigation; staff warned the appropriation could reduce general-fund reserves below the recommended 18 percent.
The West Covina City Council on Dec. 16 approved a $500,000 budget amendment to fund outside legal counsel, a forensic audit and other services tied to an ongoing investigation. The motion passed 4–1, with Mayor Pro Tem Contos voting no.
Finance Director Karen briefed council members that two months of invoices for outside counsel and related services totaled approximately $150,000 and that the requested $500,000 is intended to cover remaining costs through the investigation. She said hourly rates and the scope of services appear to be in line with market norms, but acknowledged uncertainty about how many billable hours the matter will require.
Council members debated the fiscal implications. Mayor Pro Tem Contos and others asked whether the city should tap other funds or limit the appropriation; Finance Director Karen said the requested funds would come from general-fund reserves and that using them could drop the city below its typical 18 percent reserve target by fiscal year end.
City Attorney noted parts of earlier billing were related to litigation (a TRO) rather than the investigation itself and suggested some costs might be eligible for liability-fund coverage; the city manager and legal staff said they would explore that door and provide more detail.
"For just two months we've seen bills amount to about $150,000," the finance director said, adding the $500,000 request was intended to ensure the work proceeds and outside vendors can be paid.
Outcome and oversight: Council approved the appropriation on a 4–1 vote. Several council members asked staff to provide a breakdown of how the funds will be spent (special counsel, forensic audit, other vendors) at the next opportunity. Staff committed to produce a more detailed allocation in future reports and to explore liability-fund coverage where appropriate.
Representative quotes: "I can tell you that I have received two months of bills, and those bills amount to about $150,000," Finance Director Karen said as she explained the requested appropriation.
What to watch next: Staff promised a future report identifying allocation-by-vendor and options for offsetting the appropriation using other funds if feasible; the council recorded concern over reserve levels and demanded greater breakdowns in follow-up materials.
