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California City Council orders parallel SDI due-diligence probe as forensic audit continues
Summary
Council voted unanimously to request a parallel due-diligence investigation into management of the SDI fund after landowners and the SDI committee raised questions about missing records, liquidity and past investment decisions; staff said additional trade records were provided to auditors and more reporting is scheduled.
The California City Council voted 4–0 on March 24 to request a parallel due-diligence investigation into the management of the SDI (Special Development/Investment) fund, directing staff to pursue answers alongside an ongoing forensic audit.
Council members moved after extensive public comment from SDI landowners and committee members who raised concerns about missing quarterly reports, large unexplained transactions and what they described as inconsistent cooperation from city staff in prior requests. A member of the public told the council that additional trade records had only recently been produced to the committee and forensic auditors and urged expedited reporting.
City staff said they have provided an additional set of trade records to the SDI committee and the forensic auditor and have issued demands for third-party records. The city manager described a timeline for next steps: reconvening with the SDI committee in April, presenting potential SDI improvement projects for FY 26–27 in late April, and producing quarterly investment reports and a proposed statement of investment policy for council adoption.
The council’s motion asks staff to pursue a parallel investigation to provide an independent due-diligence review of SDI fund management and liquidity. The motion passed unanimously, with councilmembers saying the aim is to determine whether municipal code and past practices were followed and to bring clarity to landowners who have raised questions for years.
Public speakers urged speed in producing missing reports and called for clear answers about who authorized specific trades and transfers. Council members emphasized transparency and noted the work will proceed without interfering with the forensic audit already under way.
The council directed staff to return with additional reports and timelines at future meetings; the forensic audit and the new due-diligence review are expected to run in parallel.
