November 26, 2012 Tom Bakaly City Manager City of Hermosa Beach 1315 Valley Drive Hermosa Beach, California

Dear Mr. Bakaly, We write this letter to express our deep concern over potential implications that recent criminal allegations involving the City’s Treasurer will have on the safety and integrity of our financial system and investments. We understand these allegations are under investigation and applaud your decision to invite the LA County Sheriff’s Department, a third-party agency, into the City to handle them. Nonetheless, consistent with our sworn duty of financial oversight and in an abundance of caution, we propose acting swiftly to ensure – and demonstrate to the public and our financial partners – that the City’s funds and financial operations have not and cannot be jeopardized by this development. In particular, we request that an emergency resolution be placed on the City Council’s November 26, 2012 agenda that suspends the Treasurer’s authority to manage the City’s assets or unilaterally assert control over City Staff or City funds until such time as the authorities have completed their investigation of the matter, and an audit of City funds has been completed. In the interim, you and your deputy should temporarily be responsible for these duties. Further, we request that, at the same meeting, City staff provide a comprehensive briefing to the City Council explaining what has and can be done to implement proper protocols and other protectionary devices that guarantee the safety of our financial systems.



Initiating a swift and public review of our current standing is in the best interest of the City, the public, and the continued credibility of the Office of the City Treasurer.

Sincerely yours,

Patrick Bobko, Mayor Pro Tempore Michael DiVirgilio, Councilmember

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