Less than 12 hours after one of the most controversial Stockton council meetings of the year, Vice Mayor Jason Lee on Thursday formally requested a state audit of Stockton’s finances, escalating a conflict that began the night before, when the City Council unanimously voted to forward concerns over the potential misuse of public funds to state and county investigators.
In a Thursday morning press release, Lee said the unanimous vote shows a “shared commitment to ensuring that taxpayer resources are governed with the highest level of integrity and responsibility.”
He added that fiscal accountability and transparency “are obligations we owe to every resident of Stockton.”
A unanimous vote after explosive debate
The request came on the heels of a turbulent special meeting Wednesday night, called to examine allegations that former interim City Manager Steve Colangelo promised nearly $1 million in city funds to Service First of Northern California as part of a state behavioral-health grant without council approval.
Lee argued that the letter, issued under Colangelo’s signature, could set a “dangerous precedent” by allowing staff to commit taxpayer dollars outside of public oversight.
Not everyone agreed with Lee’s approach. Councilmember Brando Villapudua accused him of trying “to defame, to slander, to tear down” Colangelo. Service First president Vernell Hill Jr. pushed back, telling the council, “I completely reject any suggestion that Service First or myself has done anything unethical or improper.”
Despite the tense exchanges, the council voted 7–0 to refer the matter to the California Attorney General, the San Joaquin County District Attorney and the county’s Civil Grand Jury.
Residents questioned council absences
Public frustration also boiled over regarding the failed Nov. 6 special meeting, which collapsed after Mayor Christina Fugazi and three councilmembers did not attend, preventing a quorum.
“When there’s a committee and people don’t show up, that’s kind of scary. It kind of says, where’s our representation?” resident Diana Buettner said. Another resident, Tamica Small, asked, “One has to wonder, was it coordinated? It certainly looked that way.”
Former Councilmember Ralph Lee White defended the mayor, telling her, “I think you’re doing a damn fine job.”
Lee’s audit request: warning signs of “renewed fiscal crisis”
In his formal letter to the State Controller’s Office, Lee said the city is facing “serious concerns regarding fiscal stability,” citing long-standing vacancies in key financial positions and internal control failures he believes put Stockton at risk of “a renewed fiscal crisis.”
He pointed to five areas requiring immediate state review, including unauthorized commitments of public money, improper procurement practices, fraudulent or unapproved budget modifications, payroll errors totaling hundreds of thousands of dollars, and hiring practices he described as inconsistent with established policy.
The city, he wrote, has operated for more than a year without a chief financial officer or procurement director, a situation he described as “comparable to a bank with the back door left open and no one watching it.”
A second confrontation: mayor proposes investigating Lee
Wednesday night’s meeting erupted again when Mayor Fugazi introduced a separate item to create a temporary ad hoc committee to investigate what she described earlier as Lee’s “hostility” toward staff. The proposal offered no written complaint, evidence or defined scope, according to Lee’s press release.
Councilmember Mario Enriquez objected, saying, “All I see is a whole lot of nothing.” The City Attorney told the council she had never seen such a process initiated without documentation in her 10 years with the city.
The committee passed 4–3. Lee later responded he “will not be participating in any political witch hunt.”
With multiple investigations now underway and a state audit request pending, city officials and outside agencies will determine next steps in the coming weeks.
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