New London — The City Council on Tuesday night unanimously rejected a request from Mayor Daryl Justin Finizio to transfer $92,500 from an economic development fund to pay for an investigation of Margaret Ackley's conduct as police chief.

Finizio announced at Tuesday night's council meeting that he was nominating William H. Webster - a former federal judge who also served as director of both the CIA and the FBI - to lead the probe of Ackley.

"We are in uncharted territory, since the just cause statutes were passed to protect police chiefs and fire chiefs, none in the state of Connecticut have ever been removed pursuant to those statutes," Finizio said. "Obviously, if we become the first in the state to take action - or not take action, who knows - it is going to be a test case. The city's liabilities in that circumstance could be very significant."

The $92,500 amount was a "high-end" estimate of the total cost for Webster and his team to complete the investigation, and would have been paid upfront as a retainer, according to the mayor.

On July 31, Finizio suspended Ackley, with pay, "pending the outcome of an investigation into her conduct as chief." Finizio said he suspended Ackley because of allegations that she selectively targeted union leaders for discipline, withheld information about the public safety requirements for the Sailfest festival and deliberately failed to assign officers to Ocean Beach Park on the weekend of July 4 "in order to make a political budgetary point."

Ackley's suspension came one day after she filed a request for an injunction against the mayor as part of a pending lawsuit against the mayor and the city that she filed last year in which she claims the Finizio reneged on terms of a new contract he signed. A judge in New London has set a Dec. 9 date for a hearing on Ackley's requested injunction.

Finizio's request Tuesday was not well received by the City Council, which would have to approve the fund transfer in order for Finizio to enter into an agreement with Webster.

Councilors voiced their concern over the cost of Webster's services, the funding source Finizio proposed drawing from and the way Finizio presented his nomination.

"This is a transfer resolution for $92,500 and we found out tonight that it is to hire probably the most expensive investigator in the country, albeit a very competent one," Councilor Michael Passero said. "I'm not sure it is something the city of New London can well afford."

Councilors expressed apprehension in approving a transfer that would take money out of a fund designated for economic development to then be used to address a personnel matter.

"Transferring this amount of money from economic development fund for something not related to economic development is probably not wise," Councilor Erica Richardson said. "There are such better things to do with our funds at this point."

The agenda for Tuesday's meeting contained very little by way of background information. The resolution included in the council's agenda packet listed only "police department" as the reason for the transfer, and councilors were not given more details until Tuesday afternoon, they said.

"I am exceptionally disappointed with the lack of transparency exhibited by the administration on this item. To get this handed to us and his verbal explanation this evening is bad form, to be kind in a public forum," Councilor Martin T. Olsen said. "The item at hand is exceptionally important and needs to be well thought out, and we as a body ought to be given appropriate time to consider something of such importance."

Webster, 90, headed the FBI from 1978 to 1987 and the CIA from 1987 to 1991. He is the current chairman of the Homeland Security Advisory Council.

It was unclear Tuesday night how the mayor plans to proceed with the investigation of Ackley.

c.young@theday.com

Twitter: @ColinAYoung