In mid-October, police were contacted by the Office of the City Administrator and an officer began gathering information for the investigation.
Mayor Brad Woodside issued a statement Wednesday saying management undertook its own investigation and asked for police help.
But he says the complaint was withdrawn once the employee resigned.
He says the money is being recouped and there is no loss of revenue to the city.
Police Chief Leanne Fitch says city staff handled the situation in good faith, but there's a need to satisfy the public interest since the complaint relates to public funds. (CKHJ)