Staveley suddenly resigned Monday, saying he's unhappy with the Council's plan to reduce police staffing to help balance the budget.
A City Council meeting was slated for Tuesday to vote on a budget that could include the reduction of the police force by eight, which would bring it down to 131 officers. The Council stressed they are not reducing patrol officers. They are also asking non-sworn employees to work five days a week, 8 hours a day, instead of four 10-hour days.
"We are running out of cash in the city," Councilman Jim Righeimer said. "Last year we were down to less than $5 million cash in the bank."
Last March, the city issued notices to more than 200 workers in 18 departments letting them know their jobs could be gone after six months due to outsourcing.
The union for Costa Mesa's employees issued a study that it says identifies more than $26 million in reserve funds that could be used by the general fund to protect city services and save jobs.
"It's very clear to me that there is no fiscal crisis in the city of Costa Mesa," Staveley said in his letter.
"Chief Staveley has confirmed what we've been saying for a long time: the budget numbers seem to be more about politics than about the actual budget," said Jennifer Muir of the Orange County Employees Association.
Staveley, a veteran officer who took over as the city's interim police chief three months ago, said he has placed Cpt. Les Gogerty in charge of the department temporarily.
In a statement, Costa Mesa Chief Executive Officer Tom Hatch said he is "shocked and saddened by the unprofessional letter" by Staveley.
"If he has some unethical behavior he needs to tell us right now what that is," Righeimer said. "I've never seen such an unprofessional exit in my life."
Hatch said he hopes to hire a permanent police chief in the next few weeks.
The Associated Press contributed to this report.