Malibu is facing a de facto bankruptcy if they lose a lawsuit brought by environmental groups claiming that the city allowed polluted water to drain into a protected area. Facing a potential $105 million in damages, the city has decided to dip into its reserve accounts to appropriate more than three quarters of a million dollars to fight the suit.

The decision to spend the money came after the city tried to negotiate a settlement to the suit with the groups, but those efforts came up empty.

Now, instead of the city’s environmental staff working to clean up water issues, they are spending their time preparing for court, a misallocation of resources that one council member says is keeping the city from correcting the very issues associated with this and other lawsuits.

From the Malibu Times:

With a multimillion dollar lawsuit by environmental groups against the city headed for trial in November, the Malibu City Council voted unanimously Monday night to approve an additional $755,000 in funding for legal expenses related to its defense. The lawsuit, filed in 2008 by the National Resources Defense Council and Santa Monica Baykeeper, alleges violations of the Clean Water Act by the City of Malibu and requests damages of $105 million.

Specifically, the lawsuit alleges the city illegally discharged polluted water in the coastal preserve off western Malibu that is designated as an Area of Special Biological Significance (ASBS). It also holds the city responsible for exceeding levels of pollutants in Malibu Creek.

Read the full article here.