They should be looking at seizing all assets and chattels to auction off and recoup what they can.
Except that will never happen, given how public this situation is. That would mean that local government made a mistake, gave money to someone that wasn't worthy (and the public found out about the whole thing or knew from the start) and now that it failed miserably (what the hell do they do with all this money?! $75 MILLION?! Think about that for a second. No way operating expenses went that high. Not a chance. It was wasted, plain and simple) they have to find a way to come out of it without having to resign. Auctioning the assets would be the smart thing, but it will be the last resort...
'Now, we gave you a promise and we are bound by that promise and damn you for asking for it! And damn me for agreeing to it! And damn all of us to Hell because that is exactly where we're going!'