Smollett took a plea deal from the prosecutors, this obviously included him pleading guilty. This also included him paying a 10K fine. The problem is that the Chicago police department is actually overstepping their bounds. Their job is to arrest a suspect, gather necessary information and then turn that over to the prosecutors. That is where their power stops. After that it is up to the prosecutors and judicial system to handle the rest.
As for the city trying to get money out of Smollett for the investigation, that's just laughable and they won't get a dime from him. 130 grand is nothing to the city of Chicago and truthfully that's probably a greatly inflated dollar amount for the purposes of the media.