Legally, Velez could not take any action, but he allowed the more than 200 residents to speak out.
"We won't be able to have our regular meeting today," Velez told the crowd.
Artiga and seven other Bell executive officials were arrested in September, accused of taking unlawful salaries and illegally procuring excess Bell public money.
"It's in the best interest for the city of Bell that I resign," said Artiga Monday.
Artiga said he's not admitting guilt by stepping down, but notes the ongoing criminal investigation.
Artiga, who is out on bail, said he will continue to serve residents as a pastor.
"The city needs to go through a lot of healing, certainly, and I will be there, as I have been in the past, serving the residents with all my heart, with all my life, to the community, and I will be there," said Artiga. "Even though I'm not a counselor, I will be there as a pastor."
Also arrested and charged were former City Manager Robert Rizzo, 56; former Assistant City Manager Angela Spaccia, 52; Mayor Oscar Hernandez, 63; City Council members Teresa Jacobo, 52, and George Mirabal, 60; and former council members George Cole, 60, and Victor Bello, 51.
Most of the officials have posted bail, but Mirabal and Rizzo remain jailed. Rizzo's attorney filed papers on Monday seeking release on $2 million bail. He cannot be released until convincing the court that his bail money comes from legitimate sources. A hearing on his latest effort to post bail is scheduled for Wednesday.
All eight defendants are charged with misappropriation of public funds.
Rizzo also is charged with conflict of interest and falsification of public records by an official custodian.
The current and former council members were charged in nearly two dozen counts of misappropriating about $1.2 million. District Attorney Steve Cooley said Bell City Council members were collecting salaries for "phantom" meetings that never happened.
City News Service contributed to this report.