In August 2023, Hoover City Council members began investigating rising legal fees that were causing budget overages. Their concern and curiosity led to several meetings, which were summarized in an email from City Council president John Lyda to other members.
Lyda stated in the email, “The overage for the current FY will require a $90k budget amendment and we will need to budget additional legal funds for the next FY.”
In 2023, the City budgeted the exact amount they had since 2019, $517,500 for General Legal Services. The actual spending for 2023 was $810,470.
“We experienced much higher than normal bills in June and July due to some special project work, which prompted Wendy to inquire about the billing details behind the invoices. That led to questions about 'special project' billing that did not seem to match the fee arrangement detailed in the 2016 engagement letter,” Lyda explained.
According to Lyda, the questions led to a meeting with two of the City's attorneys, Phillip Corley and April Danielson, a City staffer, and three Councilmen: Khristi Driver, Curt Posey and Lyda, during which they learned some shocking details.
“As it turns out, there was a new engagement letter negotiated between the Mayor and Phillip in August of 2022," said Lyda. "It’s my understanding no one on the Council was aware of this new arrangement, nor was Wendy. It came as a surprise to those in our meeting that a new arrangement had been developed that included a cap on the number of general legal services hours each month for a fee of $515,000. That cap is 150 hours and anything beyond is billed at $295 per hour. I suspect that will come as a surprise to each of you as well.”
1819 News posed questions to Corley and Brocato as well as an open records request for invoices. Corley responded, and the open records request was answered. Corley told 1819 News, “Upon my appointment by the Mayor and approval by City Council, my firm sent a representation letter to the Mayor setting out the scope of representation, which is not a contract. This is customary for legal representation.”
According to the Alabama League of Municipalities, "the mayor cannot change the price fixed by the council without authority from the council to do so. Albany v. Spragins, 93 So. 803 (Ala. 1922).
Corley continued, “The City Council has approved an annual budgeted amount for legal services for each year of my term as City Attorney, and this budgeted amount does not set an hourly rate. We have performed only legal work requested by the City and the Council has considered and approved all amendments to the annual budgeted amount for legal fees. Each of our invoices have been duly and properly approved by the City Council.”
In his letter, Lyda addressed this, saying, “It has been my understanding that we have continued to work on a 'flat fee' arrangement just as we have for the 10 years I have served the city. That is no longer the case and explains, in part, the budget overage we are seeing today.”
1819 News understands from a source with knowledge of the process that at some point in 2023, the way that legal bills were presented to City staff and the council had been changed, dramatically reducing oversight.
As a result of concerns, Lyda said, “Going forward, we requested access to the monthly bills so the Council may monitor legal activity. The plan is to load these bills to a secure FTP site that will be accessible by a defined list of city representatives.”
1819 News has reached out to council members to determine the methods they’ve used for authorizing payments, as not all have access to invoices.
In the 12 days since 1819 News reached out to him, Mayor Frank Brocato has still not responded to the request for comment on whether he believes his actions were done in a transparent way.
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