One of the main themes in the upcoming Hoover municipal elections is transparency. Nearly every candidate is united in calling for and promising more of it.
According to several sitting council members, one area where change is needed is in the City's increasing legal fees, with members offering a clearer view of their concerns and plans to address the issue.
In a September 5, 2023, email from council president John Lyda to the other members of the council, Lyda reported back to the full council on a meeting that included him and fellow Councilmen Curt Posey and Khristi Driver what they learned, saying, "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."
The council learned at that time that Mayor Frank Brocato had entered into a new agreement with Phillip Corley, the City's contract lawyer at Wallace, Jordan, Ratliff & Brandt, via a new "terms of engagement" letter.
A review of the City's legal fees, obtained through a public records request, shows that for general legal services, the actual amount spent has gone up in recent years. The overall fees have also spiked, despite the increases to the yearly budgeted amount.
1819 News contacted all members of the current council and Mayor Frank Brocato to ask about the amended engagement letter for legal services, which resulted in tens of thousands of dollars in budget overages, asking the mayor if he felt it was handled with transparency, and for the councilors' response to the way it was handled.
Council members were also asked about the process they have followed since discovering the issue and their hopes for the future.
Councilmen Derrick Murphy, Khristi Driver, Curt Posey, Sam Swiney and Steve McClinton provided written responses. Councilman Casey Middlebrooks declined to comment. Neither Lyda nor Brocato responded.
One recurring theme was that the second "surprise" agreement between the mayor and the City attorney was not handled transparently, with some arguing it hindered their ability to fulfill their statutorily required role of overseeing the city's contracts and finances.
Swiney gave a simple statement confirming Lyda's statement "that the council was not aware of a new arrangement regarding the legal fees," entered into by Brocato.
Of the decision to change the fee structure, McClinton said, "There was no transparency in that decision. Changing the fee structure without informing or seeking approval from the Council is highly inappropriate and should never have happened. It appears the mayor and the city attorney sought to circumvent the Council entirely, which is troubling and unacceptable."
Murphy stated, "The council should have been notified by the mayor's office earlier about changes in legal agreements."
McClinton, Murphy and Posey explained the prompt actions the council took after being alerted that city staff had concerns about the budget overages. The formation of a subcommittee, consisting of Lyda, Posey, and Driver, has provided access to additional billing information not shared with the council as a whole.
A committee, McClinton said, "has brought more clarity and confidence. But the trust that was once assumed has had to be rebuilt — and that's been a process."
"Hoover taxpayers expect our city to be responsible and accountable with how their dollars are spent," Councilwoman Driver explained. "Our community values clarity, fiscal responsibility, and good governance, and that includes being good stewards of public funds. It's important that city spending reflects those values and is communicated openly with residents."
She continued, "When there's a noticeable increase in legal fees, the public deserves a clear explanation. While some increases may be justified, we also need to ensure our spending remains predictable and aligned with our budget. Given the recent rise in legal costs, I believe it's time to reevaluate how we handle and structure legal compensation for the city."
Corley pointed out that the council approved the bills that came before it, including the overages. McClinton said, "[W]e approve the bills, but we do so based on trust that the details we're being provided are accurate and complete. As I mentioned earlier, the change in fee structure that was done behind our backs makes it clear that trust was misplaced."
The issue extends beyond just billing; it also concerns the council's capacity to ensure that contracts are entered into and paid for legally, ethically, and transparently.
Posey explained, "During my first term (2016-2020), Corley approached the council about the creation of a special projects designation for legal that was designated to deal with larger projects that would eat up the allocated billable hours. This was a fair agreement since some legal work, such as the creation of the IDB, CDA and DRA were labor intensive. The same applies to the small cell ordinance and the creation of the arts council."
He then described, "Where I took issue was the use of the special projects designation to enter into contracts with consultants. Contracts should be approved via resolution. Two examples of contracts that were entered in this manner are the consultant that was hired to investigate the annexation of Indian Ford and the unnecessary Kroll investigation and report. It was no secret that Hoover was interested in the annexation of Indian Ford, so approval of a contract publicly would not have raised red flags."
The Alabama League of Municipalities' "Handbook for Mayor and Council" says, "The Alabama Supreme Court held that, absent authorization from the council, the mayor does not have the authority to enter into and execute a contract on behalf of the municipality. While the Court recognized that the mayor is authorized to enter into and to execute contracts, it determined that the authority cannot be exercised without the direction and authorization of the council. Town of Boligee v. Greene County Water & Sewer Auth., 77 So.3d 1166 (Ala. 2011). Accordingly, the general rule is that the only method by which an employee or official may expend funds or be given authority to bind the municipality to a contract is by an affirmative vote of the council reflected in the minutes. An exception is the mayor's authority to contract for an annual municipal audit pursuant to Section 11-43-85, Code of Alabama 1975."
SEE: Hoover's forensic audit firm confirms off-the-books payment, council authorization
The members who responded were unanimous in saying that change is needed in the future.
"I do think that the next council needs to change the reporting structure to have legal report to them directly. This move would put the decisions surrounding special project designation in the hands of 7 elected officials vs. solely the mayor's discretion," Posey said.
One potential solution was suggested by Murphy, who said, "Looking ahead for next term, I believe we need to consider bringing certain legal functions in-house, particularly for routine employee matters, benefits, and day-to-day operations. Having internal legal staff for these issues would offer cost savings and efficiency."
Recognizing the limitations of an in-house lawyer, Murphy said, "However, it's also critical to maintain a diverse outside legal consultants/city attorney due to the multitude of government needs . No single in-house counsel will have the expertise to handle every specialized area of law. For larger cities like ours, outside counsel will continue to play an essential role."
"I will recommend for next term an organizational structure that places legal oversight directly under the city council. Checks and balances work when they're applied consistently. The efforts we've made so far have stabilized legal costs, but continuing ongoing oversight and structure will be vital to maintaining fiscal responsibility and transparency in the future," he added.
Driver echoed that sentiment, saying, "Given the recent rise in legal costs, I believe it's time to reevaluate how we handle and structure legal compensation for the city."
McClinton said, "I believe residents have a right to know how much we're paying in legal fees, what it's for, and how frequently it's occurring. Transparency is essential for trust."
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