$2.58M legal payment violated City Code, say some on Birmingham City Council

By Ariel Worthy

The Birmingham Times

Council President Johnathan F. Austin asks a question about a proposed rental contract during August's Budget and Finance committee hearing. (Frank Couch photos, The Birmingham Times)
Council President Johnathan F. Austin asks a question about a proposed rental contract during August’s Budget and Finance committee hearing. (Frank Couch, for The Birmingham Times)

Some Birmingham City Council members said Tuesday they had serious concerns about a $2.58 million legal payment to C.W. Woods Contracting Services Inc. last month, saying the payment was a violation of City Code.

Council President Johnathan Austin asked the city’s law department why the council was not informed about the judgment. “That is clearly a direct violation of City Code,” he said.

Austin said that the City Code states that any amount exceeding $10,000 for a settlement or consent to judgment must be approved by the mayor and “any five members of city council,” based off Section 2-3-27 of the City Code. Austin said that did not happen.

City officials said there was no violation of that code.

“The payment to C.W.  Woods Contracting Company, Inc. was not paid as a result of a ‘settlement’ or ‘consent of judgment,’” a lawyer for the city said. “The payment to C.W. Woods Contracting Company was the result of a judgment entered by a judge as a result of a jury’s verdict. A judgment entered by a judge as a result of a jury’s verdict is neither a settlement nor a consent of judgment.”

The lawyer further stated, “the city never agreed to settle with C.W.  Woods Contracting and did not consent to the entry of a judgment against the city. Instead, the city was legally obligated to pay the final judgment entered by the court. As a result, the mayor did not violate the City Code as alleged by City Council President, Johnathan Austin.”

Austin said he looked into the matter after receiving a letter from the law department saying that its budget had been exhausted and they could not afford to hire any more lawyers.

“How do you not have any more money and we just approved a new budget a few months ago that gave the law department $3 million,” he said.

Austin said he was concerned that the mayor’s office was not being transparent.

“They should have informed us that they have exhausted all the money … for budgetary concerns, that this is what is going on; this is what we need to be looking at, but they did not inform us,” Austin said.

Austin said he has reached out to the mayor who hasn’t called him back.

“As the head of legislative government you would think we’d have an open dialogue about any issues that may exist with the city, because we have to accomplish whatever is before us and overcome any obstacles or hurdles, but when there is a lack of communication, there is no communication,” Austin said.

City officials said the council was aware of the matter.

“City council gets a monthly budget report (revenues and spending) plus they have total access to the financial systems and can look at any spending for any department at any time,” said the mayor’s office. “In addition, the judgment against the city was discussed at numerous executive sessions (away from cameras and public viewing).”

C.W. Woods Contracting Services Inc won a lawsuit against the city in 2015. The firm had filed a lawsuit in 2013 after being fired from completing construction being done on the West Police Precinct, Fountain Heights Recreation Center, and the Negro Southern League Museum.