Denton’s city attorney announced his pending retirement amid the disclosure that his deputy authorized thousands of dollars in legal bills without the City Council’s approval.

But City Attorney Ed Snyder said the two developments were “absolutely not” related.

“I’m the one that told the council I was retiring because I decided I wanted to end my career as an attorney and go into something else,” said Snyder, 58, whose retirement takes effect June 30. “It just happened to be right around that same time that this issue [of legal bills] came up. The council was not upset with me over this issue at all.”

Denton businessman Bob Clifton, whose federal lawsuit against the city racked up the legal fees in question, raised questions about the bills during the Feb. 5 council meeting. The city’s contract with an outside legal firm had capped expenses in the case at $75,000, but the city had continued paying the bills as the total approached $200,000.

“I find it unusual that he would tender his resignation so soon thereafter,” Clifton said.

The city’s public information office announced Snyder’s retirement Feb. 29, but he said he broke the news to council members Feb. 5. The city attorney is one of four positions under the council’s direct control, along with the city manager, municipal court judge and internal auditor.

Council members said Snyder, who came to Denton in 1999 as deputy city attorney and became city attorney in July 2005, was not pressured to resign.

“We weren’t looking for scalps on that,” council member Bob Montgomery said. “We were just saying, ‘Don’t do that again.’”

Council member Jack Thomson, who leads the Council Appointee Performance Review Committee, said Snyder has received “very good” performance reviews.

“We have felt and continue to feel that he has performed extremely well,” Thomson said.

Still, Deputy Mayor Pro Tem Joe Mulroy, chairman of the council’s Audit and Finance Committee, said the matter exposed a gap in the city’s system of financial checks and balances. He expressed a similar concern this month about news that the cost of a Denton Municipal Electric building project skyrocketed by more than 80 percent without the council’s knowledge.

“My overriding concern is that our system should be such that it would catch that, regardless of an error of judgment or a plain mistake,” Mulroy said of the legal bills. “So my question would be, how did the checks get written without authorization? I think [the] finance [department] is taking under evaluation their systems.”

Rising costs

Clifton, a fiery City Hall critic and former mayoral candidate, sued the city and two assistant city managers in November 2006. Clifton claimed the city violated his constitutional rights by kicking him out of City Hall after arguing with a city official over his allegations of corruption in the electric department.

A federal district judge dismissed the suit Sept. 19. Clifton is appealing.

The city hired Dallas law firm Figari & Davenport as its legal counsel in the case. Attorney Ernest E. Figari Jr. handled most of the work, charging $450 — and later $400 — an hour.

An analysis of the firm’s invoices and court records shows:

The city continued paying invoices even after the firm’s legal costs exceeded limits prescribed in its contract. Costs exceeded the original $35,000 cap by April 2007, but the contract wasn’t amended until June 6. City Manager George Campbell, who can authorize expenses up to $100,000 without council approval, signed the contract amendment increasing the limit to $75,000. By then, costs had already surpassed $60,000.

The firm did not send an invoice for work performed in May 2007 until well after the city manager approved the increased cap. Costs from May 1 to June 30 appeared on an invoice dated July 26. In contrast, most of the firm’s other invoices are dated the first of the month and include work for one month only. After the July 26 invoice, the firm quickly submitted another bill dated Aug. 1. Figari explained that he was in trial for another case and simply fell behind on his billing.

The firm’s billable costs exceeded the new $75,000 cap on June 19 — two weeks after the limit took effect. However, the city’s legal department did not seek another amendment to the firm’s contract until eight months later, when bills had surpassed $190,000. Snyder acknowledged that council members were ratifying prior expenditures when they approved a new cap of $250,000 on Feb. 5.

The contract required the firm to notify the city if costs exceeded the cap. Figari said he could not recall how or whether he fulfilled the requirement. “I guess the city had notice, of course, because they received my bills periodically,” he said.

In a Dec. 10 court filing, Deputy City Attorney Jerry Drake said he supervised the case and “personally approved” all invoices for payment. In interviews, he described the expense caps as nonbinding estimates. “Nothing about that limit has any bearing on anybody’s authority to do anything,” he said.

Council approval

Snyder said he and Drake provided council members with monthly updates on the legal costs but didn’t realize the costs had exceeded $75,000 until recently.

“It wasn’t on my radar screen, to be honest with you,” Snyder said during a joint interview with Drake. “I personally did not know.”

“When we realized that we hadn’t gone back and gotten formal council approval, we did it,” Snyder said. “We put it on the [Feb. 5] council agenda and got them to approve the new amendment.”

But Snyder later backed away from those comments, saying he and Drake discovered much earlier that the cap had been exceeded. Snyder explained that he made his prior comments based on faulty memory and that Drake did not want to contradict him.

“We both apparently were aware as early as July last summer that the not-to-exceed amount had been exceeded,” Snyder said.

Snyder and Drake said they did not seek to amend the firm’s contract again because they thought the case would soon end, based on a magistrate’s favorable recommendation.

“It drug on longer than we thought,” Snyder said.

However, court records show U.S. Magistrate Judge Don D. Bush did not issue his recommendation in the case until Aug. 15 — a month after Snyder and Drake said they realized the cap had been exceeded.

Drake explained that they had expected the magistrate’s decision.

“The motions had been pending for a long time,” he said. “We had been anticipating that.”

He also said the lag in billing from May 1 to July 26 temporarily obscured how much expenses had risen.

Montgomery disputed the notion that the council received frequent financial updates.

“By the time we got the final analysis it was more than we expected it to be,” he said. “I’m not saying it was unfair or overpriced or stupid. We just weren’t prepared for the final bill to be that great.”

On March 6, the magistrate denied the city’s motion to recover attorney’s fees from Clifton and his attorney. Snyder said the city was considering an appeal.

Legal authority

Clifton and even some council members have questioned Drake’s authority to approve the payments, especially those over what the contract permitted.

“I think that he [Drake] knew the intention of the council … to pursue the matter, but I guess technically he didn’t have the authority,” Thomson said. “It was a case that needed to be defended. Unfortunately, it took a lot more money than I would have thought, but I guess that’s the way it is.”

Drake said there’s a difference between legal authorization and “managerial authorization.” Despite questions about whether the council should have approved the extra costs sooner, Drake said he always had legal authority to approve them.

“I do not agree with the characterization that the contract terminated once that [$75,000] threshold was crossed,” he said. “And as far as any issues that could be argued about it, once the [council] ratification took place, those issues are legally resolved at that point in time, to the extent they existed at all.”

Campbell said a lawsuit doesn’t stop simply because a lawyer’s payment cap is reached.

“It doesn’t keep the expenses from being incurred,” Campbell said. “Clearly they have to be paid.”

“Technically yes, there may have been a breakdown in the formal process, but I don’t think there was a breakdown in the intent or spirit of the contract itself,” he said.

Snyder described the problem as an “oversight” in the legal department. The department reviewed and approved all invoices and sent them on to other city departments to issue the checks, Snyder said. But employees outside the legal department likely were unaware of the contract’s spending parameters, he said.

“That’s probably a flaw in the system,” he said.

Snyder said no one had been reprimanded.

“There was no need for reprimands,” he said. “It was just one of those honest things that fell through the cracks, and we resolved it.”

Other questions

Clifton also raised other questions about the contract, saying invoices showed an extraordinary amount of communication between Figari and Drake. In court filings and before the council, he also questioned why Figari did not itemize certain expenses.

“These are padded timesheets,” he told the council.

Snyder called the charge “bogus.” Figari also defended his billing practices.

“I absolutely have not … padded my bills,” Figari said. “If anything, I’ve given the city every break in the world.”

The city originally agreed to pay Figari $450 an hour, which the lawyer said is below his standard hourly rate of $525.

Figari said he voluntarily dropped his hourly rate from $450 to $400 last year because he “felt sorry for the city” that the case had taken so long.

He described his frequent communication with Drake as routine.

“An outside trial lawyer like myself usually has a point of contact within a corporation or municipality,” Figari said. “I would say the communications about this case, there was nothing that made them extreme.”

Snyder said he found it ironic that Clifton was complaining about legal costs. Clifton’s suit was one of three he filed against the city in 2006 — all of which he ultimately lost. The other cases dealt with access to city records and the legality of a charter amendment election.

“He’s the one that caused us to have to expend this money,” Snyder said.

LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com.