Trussville Redevelopment Authority reports possible violation to the Alabama Ethics Commission
By Erica Thomas, managing editor, and Scott Buttram, publisher
TRUSSVILLE — The attorney for the Trussville Redevelopment Authority (TRA) has contacted the Alabama Ethics Commission about a possible violation by a member of the TRA following questions raised during an interview with The Trussville Tribune after the authority’s May 7 meeting, according to a written statement from Rick Stotser, of Massey, Stotser & Nichols.
The TRA is a separately incorporated body charged with revitalization and development of the downtown business district, according to the city’s website. The authority works to promote trade, commerce and employment opportunities.
TRA received $1.5 million in funding from the city council in 2018. The city has also conveyed real estate assets to TRA to lease or develop with the intention of bringing in business to the downtown district.
Following an open records request by the Tribune, questions were raised concerning a contract executed between the TRA and a former TRA board member.
Concerns were first voiced after real estate agent and board member Kevin Sargent resigned from the board and was hired by the board to handle real estate matters. According to the meeting records from June 19, 2018, Sargent resigned from TRA and signed a contract with the board on the same night.
Sargent has retained former judge John Amari of Amari and Gray to represent him since the city contacted the Ethics Commission.
“I have advised Mr. Sargent to refrain from making any public comment while a review may be ongoing,” Amari said in a written statement. “However, I can confidently say that while volunteering as a board member on the TRA and working under contract, Mr. Sargent was diligent in performing his duties ethically, professionally, and with transparency. At all times, Mr. Sargent carried out his responsibilities with the City of Trussville’s best interests in mind. When this issue was brought to Mr. Sargent’s attention, he and the board mutually agreed to terminate his contract. Mr. Sargent is fully cooperating with any review and is confident his efforts to improve the City of Trussville will be apparent.”
It all started with a special-called meeting on the night of Tuesday, June 19, 2018. Board members Kevin Sargent, Ian Maddox, Matt Phillips and Diane Poole met in an upstairs conference room at Bryant Bank. Also in attendance in an official capacity were attorney Chesley Payne, secretary and treasurer Robin Wilkins, city of Trussville inspector David Arnett and city council liaisons to the TRA, Alan Taylor and Perry Cook.
First, the authority held a workshop. Things discussed included zoning, updates to Trussville Office Park and the future of the former Borella Auto building. During the special-called meeting, the board discussed grant applications from several businesses.
Board member Diane Poole then made a motion to adjourn into an executive session. Councilman Taylor and Councilman Cook were invited to stay and listen in on the executive session. The motion to enter executive session was seconded by Kevin Sargent.
According to the minutes from the meeting, the reason for this meeting was to discuss a contract. The minutes did not specify what contract or the nature of the said contract.
Following the executive session, the board resumed the special-called meeting and Sargent submitted his resignation from TRA. The board then approved a contract with Sargent Realty Consulting, LLC., which Sargent signed and dated June 19, 2018.
According to Dennis Bailey, who serves as attorney for the Alabama Press Association and was instrumental in drafting the Alabama Open Meetings Act of 2005, meeting in executive session to discuss the contract may be problematic.
The act strictly limits the reasons a government body may call an executive session. In fact, there are only nine statutory reasons set forth in the act for which a body is allowed to call an executive session.
Bailey said the TRA did not trigger an exception that would have allowed an executive session, especially with Sargent present.
“The exception did not apply to a contract to hire a real estate agent and even if it did, it would not apply because a member of the body was involved,” Bailey said. “All discussions about this contract should have been in public.”
During an interview with the Tribune on Tuesday, May 7, questions were raised concerning the contract between TRA and Kevin Sargent. Upon being asked when the TRA discussed the contract with Sargent, Board Chairman David Morgan initially said the contract was likely discussed in an executive session. Although attorney Chesley Payne insisted Sargent resigned before discussions on hiring him, that is not reflected in the minutes of the two meetings prior to Sargent resigning and the contract being signed.
“After Kevin resigned, then the board met separately without Kevin and discussed the terms of the agreement, various proposals, things of that nature,” Payne said. “…Typically, the way it would work is we would approve the terms and then draft the agreement, itself, according to those terms.”
Board member Ian Maddox said he remembers discussing the contract with Sargent on at least two occasions.
“If they aren’t in the minutes, they had to be in executive session,” Maddox said.
A review of board minutes dating back to March 6, 2018, revealed no mention of any public discussion of a possible contract with Sargent.
Kevin Sargent resigned immediately following the executive session on the night of June 19, 2018. He signed the contract to provide real estate services for TRA on the same night, according to board minutes.
Attorney Payne said that during the hiring process, there were never any concerns about possible ethics violations because he said he was sure to advise Sargent to resign before taking a job with the TRA.
Sargent Realty Consulting was charged with managing lease tenants of TRA, supervising TRA property, helping the TRA prepare property for development and finding property that could be developed.
Sargent said he had experience in commercial development. Before being contracted by the TRA, he had dealings with Alabama Outdoors in Birmingham, an optometrist office in Chelsea, Signature Homes in Inverness and several fitness centers in the Birmingham-metro area.
Following a request for a copy of the contract through the Open Records Act, the Tribune discovered Sargent Realty Consulting was contracted to be paid $4,000 a month as a retainer fee. Sargent would also be paid a commission, in addition to the retainer, for selling real estate.
According to Sargent and TRA members, no commissions have been paid during the 10 months that the contract has been in effect.
Morgan said the board did not consider putting the job out for bid because it was following past hiring routines and practices. Attorney Payne pointed out state law did not require that specific job to be put up for bid.
Attorney Hugh Evans, who served as the general counsel for the Alabama Ethics Commission for 22 years, said anyone appointed by the city council would be considered a public official.
“They are a public official if they are either elected or appointed at the state, county or municipal level,” Evans said. “As your members are appointed by the city council, that makes the development board a governmental entity and it makes them public officials.”
Evans said the move could be a violation of the Revolving Door Act that was put in place in 1995 to prevent somebody from being able to personally profit from a decision they made while on a board.
“They can’t resign from the board, (then) go to work for the board; they can’t contract back with the board for any reason for a period of two years,” said Evans. “The contract may have been okay, depending on the contract, if they had waited the two-year period.”
During The Trussville Tribune’s interview with the board on May 7, 2019, Attorney Payne said the Revolving Door Act does not apply to the TRA board.
“They are not public officials,” Payne said. “This has been confirmed with the Attorney General’s Office. They are not public officials per se, even though each and every member of this board has undergone ethics training for public officials, voluntarily.”
According to the Ethics Commission, as of May 2, 2019, board members Kevin Sargent, Ian Maddox, Matt Phillips, Diane Poole and Heath Buckner had completed the online ethics training course.
Trussville City Attorney Rick Stotser said after The Trussville Tribune asked the TRA board about the hiring of Sargent, his contract was canceled pending a response by the Alabama Ethics Commission.
“At the Tuesday, May 7, 2019, regularly scheduled board meeting of the Trussville Redevelopment Authority (TRA) a question was raised regarding the TRA’s engagement of a real estate consultant which occurred in June 2018,” Stotser said in a statement. “Prior to entering into the contract, the matter had been subjected to review by the TRA’s legal counsel. Its legal counsel determined statutory authority existed for the TRA to engage a real estate consultant.
“Following the question raised at the May 7th meeting, the TRA’s legal counsel conducted another review. It was then determined that a potential issue may have existed- unbeknownst to the Board or the consultant. The TRA’s board instructed its legal counsel to contact the Alabama Ethics Commission on May 8th to bring this issue to its attention,” the statement continues. “Additionally, out of an abundance of caution, the TRA’s board and the consultant mutually agreed to cancel the consultant’s contract pending guidance from the Ethics Commission. The Ethics Commission is currently reviewing the matter. Once the Ethics Commission has completed its review, the TRA will evaluate the Commission’s findings to determine how it should proceed.”
“All parties stand ready to assist the Commission in its review of the potential issue,” Stotser said.
Attorney Evans said only a member that received a benefit would have exposure to a possible ethics violation.
“Under the ethics law, the personal gain has to be limited to yourself or a family member or a business you are associated with,” said Evans. “So, if any of the other members had business dealings with this guy where they would benefit, then quite possibly. But just helping a friend, unfortunately, doesn’t fall under there.”
Evans said that the statute of limitations for an ethics violation can be two or four years.
“For ethics violations, it’s four years,” Evans said. “A misdemeanor has gone up to two years. We always approach things as they are probably a felony with Revolving Door, which would be four years statute of limitations. Sometimes as the facts develop, it may end up being a misdemeanor or a prosecutor could proceed with it as a misdemeanor. But I would travel under the assumption of four years statute.”
Trussville Mayor Buddy Choat said if mistakes were made, they were unintentional and that city leaders would work to correct any errors.
“I was made fully aware of this last Wednesday morning,” Choat said. “It was reported to the Ethics Commission by the TRA counsel at the direction of the TRA board.
“I can assure everyone that the volunteers serving on our Redevelopment Authority were acting on the advice of counsel. If any mistake was made, it was an honest mistake, and the TRA will correct it. The character and commitment of these volunteers and their counsel is outstanding and very much appreciated.”
As for deals made by Sargent Realty Consulting, Kevin Sargent said that in the first 10 months of his employment for the board, he has completed a deal to bring more parking to the city’s new entertainment district by connecting a private developer with a downtown property owner.
“Without that private developer coming in and buying a strategic piece of property, we couldn’t have added additional parking to what we were looking at,” Sargent said. “Now that developer is looking at multiple properties, so purely that networking is one of the pieces I do.”
In a regular meeting on Tuesday, May 7, 2019, Sargent said he still had ongoing projects that he has been working on for months.
“There are several things we just had to get going for the first months because it was all so new,” Sargent said. “We were trying to figure out the direction we needed to go.”
Councilman Taylor expressed his pleasure with the job that members of the TRA have done.
“We’re extremely pleased with you guys and what you’ve done and the progress we’ve made,” Taylor said. “I don’t think it’s any accident that the interest we have in Trussville is the result of all your work.”
Maddox, a downtown business owner who has served on TRA for the last few years, said he values the opportunity to serve the community.
“I think there is great satisfaction in being able to use your professional skills, your passion for the city, for the community, to facilitate, to be a member of the TRA,” said Maddox. “I think just being able to contribute back to your town where you live, to be able to have a voice, to have influence in what comes down here is just wonderful.”