The City of Marion is describing the Alabama Attorney General’s investigation into $1.7 million in unaccounted-for water and sewer payments as a routine administrative matter, even as the city council met Monday evening with no public discussion of the inquiry on its agenda.
In a statement posted to the city’s Facebook page on Friday, April 4, the city acknowledged the investigation but sought to minimize its significance, calling the subpoena “a request for information” and characterizing the inquiry as “a standard administrative process used to gather information.”
“It is important to emphasize that this is not a criminal investigation, but a review mechanism utilized by oversight agencies to ensure compliance with applicable laws and procedures,” the statement read.
The city said it is “fully cooperating with the Attorney General’s Office” and “actively compiling all requested materials,” but offered no specifics about the $1.7 million discrepancy, the city’s failed audits, or the dozens of categories of financial records demanded in the subpoena. The statement asked the community to “allow the Attorney General’s Office to complete its review.”
What the city did not say is that the investigation was opened under the Alabama Deceptive Trade Practices Act, a consumer protection statute that carries civil penalties and allows the Attorney General to seek injunctive relief. The subpoena is not a voluntary request — it is a compulsory legal demand, signed by Brad A. Chynoweth, Assistant Chief Deputy of the Attorney General’s Civil Division, with a deadline of 10:00 a.m. on April 30 at the Attorney General’s offices in Montgomery.
As the Times-Standard-Herald first reported on April 1, the investigation centers on whether the city collected utility payments from its customers during Fiscal Years 2022 and 2023 and failed to properly track or account for those funds. The Attorney General’s office stated in an addendum to the subpoena that it has “a good-faith basis to investigate whether the systemic failure to account for these consumer payments, or the unauthorized diversion thereof, constitutes unconscionable, false, misleading, or deceptive acts or practices” under state law.
The subpoena was triggered in part by the city’s own audits. Independent financial audits for FY2022 and FY2023, conducted by the accounting firm Banks, Finley, White & Co., could not be certified because the city’s bookkeeping was too incomplete and unreliable to verify. The state is now demanding the underlying records — bank statements, ledgers, transaction logs, and more — that should show where the money went.
The scope of the investigation extends well beyond the $1.7 million. The subpoena demands records covering at least four years, organized into dozens of specific requests including all city budgets, general ledgers, bank statements, canceled checks, payroll records, and wire transfer logs for every municipal account.
It also targets specific transactions previously reported by this newspaper, including approximately $170,000 in ADEM grant funds, emergency borrowing of $150,000 in late 2025, unpaid IRS payroll taxes, an unpaid balance owed to the city’s fuel supplier, demands for upfront payment from water treatment chemical vendors, and an affidavit of insolvency the city provided to a court in connection with a $12,000 civil penalty for illegal dumping.
City Clerk-Treasurer Laura Williams-Hinton responded to the subpoena in a letter dated March 31, one day after it was received, asking for 60 to 90 additional days to comply and citing “limited administrative capacity, including recent staff transitions and ongoing restructuring within key operational areas.” She proposed a phased production schedule and suggested the Attorney General consider “alternative methods of compliance” such as on-site review of records. The response was copied to City Attorney Hank Sanders, Ainka Sanders Jackson, Mayor Dexter Hinton, and all five council members.
The Marion City Council met in regular session on Monday, April 7, at 6:00 p.m. at Marion City Hall. The agenda as released did not include any items addressing the Attorney General’s investigation, the subpoena, the city’s response, or the underlying financial questions.
Meanwhile, the city faces another fast-approaching deadline. The Alabama Department of Environmental Management warned the city in March that $2,475,000 in American Rescue Plan Act funding for sewer and wastewater infrastructure improvements could be at risk if the city did not respond to compliance concerns by April 10.
The city’s characterization of the investigation as routine is at odds with how the Attorney General’s office itself has described similar inquiries. In an interview with 1819 News published last week, Attorney General Steve Marshall discussed his office’s investigation of the Wedowee Utilities Board in Randolph County, where an audit uncovered $1.5 million in operating losses over five years, unpaid IRS taxes, employee bonuses paid as vendor checks to avoid payroll reporting, and missing audit records. Marshall said utility boards and municipal utilities often operate with minimal oversight, making them a focus for his office.
“We’ve seen instances just like we’ve seen city councils and county commissions and other public officials that have either violated our ethics laws or our criminal laws,” Marshall said, describing a pattern of investigations into boards with “little to no oversight.”
While the city’s statement emphasizes that the Marion investigation is civil rather than criminal, the DTPA provides the Attorney General with broad authority. The statute allows for civil penalties of up to $2,000 per violation, injunctive relief, restitution to consumers, and the ability to refer matters for criminal prosecution if evidence of criminal conduct is uncovered during the course of the investigation.
The city’s three pending public records requests from the Times-Standard-Herald, filed beginning in December 2025, also remain unfulfilled. The Attorney General’s subpoena now demands many of the same categories of records the city has yet to produce in response to those requests.
