New Fountain Hills Council Member Gayle Earle reviewed the town’s finances after assuming office this year, and discovered that the town may have unnecessarily overpaid $321,154 to their town counsel, Pierce Coleman PLLC by not doing their “due diligence.”
When she brought up her concerns, instead of addressing them, the firm canceled its contract. However, there was a vote in executive session to retain the firm for an additional 60 days.
Earle told The Arizona Sun Times that when she looked over the town’s contract with Pierce Coleman, she discovered that it had not been reviewed in 65 months despite requiring annual reviews.
“I don’t think we did our due diligence by failing to review this contract as required, and perhaps a flat rate contract isn’t the best deal for the town,” Earle explained.
“I commissioned a standard financial audit, as outlined in the contract, which requires the firm to track time and provide monthly ‘shadow’ invoices based on agreed hourly rates,” she said. “The audit reviewed 65 shadow invoices, to compare actual hours worked to the flat rate fee and determine whether the town is saving money or spending more than necessary. I presented documents in the e-session to support this. The review was thorough and focused on ensuring transparency and compliance with the contract.”
She found, “The contract’s flat fee of $234,000 per year ($19,500 monthly) was to be compared against ‘shadow’ invoices tracking hours at rates of $260/hr. (Partner), $235/hr. (Of Counsel), $190/hr. (Associates), $125/hr. (Law Clerks), and $90/hr. (Paralegals) to determine if the fee should adjust.”
By comparing the hourly rates to the totals billed, she discovered the discrepancy.
She asked the firm for more records in emails, including in an email dated April 7.
“As you have indicated that you are unable to provide invoices for years 2019, 2020, and 2021 as requested, I am formally requesting that you provide the annual billing reviews for the fiscal years 2019, 2020, 2021, 2022, 2023, 2024, and 2025,” Earle wrote.
However, after that email, attorney Aaron Arnson stopped cooperating.
