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.
“Initially, the attorney cooperated, but halfway through, he sent me an email letter refusing to provide additional invoices or time keepers role confirmations, claiming my requests burdened their staff and town resources and were a ‘disingenuous audit’ of their billing practices,” Earle said.
Instead, she was forced to work with the town’s CFO to get further documentation, who complied. “This review revealed the town overpaid by $321,154 compared to hourly rates: $20,080 (October–December 2019), $84,245 (2020), $74,721 (2021), $42,868 (2022), $21,703 (2023), $70,867 (2024), and $6,673 (January–February 2025),” she found.
Following an executive session, the firm terminated their contract with 15 days notice, refusing to discuss the issue.
Earle said Arnson “approved statements in The Fountain Hills Independent that mischaracterized my review as a ‘self-initiated personal audit’ and ‘witch hunt.’ These claims are inaccurate; my actions were part of my duty to ensure fiscal accountability.”
Arnson told The Fountain Hills Times Independent , “Unfortunately, this once-valued relationship appears to have deteriorated beyond repair. Neither my Firm nor I would continue to work with any client that baselessly accuses us of overbilling or unethical billing practices, especially not under false pretenses, as is the case here. As a result, and by way of this letter, the Firm is providing its notice of intent to terminate its agreement for services with the Town of Fountain Hills, effective May 1, 2025. In the event of changed conditions that resolve the issues described above, we will be happy to revisit a future working relationship with the town.”
The Times Independent asked Earle for a response.
“I raised this issue in an executive session meeting and cannot lawfully discuss the process detail,” she said in a statement that was published in the paper. “However, Mr. Arnson was given the opportunity to respond to the council’s concerns at an executive session next week. He chose to terminate the contract instead of responding to the council’s concerns. Now he is litigating in the court of public opinion which violates his ethical duty as an attorney. It shows his nature and character by the fact he chose to attack me, his client, a councilwoman, and quit rather than address the issue in a future executive session.”
Pierce Coleman also represents other cities and towns in Arizona, so there is concern that the same billing practices may be occurring elsewhere.
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Rachel Alexander is a reporter at The Arizona Sun Times and The Star News Network. Follow Rachel on Twitter / X. Email tips to [email protected].
Background Photo “Fountain Hills” by Bernard Gagnon. CC BY-SA 3.0.
The post Arizona Town Fails to Annually Review Contract with Town Attorney, Resulting in Alleged Unnecessary Overpayment first appeared on The Arizona Sun Times.
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Author: Rachel Alexander
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