Citing “defamatory statements” made by members of the Flagstaff City Council, the city’s consultant is no longer working on the study of its minimum wage.
Jim Rounds, President of Rounds Consulting Group, sent a letter to the city on Friday stating the company would deliver the preliminary findings from the study and then terminate their contract.
“The council had a significant number of defamatory statements against myself and my firm that were not based on any facts,” Rounds told the Arizona Daily Sun. “That was very frustrating to watch given that we were still working on the study and our reputation, if they had done research, speaks for itself.”
Members of the council and the public had questioned whether Rounds Consulting would be biased after it was linked to the libertarian Goldwater Institute.
Rounds said he doesn’t want to raise the allegation of defamatory comments to the courtroom, but said councilmembers need to be careful about the statements they make regarding himself and his firm.
“My bottom line is that they need to shut up,” Rounds said. “They need to stop with their comments about myself, Arizona State University, my firm [and] other organizations that are just trying to help.”
Mayor Coral Evans said she was disappointed to hear that Rounds Consulting was pulling out of the contract, but said she understood why Rounds made the decision.
Evans said the council should have waited to see the documents before making remarks about potential bias within the study and called the fact that councilmembers did otherwise “ludicrous.”
Meanwhile, Vice-Mayor Adam Shimoni said he was glad to hear Rounds was ending their involvement with the study. Shimoni added continuing with Rounds Consulting would not have been the right way for the city to go.
In response to Rounds characterizing some of Council’s comments as defamatory, Shimoni said councilmembers have one job to do and that is to represent the community.
Shimoni said in the political arena, something like the connection to a libertarian leaning organization such as the Goldwater Institute is going to come up, especially when dealing with something as contentious as the minimum wage.
Rounds Consulting won the contract to study the effects of the minimum wage law in Flagstaff in October 2019.
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But in December, the fact that Jim Rounds is a Goldwater fellow raised questions for some as to whether the study produced would be biased against the city’s minimum wage law.
But Rounds said that assertion was ridiculous and said it was simply an honorary title.
Evans said she generally agreed with Rounds on the account.
“I have three different fellowships,” Evans said. “That doesn’t mean I directly align with everything each one of those institutions is involved in. That does not also mean I cannot be objective when I am looking at something outside of those three institutions.”
Rounds said he was also disappointed when the council decided against bringing the Seidman Research Institute, from Arizona State University, onto the study.
After questions of bias around the study first arose, the mayor suggested the addition of a second research group to also work on the study.
Evans said a second independent research group may have led members of the public and the council to have more confidence and trust in the results of the study.
So Rounds said he was surprised when the council then questioned whether the Seidman Institute would be biased and decided against bringing on the institute during their Jan. 7 meeting. Rounds added they had gone out of their way to bring Seidman on and were ready to redirect money to Seidman.
“I’ve been doing this for 25 years. I have never exited a project before,” Rounds said. “I have dealt with the best and the worst politicians at the state, county and city level and I have never experienced anything more egregious than the manipulation by this council on a particular public policy item.”
Because the contract ended early, the letter from Rounds Consulting outlines that although they have completed $44,500 worth of direct work, the city will only be charged for $39,900.
Additionally, Rounds said as a courtesy to city staff, Rounds Consulting will spend one additional week free of charge consolidating data and compiling a draft presentation.
Evans said she still believes the information gleaned from a study of the minimum wage and its effects is important and will help small business and workers in Flagstaff. As such, she said Council may need to fund another study during the upcoming budget cycle.