Mankato -Expenditures of almost 1 million US dollars were left out of the public, the Minnesota Ministry of Transport and the city council of Mankato, when the reconstruction of the Riverfront driving was approved by the old town a year ago.
The misleading prize was one of several defects in the budget and approval process in connection with the improvements on the Riverfront Drive from Main Street to Third Avenue, including a complete revision of one of the best-known streets of Mankato that goes through the Business District Old Town. Once probably cost 9.1 million US dollars, the final price will now be almost 18% higher.
The city administrator Susan Arntz has set the problems in the past few weeks during a report to the city council on Monday evening and during an interview with the Free Press, which was separated from the meeting. While Arntz said that she was confident that none of the projects were misused, the problems were serious enough that they were reported to the city's auditor, and a company was brought in to provide an independent examination of dealing with the project.
“We have commissioned an external investigator to conclude some of the outstanding objects,” she told Free Press.
To the problems: The city's engineering department has subjected the income to the income from ratings against property owners by $ 700,000; The general contractor for the early completion of the project, which ultimately completed 280,000 US dollars, was not taken into account in the budget. And changes that still reflect the increased construction costs in March after completing the work came in the Arntz desk.
However, the greatest concern was that the city's engineering department had given an order for 940,000 US dollars of traffic signal systems and street lamps for the Riverfront project in March 2024 without the knowledge or approval of the Council or the city administrator. The purchase was far above the threshold of 175,000 US dollars, which requires the approval of the Council. It was 94 -higher than the level of 10,000 US dollars that required the city administrator's approval.
“I didn't know that the order had been granted until we started combing the details,” said Arntz.
The expenses for the semaphors, signal boxes and street lamps were not listed in one of the budgets for the Riverfront Drive project.
Michael McLaughlin, member of the first member of the council, wondered whether it was common in large projects for a cost of $ 940,000 in order not to be mentioned or to evaluate income that is wrongly stated by such a big conclusion.
“In all the years I have worked, I've never seen such a mistake,” replied Arntz.
Council President Mike Laven had a similar reaction at the time of more than 20 years and hopes that the results of the investigation will be published.
“I'm just at a loss,” said Laven, adding that he is used to seeing some change orders that increase the final costs of a project. “But nothing to the point where the process and procedure have led this path.”
File photo
A worker removes a barricade From the Riverfront Drive at the Madison Avenue intersection in October 2024 with the opening of the 10 million dollar project.
The process seemed relatively typical in winter 2023-24. In a final feasibility report, the signal systems and street lighting were expressly described as components of the work and estimates that the construction of 7.17 million dollars would cost -9.1 million dollars if engineering, emergency and administrative costs were added.
These were the numbers listed in the city in 2024. The final designs completed in the first few months of 2024 increased the construction phase of the project to $ 7.633 million, whereby a memo to the Council was due to 490,000 US dollars in additional work for water and sewage channels.
Until April 2024, the engineer's estimate for the construction costs had increased – without further explanation, but at a time when infrastructure prices escalated due to high inflation – to 8.46 million dollars. When private contractors were submitted four offers, the lowest – 8.24 million US dollars by Dirt Merchant Inc. of Mankato – was an acceptable prize for the Council. The decision to make the final approval for the project was so routinely that it was unanimously approved on April 22nd of last year without discussion as part of the “consent calendar”.
What the Council did not recognize was that the city was already obliged to pay a further 940,000 US dollars for the purchase of the semaphors and street lamps. Arnz also had the impression that these costs were shown in the 8.24 million dollar contract.
“Before March 2025, I would have told you that it was part of the offer,” she said on Monday evening.
The city's engineering department had made the purchase by opening a reimbursable account at the state AID office of the Minnesota Ministry of Transport and ordering the equipment through the contract for the state of Minnesota, which according to a summary stated by the council provides the state purchases nationwide.
The fact that these components were ordered before construction is not unusual or inappropriate, since it often requires a few months so that they are delivered by the manufacturer, said Arntz. The same was done when the Madison Avenue was reconstructed more than a decade ago.
“Essentially, they do this because it takes 16 to 18 weeks to get them,” she said.
Arntz said that she could currently not explain why the approval of the city guides was not obtained before the purchase or why it was not included in the project budget documents that were presented to the Council next month. The approval is not only mandatory, but would also have given the Council the opportunity to put the purchase on ice if chosen civil servants had doubts about driving the road project forward.
“If you appear in June and we have no project to do, it would have been problematic,” she said about the costly semaphor systems.
Arnz also has no explanation for technical employees in three different documents that were presented to the council and the public, whereby the total ratings on the Riverfront drive of property owners are listed as $ 1,034,700 if the amount should be $ 1,742.222.
The three engineers involved in the project are currently not working in the town hall. Jeff Johnson, director of public work and city engineer, began military commitment in October. Former deputy city engineer Michael McCarty was hired in September as an engineer of the Watonwan County. And Jon Nelson became the deputy city engineer of Lakeville in spring 2024.
“None of them are here, and that increases the problematic examination,” said Arntz.
Although she said she had preferred to have more answers before she had brought the problem to the advice, Arntz said that it would not have been appropriate. As late as it is, the approval of the Council for the purchase of lights and traffic signals of 940,000 US dollars was still required. The incentive bonus of 280,000 US dollars for the DIRT Merchant for the original schedule, which reflects for additional work and weather delays, also needed the blessing of the council.
Further amendments were also reported to the Council on Monday evening, although these were to be approved in the area of the city administrators, and were considered typical of what is created in a large construction project on which the infrastructure is aged.
After the change orders at the meeting were approved on Monday, the final costs of the Riverfront Drive project are $ 9,766 million for the construction and a total of USD 10.718 million, whereby the previous amounts for engineering ($ 43,000 $ 519,000) are not changing.
At the moment it seems that the increase – although it is almost 18% above the budget of 2024 – can ward off without ground tax.
“So far, at least in our first evaluation, it does not seem that we have to lose more from the general fund in order to put together this,” said Arntz.
The error in the evaluation role of 706,000 US dollars, since it has incorrectly subjected the available income, helps to enable this. The provisional evaluation announcements sent to real estate owners were correct and added up to 1.74 million US dollars, so that the ratings at this level can be collected to minor adjustments if they are completed later this year.
And the street lamps and signal systems were financed as financed by the “Municipal State Aid Fund” of the city – Mankato's share of gas tax in Minnesota and other state means of transport.
Despite the numerical errors and the obvious process violations, the city's employees have indicated that they have not found an indication of abused dollars after seeing all the expenses involved in the project.
“We have the files, the data records, the documentation, the bills, the change orders went through – we are confident in the invoices submitted,” said Arntz of Free Press.
The city's department for administrative services has also checked other construction projects, including those planned for 2026, to determine whether there are similar problems.
“We have not found any problems with other projects,” said Arntz.
The city's examiners were made aware of the problems and were asked to identify mistakes in Mankato's administrative procedures.
“You assured us that our procedures are correct,” she said. “… our team just didn't follow the protocol.”
The retraining for the city's staff is also planned in the further existence of the work of the external investigator. Arntz does not know when the examination will be completed, but promised that a final report will be submitted to the Council.
“We will be in front of you again,” she said.