TOWER— It appears that mismanagement of the latest improvements at the city of Tower’s harbor could well leave the city on the hook for $120,000 in costs due to an error by suspended city clerk-treasurer Linda Keith. At the same time, the project is likely to face additional scrutiny from the Legislative-Citizen Commission on Minnesota Resources, which provided $679,000 in funding for the first phase of the two-phase project. That could put some of the already-approved grant dollars at risk due to unauthorized changes made to the project, apparently by Keith and project manager Matt Bolf, of Short, Elliot and Hendrickson, or SEH.

LCCMR Director Becca Nash confirmed that neither Keith nor Bolf sought a project amendment from the LCCMR before making what appear to be significant changes in the scope of the project. Prior approval of such amendments is required under the grant contract. Neither Keith nor Bolf responded to written questions for this story.

The city originally requested $1.43 million back in 2016 for what was described as the “Tower Historic Harbor Nature Trail/Kayak Route,” a proposal that was supposed to include construction of a walkway around the harbor along with a half-mile-long bituminous trail connecting the city’s harbor zone to the Mesabi Trail near Hoodoo Point. It was also to include mapping and interpretive signage for a kayak route encompassing the East Two and West Two rivers and a portion of Lake Vermilion’s Pike Bay.

A second phase of the project was to include a boat landing and trailhead kiosk adjacent to the Hoodoo Point connecting trail that was supposed to be built as part of Phase One. The LCCMR awarded a total of $1.279 million, including $679,000 for the first phase, which needed to be completed by June 30, 2019, and $600,000 for the second phase, scheduled to wrap up by June 30 of next year.

The work plan developed for the first phase estimated the cost of the packed aggregate harbor trail at $265,228, while the half-mile long bituminous connecting trail was projected to cost $250,022. Signage for the kayak route was estimated at $15,014. SEH’s fees for design, engineering, and project management were estimated at $148,636, although the council and SEH subsequently approved a supplemental contract totaling $120,000 for that work. All of those expenses should have been covered under the $679,000 in state funding for the first phase according to a budget the city presented to the LCCMR.

But the project languished for more than two years without any progress and by the time that Keith and Bolf readied the project for bidding they were already up tight against the time deadline for the completion of the project. In the meantime, it appears Keith and SEH, without explicit authorization from the city council and without approval from the LCCMR, had substantially modified the project, dropping the half-mile long bike and pedestrian connection to the Mesabi Trail in favor of decorative lighting and fencing along the harbor, as well as a 150-foot section of floating dock/boardwalk along the harbor’s north shore. The original grant proposal and subsequent work plan submitted to the LCCMR by the city makes no mention of lighting, fencing, or the floating dock and those additions pushed the cost of the project far above the available funding.

Last September, the city received a single bid for the project, from Nordic Group, of Hermantown, for $890,000. Keith asked the council to approve the bid without showing it to them and said she and Bolf would negotiate with the company to get the final cost down to $679,000. She did so, apparently forgetting that the $679,000 project price tag was supposed to include the $120,000 in engineering and project management costs due to SEH. City officials have never publicly indicated an additional source of funding for the project which might cover the SEH fee and Bolf did not respond to a question on that possibility.

Mayor Orlyn Kringstad, who inherited the project from the prior mayor and council, said he was unaware of any other source of funding for the project, but acknowledged that Keith was rarely forthcoming with information. “Things are becoming very clear now as to why so many people felt left in the dark about what was happening at city hall,” he said. “There were certain people who just didn’t want any interference in what they were doing.”

With the first phase of the project now completed (except for signage) and the contractors expecting to be paid the full amount of the available grant funding, the city has received none of the funds to date and it remains unclear how the city will cover the $120,000 fee to SEH— a cost that was supposed to be part of the grant funding package. That outstanding fee, for perspective is nearly one-third of the city’s local tax levy and is in line with what the city spends annually on its police contract with Breitung Township.

What’s more, given the significant and unauthorized changes to the project, the city is likely to face more scrutiny from the LCCMR over its handling of the project— and that could limit its ability to seek reimbursement for work that’s already been done.

“We would need evidence that the deliverables that we approved were actually completed,” said LCCMR’s Nash this week. “I don’t see the lighting and the fencing and the floating walkway [in the grant proposal].”

In addition, the city could well be on the hook for the cost of production and installation of the maps and interpretive signage for the kayak route. While that signage was included in the contract with Nordic Group, interpretive signs for the harbor, kayak route, and Hoodoo Point connecting trail, which were supposed to be installed, appear to have been overlooked by project managers and were not installed prior to the June 30 deadline to complete the project. Whether state officials will grant the city an extension to complete that work remains to be seen. If not, the kayak route signage will either be paid for out of city funds or won’t be completed at all.

Scrambling

to fix it

With Keith now suspended for potentially criminal violations involving falsification of records and other allegations, longtime grant writer Nancy Larson, of Soudan, has been volunteering her time at city hall in recent weeks in an effort to understand and explain the project’s numerous irregularities. Among the other surprises was the fact that the work plan that Keith submitted to the LCCMR lists a $25,000 contribution from the Tower-Soudan Historical Society for research and development of the harbor signage.

Larson, who is a long-time board member of the TSHS, said no such request was ever presented by the city, nor was the contribution ever approved by the TSHS board of directors. “It’s the first I’ve heard of it,” said Larson, who was now scrambling to develop copy for the interpretive signage even though it won’t be finalized until well after the deadline for funding.

Larson is trying to obtain a long list of documentation from Bolf, such as payroll records from Nordic Group and other proof that the work was completed as per the city’s grant contract with the state.

At the same time, Larson is trying to determine how to explain the lack of a paved connector to the Mesabi Trail. That change in the project is likely to complicate the second phase of the project, which the LCCMR agreed to fund in 2017. That part of the project was supposed to include development of a boat landing north of Hwy. 169 along with a trailhead kiosk. The kiosk was supposed to be located adjacent to the Mesabi Trail connection, which it now appears will not be built any time soon. The value of a trailhead kiosk without a trail remains unclear.

As Larson works to prepare reimbursement requests to help the city pay for the work that’s been done, she is almost certain to face questions from LCCMR officials about whether the work that’s been done is consistent with the grant award. According to Nash, the LCCMR won’t ask those questions until it receives an actual request for reimbursement, which is something that Keith never prepared prior to her suspension. Until then, said Nash, “We don’t necessarily have evidence that they’ll be seeking reimbursement from us for that work. If such a request is made, that’s when we would have to look at what was actually done.”