State finds financial, open meeting violations in Kettle River

The state auditor’s office found violations made by the Kettle River City Council and staff including improper use of the city’s credit card and open meeting violations, among others.

Carlton County Courthosue
The Carlton County Courthouse in Carlton, Minnesota.
Dylan Sherman / Cloquet Pine Journal

KETTLE RIVER — A Feb. 22 letter from the state auditor’s office lists a range of violations the state has found city of Kettle River officials committed, including purchases made with the city's credit card being sent to non-city addresses.

In the letter, addressed to the mayor of Kettle River, the auditor’s office looked into claims as well as made recommendations on how the city should move forward.

State Auditor Julie Blaha said her office’s goal is to bring the violations to light to not only identify the problems but also to get them fixed.

“They are out of compliance with the law, and they need to get back in compliance,” she said. “When we feel we have to send a formal letter on something like that, we have concerns.”

Despite Kettle River's size, with a population of 172 people, Blaha said issues like these occur in cities across the state and are usually brought forward by tips to her office.


Kettle River Mayor David Lucas said the letter did not list anything egregious, and officials have already worked to remedy the violations, as the auditor’s office had been working on the report for over a year.

“Most of those things we’ve fixed,” he said. "They are simple fixes, and the others we are working on."

Credit card misuse

The use of the city’s credit card was one of the major points of the report. Based on the auditor’s review, there were five instances where the city’s credit card was used to purchase items that were shipped to an address that was not an official city address.

Lucas said the situation arose from the city office only being open for certain times during the week: Monday to Thursday from 8 a.m. to noon. Because of the hours, city employees would have items shipped to other addresses to ensure they got picked up.

To remedy this, Lucas said Kettle River officials implemented a claims list for purchases and have alternative locations for packages to be dropped off when city hall is closed.

Additionally, the city’s credit card was used by a former employee until April 2021. The person's employment with the city of Kettle River ended August 2020

The report states the Sept. 8, 2020, city council minutes list the former employee had returned the credit card, and officials were awaiting paperwork from the credit card company to change the name on the card.


On Aug. 14, 2020, a purchase was made at The Golf Warehouse, which the auditor notes does not appear to be a city purchase.

According to the letter, the auditor received an order confirmation that was not itemized for the purchase.

An email was provided to the auditor that indicated the purchase had “since been reimbursed by the Fire Relief Association.”

Lucas said the purchase, which amounted to $67, was caught by the city when the invoice came through. He added the card was taken away from the employee who was also verbally reprimanded at the time—actions that were deemed appropriate by the city's auditor.

The auditor’s office requested itemization of 13 separate city purchases made with the credit card that were not provided by local officials. Lucas said city staff are currently looking through their invoices to figure out what the purchases were for.

The state recommends that city staff, employees or elected officials do not make any purchases that are not for the city—even if they are to be later reimbursed—and to ship all purchases to an official city address.

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Open meetings violations

The second category of violations came from the city’s approval of fire department service contracts, which the state auditor found the city council did not vote to approve at an open meeting.


The included contracts include those with Automba Township, Beaver Township, Kalevala Township, Silver Township and Split Rock Township from 2021 to 2022.

According to the report, the contracts had the city agree to provide its fire service to the surrounding townships, as well as develop an operating budget that would determine what each township would have to pay.

The auditor found that the contracts described the payments from townships as “determined by the fire commission;” however, the city clerk reported that she determined the payment amounts due under the fire services contracts.

The contracts were not voted on, approved or discussed by the city council, according to the report.

The recommendation from the state is for the city to consider consulting with its legal counsel to clear up issues related to the fire service.

Lucas said the council is currently working on approving the individual contracts with surrounding towns, as the council did not think it needed to “reapprove” contracts that were approved by the townships.

Additionally the state recommended the city approve the terms of the contracts with advice from advisory boards when appropriate.

The city is currently working through the remaining violations, and Lucas said the city can only move forward from here.


“We are not perfect; it is not like we are doing this on purpose,” he said.

The auditor's office does not assess penalties, but the letter was forwarded to the Carlton County Attorney's Office.

County Attorney Lauri Ketola said she could not comment on the letter as the investigation is ongoing.

Dylan covers the local governments of Cloquet and Carlton County, as well as the Esko and Wrenshall school boards for the Cloquet Pine Journal.
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