The donation to the Coalition for the St. Croix River Crossing did not have a contract to keep public informed on spending, an inquiry found.
The city of Stillwater made an improper $80,000 donation to a nonprofit coalition formed this year to promote construction of a four-lane bridge across the St. Croix River, the state auditor's office has determined.
The donation of public money, which Mayor Ken Harycki and three other City Council members approved in a July vote, was made without a contract that would keep the public informed about how the money would be spent, attorney Nancy Bode wrote in a letter to city officials this week.
Money given to the Coalition for the St. Croix River Crossing came from a tax increment financing fund, a decision that City Attorney David Magnuson had concluded was legal. The mayor, who voted in favor of the donation, also serves as the coalition's co-chairman.
Bode said in her review that the bridge coalition of various government and community leaders had claimed "non-public, trade secret" protection for documents that describe the coalition's plans and costs. "As a result, there is no opportunity for the City or the public to review any document explaining what, if anything, the City might receive for this $80,000 expenditure of public funds," she wrote.
The auditor's letter advised Stillwater to "recover the money" donated to the coalition as well as $70 the city paid for the coalition's filing fee with the Minnesota secretary of state. The city lacked authority to pay the fee, Bode's letter said.
Harycki contended Thursday that the review was issued because of political pressure from opponents of the $690 million bridge project in Oak Park Heights. Stillwater's interest stems from traffic congestion as motorists cross the 80-year-old Stillwater Lift Bridge, and Harycki said he's asked the city attorney to take a second look at the arrangement in light of the auditor's review.
"Unfortunately this is part of modern-day politics," Harycki said. "We have never been closer to securing this new river crossing. They're losing their fight on the facts and now they're resorting to other means."
Rebecca Otto, the state auditor, said the review wasn't motivated by politics but from citizen complaints over the donation and how it's being spent. "The issue of a bridge in Stillwater is a political issue but this is a fiscal issue," she said. "We're an independent body that can be here for anybody."
One of the complainants, Don Empson of Stillwater, said City Council members with the exception of Micky Cook have "run amok" with public funds and failed to disclose how it's being spent. "This is taxpayer money. This isn't their personal piggybank," Empson said.
Cook, the only City Council member to vote against the donation, had asked why she couldn't see the coalition's expenses. "Whether you support the proposed super highway bridge or not, the use of public funds must be accounted for, and a very open process must be followed," she said Thursday.
Harycki said that the coalition was "too new" to provide public documents and said much of the money is being spent for "lobbying and research efforts." The mayor said he couldn't provide an audit of specific expenditures.
Magnuson was unavailable to comment Thursday, but wrote in his June 9 opinion that Stillwater could spend tax increment funds for the project because the Lift Bridge would be converted to a pedestrian walkway as part of that construction.
Otto said her agency wants to know by Sept. 30 what action Stillwater plans to take on the $80,000.
Kevin Giles • 651-925-5037 Twitter: @stribgiles