North St. Paul council member calls for outside financial investigation

A North St. Paul City Council member has asked the state auditor to investigate his city's finances after several "red flags" emerged this spring, including nearly 200 missing credit card receipts and $2,400 billed to the suburb that the city manager later admitted was for his family's personal use.

Council Member Scott Thorsen said he's also asking his fellow council members to hire an outside accounting firm to conduct a forensic audit for the Ramsey County suburb of 12,000.

"I work as an accountant and this is a huge red flag," Thorsen said. "There needs to be an independent investigation into this."

The council will evaluate the manager's performance at its Tuesday meeting. Council Member Candy Petersen said she didn't want to comment on a personnel matter before the meeting but said, "I am in agreement with Council Member Thorsen."

Mayor Terry Furlong did not respond to a request for comment. The other two council members could not be reached for comment.

Thorsen said information from city staff and the city's audit report in May first caught his attention. According to those sources, staff failed to properly file receipts for 191 of the 387 charges made on city-issued credit cards last year in time for the city's annual audit — a "significant deficiency," according to auditors, that flouts both state statute and the city's own policy.

In particular, City Manager Scott Duddeck failed to provide receipts for 154 of the 169 charges on his city-issued credit card.

In an interview Wednesday, Duddeck admitted there were problems, including two contractors erroneously billing the city for services and supplies — including paint and a portable toilet — for his sister-in-law's home renovation and hundreds of missing receipts at the time of the annual city audit. But he said he has corrected the problems and no outside examination is needed.

"This is very, very upsetting to me. I can assure you steps are being taken so this never happens again at any level," said Duddeck, who was at work Wednesday. "North St. Paul is not a job to me. It's my life. I am committed to the city and would do anything for this city."

Duddeck said that since the audit, he has produced the missing credit card receipts. He said several employees across multiple departments use his card, which caused filing delays.

In addition, Duddeck said, he has personally paid the $2,400 owed for the paint and portable toilet and has agreed to refrain from hiring firms for personal use that also have contracts with the city.

Duddeck stressed that no money left city coffers.

"It should have never happened. I acknowledge that openly and honestly. I want this to be corrected and to move on," he said.

But Thorsen said too many unanswered questions remain — including the total amount charged to Duddeck's city credit card and whether all of those purchases served a public purpose — and the city needs outside assistance.

"We are held to higher standards as elected officials and government employees," Thorsen said. "We need to make sure everything we do is on the complete up and up."

Duddeck was hired as city manager in 2019. He had previously worked for the city for more than three decades in several roles including public works director and fire chief.

According to city e-mails and documents provided to the Star Tribune, problems started last summer when On Site Companies billed the city for portable toilets at nearly a dozen work sites. A city staffer flagged the toilet located at Duddeck's family property and directed the company to personally bill Duddeck the $169 due.

"Scott Duddeck is the property owner ... and he is also our city manager. I'm guessing that this address got set up under the city's account by mistake because it was for Scott instead of creating a new account for his personal property," a city staffer wrote in an Aug. 12 e-mail. "The city of North St. Paul will not be paying these invoices as the property is not owned by the city."

On Sept. 16, On Site's collections administrator again e-mailed the city's finance department indicating they could not get in contact with Duddeck. It's unclear when the bill was paid.

In November, a contractor named "Jimmy" purchased $2,234.35 worth of paint and supplies at Sherwin-Williams and charged it to the city's account. An invoice sent to the city showed the city was billed for paint in the shades "tricorn black" and "front porch."

The bill went unpaid for months. At one point the city's account was frozen. A city staffer e-mailed Duddeck several times between February and May asking him to either code the bill as a city expense or take care of it.

Thorsen said the city owes taxpayers a thorough investigation.

"You know the saying, if there's smoke, there's fire," he said. "There is a huge cloud of black smoke coming out of North St. Paul right now."

Shannon Prather • 651-925-5037