Resident urges audit of urban renewal spending; council agrees to accounting review

Rob Dayton, a Dundee resident, told the council during the public hearing that the city’s recent combined street projects had costs outside the urban renewal area and asked the city to account for that spending and, if needed, move funds back into the urban renewal account.

“For the record…you spent approximately 2,800,000.0 on the combined [Alders] Street and Ninth Street improvements,” Rob Dayton said. “The objection I had is that approximately $600,000 of the 2,800,000 is outside urban renewal area.” He urged the city to calculate the exact amount and “move that money back to urban renewal.” Dayton also questioned whether urban renewal dollars should be used where local improvement district (LID) assessments are already paying part of the cost.

City staff and councilors acknowledged the concern and agreed to pursue a formal accounting. Council members discussed two options for an audit or accounting review: (1) have the city’s engineering contractor perform a line-by-line accounting of project invoices and LID allocations, and then (2) have the city auditor review the findings or provide audit-level assurance. One councilor said an engineering firm could prepare the technical split and the auditors could later review the work for audit purposes.

Steve, the city administrator, said staff will develop a scope of work for the review and bring it back to the Urban Renewal Agency or the council. “We’re gonna take steps in the new fiscal year to do a full accounting of the expenditures that occurred inside and outside of the rural district related to the Ninth Street, [Alders] Street projects, and we get those numbers correct,” a councilor said in response to Dayton’s testimony.

Rob Dayton also raised concerns about LID assessments on Ninth Street and whether assessments that already fund parts of the project should be paid again by urban renewal. Staff noted there are different methodologies for the LIDs and that the engineering contractor who produced the original project schedules can separate costs by location and fund source.

The Urban Renewal Agency then approved Resolution No. 2025-1 adopting its FY 2025–26 budget in a separate action; staff said the audit/accounting scope would be prepared and returned to the agency or council for consideration. The council asked staff to prepare a written scope and estimated cost for the third-party review and present it at a future meeting.