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Kandiyohi council moves to seek change order after water tower subcontractor fails
Summary
After a subcontractor for the city's new water tower went out of business, the Kandiyohi City Council authorized initiating a time-extension change order request that could add $240,000 and push completion to November 2027, pending USDA Rural Development approval.
The Kandiyohi City Council on Oct. 20 authorized city staff to seek a time‑extension change order for the city's water tower project after the subcontracted tower builder went out of business. Council Member Spencer Hunt moved to initiate the request, which the council approved pending review by USDA Rural Development and the city attorney.
Brandon Freudenrich of Eagle Construction told the council that General Construction Services, the subcontracted water tower builder, experienced internal issues, including employee terminations and financial difficulties, about two weeks after the bid award and is now going out of business. Eagle Construction reported that Maguire Iron is the only contractor able to complete the tower, but its proposal would push substantial completion from the original September 2026 date to November 2027 and add approximately $240,000 to the project cost.
Jon Pauna of Moore Engineering confirmed the change order will require approval from USDA Rural Development. Pauna told the council that USDA RD review is delayed because of the federal government shutdown, and that the city must secure RD approval before the contract amendment can be finalized.
Council Member Hunt's motion to initiate the time-extension request was seconded by Council Member Jeff Clark and passed on a voice vote; city minutes record Clark, Hunt, McGillivray and Giese as voting yes. The minutes do not record the mayor casting a vote. The motion was conditioned on subsequent approvals by USDA RD and the city attorney.
The council did not adopt a final contract amendment at the Oct. 20 meeting; the action was limited to authorizing staff to pursue the change order and required approvals. Moore Engineering will pursue the RD approval process once the federal shutdown ends and the city attorney reviews the change order language.
