Duluth city officials being investigated

Duluth, Minn. — Two city of Duluth finance officials are on administrative leave and under investigation by the city.

Jeff Pappas, a spokesman for the city, confirmed that city Finance Director Genie Stark and Payroll Manager Jackie Morris are each on paid leave and under investigation.

Pappas said he did not know, and could not speculate on the nature of that investigation, but says it stems from a complaint.

Finance Director Stark was closely involved last year in a failed investment in a Merrill Lynch product called Mainsail II. That investment cost the city more than $2 million, contributing to a city deficit that was once projected at $6.5 million.

However, there's been no indication that the investigation has anything to do with that transaction.

The city's proposal to implement new fees, cut spending and lay off some employees has lowered the project deficit to about $600,000.