By Mani Souphom – R & J Broadcasting, Inc. | Tuesday, February 3, 2026

ROSEAU, Minn. – The Roseau City Council voted unanimously Monday Feb. 3 during their regular meeting to terminate the city’s contract with Equity Builders on the Memorial Arena roof project, after determining the contractor was in breach of contract and unable to continue work.

City officials said Equity Builders notified the city it could not perform under the contract due to financial and compliance issues, including failure to pay subcontractors and lapses in required insurance and licensing. City Attorney Michelle Moran said the city received confirmation Jan. 30 that the contractor’s insurance had been canceled, prompting the city to issue a cease-and-desist order.

Moran told council members the contractor was in substantial default and legally prohibited from continuing work. She advised against a proposal to reassign the project to another roofing company tied to similar ownership, citing increased liability and legal risk to the city. “I’ve never seen anything quite like this,” Moran said during the meeting.

The city has withheld $100,000 in payment under the contract and has not paid more than the amount covered by the performance bond. City officials confirmed at least one subcontractor has filed a claim against the payment bond. Because the project involves a public facility, the law does not allow subcontractors to place a lien on the building.

City Development Coordinator Todd Peterson told council members the city has not received a finalized roof warranty from Equity Builders and has no record that required fees related to the roofing system were paid. The project was expected to include a one-year construction warranty, followed by a longer-term manufacturer’s warranty, pending inspection.

Concerns were also raised regarding the status of an inspection conducted in November 2025 by the manufacturer, Mule-Hide. City officials said a formal inspection report has not been provided to the city and may have been sent only to the contractor.

Todd Peterson said the city is now moving forward with a claim on the project’s performance bond, which is intended to cover the cost of completing the roof and addressing all contract requirements:

Council members expressed concern about whether the manufacturer’s warranty can still be secured and what steps would be required to obtain it. Peterson said the city is working to determine what documentation or corrective work may be needed to satisfy warranty requirements:

Peterson said the performance bond will leave the city whole and cover all obligations under the contract, including warranties. The council approved a resolution authorizing staff to formally sever ties with Equity Builders, pursue the performance bond and investigate how the project reached its current state.

The bonding company on the project is Old Republic, with Kraus-Anderson listed as the liability holder. City officials said they will continue to provide updates as the process moves forward. KQ92 and KRWB will continue to follow Roseau City Council meetings and updates.