With slim 5-4 DFL majority, new look IRRRB to talk big issues Tuesday

The newly reorganized Iron Range Resources and Rehabilitation Board (IRRRB) will meet for the first time this year on Tuesday, Feb. 28 at the Minnesota Senate Building in St. Paul.

What looms on the docket? No less than the future of the agency’s role in regional economic development and the Giant’s Ridge Ski Resort.

The nine-person board will feature four new members, and — for the first time — four Republican lawmakers. The DFL’s narrow 5-4 majority is the tightest in modern memory.

Returning to the IRRRB are State. Sens. David Tomassoni (DFL-Chisholm) and Tom Bakk (DFL-Cook) and State Reps. Jason Metsa (DFL-Virginia), Rob Ecklund (DFL-International Falls) and Dale Lueck (R-Aitkin).

State Sens. Justin Eichorn (R-Grand Rapids) and Carrie Ruud (R-Breezy Point) join the board. Other new members include State Reps. Julie Sandstede (DFL-Hibbing) and Sandy Layman (R-Cohasset), who served as commissioner of the IRRRB under Gov. Tim Pawlenty.

The IRRRB’s first meeting of 2017 sports plenty of intrigue. Most notably, the board will consider a proposal to privatize the world class but perennially unprofitable Giants Ridge Resort and Ski facility near Biwabik.

The financial woes at Giants Ridge were among major concerns of a Office of the Legislative Auditor report last year. The IRRRB subsidized Giants Ridge by an average of $2 million per year since 2006. Since being purchased and developed by the state agency in 1984, Giants Ridge has broadly struggled. However, supporters cite the economic impact of the ski hill and resort on local tourism, saying that the subsidy is worth it. Nevertheless, both Commissioner Mark Phillips and the board seem to have an appetite to privatize the facility after the bad report.

That legislative auditor’s report clearly remains a heavy weight on the IRRRB this year. New member and former IRRRB commissioner Sandy Layman announced a bill to reform the IRRRB structure last week. House Republicans tried this last year under a bill authored by former State Rep. Tom Hackbarth (R-Cedar). That bill, which gave IRRRB spending oversight to the entire legislature, was punitive in nature and rejected by Iron Range lawmakers and the governor. It passed the GOP House, but didn’t go any further. Lawmakers implemented a much more understated reform process, essentially making the board advisory in purpose.

(I wrote a very elaborate post about IRRRB reform ideas at the time that serves as a handy guide even today.)

Layman’s bill would create a board of appointed citizens to serve as a legislative advisory board to the IRRRB. This board would have the authority to advise the commissioner on economic development projects. Further, the bill would require that the IRRRB maintain a strategic plan, so that resources are allocated according to the long range interests of the Iron Range. The implication being that, currently, the board and commissioner allocate resources in a more reactionary way.

Sen. Bakk will apparently be releasing a companion bill in the Senate, though it’s unclear whether his bill will match Layman’s. I would expect differences.

One of the items in the legislative auditor’s report that remains unaddressed is the fact that there was very little follow-up and compliance checking in several high profile economic development projects handled by the IRRRB over the past 16 years. In many cases, claims of job creation were widely overstated and sometimes simply failed to happen at all.

Though I haven’t read the Layman bill, and no one has seen Bakk’s bill, I don’t see this as part of the reforms yet. It needs to be. False promises and lack of oversight is the biggest reason for failures like the Mesaba Energy Project.

Should a reform bill pass both chambers, which is possible, it would also need Gov. Dayton’s approval. So the next couple months will likely include a complex set of negotiations about the makeup of the IRRRB.

Oh, and infrastructure spending projects — the dense burning core of IRRRB function — may also be found on Tuesday’s agenda.

This could become an interesting meeting, and an interesting year for the IRRRB. One thing seems certain. Change will come. The question is whether it’s change implemented from within the Iron Range or whether it comes from an increasingly skeptical statewide political movement.

 

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