Tony Sertich to step down as IRRRB commissioner

IRRRB Commissioner Tony Sertich speaks before Vice President Joe Biden rallied at Hibbing Community College on Oct. 23, 2014. (PHOTO: Aaron J. Brown)

IRRRB Commissioner Tony Sertich speaks before Vice President Joe Biden rallied at Hibbing Community College on Oct. 23, 2014. (PHOTO: Aaron J. Brown)

Later today, Tony Sertich, commissioner of the Iron Range Resources and Rehabilitation Board, is expected to announce he will step down before the second administration of Gov. Mark Dayton. Sertich will succeed the retiring Tom Renier as President of the Duluth-based Northland Foundation.

The change means Gov. Dayton will need to appoint a new leader for the unique state agency that acts under state law to distribute the much of the iron ore production tax revenue paid by Northern Minnesota mines in lieu of local property taxes.

For those unfamiliar with the IRRRB, that’s an important point: this is not “extra” money and it doesn’t come from the state’s general fund. This is local money that would otherwise be considered property tax. The Taconite Amendment of 1964 created this system so that mines would not have to pay enormous sums for property taxes when the price of taconite was down.

The IRRRB is like no state agency in the country. It’s executive leadership comes from the governor, but its operations and budget are overseen by a board of lawmakers from districts with active iron mining. Additional lawmakers from the region are then appointed by the Speaker of the House and Senate Majority Leader, respectively.

The IRRRB has two jobs, and oftentimes they conflict with one another. On one hand, the agency is entirely funded by mining and it uses those funds to support communities, schools and businesses in its jurisdiction, the “Taconite Tax Relief Area.” So, in this capacity the agency often becomes the public relief aspect of the mining industry — funding public works projects and education initiatives like a big city council would.

What does TTRA stand for? TTRA stands for Taconite Tax Relief Area.

But the IRRRB has another charge as well, to diversify and strengthen the economy of the region so that it is less dependent on the very industry that funds the agency. This is where the agency often ends up in tricky territory. Because the mining industry remains a strong part of the region’s economy and political structure, the leaders who end up pulling levers on the board or inside the agency often have an immediate interest in sticking with the golden goose — mining — and less incentive to push the region into new economic territory.

In the worst scenarios, the agency ends up funding massive failed industrial projects pushed by developers or lobbyists with Iron Range ties. One only needs to look at the Mesaba Energy Project debacle in the early 2000s in which the agency pumped millions of dollars into a shell company, Excelsior Energy, which then directed the funds to a labyrinth network of law firms with lobbying wings. The result was many millions more dollars lobbied from the federal government, but ultimately total failure when Excelsior could not convince the state PUC to force Xcel or Minnesota Power to buy their overpriced “clean coal” electricity.

The project’s origins were essentially borne of personal and professional relationships among IRRRB board members and these developers. As a practice, this sort of thing is unsustainable, improper, and ferociously ineffective in accomplishing any of the IRRRB’s stated goals. This way of thinking and acting with public funds must end, and I think most (though not all) Iron Range lawmakers understand this.

So, the commissioner has to contend with old time Iron Range grudges and power plays, a turbulent local economy, a need to diversify amid aging local leadership that wants very little to change. Nevertheless, he or she will lead during a healthy streak of iron mining revenue, and with a flexible funding source for small business development and public works that most regions would envy.

One of the big challenges awaiting the next commissioner is what to do with the Douglas Johnson Economic Trust fund, a pool of mining dollars designated for economic development that had been the target of GOP budget raids in years past. Several different ideas for how to use the money to help areas businesses and generate growth over a long period of time are being discussed. One of the more interesting concepts has the money going to creating a foundation that generates annual business development grants.

For my part, I’d like to see an even bigger commitment to the educational initiatives Sertich began during his run as commissioner. The next commissioner has a limited window to lead our Iron Range communities toward ways of modernizing our shared economy, interdependent localities, and cherished educational traditions.

The goal of diversifying the Iron Range economy made incremental but tangible progress during Tony Sertich’s stint in this job. Let us continue forward.


  1. I hope the IRRRB can get its act together and get some jobs into the area. I’m not sure I can name many achievements that are impressive over the past 15 yrs. We seem to get Essar, Mesaba energy, wind turbines and many other projects that do not create jobs. The IRRRB has money that companies need to get started but no concrete plan to bring them up here. Frustrating….

  2. The IRRRB helped with funding for two recent expansion projects that immediately come to mind: Delta Airlines in Chisholm, and Delta Dental in Gilbert. The result? Hundreds of sustainable jobs that don’t involve pulling rocks out of the ground.

  3. I think the Delta center in Chisholm was in mid 90’s and cost IRRRB 8.7M. They loaned Delta 9.7 and they paid back 1M, followed by IRRRB forgiving the remaining 8.7M much to the surprise of many. That is a great business model if it is not your money and you don’t care about profit or bottom line…..

  4. I can’t say the Board has been blameless in their allocation of money — far from it. But the discussion turned to jobs and economic diversification. For recent evidence of same I was referring not to the creation of the (then) Northwest facility, but to the expansion project:

  5. Very informative link to the discussion, cjh. The reading of the linked article should put to rest thoughts of conspiracy and mismanagement by IRRRB for the uninformed, such as myself. As a new resident of St. Louis County it is gratifying to learn about positive economic diversification projects that employ people which , as you say, “don’t involve pulling rocks out of the ground”.

  6. I’m happy that there are 400 to 500 jobs that are up here ranging from $22,000 to 42,000. The cost to IRRRB is $14,600,000 in total out lay. I’m not sure of the benefits included with the Delta center but if you worked at Sub Way for 8 dollars an hour 40 hours a week you make around $20,000…. All I ever say about the IRRRB is they have cash to bring up businesses to our region, but their managerial skills of handling 10’s of millions of dollars has been shaky since they’ve started. If you gave a manufacturing plant $14,600,000 dollars to start a plant up here that hired skilled welders/fabricators and all the labor it takes you would find your return on $$$$ spent more palatable. There has been 10’s of millions of dollars wasted (Essar Mesaba Energy ect) so if you add that to the success of the Delta call center the cost per job is about $360,000 per job up here past 15 yrs. As I’ve said for yrs, easy to spend other people money!!!!

  7. Invest in clean manufacturing – there is a shortage of manufacturing /technical engineers in MN. Start by investing in a FAB Lab in the high schools in order to give the students a head start by teaching them to design and build anything with a 3D printer etc. The jobs are out there, and manufacturing companies will be drawn to the Range if there is investment in the workers and in the community. Some community colleges now have Fab labs and are training workers who get paid well and get good benefits. Get businesses to contribute to this investment in your schools and in your students.

    • You’re the second person I’ve talked to recently who has mentioned 3D printing as an economic future. The other guy was talking about applications of 3D printing with steel. THAT might be the way we finally get steel making on the Range. Raw material loaded into the printer, so to speak. But companies could also make all manner of goods, and there would be logical reasons to house these businesses here.

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