IRRRB reforms announced after tough audit


The Iron Range Resources and Rehabilitation Board will voluntarily reform itself to comply with findings from a recent Legislative Auditor’s report.

Under a new plan, the IRRRB would retain its power to allocate funds from its unique regionally-funded state agency but those allocations would require the governor’s approval.

This would address the Legislative Auditor’s finding that having nine state lawmakers serve as the arbiters of agency funding allocations represents a conflict of separation of powers. The OLA said the agency would be vulnerable to a legal challenge on those grounds.

Yet unresolved are matters concerning improving accountability in the agency’s loans and projects, ensuring that promises of job creation and specific outcomes are kept. The deeply unprofitable Giant’s Ridge ski facility remains an enduring problem for the IRRRB as well.

IRRRB Commissioner Mark Phillips, who has held the position for about a year, has said publicly that the agency is working on its financial processes, to ensure better results from loans and grants. And Giant’s Ridge? Well, the agency is coming up on an important decision about what to do with Giant’s Ridge. It’s difficult to justify the losses.

Does this new reform constitute the kind of reform many demanded after reading the audit two weeks ago?

It’s certainly a start.

More sweeping reforms, such as moving away from having legislators sit on the board, would require greater public demands and significant legislative action. Those would be difficult to produce in a shortened election-year session. Nevertheless, Marshall Helmberger has written a compelling argument that broader reforms to the board structure are needed.

The greatest problem revealed by the IRRRB’s legislative audit is a lack of accountability. Board members and commissioners are happy to revel in the successes, but never have to own up to the failures. Further, they don’t push familiar developers or lobbyists very hard when proposals are slow to materialize, or when promises are clearly broken. This is part of a cycle I’ve written about before.

One of the highest profile responses to the legislative audit came from former Commissioner Sandy Layman, now a Republican candidate for the State House. She argued that the audit demanded reforms to the board, and I agree with her assertions on that front. But even in castigating the conflicts of interest on the board (which are significant) Layman fails to address her role in approving some of the biggest failed loans found in the auditor’s report. Or how she extended the loans even as serious warning signs appeared.

Her responses then resemble those of her successors now. And that’s typical of the intermittent attempts to “reform” the IRRRB over the years. Everyone involved has a legitimate beef with some other part of the problem.

The IRRRB doesn’t just need reform to the board’s structure, it needs broad operating reform. The IRRRB needs to focus its mission and treat all potential projects or requests with equality based on measurable outcomes. The agency needs to protect its investments while preserving capacity for some risk. None of this is easy.

So far, the last year has shown some progress on agency reforms. But that progress must continue beyond Commissioner Phillips, and carry forward into the next administrations — no matter which person or party holds the governor’s office.

The people of the Iron Range don’t need to improve the IRRRB because someone scolded us. We must do so because we have limited time to turn the unique opportunity provided by the IRRRB into a sustainable, balanced economy.


  1. Jake Mackey says

    I don’t like the idea of the governor having the final say in the way funds are distributed. He is not from this area and has shown recently that he is willing to act on emotions and not facts. He could do more harm than good by having the ultimate power in this agency.

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