IRRRB budget adds Giants Ridge investment

May 23--The Iron Range Resources and Rehabilitation Board is expected to approve a $35.5 million budget for fiscal 2018 when the board meets Tueday in St. Paul, including more money for the Giants Ridge ski and golf complex the agency owns in Biwabik.

The budget proposed by IRRRB Commissioner Mark Phillips is up about $200,000 from the final fiscal 2017 budget.

The budget includes $18.2 million on projects and programs and more than $7.2 million on operations. Fiscal 2018 starts July 1 for state agencies.

Phillips said he's proposing $843,000 in the budget for capital improvements at Giants Ridge, including some added costs for the facility's new high-speed chairlift set to be ready for skiers this coming winter.

The IRRRB earlier this year hired a private firm, Guest Services, to operate Giants Ridge under one management team. But the state agency still owns the facility and is still investing in amenities and improvements to draw more people to spend more money.

"We are trying to increase revenue opportunities there, so we're going to continue to invest there," Phillips told the News Tribune Monday. Other new spending will go to bike trails.

The IRRRB spends a portion of the state's per-ton tax on taconite shipped out of state, the tax mining companies pay in instead of property taxes on the value of their ore in the ground. The IRRRB gets a share of the tax collected based on a three-year average. Because production dropped in 2015 and 2016 when the domestic iron and steel industries sagged, tax revenues to the IRRRB also dropped -- from $21.2 million in fiscal 2016 to $19.4 million this year to just $15.4 million estimated for fiscal 2018. But because the IRRRB won't be giving taconite producers tax rates for capital improvements this year, the agency budget bounces back to $21 million for fiscal 2018. The tax rebate is only applied when the industry produces at least 30 million tons of taconite annually. They fell just short in 2016, Phillips noted.

"We're going to drop to $16.6 million next year so we've been carrying over as much money as we can to flatten out the drop," Phillips said.

Meanwhile Monday the Minnesota Legislature's bill to fund state jobs, economic development and labor agencies, including the IRRRB and Department of Commerce, was headed to Gov. Mark Dayton for his signature.

The compromise bill cleared the House and Senate and includes provisions that will change the makeup of the IRRRB's board of state lawmakers from the Iron Range region to be advisory only to the state agency commissioner who reports to the governor.

It was one of many recommendations made by Minnesota's legislative auditor in 2016 when he suggested the agency makeup may have been unconstitutional as well as inefficient.

The new legislation also will change the name of the state agency to the Department of Iron Range Resources and Rehabilitation, reflecting autonomy from the board of lawmakers.

The change reflects the advisory nature of the board as it was before 1995 legislation gave the board ultimate approval of projects and spending.

The new legislation also includes language requiring the state agency to develop long-term strategic plans and regularly evaluate projects for their effectiveness in creating jobs.

Some groups were calling on Dayton to veto the spending bill because of changes it makes in state solar energy policy through the Department of Commerce.

The IRRRB board also is advancing a recommendation by the Iron Range Higher Education Committee to spend $450,000 of the higher education account funds to provide a grant to develop Associate of Applied Science Veterinary Technician Program at Vermilion Community College in Ely.

* The IRRRB also is expected to approve $1.45 million for 11 municipal projects across the Iron Range, including:

* $250,000 to Gilbert, the first phase of an $8.5 million waste treatment facility.

* $250,000 to Biwabik for the second phase of a citywide infrastructure upgrade and road development project.

* $250,000 for Hoyt Lakes and the first phase of its waste treatment facility project.

* $200,000 to Biwabik Township for infrastructure and site work on its new town hall and community center.

* $167,500 to Grand Rapids to extend sanitary sewer and water service to business/industries at the Grand Rapids/Itasca County Airport. Valley Med Flight is a new Grand Forks-based fixed-wing medical ambulance service establishing a base at the airport.

* $99,500 to Buhl for infrastructure and site development for construction of 10 new senior housing units at Cornerstone Villa. The current facility houses 44 residents.

* $32,500 to Cohasset for sewer and water upgrades for the expansion of Nelson Wood Shims, a 60-year-old company with 50 employees.

* $25,800 to Embarrass Township for development of a new post office. The current office closed in 2015 due to water damage. The U.S. Postal Service is re-establishing the local window/retail service in Embarrass which would also service White, Waasa and Pike Townships.

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