Funding for business development project is reduced; public works increases
A fiscal year 2020 budget of $41.8 million is on the table for the Iron Range Resources & Rehabilitation Board at its annual budget meeting.
The nine-member board, composed of area legislators, convenes Friday, at the Minnesota Department of Iron Range Resources and Rehabilitation administration building in Eveleth.
The state economic development agency’s annual budget, three business development projects in Hibbing, two education programs, and 13 development and community infrastructure projects, are on the agenda.
A $41.8 million agency budget would be a reduction of about $2.6 million compared to the fiscal year 2019 budget of $44.4 million. However, projections are that agency expenditures will actually be $38.1 million rather than $44.4 million when fiscal 2019 closes June 30.
“Overall, the budget is very similar to last year,” said Mark Phillips, Iron Range Resources and Rehabilitation commissioner. “We’ve done an evaluation of programs in each of the last two years, so it helps us justify each program. We’re trying to align programs on what we heard from people in Recharge the Range and in listening sessions. We’re trying to do the budget based on what we hear and how it aligns with our strategic plan.”
Within the 2020 budget, funding for business development projects and program grants both shrink compared to fiscal 2019.
Meanwhile, eligible communities and tribal units of government seeking assistance for infrastructure upgrades, receive a boost.
Base funding for public works projects, such as water, sewer and infrastructure projects within the agency’s 13,000 square-mile service area, increases to $6.5 million for 2020 compared to $5.5 million in 2019. An additional $2 million is proposed to be added to the public works budget from the Douglas J. Johnson Economic Protection Trust Fund.
With enhanced public works funding, communities could apply for broadband development assistance.
“We’re going to make broadband an eligible public works expenditure,” said Phillips. “It would be part of a local match for state broadband money.”
The 78-year-old agency is funded by a portion of the taconite production tax paid by Iron Range mining companies on each ton of iron ore pellets produced, investment earnings, facilities and loan revenues, and interest from the Douglas J. Johnson Economic Protection Trust Fund.
Northeastern Minnesota’s taconite industry has rebounded in the last two years.
In 2018, the six taconite plants produced 38.5 million tons of iron ore pellets, up from the 37.7 million tons produced in 2017 and 27.9 million tons in 2016.
As iron ore pellet production increases, so does tax revenue.
For fiscal year 2020, taconite production tax revenue to the agency is expected to be $18.6 million, up from $14.7 million in fiscal year 2019.
The board also considers recommending:
A $115,000 equipment loan to Hibbing Fabricators, Inc.
A $207,000 equipment loan to Range Cornice & Roofing Company.
A $305,000 loan to Cast Corporation to expand product offerings specific to the mining industry.
An Iron Range Higher Education Account expenditure of up to $870,000 to the Northeast Higher Education District for continuing support of Iron Range Engineering.
A $350,000 Iron Range School Consolidation & Cooperatively Operated School Account grant to six area school districts for a Science, Technology, Engineering, Arts, Mathematics (STEAM), summer institute pilot program for fifth through eighth grade students. Hibbing, Chisholm, St. Louis County, Mountain Iron-Buhl, Mesabi East and Ely districts, are participating in the institute. 227 students are signed up for the program. With success, the program could in the future be expanded to fifth through 12th grade students.
$2,376,892 in Development and Community Infrastructure grants that will generate a total of $17.7 million in investments including:
$250,000 to the City of Aitkin for water, sewer, storm water, hydrants, and road reconstruction on Northwest Street.
$190,000 to the City of Chisholm for street and utilities replacement along 13th Street Northwest from Highway 73 westerly to Seventh Avenue Northwest and Fifth Avenue Northwest between 12th and 13th Streets Northwest.
$154,680 to Chisholm-Hibbing Airport Authority for airport parking lot replacement, expansion of LED lighting, security fencing, and vehicle access gates.
$120,000 to the City of Crosby for sewer main relocation for construction of a multi-use underpass tunnel across Highway 6 for snowmobilers, bikers and walkers.
$47,412 to the Greenway Joint Recreation Association for widening the east Hodgins-Berardo Arena walkway to make it ADA accessible, new infrared gas heaters, glass in the lobby for added viewing, and a new public address system.
$62,000 to the City of Ironton for water system improvements.
$250,000 to the City of Babbitt for utility extension to a Birch Lake Recreation Area campground development project.
$175,000 to Kelsey Township for construction of a new emergency services facility/ fire hall.
$350,000 to the City of Cook for a new water main loop on the south side of Highway 53 to support potable water and fire protection to existing businesses, an available parcel and redevelopment of Zup’s Food Market.
$120,000 to the City of Ely to extend a fiber optic line on the north and south side of Sheridan Street from Third Avenue West to Eighth Avenue East.
$57,800 to the City of Grand Rapids for new sewer and water line extensions and site work for construction of a new 8,400 square-foot fitness health center at 110 Golf Course Road.
A $350,000 grant to the City of Mountain Iron for reconstruction of Mountain Iron Drive from 13th Street South to the Mountain Iron/Virginia border.
A $250,000 grant to the City of Silver Bay for phase II building construction at a 49-site municipal campground along the North Shore.