IRRRB opts out of financial transparancySen. Tom Anzelc failed last week to enlist the support of colleagues on the Iron Range Resources and Rehabilitation Board for his efforts to increase the financial transparency of the agency.
Sen. Tom Anzelc failed last week to enlist the support of colleagues on the Iron Range Resources and Rehabilitation Board for his efforts to increase the financial transparency of the agency.
Anzelc, DFL-Balsam Township, said his concern arose out of thwarted efforts to gain access to IRRRB documentation about disbursements made to Excelsior Energy, an entity that received $9.5 million in loans from the agency but has so far failed in its decade-long efforts to build a $2.1 billion power plant on the Iron Range.
“I think it behooves us to open our books and be accountable for the expenditure of all our resources, not only with this loan agreement but with all the entities we do business with,” he said.
Anzelc requested that fellow IRRRB members pass a motion publicly voicing support for a bill he aims to introduce in January. That bill will seek to repeal language a conference committee inserted into the 2008 omnibus tax bill. The effect of the language was to shield financial information the IRRRB collected from public view.
Sen. Tom Bakk, DFL-Cook, brought forward the 2008 language change at the request of then-commissioner Sandy Lehman. He expressed concern Thursday that reducing the protection afforded to potentially sensitive financial information could discourage developers from doing business with the IRRRB.
“As an economic development authority, how much do we expect a company to disclose to the public or the newspaper?” he asked.
Acting IRRRB Commissioner Tony Sertich said he had researched the language and determined that it was modeled on a statute originally written to protect documents collected on behalf of the Minnesota Department of Health.
Sertich said he couldn’t be sure what effect eliminating the data protections would have on the IRRRB’s effectiveness.
“It may preclude some business coming to us. Some businesses won’t even open their books to us privately,” he said.
Anzelc contends there’s a big difference between financial records and medical documents.
“It’s disingenuous to base this provision on personal health records,” he said.
“This is a public agency,” Anzelc said emphatically. “It’s not a bank. It’s not a credit union.”
If Anzelc is successful in repealing the 2008 amendment, he said the language would revert to what had previously been in place.
“The sky will not fall. Business will go on. And companies will continue to come to us,” he said.
Sen. David Tomassoni, DFL-Chisholm, warned that requiring more public disclosure of business documents could be risky. He cited the example of L&M Radiator, a Hibbing-based company that Tomassoni said chose to expand production in Iowa rather than close to home because of its discomfort about opening its books to the IRRRB.
L&M opened a plant in Independence, Iowa, in 2005.
Anzelc said he finds the timing of the 2008 amendment “peculiar and extraordinary,” coming as it did on the heels of a legislative audit of Excelsior.
Tomassoni countered, saying that audit found fault with only about $40,000 worth of expenditures Excelsior had made, and involved less than one-half of 1 percent of funding it had received. Those funds were then repaid by the company.
“The audit pointed to nothing inappropriate that was done,” he said.
Bakk suggested it was not the place of the IRRRB to be weighing in on prospective bills and telling the Legislature what to do.
Rep. Carly Melin, DFL-Hibbing, said she may well choose to support Anzelc’s bill when it is introduced in the Legislature, but she didn’t feel comfortable voting for it as an IRRRB member.
The motion failed 9-4, with Rep. Carolyn McElfatrick, R-Deer River; Rep. Tom Rukavina, DFL-Virginia; and citizen member Joe Begich of Eveleth supporting Anzelc.
Anzelc also made a motion directing Sertich to attempt to renegotiate the repayment terms for $9.5 million in IRRRB loans made to Excelsior. But it, too, failed 9-4.
Tomassoni said the power plant is a complex project. He noted that other large projects, such as Polymet’s proposed copper-nickel development, also have encountered delays.
He advised his colleagues not to give up on Excelsior.
“I think trying to kill this project would be a really bad mistake,” Tomassoni said.