Constitutionality of IRRRB Board Questioned in Audit

A new report suggests the structure of a crucial Iron Range oversight board may be unconstitutional.  

The Office of the Legislative Auditor made that conclusion in an examination of the Iron Range Resources and Rehabilitation Board released Friday. The IRRRB is a state agency based in Eveleth that doles out grants and loans to spur economic development in northeastern Minnesota. 

But the auditor’s report says its governance is a potential problem.  A board of nine lawmakers approves spending decisions.  Because it’s an executive agency, the audit says that’s ripe for a constitutional challenge over separation of powers.  

The audit also shows the agency hasn’t adequately tracked the payoff from its investments and has heavily subsidized Giant’s Ridge ski resort amid heavy losses. 

Commissioner Mark Phillips says he’ll make some changes. 

Iron Range Legislators Rep. Tom Anzelc, Senate Majority Leader Tom Bakk, Representatives Rob Ecklund, Dale Leueck, Carly Melin, Jason Metsa, Tom Saxhaug and David Tomassoni responded to the OLA report saying the following: 

“As the members of the Iron Range Delegation of the legislature, we take very seriously the concerns the OLA has laid out today about the IRRRB. This agency’s goals are to advance the regional growth of northeastern Minnesota’s economy by promoting and investing in business, community and workforce development—goals we also take very seriously.”

“There is no ‘magic wand’ to achieve the complex goals of economic development and diversification. The agency staff work very hard and are extremely dedicated to this challenging work. We are grateful for their service and cooperation. The success stories of the IRRRB are not necessarily the focus of today’s report, but as the OLA staff noted in today’s hearing, successes do exist, and in our opinion are the result of the IRRRB staff’s thoughtful work.”

“We will review the OLA’s findings and hope the IRRRB, and if necessary, the legislature can take action on the recommendations to ensure that the IRRRB is operating at the highest standards we expect of all our state agencies. While we are still reviewing these findings and recommendations, we are pleased that the IRRRB is also taking these recommendations very seriously as well. In particular, their commitment to update the loan database and review all 13 loan programs are promising steps that we support.”

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