Meeting of the Iron Range Resources and Rehabilitation Board 10 2020 Packet_tcm1047... ·...

Iron Range Resources and Rehabilitation Board Meeting June 10, 2020

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Meeting of the

Iron Range Resources and

Rehabilitation Board

Wednesday, June 10, 2020 – 10:00 a.m.

In accordance with Governor Walz’s Executive Order 20-01 and

due to the COVID-19 pandemic, the meeting will be held via

ZOOM and live-streamed through YouTube as authorized by

MN Statute 13D.021

Access to view the meeting will be posted on our website.

MN.GOV/IRRRB


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Meeting of the Iron Range Resources and Rehabilitation Board ZOOM Meeting

Wednesday, June 10, 2020 – 10:00 a.m.

TABLE OF CONTENTS

AGENDA ......................................................................................................................................................................... - 3 -

FY20 Development, Community and Broadband Infrastructure Projects .................................................................... - 4 -

Way of the Warriors Film Production Project ............................................................................................................... - 9 -

FY20 Trails Projects ...................................................................................................................................................... - 10 -

Iron Range Higher Education Account ........................................................................................................................ - 12 -

Giants Ridge Recreation Area Tax – Use of Proceeds ................................................................................................. - 20 -

Addendum A – FY21 Budget .............................................................................................................................................. A

Addendum B – IRRRB March 18, 2020, Meeting Minutes ................................................................................................ B


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MEETING OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD

Wednesday, June 10, 2020 – 10:00 a.m. ZOOM MEETING

In accordance with Governor Walz’s Executive Order 20-01 and due to the COVID-19 pandemic, the meeting is

being held by ZOOM and is being live-streamed through YouTube as authorized by MN Statute 13D.021.

AGENDA

1) Call to Order

2) Roll Call

3) Approval of March 18, 2020, Minutes See Addendum B

4) Commissioner’s Comments

5) FY20 Development, Community and Broadband Infrastructure Projects

6) Way of the Warriors Film Production Project

7) FY20 Trails Projects

8) Iron Range Higher Education Account

9) Giants Ridge Recreation Area Tax – Use of Proceeds

10) FY21 Budget See Addendum A

11) Other

12) Adjournment


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FY20 Development, Community and Broadband Infrastructure Projects

P.O. Box 441 4261 Highway 53 South

Eveleth, Minnesota 55734-0441 (218)735-3000 • 800-765-5043

Date: 6/10/2020 To: Iron Range Resources and Rehabilitation Board From: Mark Phillips Commissioner RE: FY20 DEVELOPMENT, COMMUNITY AND BROADBAND INFRASTRUCTURE PROJECTS

PURPOSE The Development Infrastructure grant program provides funds to cities, townships and tribal units of government that may be used for infrastructure, site work or healthcare capital projects that support economic development. The Community Infrastructure grant program helps cities, townships and tribal units of government fund infrastructure projects located within the agency's service area to support community development. ECONOMIC IMPACT

FY20 infrastructure grants FY 20 Grant Amendment

10 1

Iron Range Resources & Rehabilitation investment

$2,184,900

Total investment

Leverage public/private

$51,237,796

1:22

DEVELOPMENT INFRASTRUCTURE

City of Aurora Grant Amount: $135,000 The project consists of structural reinforcement to a public building. The Aurora Housing Redevelopment Authority is making rehabilitative modifications to a commercial building which houses three tenants to include the area food shelf. The building will be housing a new tenant which will be providing an essential service to the East Range. Iron Range Meats - Aurora Market will provide meats and grocery product in Aurora and the surrounding communities. The structural modifications are necessary to support the new business. The project is expected to create 10 construction jobs and 14 permanent jobs.


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USES SOURCES

Structural Reinforcement Construction

$135,000 Iron Range Resources & Rehabilitation

$135,000

Building Renovation 999,950 IRRR Demo 67,000

Equipment 182,480 Private 1,317,425

A&E 88,500

Contingency 113,495

TOTAL $1,519,425 TOTAL $1,519,425

City of Bigfork Grant Amount: $99,900 The project consists of the reconstruction of Ash Street and Rajala Mill Roads to accommodate 10-ton trucks that travel to Rajala Mill. Ash Street and Rajala Mill Road are parallel east-west roadways that connect Rajala Mill to Main Street in the City of Bigfork. Ash Street is roughly 1,800 feet in length and Rajala Mill Road is roughly 1,600 feet in length. The roads were not built to 10-ton capacity and are used daily by logging trucks bringing loads to Rajala Mill. Consequently, the roads are so deteriorated that they are impacting the logging trucks. This makes it nearly impassable for the logging trucks and a deterrent to new development that could occur in Bigfork. This project will enable the mill to expand their building and operation while retaining jobs and creating new jobs. It will also increase the potential for commercial development as lots around the mill are sold. The project is expected to create seven construction jobs and five permanent jobs.

USES SOURCES

Construction $1,218,230 Iron Range Resources & Rehabilitation

$99,900

A&E 160,000 City 1,250,053

Contingency 121,823

TOTAL $1,500,053 TOTAL $1,500,053

City of Chisholm Grant Amount: $300,000 The project consists of infrastructure and sitework for a new assisted living facility in Chisholm. Aspen Grove Assisted Living will be expanding their services in Chisholm by constructing a new 13,000 square foot assisted living facility located next to Delta Airlines. The facility would provide housing and care for 30 residents. The project is expected to create 17 construction jobs and 30 permanent jobs.

USES SOURCES

Infrastructure and site work $345,000 Iron Range Resources & Rehabilitation

$300,000

Building construction 1,800,000 Private 2,132,000

A&E 130,000 City

Contingency 157,000

TOTAL $2,432,000 TOTAL $2,432,000

COMMUNITY INFRASTRUCTURE City of Biwabik Grant Amount: $250,000 The project consists of phase II total road reconstruction and utility replacement of a segment of Highway 135 to include Main Street through Biwabik in coordination with MNDOT. The project will cover three phases and end in the fall of 2021. The phases of road reconstruction are comprised of driving surfaces and sidewalks, curb and gutter and


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parking lanes. The sanitary sewer, water and storm sewer systems will be repaired or replaced, and the electrical system will be repaired and upgraded to ensure adequate street lighting for driver and pedestrian safety. The project is expected to create 18 construction jobs.

USES SOURCES


$250,000

A&E 250,000 City 250,000

Contingency 200,000 MNDOT 502,166

Federal Highway Funds 1,747,834

TOTAL $2,750,000 TOTAL $2,750,000

Fond du Lac Band of Lake Superior Chippewa Grant Amount: $250,000 The project consists of new water source, tower and treatment facility to meet drinking water standards and provide a level of fire flows to service the communities of Mahnomen and Brookston. The first phase of the project will encompass the construction of a water tower storage tank. This will be followed by the construction of a new water line and treatment facility. The current water system has been cited as non-compliant with the United State Environmental Protection Agency. The project is expected to create nine construction jobs.

USES SOURCES

Construction $974,918 Iron Range Resources & Rehabilitation

$250,000

A&E 287,935 Fond du Lac Band 834,243

Contingency 84,290 US EPA 131,450

IHS 131,450

TOTAL $1,347,143 TOTAL $1,347,143

City of Grand Rapids Grant Amount: $50,000 The project consists of a new broadcast plant, which is in critical need of replacement for Northern Community Radio's KAXE. The transmitter is 30 years old, obsolete and out of production. The current tower has been structurally assessed and is at risk of falling. KAXE is a community-based public radio broadcast service provider. KAXE provides Emergency Alert Services for inclement weather, natural disasters, child abductions, evacuations, law enforcement announcements and shelter in place warnings to northeastern Minnesota. The project is expected to create six construction jobs.

USES SOURCES


$50,000

A&E 11,200 State Bonding 513,000

Contingency 17,538 Private 236,583

Blandin Foundation 250,000

TOTAL $1,049,583 TOTAL $1,049,583

Lake County Grant Amount: $125,000 The project consists of ADA accessibility compliance site upgrades for Veterans on the Lake in St. Louis and Lake Counties. Veterans on the Lake is a 501(c)3 non-profit organization, which serves disabled American Veterans and others with physical and mental disabilities. Parking lots, pathways, docks, and the roadway will be upgraded to allow barrier free access, including below grade work, paving, and dock renovation. Upgrades to cabins and the lodge will include widening doorways, building new accessibility ramps, adding grab bars, walk-in showers and bathtubs, upgrading flooring, closets, automatic doors/handles, accessible kitchens as well as energy improvements including


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windows, roofing, insulation, and heat plant infrastructure. Other upgrades will concentrate on sewer and water infrastructure and researching the possibility of installing solar modules to reduce operating costs. Some cabins will be razed and replaced. The project is expected to create five construction jobs.

USES SOURCES


$125,000

A&E 65,000 Veterans on the Lake 12,000

LCCMR 650,000

St. Louis County 100,000

Lake County 10,000

TOTAL $897,000 TOTAL $897,000

City of Silver Bay Grant Amount: $225,000 The project consists of street reconstruction and infrastructure for a drop-off safe zone and parking area for the new Childcare Center, which will be located in the William M. Kelley School in Silver Bay. The grant funds will be used for the infrastructure improvements including excavation, fill, asphalt, sidewalks, stormwater, lighting, and landscaping. The regional community has some of the lowest childcare availability in the state and this has had a major impact on area business with regard to retaining and capturing new workforce. The new facility is vital to addressing the childcare and workforce crisis in Silver Bay. The project is expected to create three construction jobs and eight permanent jobs.

USES SOURCES


$225,000

A&E 23,500 ISD 381 32,637

Contingency 42,421 Foundations 160,000

FF&E and Playground 150,000 Private 82,500

TOTAL $500,137 TOTAL $500,137

City of Virginia Grant Amount: $500,000 The project consists of infrastructure for the construction of the new Miners Events and Convention Center. The original Miners Memorial Complex was constructed from 1957 to 1959 at a cost of $1,244,032.00. It was originally built as a basketball arena. In 1961 sheets of ice were added and the facility was converted to house an ice arena. In addition to an ice area, the Miners Memorial Complex has acted as a regional hub of activity by hosting numerous weddings, concerts, and large-scale events such as car shows, spaghetti feeds, live auctions, labor rallies and the circus over the last 60 years. The building has supported many types of events over the years with an average of 30 events scheduled at the Miners Memorial Complex annually. The plumbing, heating, ventilation, controls, electrical, lighting systems, and kitchen equipment are original to the facility. At 53 years old, many of these items have outlived their useful life. Technology, industrial regulations, and innovations in the industry have made repairs to these antiquated systems time consuming and costly. The desired impact of this project is to increase the economic growth for the city and the region by offering a new venue and event services not currently available in this area. These enhanced services and offerings will be made possible through the construction of a 144,000 square foot event and convention center, along with major site improvements and amenities. The project will add economic diversification to the region and further solidify the area as a destination spot. The project is expected to create 252 construction jobs.


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USES SOURCES


$500,000

FF&E 3,739,629 City 26,145,205

A&E 2,390,517 State Bonding 12,000,000

Contingency 1,314,481 IRRR Demo – Ewens Stadium 147,250

TOTAL $38,792,455 TOTAL $38,792,455

BROADBAND INFRASTRUCTURE

Township of Morse Grant Amount: $150,000 The project consists of the expansion of a fixed wireless broadband network serving 350 unserved and underserved households, including 10 resorts, in the area of Burntside Lake, Little Long Lake, and Wolf Lake in Morse Township. Treehouse Broadband will construct the infrastructure, operate the system, and provide broadband service once the network is constructed. The project is capable of speeds that will meet the State of MN 2026 Speed Goal of 100 megabits per second download and 20 megabits per second upload. Construction will begin immediately with service to customers beginning in July 2020.

USES SOURCES

Infrastructure (1 mile Fiber, 2 60’ Towers, 10 PoP’s )

$292,500.00 Iron Range Resources & Rehabilitation

$150,000.00

Customer Installs (350 HH) $157,500.00 Morse Township $100,000.00

Treehouse Broadband $200,000.00

TOTAL $450,000.00 TOTAL $450,000.00

* Grant Amendments

City of Aurora Original Grant Amount: $150,000 Additional Funds Requested: $100,000 On December 19, 2019, the Board recommended the approval of a grant to the city of Aurora for $150,000 for upgrades and replacement to the anaerobic digestion system at the city’s wastewater treatment facility (WWTF). The system failed in November 2018 when the primary digester experienced over-pressurization and the cover was lifted from the structure causing structural damage to the cover and tank. The city of Aurora is requesting additional infrastructure grant funds due to bids coming in higher than the engineering estimates and the loss of another source of funding for the project.


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Way of the Warriors Film Production Project P.O. Box 441

4261 Highway 53 South Eveleth, Minnesota 55734-0441 (218)735-3000 • 800-765-5043

Date: 6/10/2020 To: Iron Range Resources & Rehabilitation Board From: Mark Phillips Commissioner RE: WAY OF THE WARRIORS FILM PRODUCTION PROJECT

PURPOSE The Department of Iron Range Resources and Rehabilitation has an opportunity to bring a new film production to our service area. FilmNorth has requested $350,000 in grant funding assistance from the agency to attract and support the production of “Way of the Warriors” in our region. The agency will reimburse the grantee 25% for all eligible film production expenditures incurred within the TAA (defined in Minnesota Statutes Section 273.1341) with a total cap of $350,000. Set on the Iron Range in northern Minnesota, Way of the Warriors is an inspirational story about a hockey town that unites to achieve the impossible. Upon learning that their local hero, history teacher, and coach has terminal cancer, the high school hockey team comes together with a shared mission to make his last season the best ever. Ultimately, Way of the Warriors is about a man who learns how to live while he's dying. It's a heartfelt story about the importance of family, faith, and community – with an emphasis on unity. The project is represented by William Morris Endeavor (WME), which is one of the world's leading entertainment and media companies. The screenplay has been praised by some of the most respected agents, executives, producers, and talent in the film industry. Writer and Producer John Montague's goal is to "showcase the State of Hockey and the Home of Hockey (Iron Range) in the most authentic, positive and compelling manner possible". ECONOMIC IMPACT This production’s economic impact for the Iron Range will be significant. Approximately $3 million of the film's $7.5 million budget will be spent locally for labor, locations, services, equipment, materials, supplies, food, and lodging. There will be jobs created in a variety of departments for local residents and there will be numerous opportunities for members of the community to get involved with the project, whether it's a job behind the camera or a role in front of the camera. JOB CREATION AND ECONOMIC IMPACT OF FILM PRODUCTIONS IN MINNESOTA According to the Motion Picture Association of America each $1.00 spent on film production in the U.S. results in $1.99 in economic activity. The spending multiplier calculated by the U.S. Department of Commerce, Bureau of Economic Analysis (Jan 16, 2012) is $1.65. The economic impact of North Country was estimated by the Minnesota Department of Employment and Economic Development at $5 million. More than 70 temporary jobs were created (Minnesota workers employed directly by the production company).


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FY20 Trails Projects



Date: 6/10/2020 To: Iron Range Resources & Rehabilitation Board From: Mark Phillips Commissioner RE: FY20 TRAILS PROJECTS

PURPOSE The Regional Trails grant program provides funding to assist with design, engineering and construction of various types of trails. ECONOMIC IMPACT FY20 Regional Trail Grants 3 Iron Range Resources & Rehabilitation Investment $466,350 Total Investment $1,336,058 Leverage 1:2 City of Virginia - $250,000 Grant Request This project consists of the total reconstruction of the existing Baily Lake Trail and the construction of a new fishing dock. The new trail will be a 10-foot wide asphalt trail approximately 1.5 miles long. Decorative lighting will be installed, signage will be added, culverts and storm water control will be constructed, new fencing will be installed and the area adjacent to the trail will be landscaped. The new trail will be a public, non-motorized trail and available for walking/hiking/biking traffic, and will connect with the Mesabi Trail.

USES SOURCES

Project Design/Construction Administration/Project Management


$250,000

Project construction hired through competitive bidding process

$467,725 LCCMR $550,000

Light poles and fixtures $65,200 City $95,614

Electrical conduit and service equipment

$44,906

Construct dock $50,000

Remove existing pier $50,000

Contingency $67,783

TOTAL $895,614 TOTAL $895,614


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City of Orr - $196,350 Grant Request This project is to improve and reconstruct the Orr Bog Walk, which was constructed in 1993 to further enhance the City of Orr’s tourism economy and provide open green space for residents. It has been a popular boardwalk trail for local residents and tourists in the Orr area, but now is at the end of its useful life and must be rebuilt using the same footprint. The bog walk leads visitors safely over one-half mile through an ash bog outdoor recreation area to the shoreline of the Pelican River. The bog walk boardwalk accommodates walkers of all ages and will be built to ADA standards. The City of Orr estimates 24,000 people use the bog walk annually.

USES SOURCES

Bog Walk construction $375,950 Iron Range Resources & Rehabilitation

$196,350

Permits $10,000 MN DNR Outdoor Recreation Grant Program

$186,350

Interpretative signage $2,250 City $10,000

Planning and design $4,500

TOTAL $392,700 TOTAL $392,700

Friends of Sax-Zim Bog - $20,000 Grant Request This project includes the construction of a 1,200-foot long raised bog boardwalk on one of Friends of Sax-Zim Bog's black spruce bogs, and would help get visitors to Sax-Zim into the bog on a safe, dry and enjoyable trail. The first bog boardwalk was built two years ago, and has been a success. At least 4,377 visitors from 45 states and 5 foreign countries visited the Sax-Zim Bog and came through the Welcome Center during the winter of 2018-19. The new boardwalk trail would benefit both residents in the area, visiting school groups, and tourists. The town of Meadowlands is a partner in the annual Birding Festival and supports the project.

USES SOURCES

Boardwalk hardware galvanized “bog feet”, brackets, hardware & shipping


$20,000

Tamarack decking for boardwalk

$7,200 Friends of Sax-Zim Bog $27,744

Lumber for boardwalk superstructure: green treated

$4,000

Labor $2,600

Transportation of tamarack to site via semi truck

$1,200

Signage (interpretive/memorial)

$3,000

Storage of materials: Staging $200

Trailhead parking: culvert, permits, clearing, gravel

$10,000

TOTAL $47,744 TOTAL $47,744


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Iron Range Higher Education Account



Date: 6/10/2020 To: Iron Range Resources & Rehabilitation Board From: Mark Phillips Commissioner RE: IRON RANGE HIGHER EDUCATION ACCOUNT

The Iron Range Higher Education Committee (IRHEC) is a legislatively created committee charged to advise the Commissioner of Iron Range Resources and Rehabilitation Board on providing higher education programs in the Taconite Assistance Area (TAA). The IRHEC met on Wednesday, May 27, 2020, via Zoom, to hear program updates and consider two funding requests. The IRHEC has approved, and I support an expenditure of up to $860,000 of Iron Range Higher Education Account funds to provide a grant to the Northeast Higher Education District for use by the Iron Range Engineering program for the continuation of a higher education program that, in collaboration with private industry, allows students to earn a Bachelor’s of Science degree in engineering from Minnesota State University Mankato. The IRHEC has also approved and I support an expenditure of up to $820,000 (phase 1 $370,000, phase 2 $450,000) for the implementation of the Northeast Higher Education District President’s Cabinet plans to merge the five independently accredited colleges (six campuses) of NHED merge into one accredited college (six campuses). This initiative is known as VisionNE. The one-college model is planned to begin operation in the Fall of 2022. Intended Outcomes of Restructuring: 1. Maintain the vitality of the six NHED campuses. 2. Create seamless learning experiences for students across the region.

3. Increase student enrollment and success measures through a comprehensive/cohesive enrollment management plan.

4. Expand existing academic programming regionally and develop new programming. 5. Advance regional business/industry, university, and K-12 partnerships.

6. Improve instructional efficiency and streamline operational processes. 7. Leverage the capacity and flexibility of a larger college and maintain individual campus

identities. Funding Authorization: This expenditure is authorized under the provisions of the Iron Range Higher Education Committee and the Iron Range Higher Education Account as codified under Minnesota Statutes, Section 298.2214 and 298.28, subdivision 9d, respectively.


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Overview

The Iron Range Engineering (IRE) program is a Northeast Higher Education District program operated on the Mesabi Range College campus. The Minn State partners that employ the faculty and enroll the students are Mesabi, Itasca Community College, and Minnesota State University, Mankato. Implemented initially as an upper division (junior and senior year) program, IRE has expanded to lower division (freshmen and sophomore year). IRE started in 2009, began graduating students in 2011, gained ABET accreditation in 2013 and 2017, and has received national and international recognition. In 2017, IRE received the ABET innovation award. This award recognizes the pioneering institutions that challenge the status quo in engineering education. ABET accredits over 3700 engineering institutions in 33 different countries and at the time, had only given away their innovation award twice in its history. ABET recognized the IRE Program at an event in Baltimore, Maryland. Along with this, in 2018, MIT released a study listing the top ten emerging world leaders in engineering education. Iron Range Engineering was listed as number five and was one of only three institutions on the list from the United States. IRE took part in a global colloquium held at MIT last April with the other world leaders listed in the study. IRE was slated to be honored at a second global colloquium in London, England in April 2020, but due to COVID, this has been postponed. With the partnerships IRE has developed in its ten years, it has become a regional asset for students and industry employees. Recently, IRE industry partners have started to take notice on a large scale. To see financial recognition from companies, please go the awards and recognitions section of this document on page 2. During the spring 2020 semester, COVID-19 impacted every part of society. It was up to the faculty and staff at IRE to manage uncertainty during an evolving and complex situation. Within a day of being notified that the entire curriculum would be moved to online, a plan was in place to continue to educate IRE students. The plan allowed for a week of time to finalize projects and send to clients. It also allowed for eight week classes to be compressed into four weeks. Both of these strategies still added value to the project while maintaining high quality learning for the students. No student was left behind or fell through the cracks during the transition. For students who have been looking for job opportunities, many have lost internships and co-ops due to COVID. There have also been recent graduates who have had employment fall through. As a program, IRE is supporting them in whatever way possible. One way has been to offer additional summer courses for students.

Program Highlights

Enrollments and Graduates

IRE graduates 20-25 engineers per year.

To date, 180 students have graduated from the program.

67% of IRE graduates are employed as engineers in northeastern Minnesota.

95% of the students who started IRE have graduated or are still progressing to graduation.

In academic year 2019-2020, there was a 35% increase in students who started the IRE program.

86% of all IRE graduates came from northeastern Minnesota.

28% of all IRE graduates are women.

28% of all IRE graduates are nontraditional students.


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The first five graduates who took the Professional Engineer’s (PE) exam, passed the exam.

22% of all IRE graduates are heading towards their PE or pursuing a graduate degree.

95% of graduates have employment within 6 months of graduating.

Projects

IRE students complete engineering design projects for an average of 16-20 regional industries per semester.

IRE students complete an average of 4-6 entrepreneurial projects per semester.

To date, approximately 255 projects have been completed for industry partners. 85% of the projects were in

northeastern Minnesota.

Awards and Recognitions

IRE Received recognition in a 2018 MIT Study.

o IRE Faculty attended the MIT sponsored global colloquium in Boston. The program was going to be

honored at a second global colloquium in 2020 taking place in London, England. This has been

postponed.

PCA Boise has presented Iron Range Engineering with a $100,000 endowment.

Marvin Windows and Doors donates $3,000 to IRE annually.

Barr Engineering donates $1,000 to IRE annually.

A private donor donates $6,000 to IRE annually.

Don and Yvonne Webb:

o Donate $25,000 - $30,000 in scholarships annually.

o Are leaving an endowment in their will to the IRE program.

Aagard awarded a $10,000 grant to IRE for student equipment.

girlsBEST grant (worth $14,000) finalist for recruiting efforts.

Cleveland-Cliffs United Taconite will be awarding a $2,000 this fall.

NASA CFO, Melanie Saunders, recognized IRE as one of the top ten emerging world leaders in engineering

education.

Future Outlook

Before COVID, the IRE program enrollment was projected to increase. IRE has taken steps to ensure

projections are maintained.

The IRE program qualifies for displaced worker training.

Research is being done on IRE as a difference maker in engineering education. World leaders are looking to

IRE for guidance.

KEEN (the Kern Entrepreneurial Engineering Network) has become interested in IRE. Faculty members have

become active members of their community.

IRE has rehired Dr. Dan Ewert. He brings a plethora of knowledge, expertise, and value to the program.


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Expenses

FY2021 Budget Request for Iron Range Engineering

ESTIMATED EXPENSES

Description Amount

Consulting $ 20,000

Personnel $ 840,000

TOTAL $ 860,000

The expenses for Iron Range Engineering (IRE) can be broken down into two main categories: personnel and consultants. IRE’s operating budget continues to trend in a downward trajectory as the effort for sustainability carries on. A description of each category can be seen in the subsequent pages. Consulting - $20,000

The consulting expense is for having project facilitators who act as guides to student project teams. These engineers in residence help ensure successful project completion as well as successful project-based learning for each of the students on the team they are facilitating. Specific job duties include:

1. Interacting with the project teams during bi-weekly meetings to assess design and learning progress as well

as individual contributions to the team

2. Work with each student on their project team to ensure evidence for a student’s project based learning is

being collected/supported

3. Attend other project teams’ design reviews to evaluate how a design is meeting requirements and ask

difficult engineering questions in order to challenge IRE students’ thinking

4. Review reflections written by students on a weekly basis and provide valuable feedback

5. Provide a 360 review for each student at the end of the semester evaluating their performance in a variety of

areas

To provide an example of how a facilitator interacts with a student team, a past project at IRE was re-evaluating a pit sump pump and piping system at a local mine. To start the semester, the facilitator contacted the client contact to set the initial scoping meeting between the student project team and the industry representative. The facilitator also attended this meeting with the team to ensure all of the pertinent information was gained during the visit to ensure efficiency and learning. After this, bi-weekly meetings took place with the student team to discuss what information has been gathered by the team (current pit conditions, pump specifications, pipe size, ergonomics, safety etc) and what is left to be gathered. At these bi-weekly meetings, the facilitator also has worked with the team to determine what calculations need/have to be completed in order to select the correct type of pump, do system head


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calculations, size piping, evaluate pump curves, etc. This ensures that students are learning the content and complete the project to client expectations. Each facilitator reviews weekly reflections that the student submits on a variety of topics such as the scoping process (how the student felt it went, and what they could improve upon) as well as help the student set and accomplish goals. Throughout this process, the facilitator removes obstacles so that the project and student learning goals both remain on schedule. Along with this, the facilitator attends weekly meetings with other faculty and facilitators to discuss what the upcoming academic requirements are for IRE (presentations, technical documents, project based learning, etc) so the facilitators are prepared to answer questions on these topics. Facilitators are a window into the profession for student engineers. Their guidance is essential to help student success in college and once students graduate. Personnel - $840,000

The Iron Range Engineering personnel breakdown can be seen in supporting documentation titled Iron Range Engineering: Faculty and Staff Breakdown, FY2021. This document includes, names, titles, duties, and salaries of the individuals involved in the operation of IRE. Not only do these individuals teach the next generation of engineers, but the are contributors to the local economy. Many have moved to the region specifically for obtaining (and retaining) a job at IRE. These individuals have bought homes, rent, buy goods, etc, on the Iron Range.


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Faculty and Staff Breakdown


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VisionNE

Northeast Higher Education District (NHED)

IRHEC – May 27, 2020

For consideration at the May 27, 2020 IRHEC meeting - A broad overview of the progress on VisionNE (the

operational restructuring of our five college district into a single college with six campuses) and a request for financial

support with itemized budget.

Northeast Higher Education District (NHED)

NHED consists of five independently accredited community colleges (Hibbing, Itasca, Mesabi Range [two campuses],

Rainy River, & Vermilion) within the Minnesota State Colleges and Universities system. The five colleges share a

president and several non-instructional services. While the colleges work closely together in many areas, they still

operate as independent colleges in areas such as academic programming, enrollment management, budget,

accreditation, and athletics.

The Plan

The Northeast Higher Education District President’s Cabinet plans to merge the five independently accredited colleges

(six campuses) of NHED merge into one accredited college (six campuses). The one-college model is planned to

begin operation

Rational for the Recommendation

Significant and sustained enrollment decline (33% loss of tuition paying student FYE from 2011-2019) limits our

ability to make strategic investments, results in fewer employees to serve students, and leaves us vulnerable as five of

the seven smallest colleges in the Minnesota State system. Operating as five separate colleges produces inefficiencies

and duplicative expenses that are more difficult to absorb with declining revenue and creates barriers to the increasing

number of students who seek access to courses and programs at multiple NHED colleges. The COVID-19 crisis has

significantly exasperated the enrollment challenges, which adds urgency to completing the objectives of VisionNE.

Intended Outcomes of Restructuring

Maintain the vitality of the six NHED campuses.

Create seamless learning experiences for students across the region.

Increase student enrollment and success measures through a comprehensive/cohesive enrollment management

plan.

Expand existing academic programming regionally and develop new programming.

Advance regional business/industry, university, and K-12 partnerships.

Improve instructional efficiency and streamline operational processes.

Leverage the capacity and flexibility of a larger college and maintain individual campus identities.

Important Considerations

Maintaining strong campus identities.

Ensuring f-2-f instruction and services to students remains primary wherever possible.

Keeping effective practices intact.

Recognizing restructuring will be an evolutionary process and will take time to implement effectively.


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Process Leading to this Recommendation

Strategic planning outcomes along with sustained enrollment decline and financial challenges led to the development

of a Regional Academic Plan (RAP) by a committee of NHED faculty, staff, and administrators who met regularly

through the 2018-2019 academic year. The resulting RAP consisted of several academic goals and -most notably- a

proposal to restructure by merging accreditations. After extensive communication across stakeholder groups, the one

college model was chosen as the most effective path forward.

Approvals

Received formal approval from the Minnesota State Colleges and Universities Board of Trustees (BOT) in February to

proceed with the Higher Learning Commission’s (HLC) Change of Structure process. Met with HLC president and

chief of staff and received verbal support and assurance. Submitted a formal letter of intent to merge accreditations

with the HLC.

Current Work Status/Next Steps

VisionNE Advisory Council Meeting scheduled in early June

Formed workgroups. See appendix A.

Innovation Teams begin work in June

Finalizing MOU with faculty related to VisionNE AASC and leadership workgroup. Begin academic redesign

upon completion of MOU

Opted out of contracted project management and instead utilized local/internal coordinators/process experts.

Building a comprehensive timeline for work completion and implementation within departments/disciplines.

Submitting Multi-Campus Collaboration grant through Minn State system office.

Conducting Workforce of the Future Summits within specific industry sectors.

Total Request for VisionNE Financial Support – IRHEC $787,000 (Over 2 years $347K/$440K)

Appendix B includes itemized budget including line-item descriptions and secured or anticipated additional

funding.


Page - 20 -

Giants Ridge Recreation Area Tax – Use of Proceeds



Date: 6/10/2020 To: Iron Range Resources & Rehabilitation Board From: Mark Phillips Commissioner RE: GIANTS RIDGE RECREATION TAX AMENITIES PROPOSAL – $174,000 RECREATION TAX USE

The Giants Ridge Recreation Area (GRRA) Special Tax (admissions and recreation, lodging, food and beverage), which was passed by the Minnesota State Legislature and implemented by the city of Biwabik in 2010 is dedicated to construction, renovation, improvement, expansion or maintenance of public recreation facilities located within portions of the city of Biwabik that lie within GRRA. Under current law the Commissioner, after consultation with the Board, must approve expenditures of the tax revenues. The tax revenue balance as of April 30, 2020 is $378,745. The Giants Ridge management team, in conjunction with the Giants Ridge Master Association president, provided the agency with tax use recommendations. The four recommended projects will enhance the amenities and recreation for the region’s residents and visitors.

Maintenance of the mountain bike trails and climbing wall: $54,000.

Expand the children’s play area: $35,000.

Enhance the existing hiking trail that connects the chalet campus to the Villas: $35,000.

Construct a walking path and interpretive loop at the top of the mountain: $50,000.

Past projects that have been approved include: climbing wall, children’s outdoor play area, gravity mountain bike trails and hiking trail design. The total investment for those projects was $569,000.

FY 2021 Budget Wednesday, June 10, 2020

Page 1

FY 2021 Budget

Investing resources to foster vibrant growth and economic prosperity in northeastern Minnesota.

lhall

Typewritten Text

Addendum A


Page 2

FY 2021 Budget Table of Contents

INTRODUCTION .................................................................................................. 3

STRATEGIC PRIORITIES & FUNDING ..................................................................... 3

FY21 BUDGET ...................................................................................................... 4

PROJECTS ............................................................................................................ 5

Development Projects ..................................................................................... 5 Public Works ................................................................................................... 5 Public Works – DJJ Corpus Trust ...................................................................... 5 Regional Trails Program .................................................................................. 5 Taconite Area Business Relief Loan Program ................................................... 5 Taconite Area Community Relief Grant Program ............................................. 5 Projects Budget ............................................................................................... 6

PROGRAMS ......................................................................................................... 7

GRANTS ................................................................................................................ 7 Community Development ................................................................................ 7 Workforce Development ................................................................................. 7 Mineland Reclamation .................................................................................... 8 Culture and Tourism ........................................................................................ 8 Commissioner Program ................................................................................... 8 Application Fund ............................................................................................. 8 Programs Budget ............................................................................................ 9

REGION III ......................................................................................................... 10

GIANTS RIDGE ................................................................................................... 11

Giants Ridge Budget ...................................................................................... 11

OPERATIONAL COSTS ........................................................................................ 12

Operational Costs Budget .............................................................................. 12


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Mission Investing resources to foster vibrant growth and economic prosperity in

northeastern Minnesota.

Introduction FY21 is beginning amidst the COVID-19 global health pandemic, an unprecedented time in state, national and world history. The pandemic has impacted all areas of life including the economy, education, civics, government, health care, broadband, technology, child care, retail, food, supply chains, mining and other almost every other industry. The Iron Range Resources & Rehabilitation annual budget is funded from a three-year average of local mining production. During the spring at the onset of the pandemic, area mining companies idled their production lines until August 2020 or longer and laid off or furloughed approximately 40% of their employees. The result is a reduced production this year of approximately 10 million tons of taconite.

The resulting effects on agency revenue have been considered in the FY21 budget while still providing vital funding to private businesses, local governments, tribal nations, educational institutions and nonprofits. By managing our future reserves that result from this conservative budget we move together into short- and long-term recovery responses to economic, social and regional changes. Businesses and communities will be adapting to an increased demand for social distancing, robust broadband and teleworking. Our agency will continue to support projects that:

Retain and create jobs.

Leverage our agency’s investment with state, federal and philanthropic funding.

Improve the region’s quality of life. The FY21 budget supports the upcoming challenges to our region’s communities, businesses and workforce. The region, its economy and its people will prevail.

Strategic Priorities & Funding Strategic priorities support long-term economic growth and the well-being of all people in northeastern Minnesota. The budget focuses on leveraging capital, improving the quality of life, and retaining and creating good paying jobs.

• Increase investments by over $7 million to 35% of our budget to foster vibrant growth and economic prosperity in northeastern Minnesota through low interest loans that support infrastructure, demolition, equipment, machinery, building and land acquisitions.

• Investments of 54% of the budget in community foundational and social assets including Giants Ridge ensure quality of life for the people of our region.

• Investments of over $12 million in education and training that produces skilled workers to fill jobs in demand, and increases availability and access to innovative K-12 career pathway education.

• Investments into the agency’s fixed costs that support our three major initiatives comprise 10% of the budget.


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FY21 Budget

** DJJ Corpus Trust funds to cover Public Works, Regional Trails Program, Giants Ridge capital and

Taconite Area Business Loan and Community Grant Relief Programs.

Iron Range Resources & Rehabilitation Board

FY 2020 Budget

FY 2020 Projected

FY 2021 Budget

Resources

Carryforward In $8,827,156 $15,171,375 $10,797,469

Current Resources

Taconite Production Taxes $18,678,752 $18,678,752 $25,361,190

Investment Earnings 2,915,706 2,472,434 2,696,585

Loan Revenues 2,400,763 2,877,727 3,313,769

Facilities Revenues 5,523,155 5,242,888 5,312,043

Occupation Tax Region III 524,015 524,015 569,542

** DJJ Corpus Trust 6,000,000 5,332,971 12,220,000

Subtotal Current Resources $36,042,391 $35,128,787 $49,473,129

Total Resources $44,869,547 $50,300,162 $60,270,598

Estimated Expenditures

Projects

Development Projects 5,500,000 4,760,000 5,500,000

Public Works 6,500,000 6,500,000 5,500,000

** Public Works - DJJ Corpus Trust 2,000,000 2,000,000 2,000,000

** Regional Trails Program - DJJ Corpus Trust 2,500,000 1,832,971 2,000,000

** Taconite Area Business Relief Loan Program 0 0 5,000,000

** Taconite Area Community Relief Grant Program 0 0 2,000,000

Total Projects $16,500,000 $15,092,971 $22,000,000

Programs

Program Grants 6,305,000 5,795,116 6,922,500

Occupation Tax Region III 524,015 524,015 569,542

Total Programs $6,829,015 $6,319,131 $7,492,042

Giants Ridge 9,590,764 9,205,916 9,656,851

** Giants Ridge Capital - DJJ Corpus Trust 1,500,000 1,500,000 1,220,000

Total Giants Ridge $11,090,764 $10,705,916 $10,876,851

Operations & Development Fixed Costs $8,250,354 $7,384,675 $7,537,658

Total Budget $42,670,133 $39,502,693 $47,906,551

Estimated Carryforward Out $2,199,414 $10,797,469 $12,364,047


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Projects

Development Projects - $5,500,000 A total of $5,500,000 is designated for economic development projects to promote business development opportunities and attract new investments to the region. To streamline approvals, improve timeliness, and better serve businesses, the Commissioner, with approval of the IRRR Board Chair, is authorized to approve development projects of $500,000 and less for projects that meet the following conditions:

Qualify for Iron Range Resources & Rehabilitation financing under established guidelines.

Approved by the Technical Advisory Committee (TAC).

Public Works - $5,500,000 Public works grants help cities, townships, airport authorities, hospital boards, utility commissions and collaborative organizations complete projects that support community and economic development. Eligible projects include, but are not limited to, publicly owned infrastructure such as wastewater, drinking water, storm water and utility systems, health care and airport facility improvements and renewable energy or energy efficiency initiatives.

Public Works – DJJ Corpus Trust - $2,000,000 These funds cover additional Public Works projects.

Regional Trails Program - $2,000,000 The Regional Trails Grant Program provides funding to assist cities and townships with trail planning, design and construction of various types of trails within the region. Trail types may include: bike, hiking, ATV and snowmobile.

Taconite Area Business Relief Loan Program - $5,000,000 This appropriation provides relief to businesses in the agency’s service area that have been adversely impacted by the COVID-19 pandemic. Under the program guidelines, area businesses would be eligible for low cost loans of up to $40,000. Agency financing would be in the form of a non-recourse loan to the Entrepreneur Fund, which would originate and service the loans to the individual businesses

Taconite Area Community Relief Grant Program - $2,000,000 This appropriation provides grants at the discretion of local units of government to assist local businesses adversely impacted by the COVID-19 pandemic.


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Projects Budget

Development Projects

FY 2020 Budget

FY 2020 Projected

FY 2021 Budget

Development Projects $5,500,000 $4,760,000 $5,500,000

Public Works 6,500,000 6,500,000 5,500,000

Public Works – DJJ Corpus Trust 2,000,000 2,000,000 2,000,000

Regional Trails Program 2,500,000 1,832,971 2,000,000

Taconite Area Business Relief Loan Program 0 0 5,000,000

Taconite Area Community Relief Grant Program 0 0 2,000,000

Total Development Projects $16,500,000 $15,092,971 $22,000,000


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Programs

Grants

Community Development

Commercial Redevelopment - $1,000,000 Commercial Redevelopment grants fund the demolition and removal of commercial or publicly-owned structures, or the clean-up of brownfield sites, making way for new development. Residential Redevelopment - $275,000 Residential Redevelopment grants help create cleaner and safer communities and encourage new construction by assisting in the demolition of dilapidated residential structures. Development Partnerships - $625,000 The program funds partnerships for research, education, and development-based initiatives which support long term economic growth within the region and are consistent with Iron Range Resources & Rehabilitation strategies. Downtown Streetscapes - $200,000 The Downtown Streetscapes grant program incentivizes further investment in downtown areas and business corridors by promoting safe and attractive environments for residents, shoppers, workers and visitors. This program provides funding for highly visible and creative projects to create excitement, encourage citizen engagement and generate visible improvements. Research & Planning – $50,000 This program provides matching funds for research needed to catalyze technologies that leverage northeastern Minnesota natural resource assets into commercial business opportunities. Funding is designed to integrate industry, academic and governmental efforts on natural resource-based projects that align with the mission of Iron Range Resources & Rehabilitation. Business Energy Retrofit - $1,000,000 The program is funded by Iron Range Resources & Rehabilitation and administered through a partnership with Arrowhead Economic Opportunity Agency (AEOA) to assist business owners with energy efficient improvements and code compliance upgrades to their buildings.

Workforce Development - $350,000 Grants assist in workforce development by funding sector specific customized training programs for industry, industry clusters, schools or collaborative partnerships that build capacity, responsiveness or innovation to address workforce needs. Funding is also


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available for post-secondary educational institutions and other regional workforce development partners to develop and deliver curriculum that prepares students for a seamless transition from high school or post-secondary education to the workforce.

Mineland Reclamation - $1,292,500 The Mineland Reclamation grant programs assist communities and townships with reclaiming and reuse of mine impacted lands, identify and plan new development opportunities and provide the tools to achieve these goals. This program provides funding for highly visible reclamation. The budget includes funds for the Canisteo and Hill Annex Pit Outlet Project Monitoring, Modeling, Pit Wall Stability Studies and additional studies as needed. The Drilling Incentive Program helps to stimulate additional mineral exploration within the region.

Culture and Tourism

Culture and Tourism - $350,000 Culture and Tourism grants assist non-profit organizations to undertake projects that stimulate tourism and enrich the quality of life in communities through artistic, cultural, heritage or recreational activities. Minnesota Discovery Center - $1,450,000 Minnesota Discovery Center’s mission is to “collect, preserve, interpret and promote the history and cultural heritage of northeastern Minnesota; and to manage, promote, sustain and develop the assets of Ironworld for the long-term benefit of area residents and visitors.” Through FY 2021 the Sublease/Management Agreement provides an annual $1,100,000 operating subsidy, the interest on an endowment fund and a $150,000 challenge grant for operating or endowment fund raising. In addition to these financial terms, the budget includes $200,000 for building capital improvements.

Commissioner Program - $300,000 Grants under the Commissioner Program allow the agency to respond quickly to emergency situations or to support development opportunities that may not meet other program requirements.

Application Fund - $30,000 The grant program reimburses communities, non-profits and educational organizations for up to one-half of the cost of applying for funding from other state, federal or private grant programs.


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Programs Budget

Program Grants

FY 2020 Budget

FY 2020 Projected

FY 2021 Budget

Community Development

Commercial Redevelopment $750,000 $750,000 $1,000,000

Residential Redevelopment 300,000 300,000 275,000

Development Partnerships 375,000 375,000 625,000

Downtown Streetscapes 200,000 200,000 200,000

Research & Planning 0 0 50,000

Business Energy Retrofit 1,000,000 1,000,000 1,000,000

EDA Partnership Pilot 250,000 250,000 0

Total Community Development $2,875,000 $2,875,000 $3,150,000

Workforce Development $350,000 $350,000 $350,000

Mineland Reclamation $950,000 $440,116 $ 1,292,500

Culture & Tourism

Culture & Tourism $350,000 $350,000 $350,000

Minnesota Discovery Center 1,450,000 1,450,000 1,450,000

Total Culture & Tourism $1,800,000 $1,800,000 $1,800,000

Commissioner Program $300,000 $300,000 $300,000

Application Fund $30,000 $30,000 $30,000

Total Program Grants $6,305,000 $5,795,116 $6,922,500


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Region III

State law directs Iron Range Resources & Rehabilitation to serve as the fiscal agent for Carlton and Koochiching County (Region III) grants from occupation taxes for economic and environmental development projects. Iron Range Resources & Rehabilitation does not make any funding decisions, but funds pass through under the following provisions:

The Region III allocation is equal to the amount that would have been generated by a 1.5-cent tax imposed on each taxable ton for the preceding production year.

By law, one-third of the portion allocated for Koochiching County must be used to fund the Koochiching County Economic Development Commission.

Region III Grant – Carlton/Koochiching

FY 2020 Budget

FY 2020 Projected

FY 2021 Budget

Region III $524,015 $524,015 $569,542


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Giants Ridge Giants Ridge Recreation Area promotes destination tourism and offers a variety of recreational opportunities that enhance the quality of life for visitors and area residents. It also supports the agency’s mission to enhance and diversify the economy of the Iron Range Resources & Rehabilitation service area. Multiplier economic impacts from Giants Ridge on the local economy are estimated to be over $43 million today and $98 million by 2035. Continued investments in the facility help meet customer expectations and keep Giants Ridge competitive. Giants Ridge is a destination for amateur and high school sports and is currently the host site for the Minnesota State High School League alpine and cross country state championship races. Private sector lodging partners help fulfill hospitality needs in the recreation area and it is also home to a growing residential development population. The facility has a single operator management contract for all recreational amenities. The model provides for expanded revenue opportunities and provides more flexibility. This budget supports reinvestment at Giants Ridge to build a better future.

Giants Ridge Budget FY 2020 FY 2020 FY 2021 Giants Ridge Budget Projected Budget

Revenue

Operating Revenues $5,324,813 $4,939,965 $5,113,700

Investment by Type

Operations $3,308,410 $3,418,410 $3,413,451

New Capital / Projects 1,142,371 1,132,371 1,731,700

Capital / Projects Deferred from FY19/FY20

815,170 715,170 118,000

Deferred Maintenance Account 500,000 500,000 500,000

Total Investment $5,765,951 $5,765,951 $5,763,151

Total Expense Budget $11,090,764 $10,705,916 $10,876,851


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Operational Costs Operational costs include day-to-day general and administrative expenses for running the agency: payroll, purchased services, indirect costs, supplies, materials, repairs and maintenance. Payroll expenses include all Operations and Development employees.

Operational Costs Budget

Operational Costs

FY 2020 Budget

FY 2020 Projected

FY 2021 Budget

Payroll

Wages and Benefits $4,233,229 $4,053,725 $4,585,814

Retirement Insurance 273,296 265,003 270,854

Unemployment Compensation 25,000 830 12,000

Workers Compensation 51,597 51,435 51,597

Other Payroll Costs 13,490 29,491 11,590

Total Payroll $4,596,612 $4,400,484 $4,931,855

Purchased Services

Rentals and Utilities $113,440 $59,140 $114,761

Printing and Advertising 80,500 55,334 70,500

Professional/Technical Services 496,500 283,064 421,500

Computer and Computer Services 187,372 250,133 187,000

Communications 153,100 143,909 152,000

Travel 205,500 133,456 206,000

Employee Development 54,000 18,473 49,500

Total Purchased Services $1,290,412 $943,509 $1,201,261

Supplies and Equipment $381,450 $250,630 $392,622

Repairs and Maintenance $1,753,270 $1,546,564 $778,270

Indirect Costs

Statewide Indirect Costs $10,575 $11,659 $13,615

Attorney General Costs 18,000 2,236 15,000

Total Indirect Costs $28,575 $13,895 $28,615

Other Operating Costs $200,035 $229,593 $205,035

Total Operational Costs $8,250,354 $7,384,675 $7,537,658

IRON RANGE RESOURCES AND REHABILITATION BOARD

MARCH 18, 2020, MEETING MINUTES

PAGE 1

Addendum B

IRRRB Meeting Minutes Wednesday, March 18, 2020 – 8:30 a.m.

(In accordance with Minnesota Governor Tim Walz’s Executive Order 20-01 and due to the COVID-19 pandemic, the meeting was held by conference call

as authorized by Minnesota Statute Section 130.21) Call administered at Iron Range Resources & Rehabilitation

Eveleth, Minnesota

1) Roll Call Representative Rob Ecklund (who was present at IRRR), chair, called the meeting to order at approximately 8:30 a.m. Present by phone: Representative Sandy Layman, Representative Dave Lislegard, Representative Julie Sandstede, Senator Tom Bakk, Senator Carrie Ruud, Senator David Tomassoni. Excused: Senator Justin Eichorn; Representative Dale Lueck. Present at IRRR: Minute Taker: Laureen Hall, Executive Aide. Also present: Mark Phillips, Commissioner; Jason Meta, Deputy Commissioner; Al Becicka, Legal Counsel; Roy Smith, Director of Talent Development; Bob Scuffy, Accounting Director; Chris Ismil, Community Development Representative; Scott Sundvall, Loan Officer; Janette Godec, Executive Assistant. Present by phone: Erik Erie, Ely Schools Superintendent. 2) Approval of the December 19, 2019, Minutes Senator David Tomassoni moved approval of the December 19, 2019, meeting minutes. Seconded by Senator Carrie Ruud. Motion carried. Voting in Favor of the Motion: Representative Rob Ecklund, Representative Sandy Layman, Representative Dave Lislegard, Representative Julie Sandstede, Senator Tom Bakk, Senator Carrie Ruud, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Senator Justin Eichorn; Representative Dale Lueck 3) Iron Range School Consolidation and Cooperatively Operated School Account – Resolution #20-

020 Senator Tom Bakk moved that the Board recommend an expenditure of up to $7,000,000 of Iron Range School Consolidation and Cooperatively Operated School Account funds for demolition and infrastructure construction as part of a $19,903,000 Independent School District No. 696 (the Ely School District) project to address safety issues and increase educational opportunities for its students, contingent upon approval of a voter referendum for such projects no later than December 31, 2020, as presented in Resolution #20-020 and Board packet materials. Seconded by Senator Carrie Ruud. Motion carried.



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Roll call taken: Voting in Favor of the Motion: Representative Rob Ecklund, Representative Sandy Layman, Representative Dave Lislegard, Representative Julie Sandstede, Senator Tom Bakk, Senator Carrie Ruud, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Senator Justin Eichorn; Representative Dale Lueck

IRON RANGE RESOURCES AND REHABILITATION ADVISORY BOARD OF THE STATE OF MINNESOTA

IRON RANGE SCHOOL CONSOLIDATION AND COOPERATIVELY OPERATED SCHOOL ACCOUNT EXPENDITURE

Resolution No.: 20-020 WHEREAS, Minnesota Statutes Section 298.28, subdivision 7a created the Iron Range school consolidation and cooperatively operated school account (“School Account”) for the purpose of authorizing the Commissioner, after consultation with the Iron Range Resources and Rehabilitation Advisory Board (“Board”), to provide disbursements to assist certain statutorily identified school districts with the payment of bonds that were issued for qualified school projects, or for any other school disbursement to school districts that are located within the taconite assistance area as defined in Minnesota Statutes Section 273.1341 (“TAA”); and WHEREAS, the Commissioner has received a proposal for the expenditure of up to $7,000,000 of such School Account funds for a project for Independent School District No. 696 as more specifically set forth in Exhibit A, which is attached hereto and incorporated by reference (“Proposed Disbursement”); and WHEREAS, the Board met via teleconference at 8:30 a.m. on March 18, 2020, in accordance with Governor Tim Walz’s Emergency Executive Order 20-01 Declaring a Peacetime Emergency and Coordinating Minnesota’s Strategy to Protect Minnesotans from COVID-19, and the authority for such method of meeting provided under Minnesota Statutes Section 13D.021, to consider, among other matters, the Proposed Disbursement and has determined that such expenditure would be in the public interest and promote the advancement of schools within the TAA. NOW, THEREFORE, IT IS RESOLVED, that the Board hereby recommends that the Commissioner approve the expenditure of up to $7,000,000 of School Account funds for the Proposed Disbursement. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION ADVISORY BOARD THIS 18TH DAY OF MARCH 2020.



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Member Aye Nay Abstain Excused

Senator Tom Bakk X

Senator Justin Eichorn X

Senator Carrie Ruud X

Senator David Tomassoni X

Representative Rob Ecklund X

Representative Sandy Layman X

Representative Dave Lislegard X

Representative Dale Lueck X

Representative Julie Sandstede X

TOTAL 7 0 0 2

Signed:___________________________ Representative Rob Ecklund, Chair

EXHIBIT A

Ely School District - $7,000,000 A $7 million disbursement to the Ely School District for demolition and infrastructure construction as part of a $19,903,000 project to address safety issues and increase educational opportunities for its students, contingent upon approval of a voter referendum for such projects no later than December 31, 2020.

P.O. Box 441

4261 Highway 53 South Eveleth, Minnesota 55734-0441 (218)735-3000 • 800-765-5043

Date: 3/18/2020 To: Iron Range Resources and Rehabilitation Board From: Mark Phillips Commissioner RE: IRON RANGE SCHOOL COLLABORATION ACCOUNT EXPENDITURE

Minnesota Statutes Section 298.28, subdivision 7a, created the Iron Range school consolidation and cooperatively operated school account (“School Account”) for the purpose of authorizing the Commissioner, after consultation with the Iron Range Resources and Rehabilitation Advisory Board (“Board”), to provide disbursements to assist certain statutorily identified school districts with the payment of bonds that were issued for qualified school projects, or for any other school disbursement



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to school districts that are located within the taconite assistance area as defined in Minnesota Statutes Section 273.1341 (“TAA”). Independent School District No. 696 is seeking $7,000,000 in funding from the agency for demolition and infrastructure construction as part of a $19,903,000 project to address safety issues and increase educational opportunities for its students (the “Project”). The District’s geographic location makes it difficult to partner with neighboring districts. However, the district is financially viable and has stable enrollment numbers that demonstrate moderate growth over time. I have determined that a grant from the School Account in the amount of $7,000,000 for demolition and infrastructure costs associated with the Project would be an appropriate investment. Agency funding for the Project is contingent upon the approval of a referendum by the voters of ISD No. 696. Funding Authorization: This expenditure is authorized under the provisions of the Iron Range School Consolidation and Cooperatively Operated School Account as codified under Minnesota Statutes Section 298.28, subdivision 7a.

Ely Public Schools A New Start for Students at the End of the Road

Proposal to the Commissioner of the Minnesota Department of Iron Range Resources & Rehabilitation

Overview: The Ely community has been working since 2009 to upgrade their century old facilities, bring new technology and offerings to students, and to cooperate as much as possible with other entities to efficiently provide the best possible educational opportunities. The Ely School Board has developed a referendum plan to bring to the voters in August, 2020, which needs to be passed and submitted to the state Department of Education in May, 2020. The Ely Public Schools and community, therefore, would appreciate the support of the IRRR and the IRRRB prior to May in order to present a comprehensive plan to the voters of the Ely School District. The Proposal: Ely proposes to tear down the existing 1919 Industrial Arts Building, which currently houses two teachers and a pre-school class area. In between the current Memorial High School and Washington Elementary School, a new building would be added to house advanced technology classes, industrial arts, a new kitchen, classrooms, community space and elementary gym, and maker space. In addition, resources will be spent to eliminate the facilities’ lead in the water problem, retention and upgrade of the existing heating systems, energy efficiency upgrades including windows, doors, etc., roof repairs, technology upgrades throughout the buildings, HVAC infrastructure improvements, relocation of the band and choir areas, and historically compatible renovations in the Auditorium. This will create one building on campus, eliminating the safety issues and loss of teaching time walking students outside to other classrooms, gym, or breakfast/lunch. It will create a dynamic and secure facility that can be used by the community during non-school times. The teardown of the Industrial Arts



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Building will create this new space while also providing the space for the long-term renovation of the athletic facility and the creation of a track when funding is secured in the future. The Facts:

It costs more to renovate the 1919 Industrial Arts Building than demolishing it and building a new, connecting unit between the Memorial High and Washington Elementary Schools.

We are reducing the campus footprint by 7600 square feet, saving substantial long-term operating and maintenance cost.

The pre-school program will be relocated to the existing, renovated Memorial High School or Washington Elementary.

The investment in new heating systems will be retained by engineering them into the new connecting building.

Technology upgrades will allow the staff to use handheld devices rather than just textbooks, in order for information and technology to be available for constant improvement.

Safety and Security will be improved with a comprehensive, new entrance/exit plan and community access plan.

The proposal provides an area for Maker Space programming, new Industrial Arts and Technology-based classrooms, a new, modern Media Center, and relocation and expansion of the Fine Arts programs.

The proposal provides for a new cafeteria and elementary gymnasium. The Cost:

$19,657,000 Sources:

$10 million, voter approved referendum levy/bond $500,000 from Ely Schools General Fund Balance $1.6 million from Ely Schools Long-Term Maintenance Fund (bond) $495,000 from Minnesota Department of Education School Safety Grant $7.062 million request from Minnesota Department of

Iron Range Resources & Rehabilitation for Infrastructure through the Iron Range School Collaboration Bricks and Mortar grant program

Cooperation, Collaboration, and Cost Savings:

o Part-time Superintendent cost savings o Sharing a Business Office Manager with area schools as a cost savings o Reduced operating costs through reduction in square footage and efficiency of new system

infrastructure o Partner with 5 other area schools in an innovative Summer Institute Program o Operating a private Pre-School and Head-Start on the Ely Schools campus o Partnering with Vermilion Community College and the Northeast Higher Education District to

provide college level classes for Ely students o Partnering with Vermilion Community College for shared athletic facilities. o Collaborating with the Applied Learning Institute to help provide equipment and programs that

enable Ely students to receive hands on training combined with technology



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o Collaborating with Education Innovation Partners (EIP) to help provide technology tools, including telepresence with shared opportunities for class electives

o Partnering with Northeast Range/St. Louis County Schools on sharing teachers and providing shared Foreign Language, Robotics, and future STEAM (Science, Technology, Engineering, Arts, Math) related class opportunities

o Partnering with Northeast Range/St. Louis County Schools for extra-curricular activities that Include, Girls Swimming, Boys Hockey, Boys and Girls Golf, Boys and Girls Trap, and American Legion Baseball

o Cooperative Washington D.C student trip with Northeast Range School o Working toward a common schedule and calendar to increase collaboration with Northeast

Range/St. Louis County Schools o Cooperative programs with local businesses and organizations in providing student support and

mentoring, including Ely Community Resources Staff and Public Meetings The Ely School District recognizes that the staff and community are integral to the success of the District. To keep these stakeholders informed, the District expects to solicit much more input as our project moves along and has held the following meeting with our stakeholders thus far:

Teacher Workshop presentation on November 4

Teacher Workshop presentation on January 20

Washington Elementary Faculty presentation on January 23

Memorial High School Faculty presentation on January 28

All Faculty presentation on February 6

Bus Driver presentation on February 11

Memorial High School Faculty meeting on February 26 *meetings below are open public meetings and posted as such o School Board Study Session with Community Survey Report from School Perceptions on

November 25 o School Board Study Session presentation on December 16 o School Board Study Session presentation on January 27 o School Board Study Session presentation on February 24 o City of Ely Committee meeting on December 11

Labor Agreements The Ely School District strives to provide employees with competitive wages and benefits through a collective bargaining process. The employee benefit package for teachers is the 2nd highest in the Region (ARCC Profiles). Contract negotiations with the teachers of the Ely Education Association for a new agreement are continuing with meetings scheduled for upcoming sessions until completion. Teachers have received step and lane increases for the 2019- 2020 school year. A new contract for support staff covered bargained with AFSCME has been ratified by their membership and the Ely School Board.



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Jobs The proposed construction and renovation of the Ely School District will present a significant boost to the local economy with regard to construction jobs. The proposed improvements will not only enhance our educational system when complete, but also create numerous construction and hospitality jobs in the process. With additional workers coming to town, our local businesses will also see an increase in traffic during project construction. The proposed construction period entails approximately 20 months of construction. These construction jobs include:

Cement workers

Masons

Carpenters

Laborers

Steel Workers

Excavation Contractors

Truck Drivers

Roofing Contractors

Drywall Contractors

Painters

Glazers

Cabinet-Makers

Flooring Contractors

Heating / Ventilation Contractors

Plumbers

Electricians

Technology-Cabling Contractors. It is estimated that through completion of the project that 95,000+ hours of labor force will be employed. This equates to over 28 full-time jobs over the 20-month construction period. With this project, materials from regional businesses will be specified as often as possible in order enhance local support and community involvement in this project. The Ely School District is excited to have the opportunity to bring this project to our region and enhance the educational system of the community, while providing safe and secure facilities. Why Should the IRRRB Support Ely?

Ely is at the end of the road. The Ely Schools have limited ability because of distance to collaborate or cooperate with other schools. Even with this as the case, Ely is sharing teachers, classes, and athletics with Northeast Range.

Ely has put together a reasonable, cost effective, and limited plan at $19.675 million.

The total IRRRB ask is 36% of the cost. Local taxpayers will pay 61% of the total project cost. Ely used some leverage by getting a commitment for $495,000 from the Minnesota Department of Education School Safety Grant.



PAGE 8

Ely property owners pay more than their fair share compared to other schools in the Taconite Area.

o Ely property owners support their school by paying 20.46% of the total cost. In comparison, Virginia property owners pay 5.41%, Eveleth-Gilbert 4.38%, Cook County 13.37%. Ely pays the highest rate locally of any taconite school.

Ely receives less taconite school aid than any other of the 15 taconite area schools: o Ely received a total of $308,755 in taconite funds to support its schools—ranking 15th

out of 15 schools! o In comparison, view the following:

Cook County $410,519 Eveleth Gilbert $1,621,316 Chisholm $1,395,455 Nashwauk-Keewatin $704,118 Crosby-Ironton $500,909 Greenway $1,424,525 Aitkin $320,038

Ely has no current bond payments being paid by IRRR funds.

Ely receives zero from the Taconite School Fund, the Taconite Railroad Aid Fund, and Taconite School Building Maintenance Fund.

Therefore, the Iron Range School Collaboration Fund’s partial support of the Ely project (36%) is an effort to balance out these inequities. We understand why Ely is not eligible for some of these other taconite funds, but this is a one-time chance with the Iron Range School Collaboration Fund, to help sustain the Ely Schools and improve outcomes for its students at the end of the road.



PAGE 9



PAGE 10

4) AW Holdings, LLC/Hali-Brite – Resolution #20-021 Representative Julie Sandstede moved that the Board recommend an expenditure of up to $1,000,000 of Douglas J. Johnson Economic Protection Trust Fund monies to purchase a participation interest in a bank loan to AW Enterprises that, in combination with funds provided from other sources, that will be used to purchase Hali-Brite, Inc. and move the tax base from South Dakota to the Crosby/Ironton area, as presented in Resolution #20-021. Seconded by Representative Dave Lislegard. Motion carried. Roll call taken: Voting in Favor of the Motion: Representative Rob Ecklund, Representative Sandy Layman, Representative Dave Lislegard, Representative Julie Sandstede, Senator Tom Bakk, Senator Carrie Ruud, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Senator Justin Eichorn; Representative Dale Lueck


DOUGLAS J JOHNSON ECONOMIC PROTECTION TRUST FUND PURCHASE OF A PARTICIPATION INTEREST IN A LOAN

FOR THE HALI-BRITE, INC. PROJECT Resolution No.: 20-021 WHEREAS, the Commissioner is authorized to expend, after consultation with the Iron Range Resources and Rehabilitation Advisory Board (“Board”), the Douglas J. Johnson Economic Protection Trust Fund monies made available under Minnesota Statutes Sections 298.291-298.297 and Minnesota Statute Section 298.28, subdivision 11 (“DJJ Funds”), to provide loans and participate with private sources in providing financing for various projects located within the Taconite Assistance Area (“TAA”), as that term is defined in Minnesota Statutes Section 273.1341, which satisfy the purposes detailed in Minnesota Statutes Section 298.292, subdivision 1; and WHEREAS, the agency’s FY20 Budget includes provision for the use of certain DJJ Funds for economic development projects under a budget line item category for DJJ Business Development Projects (“FY20 DJJ Business Development Funds”); and WHEREAS, the Commissioner has received a proposal for financial assistance from AW Enterprises, Inc. (“AW Enterprises”) that, in combination with funds provided from other sources, will be used to purchase Hali-Brite, Inc. and move the tax base from South Dakota to the Crosby/Ironton area (the “Project”), which is more specifically described in the Board packet materials which are attached hereto and incorporated by reference as Exhibit A; and WHEREAS, the Commissioner has requested the Board to recommend the expenditure of up to $1,000,000 of FY20 DJJ Business Development Funds to purchase a participation interest in a bank loan to AW Enterprises, which is being made as part of a $8,138,000 total investment to finance the cost of the Project, with the



PAGE 11

participation interest to be acquired on the terms and subject to the conditions set forth in Exhibit A and as otherwise discussed at the board meeting; and WHEREAS, the technical advisory committee, appointed by the Commissioner under the provisions of Minnesota Statutes Section 298.297 to review the terms and conditions of the proposed Project, met on March 10, 2020, and recommended approval of the requested financial assistance for the Project; and WHEREAS, the Board met via teleconference at 8:30 a.m. on March 18, 2020, in accordance with Governor Tim Walz’s Emergency Executive Order 20-01 Declaring a Peacetime Emergency and Coordinating Minnesota’s Strategy to Protect Minnesotans from COVID-19, and the authority for such method of meeting provided under Minnesota Statutes Section 13D.021, to consider, among other matters, AW Enterprises’ request for financial assistance for the Project and has determined that it would be in the public interest to recommend the expenditure of DJJ Business Development Funds for the Project and that the granting of the requested financial assistance would promote economic development in the TAA.

NOW, THEREFORE, IT IS RESOLVED, that the Board hereby recommends the expenditure of up to $1,000,000 of FY20 DJJ Business Development Funds to purchase a participation interest in a bank loan to AW Enterprises to finance a portion of the cost of the Project, with such participation interest to be purchased on the terms and subject to the conditions set forth in Exhibit A and in the agency’s standard participation loan forms, including the provisions customarily contained therein that require borrowers to pay at least prevailing wages to workers performing work on construction projects. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION ADVISORY BOARD THIS 18TH DAY OF MARCH 2020.


Senator Tom Bakk X









TOTAL 7 0 0 2

Signed:_____________________________ Representative Rob Ecklund, Chair



PAGE 12

EXHIBIT A

AW Enterprises, Inc. 609 4th Street

Ironton, Minnesota 56455

Department of Iron Range Resources and Rehabilitation Participation Loan

Applicant: AW Enterprises, Inc./ Hali-Brite, Inc.

Project Location: 609 4th Street, Ironton, Minnesota 56455

Principal(s): Wes Wagner, CEO and Gabe Aldridge

Project Description: AW Enterprises was formed by Wes Wagner and Gabe Aldridge for the purpose of purchasing Hali-Brite, Inc. New ownership moves the tax base from South Dakota to the Crosby/Ironton area.

Market Opportunity: New positions will be available with new ownership. Jobs will be retained with new ownership growth resulting in more economic activity. Marketing to untouched areas will result in increased sales. Growth opportunities will increase production. New ownership moves the tax base from South Dakota to the Crosby/Ironton area.

Project Investment: Owner Equity $1,650,000

Mez (Park State Bank) - 1 year amortization $312,913

Entrepreneur Fund - 10 year amortization $550,000

American Bank – 10 year amortization $4,000,000

American Bank – 20 year amortization $625,087

IRRR – 10 year amortization/participation with American Bank

$1,000,000

TOTAL $8,138,000

Jobs: _6_ Planned New _8_Retained Wages $20 to $40/hr - $40,000 to $80,000_per year plus benefits

Collateral: Shared first positions on Account Receivables, Inventory, Equipment and all Real Estate listed with the Bank.

Business History: Hali-Brite was founded 36 years ago by Bill Walker, he built a great relationship with airports and military bases with an outstanding FAA approved beacon. Duane Smedsrud purchased Hali-Brite from Bill in 2001 and has grown the company substantially, from $1 million in sales and $150,000 in profits to $6 million in sales and $2 million in profits. Hali-Brite was founded on their airport and military beacons, they now have introduced two additional products and soon another one will be



PAGE 13

Applicant: AW Enterprises, Inc./ Hali-Brite, Inc.

added to the market. Military beacons, Airport beacons, Windcones with no current competitors on the FAA approved product list. Runway closure markers are another product that Hali-Brite supplies with only two competitors capturing a small market share.

Past Agency History: None.

Contingencies: None

Technical Advisory Committee Recommendation:

The TAC recommended approval at its March 10, 2020 meeting.

Funding Authorization: Douglas J. Johnson Economic Protection Trust Fund: This project is authorized under the provision of the Douglas J Johnson Economic Protection Trust Fund Act (Minnesota Statutes sections 298.291 – 298.297) pertaining to expenditures of Douglas J Johnson Economic Protection Trust Fund monies for economic development projects in that these statutes authorize small business development loans to private enterprises for the purpose of job creation and economic development within the Taconite Assistance Area defined in Minnesota Statutes Section 273.1341.

5) Dirty Dog Manufacturing, LLC – Resolution #20-022 Senator Tom Bakk moved that the Board recommend an expenditure of up to $150,000 of Douglas J. Johnson Economic Protection Trust Fund monies to Dirty Dog Manufacturing LLC, that, in combination with funds provided from other sources, will finance the purchase of Hand Done T-Shirts, Inc., and move the existing business to a new building, as presented in Resolution #20-022. Seconded by Representative Julie Sandstede. Motion carried. Roll call taken: Voting in Favor of the Motion: Representative Rob Ecklund, Representative Sandy Layman, Representative Dave Lislegard, Representative Julie Sandstede, Senator Tom Bakk, Senator Carrie Ruud, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Senator Justin Eichorn; Representative Dale Lueck



PAGE 14


DOUGLAS J JOHNSON ECONOMIC PROTECTION TRUST FUND PURCHASE OF A PARTICIPATION INTEREST IN A LOAN FOR THE DIRTY DOG MANUFACTURING LLC PROJECT

Resolution No.: 20-022 WHEREAS, the Commissioner is authorized to expend, after consultation with the Iron Range Resources and Rehabilitation Advisory Board (“Board”), the Douglas J. Johnson Economic Protection Trust Fund monies made available under Minnesota Statutes Sections 298.291-298.297 and Minnesota Statute Section 298.28, subdivision 11 (“DJJ Funds”), to provide loans and participate with private sources in providing financing for various projects located within the Taconite Assistance Area (“TAA”), as that term is defined in Minnesota Statutes Section 273.1341, which satisfy the purposes detailed in Minnesota Statutes Section 298.292, subdivision 1; and WHEREAS, the agency’s FY20 Budget includes provision for the use of certain DJJ Funds for economic development projects under a budget line item category for DJJ Business Development Projects (“FY20 DJJ Business Development Funds”); and WHEREAS, the Commissioner has received a proposal for financial assistance from Dirty Dog Manufacturing LLC, that, in combination with funds provided from other sources, will finance the purchase of Hand Done T-Shirts, Inc., and move the existing business to a new building (the “Project”), which is more specifically described in the Board packet materials which are attached hereto and incorporated by reference as Exhibit A; and WHEREAS, the Commissioner has requested the Board to recommend the expenditure of up to $150,000 of FY20 DJJ Business Development Funds to purchase a participation interest in a bank loan to Dirty Dog Manufacturing LLC, (“Dirty Dog”) which is being made as part of a $672,800 total investment to finance the cost of the Project, with the participation interest to be acquired on the terms and subject to the conditions set forth in Exhibit A and as otherwise discussed at the board meeting; and WHEREAS, the technical advisory committee, appointed by the Commissioner under the provisions of Minnesota Statutes Section 298.297 to review the terms and conditions of the proposed Project, met on March 10, 2020, and recommended approval of the requested financial assistance for the Project; and WHEREAS, the Board met via teleconference at 8:30 a.m. on March 18, 2020, in accordance with Governor Tim Walz’s Emergency Executive Order 20-01 Declaring a Peacetime Emergency and Coordinating Minnesota’s Strategy to Protect Minnesotans from COVID-19, and the authority for such method of meeting provided under Minnesota Statutes Section 13D.021, to consider, among other matters, Dirty Dog’s request for financial assistance for the Project and has determined that it would be in the public interest to recommend the expenditure of DJJ Business Development Funds for the Project and that the granting of the requested financial assistance would promote economic development in the TAA.

NOW, THEREFORE, IT IS RESOLVED, that the Board hereby recommends the expenditure of up to $150,000 of FY20 DJJ Business Development Funds to purchase a participation interest in a bank loan to Dirty Dog to finance a portion of the cost of the Project, with such participation interest to be purchased on the terms and subject to the conditions set forth in Exhibit A and in the agency’s standard participation loan forms, including



PAGE 15

the provisions customarily contained therein that require borrowers to pay at least prevailing wages to workers performing work on construction projects. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION ADVISORY BOARD THIS 18TH DAY OF MARCH 2020.


Senator Tom Bakk X









TOTAL 7 0 0 2


Dirty Dog Manufacturing LLC 1614 E. Washington St.

Ely, MN 55731

Department of Iron Range Resources and Rehabilitation Participation Loan

Applicant: Dirty Dog Manufacturing LLC

Project Location: 1614 E. Washington St., Ely, MN

Principal(s): Linda Enquist-Vandenbranden

Project Description: Dirty Dog Manufacturing LLC is a manufacturing company that recently formed to purchase an existing business, Hand Done T-Shirts, Inc. Dirty Dog Manufacturing will be taking over the business and moving locations once the build-out of the new building is complete. Dirty Dog Manufacturing will continue to do business as Hand Done T-Shirts as a custom silk screening and embroidery business that purchases clothing items and then customizes them with names and/or logos for sale to businesses and individuals. The market area includes the Iron Range area and the entire arrowhead Region. Linda Enquist-Vandenbranden will own and operate the business.

Market Opportunity: Online search showed that the nearest screen printing/shirt embroidery business was 50 miles away in Virginia. It appears Hand Done T-Shirts has a niche market, evidenced by the profitability and sales. Online Sales



PAGE 16


is another market opportunity.

Boundary Waters Bank – 20-year amortization $62,000.00

IRRR – 20 year amortization $150,000.00

Equipment Loan – Boundary Waters Bank – 7-year amortization negotiated rate.

$40,800.00

Revolving Credit Line – Boundary Waters Bank negotiated rate.

$140,000.00

Asset Loan – Northland Foundation, Entrepreneur Fund, Northspan – 10-year amortization negotiated rate.

$122,500

Seller Carry $105,000.00

Owner’s Equity $52,500.00

TOTAL $672,800.00

Jobs: _2 to 3_ Planned New _8_Retained Wages _$12 to $17/hr__

Collateral: The loan will be secured with a shared first position commercial real estate mortgage.

Business History: Hand Done T-Shirts, Inc. was founded in 1980 by Deb Hanson in her home. Her only customer in the beginning was Piragis Northwoods Co., located in Ely, who was also in his fledgling years. In 1991, Deb hired Linda Enquist, who had just finished college and moved back to her hometown. In addition to learning all the production aspects of the business, as is necessary in smaller businesses, Linda expressed an interest and talent in sales, and slowly started building her own client base, focusing on other areas of the state, heading north to the Voyageurs National Park area. Being a native of Ely, she also helped to increase the local sales market, gaining more logo wear business and school business. By 1993 the building had been expanded by double the original size and two additional employees were added. In 1995 they brought the addition of a 4-head embroidery machine to the business, which expanded sales and added another full time employee.

Past Agency History: None

Contingencies: None





PAGE 17



6) Cast Corporation – Resolution #20-023 Senator David Tomassoni moved that the Board recommend an expenditure of up to $125,000 of Douglas J. Johnson Economic Protection Trust Fund monies to Cast Corporation, that, in combination with funds provided from other sources, will finance the purchase of new equipment, as presented in Resolution #20-023. Seconded by Representative Julie Sandstede. Motion carried. Roll call taken: Voting in Favor of the Motion: Representative Rob Ecklund, Representative Sandy Layman, Representative Dave Lislegard, Representative Julie Sandstede, Senator Tom Bakk, Senator Carrie Ruud, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Senator Justin Eichorn; Representative Dale Lueck


DOUGLAS J JOHNSON ECONOMIC PROTECTION TRUST FUND PURCHASE OF A PARTICIPATION INTEREST IN A LOAN

FOR THE CAST CORPORATION PROJECT Resolution No.: 20-023 WHEREAS, the Commissioner is authorized to expend, after consultation with the Iron Range Resources and Rehabilitation Advisory Board (“Board”), the Douglas J. Johnson Economic Protection Trust Fund monies made available under Minnesota Statutes Sections 298.291-298.297 and Minnesota Statute Section 298.28, subdivision 11 (“DJJ Funds”), to provide loans and participate with private sources in providing financing for various projects located within the Taconite Assistance Area (“TAA”), as that term is defined in Minnesota Statutes Section 273.1341, which satisfy the purposes detailed in Minnesota Statutes Section 298.292, subdivision 1; and WHEREAS, the agency’s FY20 Budget includes provision for the use of certain DJJ Funds for economic development projects under a budget line item category for DJJ Business Development Projects (“FY20 DJJ Business Development Funds”); and



PAGE 18

WHEREAS, the Commissioner has received a proposal for financial assistance from Cast Corporation that, in combination with funds provided from other sources, will finance the purchase of new equipment (the “Project”), which is more specifically described in the Board packet materials which are attached hereto and incorporated by reference as Exhibit A; and WHEREAS, the Commissioner has requested the Board to recommend the expenditure of up to $125,000 of FY20 DJJ Business Development Funds to purchase a participation interest in a bank loan to Cast Corporation, which is being made as part of a $250,000 total investment to finance the cost of the Project, with the participation interest to be acquired on the terms and subject to the conditions set forth in Exhibit A and as otherwise discussed at the board meeting; and WHEREAS, the technical advisory committee, appointed by the Commissioner under the provisions of Minnesota Statutes Section 298.297 to review the terms and conditions of the proposed Project, met on March 10, 2020, and recommended approval of the requested financial assistance for the Project; and WHEREAS, the Board met via teleconference at 8:30 a.m. on March 18, 2020, in accordance with Governor Tim Walz’s Emergency Executive Order 20-01 Declaring a Peacetime Emergency and Coordinating Minnesota’s Strategy to Protect Minnesotans from COVID-19, and the authority for such method of meeting provided under Minnesota Statutes Section 13D.021, to consider, among other matters, Cast Corporation’s request for financial assistance for the Project and has determined that it would be in the public interest to recommend the expenditure of DJJ Business Development Funds for the Project and that the granting of the requested financial assistance would promote economic development in the TAA.

NOW, THEREFORE, IT IS RESOLVED, that the Board hereby recommends the expenditure of up to $125,000 of FY20 DJJ Business Development Funds to purchase a participation interest in a bank loan to Cast Corporation to finance a portion of the cost of the Project, with such participation interest to be purchased on the terms and subject to the conditions set forth in Exhibit A and in the agency’s standard participation loan forms, including the provisions customarily contained therein that require borrowers to pay at least prevailing wages to workers performing work on construction projects. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION ADVISORY BOARD THIS 18TH DAY OF MARCH 2020.


Senator Tom Bakk X









TOTAL 7 0 0 2




PAGE 19

Cast Corporation 11364 Highway 37 Hibbing, MN 55746

Department of Iron Range Resources and Rehabilitation

Participation Loan

Applicant: Cast Corporation

Project Location: 11364 Highway 37 Hibbing, MN 55746

Principal(s): Tim Bungarden 100% S-Corp Owner

Project Description: Purchase of two new Doosan CNC machines. One machine is to support expansion of the Pattern Department. This would allow Cast Corporation’s Pattern Department to capture additional external pattern sales and provide additional support for Cast Corporation’s foundry operations. The existing pattern machine is planning to be retained as there is project work that still “fits” that machine. The second CNC machine is for the Machining Department and this machine is suited for work related to the aftermarket electric motor parts. This is a niche market that Cast Machining Department already serves and this machine allows Cast Corporation to capture more of that business. The new machine would be instrumental in allowing the Machining Department to meet current on-time production demands and generate improved margins.

Market Opportunity: Expand product offerings specific to mining while diversifying with product offerings in the industrial steel casting market (railroad, construction, and concrete & gravel industries). Competition exists with various foundries (domestic & foreign), but Cast’s competitive advantage is their unique molding process with a high degree of automation.

Project Investment: Security State Bank - Equipment Loan - 60 month amortization at a negotiated rate

$125,000

IRRR – Equipment Loan - 60 month amortization. $125,000

TOTAL $250,000

Jobs: Existing Employees: 45 Full-time, 2 Part-time & 8 Full-time contractors. New Jobs Created: Up to 3 additional Full-time engineering and machinist positions with wages at approximately $25 per hour plus health, pediatric dental and discretionary profit-sharing.

Collateral: Equipment purchased with the proceeds from this loan.

Business History: Incorporated in 1995, Cast Corporation, a manufacturing and sales company, was involved in tooling, castings, machining and truncated



PAGE 20

Applicant: Cast Corporation

domes. Cast Corporation sold and continues to sell to a variety of industries including mining, industrial, recreation and automotive. Cast Corporation also offers complete pattern & mold manufacturing services with advanced 3D CAD/CAM technology. In the area of production machining, Cast Corporation offers complete CNC machining capability to complement their tooling and casting sales. They are able to provide partial or finish machined parts from either raw castings or billet.

Past Agency History: Date

Originated Initial Balance Current Balance

12/17/2012 $358,500.00 $292,127.70

4/3/2013 $31,500.00 $25,921.08

10/7/2014 $945,000.00 $861,619.72

3/31/2015 $500,000.00 $411,592.38

7/2/2019 $305,000.00 $275,201.51

Contingencies: None




7) FY20 Community Infrastructure Projects – Resolution #20-024 Representative Julie Sandstede moved that the Board recommend an expenditure of up to $750,000 of FY20 Taconite Environmental Protection Fund (TEPF) monies to provide grants for three community infrastructure projects, as presented in Resolution #20-024. Seconded by Senator David Tomassoni. Motion carried. Roll call taken: Voting in Favor of the Motion: Representative Rob Ecklund, Representative Sandy Layman, Representative Dave Lislegard, Representative Julie Sandstede, Senator Tom Bakk, Senator Carrie Ruud, Senator David Tomassoni Voting Against the Motion: None Abstain: None



PAGE 21

Excused: Senator Justin Eichorn; Representative Dale Lueck


TACONITE ENVIRONMENTAL PROTECTION FUND FY20 PUBLIC WORKS PROJECT RECOMMENDATIONS

Resolution No.: 20-024 WHEREAS, pursuant to the agency’s approved fiscal year 2020 ("FY20") Budget, the Commissioner is authorized to expend up to $6,500,000 for development and community infrastructure projects from Taconite Environmental Protection Fund monies as authorized by Minnesota Statutes Section 298.223 (“TEPF Public Works Funds”), of which $4,733,900 has already been obligated for projects by prior Board actions, leaving $1,766,100 that has not yet been approved by the Board for expenditure during FY20; and WHEREAS, the Commissioner has received proposals for the expenditure of up to $750,000 for three community infrastructure public works projects, which are more fully described in Exhibit A, which is attached hereto and incorporated by reference (collectively the “Proposed Projects”); and WHEREAS, the Board met via teleconference at 8:30 a.m. on March 18, 2020, in accordance with Governor Tim Walz’s Emergency Executive Order 20-01 Declaring a Peacetime Emergency and Coordinating Minnesota’s Strategy to Protect Minnesotans from COVID-19, and the authority for such method of meeting provided under Minnesota Statutes Section 13D.021, to consider, among other matters, the Proposed Projects and has determined that the expenditure of TEPF Public Works Funds for the purposes and in the amounts specified would be in the public interest and promote economic development within the TAA. NOW, THEREFORE, IT IS RESOLVED, that the Board hereby recommends the expenditure of up to $750,000 of FY20 TEPF Public Works Funds to provide grants for the Proposed Projects in the amounts and for the purposes set forth in Exhibit A. BE IT FURTHER RESOLVED that the Board’s recommendation for the expenditure of all funds for the Proposed Projects, including those Proposed Projects which have associated private development work, is contingent upon the agency, in its grant contracts, requiring each such grantee entity to commit to the payment of prevailing wages for the funded project as required by law, or to the extent required in the Board’s Resolution 96-005. BE IT FURTHER RESOLVED that the Board’s recommendation for the expenditure of all funds for the Proposed Projects is further contingent upon all such project financing being in place before the agency’s funds are released. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION ADVISORY BOARD THIS 18TH DAY OF MARCH 2020.


Senator Tom Bakk X







PAGE 22





TOTAL 7 0 0 2

Signed: _____________________________ Representative Rob Ecklund, Chair

EXHIBIT A

COMMUNITY INFRASTRUCTURE

Breitung Township Grant Amount: $250,000 The Tower-Breitung Wastewater Board and the City of Tower are upgrading the water treatment facility to meet Department of Health drinking water standards. Improvements include water treatment plant upgrades, abandonment of existing wells, well modifications, and replacement of the 70-year-old main service line to the city of Tower. The Department of Health has identified potentially harmful levels of disinfection byproducts in the water distribution system. The project is expected to create 18 construction jobs.

USES SOURCES


$250,000

A&E 488,400 Bonding bill 2,000,000

Contingency 327,600 Tower-Breitung Wastewater Board 750,000

TOTAL $3,000,000 TOTAL $3,000,000

City of Keewatin Grant Amount: $250,000 The city of Keewatin's existing mechanical wastewater facility requires significant upgrades. As a more cost-effective and viable alternative to rehabilitating the existing facility, Keewatin's flows will be routed to a regional expanded wastewater facility in the city of Nashwauk. The first phase focuses on the construction sewer line from Keewatin to Nashwauk. The project is expected to create 10 construction jobs.

USES SOURCES


$250,000

A&E 160,000 City 1,250,053

Contingency 121,823

TOTAL $1,500,053 TOTAL $1,500,053

City of Nashwauk Grant Amount: $250,000 Phase I of the project consists of site, lift station and equalization basin construction to accommodate the expansion of the city’s wastewater treatment facility. The city of Nashwauk agreed to expand its existing waste treatment facility to accommodate sewage flows from the city of Keewatin and Lone Pine Township. The



PAGE 23

collaboration of the communities will benefit the entire region by reducing pollutants to the environment. The project is expected to create 26 construction jobs.

USES SOURCES


$250,000

A&E 554,823 City 3,695,408

Contingency 308,235

TOTAL $3,945,408 TOTAL $3,945,408

8) Adjournment

The meeting adjourned at 9:21 a.m.

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