Meeting of the Iron Range Resources and Rehabilitation Board 28 2016 Packet_tcm1047-268743… ·...

Meeting

of the Iron Range Resources

and Rehabilitation Board

IRRRB Eveleth, Minnesota

Wednesday, December 28, 2016 – 11:00 a.m.

Iron Range Resources and Rehabilitation Board Meeting December 28, 2016

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Meeting of the Iron Range Resources and Rehabilitation Board

IRRRB, Eveleth, Minnesota Wednesday, December 28, 2016

11:00 a.m.

TABLE OF CONTENTS

Taconite Economic Development Fund (TEDF) ......................................................................................... - 4 -

ArcelorMittal Minorca ...................................................................................................................... - 5 -

Mesabi Nugget Delaware, LLC .......................................................................................................... - 7 -

Northshore Mining Company ........................................................................................................... - 8 -

USS Keetac ...................................................................................................................................... - 10 -

USS Minntac .................................................................................................................................... - 12 -

Exhibit A – IRRRB October 17, 2016, Meeting Minutes ............................................................................ - 1 -


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MEETING OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD

IRRRB Eveleth, Minnesota

Wednesday, December 28, 2016 – 11:00 a.m.

AGENDA

1) Roll Call

2) Approval of October 17, 2016, Meeting Minutes

See Exhibit A

3) Commissioner’s Comments

4) Taconite Economic Development Fund (TEDF) a. ArcelorMittal Minorca b. Mesabi Nugget Delaware, LLC c. Northshore Mining Company d. USS Keetac e. USS Minntac

5) Adjournment


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Taconite Economic Development Fund (TEDF)

a. ArcelorMittal Minorca

b. Mesabi Nugget Delaware, LLC

c. Northshore Mining Company

d. USS Keetac

e. USS Minntac


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ArcelorMittal Minorca

P.O. Box 441 4261 Highway 53 South

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

Date: 12/28/2016 To: Iron Range Resources and Rehabilitation Board Members From: Mark Phillips Commissioner

RE: ARCELORMITTAL MINORCA TACONITE ECONOMIC DEVELOPMENT FUND* PROJECTS - $649,457

ArcelorMittal Minorca is eligible for a rebate of $649,457 subject to the company providing a minimum match of $649,457 for a minimum total project cost of $1,298,914. The ArcelorMittal Minorca Taconite Economic Development Fund Review Committee completed its review on December 6, 2016, and unanimously approved submitting the following two (2) projects which will share the TEDF rebate. Project 1 – Line 1 Cobber Distributor and Separator Replacement - $525,000

Minorca’s concentrator was originally designed to operate three cobber magnetic separators on each of its three concentration lines in the first stage of magnetic separation. Through a capital investment program initiated in 2005, two of the three cobber magnetic separators on each line were converted from 3’x10’ double drum units to the newer, more efficient 4’x10’ single drum units to improve overall magnetic iron recovery. The remaining double drum unit on each line was left in place as a backup but it is less efficient when in use. Recent work to upgrade lines 2 and 3 backup cobbers to single drum units with new cobber distributors was partially supported by a PY 2014 TEDF grant. This proposed project would upgrade the remaining double drum unit on line 1 and replace the existing cobber distributor for this same line completing the overall conversion of this portion of the concentrating process at Minorca. The new distributor will reduce spillage and allow for a more even distribution of feed to each of the three 4’x10’ single drum cobber magnetic separator units. It is expected that this project will be completed in the first half of 2017.

Project 2 – Vacuum Disc Filter Upgrades - $1,050,000

Minorca Mine maintains seven external tube vacuum disc filters to dewater concentrate slurry. These units were installed as replacements for the original vacuum disc filter equipment in the


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early 1990’s and have reached the end of their useful life. Minorca has embarked on a replacement program for the existing vacuum disc filters with newer vacuum disc filters of a similar type. The new filters are more energy efficient and are compatible with the low pressure snap blow system recently installed and commissioned before year end. This project is for the replacement of A, B, C and D filters. The E and F filters have already been replaced under a project supported by a prior TEDF grant. Based on the expected results of the upgrade to the newer, more energy efficient units and the return to the use of low pressure air for snap blow air, the G filter will not be converted and held in reserve as back up capacity. It is expected that this project will be completed by year end 2017.


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Mesabi Nugget Delaware, LLC




RE: MESABI NUGGET DELAWARE, LLC TACONITE ECONOMIC DEVELOPMENT FUND* PROJECTS - $12,817

Mesabi Nugget Delaware, LLC is eligible for a rebate of $12,817 subject to the company providing a minimum match of $12,817 for a minimum total project cost of $25,634. The Mesabi Nugget Taconite Economic Development Fund Review Committee completed its review on December 13, 2016, and unanimously approved submitting the following project which will share the TEDF rebate. Project 1 – Water Treatment Plan – Large Scale Trial (LST) - $275,000

Many industrial facilities and sewage treatment operations on the iron Range are facing water discharge restrictions that threaten their viability. This research project was the next step in Mesabi Nugget Delaware’s, LLC (MND) evaluation of equipment and methodology for a water treatment system. This project is critical for the future restart and operation of the world’s first and only iron nugget facility. In this phase of the evaluation, water from Area 1 pit which feeds MND, is taken in, treated, and then discharged to the appropriate discharge. Water quality parameters, such as Total Hardness, Alkalinity, TDS, and Conductivity are reduced and chemically altered during the treatment process and are sent to the appropriate landfill and/or could be beneficially reused. During the summer of 2016 MND conducted a large scale water treatment trial, treating up to 5600 gallons per minute (GPM) of water. Large Scale Trial (LST) testing and evaluation was the next logical step in the process MND has been following which started with lab scale benchtop testing in 2012. After the lab scale testing was complete, MND operated a pilot scale water treatment plant for over a year that was capable of treating up to 5 GPM. This phase generated a considerable amount of data which set the stage for the LST. The LST was conducted by MND staff and operated 24/7 for approximately 30 days from August 2016 to September 2016. The purpose of the LST was to help ensure the treatment process could handle the volume and successfully produced water with acceptable quality. The project involved the purchase and/or rental of necessary treatment equipment as well as reconfiguration of the existing water treatment plant. The LST cost over $275,000 in engineering, reagents, equipment, and disposal.


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Northshore Mining Company




RE: NORTHSHORE MINING COMPANY TACONITE ECONOMIC DEVELOPMENT FUND* PROJECTS - $1,127,463

Northshore Mining Company is eligible for a rebate of $1,127,463 subject to the company providing a minimum match of $1,127,463 for a minimum total project cost of $2,254,926. The Northshore Mining Company Taconite Economic Development Fund Review Committee completed its review on November 18, 2016, and unanimously approved submitting the following two (2) projects which will share the TEDF rebate. Project 1 – Direct Reduction (DR) Grade Pellets - $2,938,122

The initial Feasibility Study completed in August 2013 concluded that DR Grade pellet production at Northshore could be economically viable if a customer base could be secured. Iron/weight recovery is vastly improved under the scheme of operating the plant with two products and simultaneously operating a scavenger recovery system. The scavenger iron recovery system does increase the cost, but this cost is mediated by an increase in iron recovery. The full scale pellet production test conducted in March 2013 produced pellets that will meet the requirements as a DR grade product for use in commercial DRI machines. Detail engineering has been completed as of the end of April 2015. A 55,000 Iong ton production trial was completed in the fall of 2015. Test pellets were subsequently reduced in a DRI plant in January/February 2016 with favorable results. As a result of these tests, a substantial number of modifications were necessary to increase the DR Grade pellet’s quality. Additional equipment was installed for improvement in the operation for stability, throughput and iron recovery. In the Concentrator, test circuits 6, 7, 9, and 10 were updated to meet the current “flow sheet 5 standards” for improved throughput and the recovery of both primary and secondary flotation overflow scavenger material. Piping was installed to direct the scavenger material to the lower circuit of section 8 for recovery of iron from the low silica producing circuits. The section 8 finisher hydro feed box was modified to improve sampling capability. The section 12 hydro underflow piping was modified to improve


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density and flow control to the filter plant. A larger slurry tank was added in section 12 to allow moisture control, which in turn minimized bentonite fluctuations. Instruments were installed on furnace 6 to monitor the natural gas burners to assure they were running. The hydrated lime system was also upgraded to minimize down time.

Project 2 – Cavex Cyclone Installation RC/RT Pumps - Residual - $1,412,000

Testing of 10 long-angle Cavex Cyclones occurred from July 2014 through December 2014 on Section 005. Northshore Mining currently uses Kreb Cyclones. The test of the Cavex Cyclones proved that they were more efficient. The hypothesis is that the increase in efficiency is due to the Cavex’s inlet geometry along with a longer cone section. Cyclone efficiency is a measure of the split of fines and coarse material leaving the underflow and overflow. The cyclone underflow containing coarse material feeds the ball mills, and the cyclone overflow containing fine material feeds the Primary Hydroseperators. The ball mills are the constraint in the process, therefore, a balance of underflow and overflow in the cyclones is needed to ensure that the ball mills are not overloaded. Results from Northshore’s testing show that the Cavex Cyclones consistently demonstrated improved cyclone efficiency compared to the Kreb Cyclones. Overall section 005 improved recovery by 1.5 long tons per hour of final concentrate compared to the other sections. Northshore has installed Cavex Cyclones on 6 sections of the concentrator.


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USS Keetac




RE: USS - KEETAC TACONITE ECONOMIC DEVELOPMENT FUND* PROJECTS - $1,005,719

US Steel - Keetac is eligible for a rebate of $1,005,719 subject to the company providing a minimum match of $1,005,719 for a minimum total project cost of $2,011,438. The USS – Keetac Taconite Economic Development Fund Review Committee completed its review on November 3, 2016, and unanimously approved submitting the following two (2) projects which will share the TEDF rebate. Project 1 – Keetac Pre-Heat Dust Collector Upgrade - $2,600,000

The two indurating pre-heat dust collectors at Keetac, which are a multi-clone type design, are over 40 years old and require a major overhaul and updating. New multi-clone dust collectors with a modern design were installed, replacing the out-of-date existing units. The new multi-clone units will be more efficient at collecting dust while enabling improved kiln energy efficiencies and reduced maintenance costs. During the recent down time, the old units were removed. New support structure was fabricated and installed. The new multi-clone dust collectors were then installed along with new ductwork between the grate and the pre-heat fans.

Project 2 – Tails Basin Reclamation & Dust Control - $200,000

The Keetac active tailings pond is 2,500 acres in size and has a perimeter of 44,000 feet. Annually 12,000 linear feet of this perimeter is built up by six feet by discharging tailings and pushing the coarse tails to build the dike. The tailing beaches in the 12,000 lineal feet of new deposition vary in width from the dike to the water from 600 to 2,000 feet. Water carries the finer tailings into the interior of the pond, where they settle out in the interior water reservoir.


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Keetac is required to establish and execute an annual reclamation activity by the MDNR and control dust to levels as established by the MPCA. The annual vegetation and tree planting activity on the Tails Basin is used to satisfy the requirements of both of these agencies. Seed and fertilizer are applied to the inactive areas of the basin by using specialized low ground pressure seeding equipment. Various seed mixtures are used depending upon if the mix is needed for temporary or permanent seeding. Temporary vegetated areas are seeded within the basin during March and April while the ground is still frozen. Permanent seeding activities on the outer slopes are generally completed in May. The soil nutrient levels are very low, so fertilizer is required to sustain plant growth. In lieu of chemical fertilizer, bio-solids have been a successful alternative. The use of hay mulch has been an effective method of controlling dust on the tails basin. Mulch is typically spread by bale busters, which are pulled by low ground pressure tractors. Tractors and other ground equipment can only be used when the ground is dry or frozen.


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USS Minntac




RE: USS - MINNTAC TACONITE ECONOMIC DEVELOPMENT FUND* PROJECTS - $3,257,432

US Steel - Minntac is eligible for a rebate of $3,257,432 subject to the company providing a minimum match of $3,257,432 for a minimum total project cost of $6,514,864. The USS - Minntac Taconite Economic Development Fund Review Committee completed its review on November 3, 2016, and unanimously approved submitting the following four (4) projects which will share the TEDF rebate. Project 1 – Lines 4 & 5 Kiln Burners - $2,000,000

Minntac currently operates five iron ore pelletizing lines in which "green" pellets are heated in an oxidizing atmosphere to harden them so they can be handled for transportation. The primary heat source for these pelletizing lines is supplied by multi-fuel kiln burners. In 2008, the Minnesota Pollution Control Agency issued a permit to Minntac requiring significant NOX (nitrogen oxides) reductions from each of the pelletizing lines waste gas streams. It has been determined that the installation of low NOX burner technology is the best solution for meeting this compliance plan. Low NOX burners have been successfully retrofitted on Minntac's lines 6 and 7. The modification of lines 4 and 5 kiln burners will include new outer combustion air tubes, larger combustion air fans , gas pilot ignition systems , building modifications for the combustion air fans and burner control panel modifications. These modifications lower the peak flame temperature within the kiln, which reduces NOX generation and will satisfy the MPCA permit conditions for lines 4 and 5. Indurating Line 5 kiln burner was converted in 2015 while Line 4 will be converted in 2016.

Project 2 – 2016 Mine Extension - $950,000

The Minntac business plan calls for the mine footprint to continue extending southward to uncover and extract iron ore. This continual extending of the mine footprint requires


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upgrades and permanent extensions to the electrical infrastructure as well as the permanent mine dewatering systems. This project is for the purchase and installation of equipment to extend the electrical infrastructure and the mine dewatering systems to enable the first phase of mining in newly permitted areas to the south. The project also allows for additional drilling and analysis in the new areas for mine planning efforts.

Project 3 – Third Stage Crusher Conversion – Single Unit - $1,800,000

The Minntac Crusher Area rented a single pass third stage crusher (FL Smidth Raptor XL900) and operated it in the footprint of an existing multi-pass third stage crusher (Symons). The new technology single pass crusher performed very well and has shown the ability to replace almost three of the multi pass units with less equipment to operate and maintain. Full conversion to single pass crushers will eliminate the need for size segregating vibrating screens, increase energy efficiency and reduce emissions. This project will purchase the single pass third stage crusher (Raptor) that is currently being rented and modify the crusher feed conveyor for more efficient feed.

Project 4 – Step 1 & 2 Cleaner Magnetic Separators - $1,800,000

Minntac's Step I & II concentrator currently operates two cleaner magnetic separators per line (20 total units) as the final stage of magnetic separation prior to flotation. A new magnetic separator with stronger magnets and improved design was installed on Line 7 in 2015 as a test unit. Testing of this new separator has shown float feed silica can be significantly reduced from current levels. Thus, increased iron recovery in the float plant can be achieved if all the Step 1 & 2 lines are converted to new magnetic separators. This project will include the purchase and installation of nineteen (19), 4 foot by 10 foot magnetic separator units to reduce the amount of silica sent to the flotation plant from the Step I & II concentrator lines. The installation is planned to be performed with USS workforce during normal plant operations.

*Minnesota Statutes 298.227, authorize grants to Minnesota’s taconite producers for workforce development and associated public facility improvement, or for acquisition of plant and stationary mining equipment and facilities for the producer or for research and development in Minnesota on new mining, or taconite, iron, or steel production technology, but only if the producer provides a matching expenditure equal to the amount of the distribution to be used for the same purpose. These funds are held in the Taconite Economic Development Fund. Effective for proposals for expenditures of money from the fund beginning May 26, 2007, the commissioner may not release the funds before the next scheduled meeting of the board. If a proposed expenditure is not approved by the board, the funds must be deposited in the Taconite Environmental Protection Fund under sections 298.222 to 298.225.

Iron Range Resources and Rehabilitation Board Meeting

October 17, 2016, Meeting Minutes

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Exhibit A – IRRRB October 17, 2016, Meeting Minutes

Iron Range Resources and Rehabilitation Board Meeting October 17, 2016

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IRRRB Meeting Minutes Wednesday, October 17, 2016 – 11:00 a.m.

IRRRB Administration Building Eveleth, Minnesota

1) Roll Call Representative Tom Anzelc, Board chair, called the meeting to order at approximately 11:00 a.m. Present: Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni. Excused: Representative Carly Melin. Minute Taker: Laureen Hall, Executive Aide. Also present: Mark Phillips, Commissioner; Mary Finnegan, Deputy Commissioner, Al Becicka, IRRRB Legal Counsel; Steve Peterson, Executive Director of Development; Roy Smith, Director of Workforce Development; Matt Sjoberg, Director of Business Development; Dan Jordan, Mineland Reclamation Supervisor; Chris Ismil, Community Development Representative, Whitney Ridlon, Community Development Representative; Bob Scuffy, Accounting Director; Sheryl Kochevar, Media Coordinator, Janette Paul, Executive Assistant; Alan Klapmeier, Aviation One; Rob Mattei, City of Grand Rapids; Andy Weiner and Judy Vest, Thunderbird Mall; Jack Roswell, Hibbing Taconite Company; Joe Silko, Education Innovation Partners; Mike Youso, Grand Itasca Clinic & Hospital; Lorrie Janatopoulus, Executive Intern. 2) Approval of the June 14, 2016, Minutes

Action required: Approval requires a simple majority of the quorum Representative Dale Lueck moved approval of the June 14, 2016, minutes. Seconded by Senator David Tomassoni. Motion carried. Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin 3) FY17 Infrastructure Projects – Resolution #17-001

Action required: Approval requires a simple majority of the quorum Senator David Tomassoni moved to approve the expenditure of Taconite Area Environmental Protection Fund monies in an amount not to exceed $2,498,000 in the form of grants for infrastructure projects in communities, as presented in Resolution #17-001. Seconded by Representative Rob Ecklund. Motion carried.


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Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin

IRON RANGE RESOURCES AND REHABILITATION BOARD OF THE STATE OF MINNESOTA

TACONITE AREA ENVIRONMENTAL PROTECTION FUND INFRASTRUCTURE PROJECT APPROVALS

Resolution No.: 17-001 WHEREAS, the Commissioner is authorized to expend, upon approval of the Board, the Taconite Area Environmental Protection Fund monies made available under Minnesota Statutes Section 298.223 (“TEPF Funds”) to promote the economic development of the Taconite Assistance Area designated in Minnesota Statutes Section 273.1341 (“TAA”), by investing in local economic development projects within the TAA; and WHEREAS, the agency’s approved fiscal year 2017 ("FY17") Budget includes the allocation of up to $5,000,000 for infrastructure projects from TEPF Funds (“TEPF Public Works Funds”); and WHEREAS, the Commissioner has received proposals for the expenditure of up to $2,498,000 of such TEPF Public Works Funds for those certain community and economic development infrastructure projects that are more specifically described in Exhibit A, which is attached hereto and incorporated by reference (“Proposed Projects”); and WHEREAS, the Board met in open session at 11:00 a.m. on October 17, 2016, in the agency's Administrative Building located near Eveleth, Minnesota, to consider, among other matters, the Proposed Projects and has determined that the expenditure of TEPF Funds for the purposes and in the amounts specified below would be in the public interest and promote economic development within the TAA. NOW, THEREFORE, IT IS RESOLVED, that the Board hereby approves the expenditure of up to $2,498,000 of FY17 TEPF Public Works Funds to provide grants for the Proposed Projects in the amounts and for the purposes set forth in Exhibit A.


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BE IT FURTHER RESOLVED that the Board’s approval for the expenditure of FY17 TEPF Public Works Funds for all 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 approval for the expenditure of FY17 TEPF Public Works 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 BOARD THIS 17TH DAY OF OCTOBER 2016.

Member Aye Nay Abstain Excused

Senator Tom Bakk X

Senator Tom Saxhaug X

Senator Rod Skoe X

Senator David Tomassoni X

Representative Tom Anzelc X

Representative Rob Ecklund X

Representative Dale Lueck X

Representative Carly Melin X

Representative Jason Metsa X

TOTAL 8 0 0 1

Signed:____________________________ Representative Tom Anzelc, Chair FY17InfrastructureRes101716-d1a

City of Chisholm Grant Amount: $350,000 This project is comprised of infrastructure and site work for the construction of four market rate duplexes. The development will be owned and operated by the Chisholm Housing Redevelopment Authority. The project is projected to create 13 construction jobs. USES SOURCES

Duplexes Infrastructure & site work A&E

$1,660,001 320,000

30,000

IRRRB Chisholm HRA

$350,000 1,660,001

TOTAL $2,010,001 TOTAL $2,010,001


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Chisholm-Hibbing Airport Authority Grant Amount: $225,000 The project is comprised of site work and aircraft apron development for the expansion of Midwest Aircraft Refinishing’s (MAR) new 10,000 sq. ft. facility. MAR’s current 16,000 sq. ft. facility is operating at full capacity. The expansion is expected to create 10 permanent jobs and 17 construction jobs.

USES SOURCES

New facility Site work & apron Equipment A&E

$1,137,828 674,499 357,500 453,961

IRRRB MNDOT DEED CHAA Private

$225,000 1,478,185

308,000 405,103 207,500

TOTAL $2,623,788 TOTAL $2,623,788 City of Coleraine Grant Amount: $150,000 The project is comprised of emergency lift safety upgrades and piston bully groomer replacement. Itasca Ski and Outing (ISO) is responsible for year-round operations and maintenance of the grounds and facilities at Mount Itasca Winter Sports Center in collaboration with the City of Coleraine, Greenway Joint Recreation Association, City of Grand Rapids, Itasca County, the State of Minnesota and three non-profit organizations: Mount Itasca Nordic Ski Association, Minnesota Youth Ski League, and Northern Lights Nordic Ski Club. ISO shut down the lifts and hill last ski season due to needed maintenance upgrades. This ski season operations will be at full capacity with the scheduled upgrades. The project is projected to create 3 construction jobs.

USES SOURCES

Lift upgrades Groomer

$100,000 248,000

IRRRB Private

$150,000 198,000

TOTAL $348,000 TOTAL $348,000 Cook County-Grand Marais EDA/Cook County Airport Grant Amount: $200,000 The project consists of renovation and an addition to the aging arrival/departure building to create a facility that is functional and ADA compliant. Project includes updates to mechanical systems, plumbing and restrooms, creating separate areas for meetings, planning, and food preparation. This project is projected to create 6 construction jobs.

USES SOURCES

Building Construction A&E

734,600 156,803

IRRRB MNDOT DEED Airport

$200,000 330,000

50,000 311,403

TOTAL $891,403 TOTAL $891,403


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Cook County-Grand Marais EDA City of Grand Marais Grant Amount: $100,000 The project consists of infrastructure and site work for new housing development in Grand Marais. One Roof Community Housing (ORCH) will construct, in two phases, 7 single-family owner occupied community land trust homes. The first phase includes the construction of 3 Community Land Trust homes that will be priced to be affordable to households that earn up to 80% of the Area Median Income, and the second phase will be the construction of 4 Community Land Trust homes that will be priced and affordable to buyers who earn up to 115% of the Area Median Income. The project is projected to create 17 construction jobs.

USES SOURCES

Infrastructure & site work Home Construction Land A&E

104,300 1,835,150

225,000 214,950

IRRRB ORCH MHFA City/County/GMHF/FHLB/AEOA

$100,000 1,801,400

180,000 298,000

TOTAL $2,379,400 TOTAL $2,379,400 Cook County-Grand Marais EDA Lutsen Township Grant Amount: $300,000 The project consists of the renovation and reconstruction of the Canyon Golf Course at Superior National. The reconstruction includes a complete rebuild of all fairways, sand traps, irrigation, cart paths, and upgrades to the road leading to Moose Mountain. This is the fourth and final phase of a $5.4 million renovation and reconstruction of this golf course. The project is expected to create 6 construction jobs.

USES SOURCES

Course Upgrades A&E

$816,514 28,071

IRRRB Cook County Bond CC EDA

$300,000 495,625

48,960

TOTAL $844,585 TOTAL $844,585 City of Eveleth Grant Amount: $150,000 Infrastructure and construction of a new entrance road for the Lundgren’s redevelopment project. Lundgren Motors will be replacing their current 50-year-old building with a new 24,000 sq. ft. facility at a construction cost of $3.7 million. The project is expected to create 3 permanent jobs and 32 construction jobs.


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USES SOURCES

Infrastructure/new entrance Building Construction A&E Contingency

$1,012,858 3,709,602 217,850 100,000

IRRRB Private

$150,000 4,890,310

TOTAL $5,040,310 TOTAL $5,040,310 Eveleth-Virginia Airport Authority Grant Amount: $52,000 The project consists of Phase I Rehabilitation/Reconstruction of the hangar site taxi lane pavements serving based aircraft. On average, these pavements are the oldest (1983-1987) and in the worst condition at the airport. Construction is scheduled to occur in 2017 to be consistent with the phased schedule. This is the highest priority pavement improvement for the airport. The airport has nearly $486,000 secured in available FAA funding to complete the project. The project is expected to create 4 construction jobs.

USES SOURCES

Taxi-lane reconstruction A&E

485,000 85,000

IRRRB Airport/FAA

$52,000 518,000

TOTAL $570,000 TOTAL $570,000 City of Nashwauk Grant Amount: $170,000 The project consists of the redevelopment of the vacant Latvala Lumber site in Nashwauk into a automobile recycling facility. This includes the refurbishing of the existing buildings, fencing, concrete slab construction, and site preparation, including the extension of water, sewer and gas throughout the site. The project is expected to create 6 permanent jobs and 3 construction jobs.

USES SOURCES

Water and sewer Land A&E Contingency Building and site upgrades

153,655 250,000

27,660 15,367

155,650

IRRRB Private

$170,000 432,332

TOTAL $602,332 TOTAL $602,332


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Reif Arts Council Grant Amount: $250,000 Facility and ADA accessibility upgrades. This is the final phase of a $10.5 million expansion and upgrade project to the Reif Center, a performing arts and culture facility, which is connected to and owned by ISD 318 in the City of Grand Rapids. The facility was in need, to become ADA accessible, and of major internal infrastructure building upgrades to expand and provide educational and performing arts opportunities for regional residents. The project is expected to create 1 permanent job and 68 construction jobs.

USES SOURCES

Facility Construction Equipment

$8,981,625 696,146

IRRRB Blandin Fdn

$250,000 2,625,000

A&E 726,676 Itasca Co. ETF State Bonding Reif

225,000 3,897,000 3,407,447

TOTAL $10,404,447 TOTAL $10,404,447 City of Tower Grant Amount: $350,000 Water, sewer, roads, and site work for the Tower Harbor Redevelopment project. The development includes the construction of 20 new townhomes, a pedestrian trail, docks, trailhead, and boat landing. The project is expected to create 2 permanent jobs and 44 construction jobs.

USES SOURCES

Road & site development Condo/townhomes Harbor docks Trails/Kayak Routes Trail Head/Boat Launch A&E Contingency

$709,506 4,000,000

400,000 679,000 680,000 193,377

87,117

IRRRB City of Tower Private DEED LCCMR Fed/State

$350,000 540,000

4,000,000 500,000 679,000 680,000

TOTAL $6,749,000 TOTAL $6,749,000 City of Two Harbors Grant Amount: $201,000 The project consists of water main relocation in order to allow the expansion of an existing business and the construction of a proposed manufacturing business. Currently a 12' City owned water main runs across private property owned by the CN Railroad and would prohibit the proposed expansion of the Castle Danger Brewery. A main also runs across a large city owned parcel, which would be the site of the proposed expansion of the Willamette Valley Company. The projects are expected to create 50 permanent jobs and 78 construction jobs.


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USES SOURCES

Water main relocation New building construction A&E Contingency

$385,579 11,500,000

57,853 38,568

IRRRB DEED City Private

$201,000 241,000

40,000 11,500,000

TOTAL $11,982,000 TOTAL $11,982,000 4) ACC Manufacturing, Inc. – Resolution #17-002

Action required: Approval requires 5 votes

Senator Tom Saxhaug moved to approve the expenditure of Douglas J. Johnson Economic Protection Trust Fund monies in an amount not to exceed $1,500,000 to provide a direct loan to ACC Manufacturing, Inc. for it to set up an aviation parts manufacturing operation in a building located at the Grand Rapids Airport, as presented in Resolution #17-002. Seconded by Representative Dale Lueck. Motion carried. Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin


DOUGLAS J. JOHNSON ECONOMIC PROTECTION TRUST FUND ACC MANUFACTURING PROJECT LOAN APPROVAL

Resolution No.: 17-002 WHEREAS, the Commissioner is authorized to expend, upon approval by a majority of all Board members, the Douglas J. Johnson Economic Protection Trust Fund monies made available under Minnesota Statutes Sections 298.291-298.294 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 defined in Minnesota Statutes Section 273.1341 (“TAA”) which will serve the purposes detailed in Minnesota Statutes Section 298.292, subdivision 1; and


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WHEREAS, the agency’s FY 2017 Budget includes provision for the use of certain DJJ Funds for economic development projects under a budget line item for DJJ Business Development Projects; and WHEREAS, the Commissioner has requested the Board to approve the expenditure of up to $1,500,000 of the DJJ Business Development Project Funds to provide a direct loan to ACC Manufacturing, Inc. ("ACC") for ACC to set up an aviation parts manufacturing operation in a building located at the Grand Rapids Airport within the TAA ("ACC Manufacturing Project"), under the terms and conditions more fully set forth in the Board packet materials, which are attached hereto and incorporated by reference as Exhibit A; 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 ACC Manufacturing Project, met on October 12, 2016, and recommended approval of the ACC Manufacturing Project and the proposed agency financing for it; and WHEREAS, the Board met at the agency’s Administration Building near Eveleth, Minnesota, on October 17, 2016, at 11:00 a.m. to consider, among other matters, the proposed expenditure of DJJ Business Development Project funds for the ACC Manufacturing Project; and WHEREAS, the Board determined that the expenditure of such funds are for the purposes authorized by law and will promote economic development in the TAA. NOW, THEREFORE, IT IS RESOLVED, that the Board hereby approves the expenditure of up to $1,500,000 of FY 2017 DJJ Business Development Project funds for the proposed ACC Manufacturing Project, on the terms and subject to the conditions set forth in Exhibit A and as otherwise discussed at the meeting. BE IT FURTHER RESOLVED, that the approval of funding for this project is subject to the condition that, to the extent any part of the funds for the ACC Manufacturing Project are for construction, ACC Manufacturing must pay or require to be paid to all laborers, workers and mechanics performing construction work prevailing wages consistent with Board Resolution number 96-005. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17TH DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X





Page - 10 -




TOTAL 8 0 0 1

Signed:____________________________ Representative Tom Anzelc, Chair

EXHIBIT A

ACC Manufacturing, Inc. 2503 Clark Carr Loop SE Albuquerque, NM 87106

IRRRB Direct Loan Program

Applicant: ACC Manufacturing, Inc.

Project Location: Grand Rapids, MN

Principal(s): Alan Klapmeier, CEO Ed Underwood, CFO Steve Serfling, COO/EVP Product Development

Project Description: This project entails ACC Manufacturing, Inc. (ACC) setting up a manufacturing operation for its parent company, One Aviation Company (OAC) and its affiliates Kestrel Aircraft Company (KAC) and Eclipse Aerospace (EAI) in Grand Rapids, MN. The operation is expected to commence in November 2016 and will initially be housed in an airport maintenance building owned by the City of Grand Rapids, before relocating to a 7,000 square foot facility, adjacent to the Grand Rapids Airport owned by Itasca Economic Corporation late in the first quarter of 2017 (the facility is currently occupied by Swan Machine who will be moving into their new building). In addition, the Grand Rapids Economic Development Authority is purchasing a 7,500 square foot private hangar (see related project write-up) that will be leased to ACC. Operations at the hangar are expected to begin in late 2016 and be fully operational by mid-2017.

Market Opportunity: OAC has begun the process to transition all composite part manufacturing from a third party vendor to ACC at its location in

Iron Range Resources and Rehabilitation Board Meeting Minutes October 17, 2016

Page 11

Brunswick, ME. The establishment of a manufacturing operation in Grand Rapids will accelerate this process. KAC currently manufactures composite tooling foam “masters” for ACC Brunswick from a facility located in Duluth, MN. This operation will be folded into ACC and the work will be done in Grand Rapids (in part due to the recent loss of the lease at the Duluth facility). The project will result in added efficiencies for EAI with added capacity for the machining and manufacturing of composite (and metal) tooling and parts between the ACC operations in Brunswick and Grand Rapids. In addition, ACC will have the capability to produce development parts for both EAI and KAC. While the sole mission of ACC at this time is to produce parts and assemblies for OAC it will have the capacity to serve other customers.

Project Investment:

IRRRB Formula rate 10-year amortization*

$1,500,000

Equity $7,800,000

TOTAL $ 9,300,000

*No payments required for first three years with the loan fully amortizing over the remaining seven years of term.

Jobs: 20 Planned New Wages $31,200- $100,000 per year plus benefits

Collateral: First priority lien on equipment to be purchased with proceeds of loan. Corporate guaranty of OAC.

Business History: ACC was formed in December 2015 to produce parts and assemblies for OAC - its parent - to be used in the aircraft and experimental aircraft it manufactures.

Past IRRRB History: None.

Contingencies: 1) ACC enter into leases for space at and adjacent to the Grand Rapids Airport that are satisfactory to IRRRB staff.

2) Equipment purchased must remain in the Taconite Assistance Area.


Page 12

Technical Advisory Committee Recommendation:

Approval at its October 12, 2016 meeting.

Funding Authorization: Douglas J. Johnson Economic Protection Trust Fund: This project is authorized under the provisions of the Douglas J. Johnson Economic Protection Trust Fund Act (Minnesota Statutes sections 298.291-298.298) 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 purposes of job creation and economic development within the Taconite Assistance Area defined in Minnesota Statutes Section 273.1341.

5) Grand Rapids Economic Development Authority – Resolution #17-003


Senator Tom Saxhaug moved to approve the expenditure of Douglas J. Johnson Economic Protection Trust Fund monies in an amount not to exceed $293,000 to provide a non-recourse loan to the Grand Rapids Economic Development Authority to finance the purchase of a 7,500 square foot hangar at the Grand Rapids Airport Site in support of the ACC Manufacturing project, as presented in Resolution #17-003. Seconded by Representative Dale Lueck. Motion carried. Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin


Page 13


DOUGLAS J JOHNSON ECONOMIC PROTECTION TRUST FUND DIRECT LOAN TO GRAND RAPIDS ECONOMIC DEVELOPMENT AUTHORITY

IN SUPPORT OF THE ACC MANUFACTURING PROJECT Resolution No.: 17-003 WHEREAS, the Commissioner is authorized to expend, upon approval by a majority of all Board members, the Douglas J. Johnson Economic Protection Trust Fund monies made available under Minnesota Statutes Sections 298.291-298.294 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 defined in Minnesota Statutes Section 273.1341 (“TAA”) which will serve the purposes detailed in Minnesota Statutes Section 298.292, subdivision 1; an d WHEREAS, the agency’s FY 2017 Budget includes provision for the use of certain DJJ Funds for economic development projects under a budget line item for DJJ Business Development Projects; and WHEREAS, ACC Manufacturing, Inc. (“ACC”), an aviation parts manufacturer, desires to expand its operations by manufacturing in a hangar building at the Grand Rapids Airport (“ACC Manufacturing Project”), which is located within the TAA (“Grand Rapids Airport Site”); and WHEREAS, the Grand Rapids Economic Development Authority (“GREDA”) is interested in purchasing a hangar at the Grand Rapids Airport Site that is suited for use by ACC for the ACC Manufacturing Project; and WHEREAS, in order for ACC to become a long-term tenant at the Grand Rapids Airport Site, a hangar as referenced above must be available to ACC to accommodate the ACC Manufacturing Project; and WHEREAS, pursuant to a request from GREDA, the Commissioner has requested the Board to approve the expenditure of up to $293,000 of FY 2017 DJJ Business Development Project funds to provide a non-recourse loan to GREDA to finance the purchase of a 7,500 square foot hangar at the Grand Rapids Airport Site (“GREDA Project”) in support of the ACC Manufacturing Project, which loan would be subject to the conditions set forth in the Board packet materials, which are attached hereto and incorporated by reference as Exhibit A; 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 GREDA Project, met on October 12, 2016, and recommended approval of the GREDA Project and the proposed agency funding for it; and


Page 14

WHEREAS, the Board met at the agency’s Administration Building near Eveleth, Minnesota on October 17, 2016, at 11:00 a.m. to consider, among other matters, GREDA’s request for financial assistance for the GREDA Project; and WHEREAS, the Board has determined that it would be in the public interest to approve the expenditure of DJJ Funds for the GREDA 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 approves the expenditure of up to $293,000 of FY 2017 DJJ Business Development Project funds to provide a direct loan to GREDA in support of the GREDA Project as set forth in Exhibit A and as otherwise discussed at the meeting. BE IT FURTHER RESOLVED, that the approval of funding for the GREDA Project is subject to the further condition that GREDA must, before any IRRRB funds are paid or released, first certify that it will pay or require to be paid to all laborers, workers and mechanics performing construction work on the GREDA Project prevailing wages consistent with Board Resolution number 96-005. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17th DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X







TOTAL 8 0 0 1



Page 15

EXHIBIT A

Grand Rapids Economic Development Authority 420 North Pokegama Avenue

Grand Rapids, MN 55744

IRRRB Non-Recourse Loan Program

Applicant: Grand Rapids Economic Development Authority (GREDA)

Project Location: Grand Rapids, MN 55744

Principal(s): Sholom Blake, GREDA President Rob Mattei, Director of Community Development

Project Description: GREDA is proposing to purchase a 7,500 square foot hangar at the Grand Rapids Airport to lease to ACC Manufacturing, Inc. (ACC), which intends to manufacture tooling and parts for its parent, One Aviation Corporation.

Market Opportunity: See project write-up for ACC.

Project Investment:

GREDA loan 1% 10-year amortization

$ 90,000

IRRRB Formula rate 20-year amortization*

$293,000

Equity contribution – from City of Grand Rapids

$203,000

TOTAL $586,000

*No payments required for the first three years with the loan fully amortizing over remaining 17-years of term.

Jobs: See project write-up for ACC.

Collateral: First lien on hangar to be purchased with the proceeds of loan.

Business History: See project write-up for ACC.


Page 16

Past IRRRB History: The IRRRB has participated with the GREDA on many projects in the past, including a loan for $750,000 for an expansion of ASV, Inc. The loan was paid as agreed and is paid in full.

Contingencies: 1) GREDA enters into a lease agreement, with a term and conditions satisfactory to IRRRB staff, with ACC or a related company prior to disbursement of any IRRRB funds.

2) GREDA provides evidence, satisfactory to IRRRB staff, that is has obtained clear title to the facility.

3) Any future tenants of the hangar comply with the current policy of the Grand Rapids Airport Authority in that they be an “aviation related” entity.


Approval at it October 12, 2016 meeting.

Funding Authorization: Douglas J. Johnson Economic Protection Trust Fund: This project is authorized under the provisions of the Douglas J. Johnson Economic Protection Trust Fund Act (Minnesota Statutes sections 298.291-298.298) 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 purposes of job creation and economic development within the Taconite Assistance Area defined in Minnesota Statutes Section 273.1341.

6) Zakobee LLC – Resolution #17-004


Senator Tom Saxhaug moved to approve the expenditure of Douglas J. Johnson Economic Protection Trust Fund monies in an amount not to exceed $82,250 to purchase a participation interest in a bank loan to Zakobee LLC, as presented in Resolution #17-004. Seconded by Senator David Tomassoni. Motion carried. Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin


Page 17

IRON RANGE RESOURCES AND REHABILITATION BOARD

OF THE STATE OF MINNESOTA DOUGLAS J JOHNSON ECONOMIC PROTECTION TRUST FUND

FUNDS FOR PURCHASE OF A PARTICIPATION INTEREST IN A LOAN FOR THE ZAKOBE LLC PROJECT

Resolution No.: 17-004 WHEREAS, the Commissioner is authorized to expend, upon approval by a majority of all Board members, the Douglas J. Johnson Economic Protection Trust Fund monies made available under Minnesota Statutes Sections 298.291-298.294 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 defined in Minnesota Statutes Section 273.1341 (“TAA”) which will serve the purposes detailed in Minnesota Statutes Section 298.292, subdivision 1; and WHEREAS, the agency’s FY17 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 (“FY17 DJJ Business Development Funds”); and WHEREAS, the Commissioner has received a proposal for financial assistance from Zakobe LLC, to purchase a new building facility located in Bovey that, in combination with funds provided from other sources, will finance its business expansion project, which is more specifically described in the Board packet materials which are attached hereto and incorporated by reference as Exhibit A (the “Project”); and WHEREAS, the Commissioner has requested the Board to approve the expenditure of up to $82,250 of FY17 DJJ Business Development Funds to purchase a participation interest in a bank loan to Zakobe LLC, which is being made as part of a $164,500 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 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 October 12, 2016, and recommended approval of the requested financial assistance for the Project; and WHEREAS, the Board met in open session at 11:00 a.m. on October 17, 2016, at the agency's Administrative Building located near Eveleth, Minnesota, to consider, among other matters, approval of the requested financial assistance for the Project; and


Page 18

WHEREAS, the Board has determined that it would be in the public interest to approve the expenditure of DJJ 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 approves the expenditure of up to $82,250 of FY17 DJJ Business Development Funds to purchase a participation interest in a bank loan to Zakobe LLC to finance a portion of the costs 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 BOARD THIS 17th DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X







TOTAL 8 0 0 1



Page 19

EXHIBIT A

Zakobe LLC 21728 County Road 71

Grand Rapids, MN 55744

IRRRB Bank Participation Loan

Applicant: Zakobe LLC

Project Location: 218 8th Ave, Bovey, MN 55709

Principal(s): Wade J Karnes & Teresa R Karnes

Project Description: This loan would be used to purchase a new building facility for Zakobe LLC to grow its business.

Market Opportunity: Zakobe will be partnering up with a local company to provide a small local paint shop to expand their business and allow this company to use a painting vendor from the immediate area. Also, this business is located in a good market for the services they provide. The outlook for Zakobe’s market continues to improve with local and nation-wide customers.

Project Investment:

Real Estate Loan – Woodland Bank – 20 year amortization, 5 year balloon

$ 82,250

IRRRB 20 year amortization

$ 82,250

TOTAL $ 164,500________________

Jobs: 1 Planned New 1 Retained Wages $25,000 - $40,000 per year plus benefits

Collateral: Shared 1st position on commercial real estate for the prospective loan.

Business History: Zakobe LLC is a manufacturing business that specializes in metal stamping, manufacturing and machining while providing metal fabricated parts to a wide array of industries including fishing, declarable battery, electronics, radiator, and hardware. Its customer


Page 20

base ranges from Minnesota to California. The company was previously Zakobe Metal Stamping and recently transitioned to Zakobe LLC as they diversified their manufacturing.

Past IRRRB History: None

Contingencies: None


Approval at its October 12, 2016, 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 Statues sections 298.291 – 298.298) pertaining to expenditures of Douglas J Johnson Economic Protection Trust Fund monies for economic development projects in that these statues 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 Statues Section 273.1341

7) FY17 Budget Amendment – Resolution #17-005

Action required: Approval requires a simple majority of the quorum

Representative Jason Metsa moved to approve an amendment to the FY 2017 Budget to add $350,000 of available Taconite Area Environmental Protection Fund carryforward funds to a line item for TEPF Business Development funds, as presented in Resolution #17-005. Seconded by Representative Rob Ecklund. Motion carried. Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin


Page 21


FISCAL YEAR 2017 AGENCY BUDGET AMENDMENT APPROVAL

Resolution No.: 17-005 WHEREAS, the Board and Governor have previously approved a Fiscal Year 2017 ("FY17") agency budget pursuant to the provisions of Minnesota Statutes Section 298.22, Subd. 11, for the funding of the operational expenditures, programs and projects of the agency, which covered the period of time from July 1, 2016, through June 30, 2017 (the “FY17 Budget”); and WHEREAS, the Commissioner has requested the Board to approve an amendment to the FY17 Budget to add $350,000 of available Taconite Area Environmental Protection Fund (“TEPF”) carryforward funds to a line item for TEPF Business Development funds in the FY17 Budget, which action would have the effect of creating and funding a balance in the FY17 Budget’s TEPF Business Development funds line item of $350,000 (the “Proposed Budget Amendment”); and WHEREAS, the Board met in open session at 11:00 a.m. on October 17, 2016, at the agency’s Administrative Building located near Eveleth, Minnesota, to consider, among other matters, the Proposed Budget Amendment and determined that amending the FY17 Budget as proposed would help promote economic development within the Taconite Assistance Area, as defined in Minnesota Statutes Section 273.1341. NOW, THEREFORE, IT IS HEREBY RESOLVED, that the Board approves amending the FY17 Budget to add $350,000 of available TEPF Carryforward funds to a line item for TEPF Business Development funds in the FY17 Budget. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17TH DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X







TOTAL 8 0 0 1



Page 22

8) Loan Guarantee Program Recapitalization– Resolution #17-006


Representative Jason Metsa moved to approve the expenditure of up to $1,350,000 of Taconite Area Environmental Protection Fund monies to capitalize an IRRRB local business loan guarantee program, as presented in Resolution #17-006. Seconded by Representative Rob Ecklund. Motion carried. Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin


TACONITE AREA ENVIRONMENTAL PROTECTION FUND LOCAL BUSINESS LOAN GUARANTY PROGRAM FUNDING APPROVAL

Resolution No.: 17-006 WHEREAS, the Commissioner is authorized to expend, upon approval of the Board, the Taconite Area Environmental Protection Fund monies made available under Minnesota Statutes Section 298.223 (“TEPF Funds”) to promote the economic development of the Taconite Assistance Area designated in Minnesota Statutes Section 273.1341 (“TAA”), by investing in local economic development projects within the TAA; and WHEREAS, the agency’s approved FY 2017 Budget includes the allocation of $350,000 of TEPF Funds for Business Development Projects (“TEPF Business Development Funds”); and WHEREAS, the Board and Governor have previously approved the expenditure of up to $1,350,000 of the TEPF Business Development Funds to capitalize an IRRRB local business loan guaranty program, under the guidelines of which program the IRRRB guaranteed up to $75,000 of a new $100,000 bank loan to an eligible business on the terms and subject to the conditions as more specifically presented to the Board at its April 15, 2011, meeting (the “Local Business Loan Guaranty Program”); and WHEREAS, the previously approved capitalization amounts have been fully encumbered, and the Commissioner is proposing an additional capitalization of $350,000 to make the Local Business Loan Guaranty Program available for additional loan guarantees; and


Page 23

WHEREAS, the Board met in open session at 11:00 a.m. on October 17, 2016, at the agency's Administrative Building located near Eveleth, Minnesota, to consider, among other matters, the additional capitalization of the Local Business Loan Guaranty Program, and has determined that the expenditure of up to $350,000 of TEPF Business Development Funds to further capitalize the Local Business Loan Guaranty Program would be in the public interest and promote economic development within the TAA. NOW, THEREFORE, IT IS RESOLVED, that the Board hereby approves the expenditure of up to $350,000 of TEPF Business Development Funds to further capitalize the Local Business Loan Guaranty Program, subject to the understanding that the Commissioner may provide loan guaranties to eligible businesses under and consistent with the Local Business Loan Guaranty Program guidelines presented to the Board at the April 15, 2011 meeting, up to a maximum of $75,000 per eligible business and without further Board or Governor approval of each loan guaranty made thereunder.

PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17TH DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X







TOTAL 8 0 0 1



Page 24



Fax: (218)735-3047

To: Iron Range Resources and Rehabilitation Board From: Mark Phillips Commissioner Date: October 12, 2016 Re: $350,000 RECAPITALIZATION OF THE LOAN GUARANTY PROGRAM* In April of 2011, the IRRRB Local Business Loan Guaranty Program was created with an initial capitalization of $1,000,000 from the IRRR Board. A subsequent capital investment of $350,000 into the program was made in December of 2014. The program has been well utilized by banks and local lending institutions. Since its inception, the agency has guaranteed a total of 36 loans to 33 businesses, with the total IRRRB guaranty amount being $1,660,960 on loans, with the aggregate original principal amount of $2,488,542. These loans have provided much needed capital to the business and have assisted in the creation or retention of more than 400 jobs. The agency currently has 23 active guarantees outstanding, with an exposure to the agency totaling $1,145,878, which results in available funds to guaranty additional loans of $167,775 (after the agency payout of $36,347 on two guaranty obligations is factored in). We are requesting an additional $350,000 to enable us to continue the program. Funding Authorization This project is authorized under the provisions of the Taconite Area Environmental Protection Fund, as codified under Minnesota Statutes, Section 298.223, by supporting local economic development and public works projects located within the Taconite Assistance Area defined in Section 273.1341. *The Technical Advisory Committee (TAC) recommended approval on October 12, 2016. 9) Taconite Economic Development Fund



Page 25

a) Hibbing Taconite Company – Resolution #17-007

Senator David Tomassoni moved to approve the expenditure of up to $1,875,068 of Taconite Economic Development Fund monies to Hibbing Taconite Company for projects as presented in Resolution #17-007. Seconded by Senator Tom Saxhaug. Motion carried. Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin


TACONITE ECONOMIC DEVELOPMENT FUND EXPENDITURE APPROVAL: HIBBING TACONITE COMPANY – PAY 2016 TEDF FUNDS

Resolution No.: 17-007 WHEREAS, taconite economic development funds (“TEDF Funds”) are made available to the Commissioner under the provisions of Minnesota Statutes Section 298.28, Subdivision 9a to provide grants to taconite producers who provide required matching expenditures for projects that involve workforce development and associated public facility improvements, or the acquisition of plant and stationary mining equipment and facilities, or the funding of research and development in Minnesota on new mining or taconite, iron, or steel production technology (“Eligible Purposes”), all in accordance with the provisions of Minnesota Statutes Section 298.227 (the “TEDF Statute”) and for the benefit of the Taconite Assistance Area defined in Minnesota Statutes Section 273.1341 (“TAA”); and, WHEREAS, iron ore producer Hibbing Taconite Company (“Applicant Producer”) is eligible to receive up to $1,875,068 of TEDF Funds for Eligible Purposes based upon its 2015 production (“Pay 2016 TEDF Funds”); and, WHEREAS, Applicant Producer made application to the Commissioner to receive TEDF Funds for projects described in the attached Exhibit A (the “Proposed Projects”), and has committed to pay at least the required matching share of $1,875,068 of the costs of the Proposed Projects which the Commissioner has determined are for Eligible Purposes; and,


Page 26

WHEREAS, the TEDF Statute provides that the TEDF Funds available to an applicant producer for any proposed project cannot be released by the Commissioner until (a) a joint committee consisting of an equal number of representatives of the salaried employees and the non-salaried production and maintenance employees of that producer (the “Committee”) has had up to six months to review the Applicant’s proposal for expenditure of the TEDF Funds, and (b) the Board has approved the Proposed Projects; and, WHEREAS, the Committee of the Applicant Producer on October 10, 2016, indicated to the Commissioner that it has approved the Proposed Projects identified in Exhibit A; and, WHEREAS, the Board met in open session at 11:00 a.m. on October 17, 2016, at the agency’s Administrative Building located near Eveleth, Minnesota, to consider the Proposed Projects and has determined that the expenditure of TEDF Funds for the purposes and in the amounts specified in Exhibit A is for eligible purposes and would be in the public interest. NOW, THEREFORE, IT IS RESOLVED that the Board hereby approves the Proposed Projects specified in Exhibit A. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17TH DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X







TOTAL 8 0 0 1

Signed:____________________________

Representative Tom Anzelc, Chair


Page 27

Exhibit A Project 1 – Highway 5 Relocation - $2,100,000

Hibbing Taconite needs to expand its ore reserves in order to remain open. The logical expansion is to move into the iron ore beneath Country Road 5. Therefore, this project involves the closure and removal of a one (1) mile stretch of County Road 5. The new replacement route will involve improving County Road 136 from Chisholm. St. Louis County Public Works is the project manager with Hibbing Taconite Company responsible for payment of project costs. The project will result in advancing Hibbing Taconite Company’s pit and will extend the mine life an additional two (2) years.

Project 2 – Furnace Stack and Scrubber Replacements - $1,800,000

Hibbing Taconite Company has twelve (12) furnace stacks and sixteen (16) scrubber houses that remove particulate matter for four (4) furnaces. This project involves the replacements of the linings in the scrubber houses and indurating furnace stack structural replacements. These projects are estimated to have a fifteen (15) year life span.

b) United Taconite LLC – Resolution #17-008

Representative Jason Metsa moved to approve the expenditure of up to $1,099,715 of Taconite Economic Development Fund monies to United Taconite LLC for projects as presented in Resolution #17-008. Seconded by Senator David Tomassoni. Motion carried.



Page 28


TACONITE ECONOMIC DEVELOPMENT FUND EXPENDITURE APPROVAL: UNITED TACONITE, LLC – PAY 2016 TEDF FUNDS

Resolution No.: 17-008 WHEREAS, taconite economic development funds (“TEDF Funds”) are made available to the Commissioner under the provisions of Minnesota Statutes Section 298.28, Subdivision 9a to provide grants to taconite producers who provide required matching expenditures for projects that involve workforce development and associated public facility improvements, or the acquisition of plant and stationary mining equipment and facilities, or the funding of research and development in Minnesota on new mining or taconite, iron, or steel production technology (“Eligible Purposes”), all in accordance with the provisions of Minnesota Statutes Section 298.227 (the “TEDF Statute”) and for the benefit of the Taconite Assistance Area defined in Minnesota Statutes Section 273.1341 (“TAA”); and, WHEREAS, iron ore producer United Taconite, LLC (“Applicant Producer”) is eligible to receive up to $1,099,715 of TEDF Funds for Eligible Purposes based upon its 2015 production (“Pay 2016 TEDF Funds”); and, WHEREAS, Applicant Producer made application to the Commissioner to receive TEDF Funds for project described in the attached Exhibit A (the “Proposed Project”), and has committed to pay at least the required matching share of $1,099,715 of the costs of the Proposed Project which the Commissioner has determined is for Eligible Purposes; and, WHEREAS, the TEDF Statute provides that the TEDF Funds available to an applicant producer for any proposed project cannot be released by the Commissioner until (a) a joint committee consisting of an equal number of representatives of the salaried employees and the non-salaried production and maintenance employees of that producer (the “Committee”) has had up to six months to review the Applicant’s proposal for expenditure of the TEDF Funds, and (b) the Board has approved the Proposed Project; and, WHEREAS, the Committee of the Applicant Producer on October 6, 2016, indicated to the Commissioner that it has approved the Proposed Project identified in Exhibit A; and, WHEREAS, the Board met in open session at 11:00 a.m. on October 17, 2016, at the agency’s Administrative Building located near Eveleth, Minnesota, to consider the Proposed Project and has determined that the expenditure of TEDF Funds for the purposes and in the amounts specified in Exhibit A is for eligible purposes and would be in the public interest. NOW, THEREFORE, IT IS RESOLVED that the Board hereby approves the Proposed Project specified in Exhibit A.


Page 29

PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17TH DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X







TOTAL 8 0 0 1

Signed:____________________________

Representative Tom Anzelc, Chair

Exhibit A Project 1 – Project Mustang - $4,136,000

United Taconite currently produces an acid pellet and has recently signed a contract to produce and supply a custom flux pellet. This project is called “Mustang”. Mustang will require plant modifications and the engineering work for these modifications began in 2015. In July 2016, the construction work began. The first phase of this project, which is being submitted for the Production 2015 Pay 2016 TEDF rebate will involve the engineering for the project. Costs associated with the fluxstone unloading, storage, and conveying as well as additional process equipment in the concentrator and pellet plant will be part of this project’s Phase II. The Mustang project brings out-of-state (Michigan) pellet production to Minnesota and potentially some experienced Empire employees will transfer as well.

10) Iron Range Higher Education Account – Resolution #17-009


Senator David Tomassoni moved to approve the expenditure of up to $1,660,000 of Iron Range Higher Education Account monies for higher education programs conducted at educational institutions in the Taconite Assistance Area, which were recommended by the Iron Range Higher Education Committee on August 30, 2016, as presented in Resolution #17-009. Seconded by Senator Rod Skoe. Motion carried.


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IRON RANGE HIGHER EDUCATION ACCOUNT EXPENDITURE APPROVAL Resolution No.: 17-009 WHEREAS, Minnesota Statutes Section 298.28, subd. 9d allocates five cents per taxable ton of taconite taxes to the agency to be deposited in an Iron Range higher education account (“Higher Education Account”) to be used for higher education programs conducted at educational institutions in the Taconite Assistance Area designated in Minnesota Statutes Section 297.1341 (“TAA”); and WHEREAS, Minnesota Statutes Section 298.2214 created the Iron Range Higher Education Committee (“Committee”) to advise the commissioner of Iron Range Resources and Rehabilitation on providing higher education programs within the TAA; and WHEREAS, pursuant to 298.28, subd. 9d, both the Iron Range Resources and Rehabilitation Board (“Board”) and the Committee must approve expenditures from the Higher Education Account; and WHEREAS, on August 30, 2016, the Committee met and recommended the expenditure of up to $1,660,000 for the programs described in Exhibit A, which is attached hereto and incorporated by reference (“Proposed Programs”); and WHEREAS, in order to provide the Higher Education Account funds to the Northeast Higher Education District and to the IRRRB Commissioner for the Proposed Programs, it is necessary for the Board to approve the proposed expenditures of funds from the Higher Education Account; and WHEREAS, the Board met in open session starting at 11:00 a.m. on October 17, 2016, at the agency’s Administration Building near Eveleth, Minnesota to consider, among other matters, the proposed expenditure of up to $1,660,000 of Higher Education Account funds in support of the Proposed Programs within the TAA, and has determined that the proposed expenditures would be in the public interest.


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NOW, THEREFORE, IT IS RESOLVED that the Board hereby approves the expenditure of up to $1,660,000 of Higher Education Account funds for the Proposed Programs in the amounts and for the purposes set forth in Exhibit A. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17th DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X






TOTAL 8 0 0 1

Signed:____________________________ Representative Tom Anzelc, Chair 1.) Year 3 Funding to launch Process Operations program at Itasca Community College - $240,000:

This new model focuses on developing a core set of worker skills that will allow them to work in a variety of industries. There is a pilot cohort that began fall semester 2016.

2.) Funding for Iron Range Engineering - $950,000: The request is decreased from the $1,000,000 that has been awarded each year since 2010. Operating expenses have increased each year, however they have been offset by increased enrollment and adjustments made in the operation of the program.

3.) Funding to study next innovation for Iron Range Engineering - $100,000: The program will

graduate its 100th student in December. Regional industries report high levels of satisfaction with graduates who have entered their workforce. The next innovation would also include creating a new business model that is less reliant on annual grant funds.

4.) Expansion and Replacement of Welding Stations in Eveleth and Hibbing - $270,000: Leverage

these funds with the $500,000 DEED Workforce Development Grant along with Minnesota State HEAPR funds and institutional facilities funds.

5.) Funding to begin implementation of NHED Advancement Strategies - $300,000: NHED colleges

have seen significant enrollment decline in full-tuition paying students. It is important to develop strategies to increase market presence and bring more new students to the region. Funding is also being sought from foundations to assist with this project.


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11) Iron Range School Consolidation and Cooperatively Operated School Account – Resolution #17-

010 Action required: Approval requires 7 votes

Senator David Tomassoni moved to approve the expenditure of up to $2,000,000 of Iron Range School Consolidation and Cooperatively Operated School Account monies to Education Innovation Partners (EIP) for regional multi-district initiatives that will result in increased availability and access to high quality education and training for students, teachers and communities within the IRRRB service area, as presented in Resolution #17-010. Seconded by Representative Jason Metsa. Motion carried. Voting in Favor of the Motion: Representative Tom Anzelc, Representative Rob Ecklund, Representative Jason Metsa, Representative Dale Lueck, Senator Tom Bakk, Senator Tom Saxhaug, Senator Rod Skoe, Senator David Tomassoni Voting Against the Motion: None Abstain: None Excused: Representative Carly Melin


IRON RANGE SCHOOL CONSOLIDATION AND COOPERATIVELY OPERATED SCHOOL ACCOUNT EDUCATION INNOVATION PARTNERS

INNOVATIVE COOPERATIVE CENTER FUNDING APPROVAL Resolution No.: 17-010 WHEREAS, the Commissioner is authorized to expend, upon approval of seven members of the Board, the Iron Range School Consolidation and Cooperatively Operated School Account monies made available under Minnesota Statutes Section 298.28, Subd. 7a, (“School Account Funds”) for school disbursements within the Taconite Assistance Area designated in Minnesota Statutes Section 273.1341 (“TAA”); and WHEREAS, Minnesota Statutes Section 123A.215 authorizes two or more independent school districts and Minnesota state colleges or universities to enter into an agreement to establish an innovative cooperative center as a public corporation to provide for technology and other educational services for the betterment of all its members and the students whom they serve; and WHEREAS, all of the independent school districts and Minnesota state colleges located within the TAA are members of an innovative cooperative center established pursuant to the statute referenced


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above that is known as Education Innovation Partners Innovative Cooperative Center No. 1 ("EIP"); and WHEREAS, the mission of EIP, which is to provide technology, training, and other educational services to its members and partners and to their patrons and other persons they serve, supports the agency's mission to promote and invest in workforce development, which will lead to more businesses and stronger communities for the betterment of northeastern Minnesota; and WHEREAS, the Commissioner has requested that the Board approve the expenditure of up to $2,000,000 of School Account Funds for use by EIP to enable it to carry out its mission and implement the programs presented to the Board in the packet materials and by staff (“EIP Expenditure”); and WHEREAS, the Board met in open session at 11:00 a.m. on October 17, 2016, at the agency's Administrative Building located near Eveleth, Minnesota, to consider, among other matters, the EIP Expenditure and has determined that the use of up to $2,000,000 of School Account Funds to enable EIP to continue implementing programs to carry out its mission would be in the public interest and promote economic development within the TAA. NOW, THEREFORE, IT IS RESOLVED, that the Board hereby approves the expenditure of up to $2,000,000 of School Account Funds for use by EIP to enable EIP to continue implementing programs to carry out its mission. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17TH DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X





Representative Carly Melin 1


TOTAL 8 0 0 1



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Fax: (218)735-3047

To: Iron Range Resources and Rehabilitation Board From: Mark Phillips

Commissioner Date: October 12, 2016 Re: IRON RANGE SCHOOL COLLABORATION GRANT PROGRAM The Iron Range School Collaboration Grant Program supports regional multi-district collaborative initiatives that result in increased availability and access to high quality education and training for students, teachers and communities within the IRRRB service area. Education Innovation Partners Cooperative Center No. 6091-50 is requesting $2M for regional multi-district initiatives that will result in increased availability and access to high quality education and training for students, teachers and communities within the IRRRB service area. These requested funds will be used to initiate and support the first year implementation of the Northeast Leadership Center. Dollars will also be re-granted to taconite aide assistance area member institutions for technology equipment infrastructure upgrades based on approved best practices 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.


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12) Other

a) Grand Itasca Infusion Center – Resolution #17-011

Action required: Resolution of Intent Representative Dale Lueck moved a commitment by the Board to provide a grant up to $300,000 to Grand Itasca Clinic and Hospital for an Infusion Center project, subject to the condition precedent that Grand Itasca has secured all other funds necessary to complete the Infusion Center Project, as presented in Resolution #17-011. Seconded by Senator Tom Saxhaug. Motion carried.


GRAND ITASCA CLINIC AND HOSPITAL PROJECT INTENT OF THE BOARD

Resolution No.: 17-011 WHEREAS, the Commissioner is authorized to expend, upon approval of the Board, monies made available under a variety of statutes to promote the economic development of the Taconite Assistance Area designated in Minnesota Statutes Section 273.1341 (“TAA”), by investing in local economic development and public works projects within the TAA; and WHEREAS, Grand Itasca Clinic and Hospital (“Grand Itasca”), a Minnesota nonprofit corporation located in Grand Rapids, provides a suite of high quality health care services for residents and visitors within Itasca County and the surrounding area; and WHEREAS, Grand Itasca desires to construct and develop an infusion center to provide health care treatment for cancer patients that is not now available in the geographic area it serves (“Infusion Center Project”); and WHEREAS, the total cost of the Infusion Center Project is estimated to be $4,100,000, of which sum $2,559,856 has been secured through corporate commitments and fundraising, leaving approximately $1,540,000 of additional funding needed to complete the project; and WHEREAS, Grand Itasca has requested the Board to commit to an expenditure of up to $300,000 for the Infusion Center Project upon Grand Itasca securing all remaining project financing from other sources; and WHEREAS, the Board met in open session at 11:00 a.m. on October 17, 2016, in the agency’s Administration Building near Eveleth, Minnesota, to consider, among other matters, the proposed


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request to provide funding for the Infusion Center Project and has determined that it would approve such an expenditure from an account recommended by the Commissioner upon receipt by the Commissioner of proof that all precedent funding for the project is in place. NOW, THEREFORE, IT IS RESOLVED, that the Board hereby commits to provide a grant of up to $300,000 to Grand Itasca for the Infusion Center Project, subject to the condition precedent that Grand Itasca has secured all other funds necessary to complete the Infusion Center Project. PASSED AND ADOPTED BY VOTE OF THE IRON RANGE RESOURCES AND REHABILITATION BOARD THIS 17th DAY OF OCTOBER 2016.


Senator Tom Bakk X


Senator Rod Skoe X







TOTAL 8 0 0 1

Signed:____________________________ Representative Tom Anzelc, Chair 13) Adjournment

The meeting adjourned at 12:42 p.m.

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