Legalectric

This is way too much fun! Another great letter in the Grand Rapids Herald Review, from someone I’ve never heard of, and an article about the choices facing the county — a binary moment approaches.

County should drive hard bargain to get its due

Editor:

Thanks to the Itasca County Commissioners for working for the interests of local citizens in the matter of Excelsior/Micheletti’s plans to put a coal gasification plant in close proximity to many private landowners and renters. Some legislators are putting Excelsior/Micheletti’s interests above their constituents, exempting a power plant from millions in personal property tax at a time when local governments are suffering due to revenue loss. Local governments are already doing a lot for this private for-profit corporation.

Isn’t it a legislatorâ??s job to help stabilize the community, not destabilize — to promote economic development, not detriment?

I hope we can drive a hard and fair bargain with this corporation in return for what they are getting from us.

Bob Beech
Iron Range Township

And about the latest county meeting with the MSI and Mesaba consultant from SEH:

County faced with commitment decisions on Minnesota Steel, Excelsior Energy projects

Itasca County will face a number of decisions in the coming two months about just how far it wants to go in financially supporting the proposed Minnesota Steel and Excelsior projects.

The Minnesota Steel project proposal has the ambition of developing an iron ore processing and steel production facility near Nashwauk. The Excelsior Energy Project proposes a coal gasification plant near Taconite. Minnesota Steel officials have estimated that the project brings to the table 700 permanent jobs. Excelsior Energy officials have previously stated that its project will bring 100 permanent jobs to the area.

Several infrastructure elements needed for the proposed developments to move forward will be discussed with county commissioners in the weeks ahead. On Tuesday at a special meeting of the board, commissioners listened to an update from Short, Elliott and Hendrickson officials, with which the county has contracted to oversee the infrastructure for the proposed projects, on where the challenges are and what decisions will likely lie ahead.
According to Chuck Michael of SEH, major infrastructure elements required for the economic development projects to move forward include railroad, roadway, gas pipeline, fresh water supply and wastewater treatment.
Roads and railways will be the main county elements of involvement – gas pipeline, water and wastewater treatment will largely be under the jurisdiction of the cites of Nashwauk and Taconite.

Already, however, the county faces potential financial outlay for the projects in the form of required aerial photography, which must be completed before infrastructure planning can begin. The current estimated pricetag for that service is about $210,000 for both projects and there is some question about if the county footed the bill if reimbursement would be possible.

While the governor has included $7 million in his bonding proposal for infrastructure for both sites, a number which falls far short of the $92.4 million requested by the county, bonding money may not be a source of reimbursement for aerial photography – unless expressly written into legislation.

County Attorney Jack Muhar noted that reimbursement for upfront costs was an issue with the bonding money allocated for the MIS project.

The difficulties with determining just how far the county wants to risk its own financial resources was put into focus by Michael who noted that financial contingencies could delay development.

“If the bonding bill passes contingent on financial close, it puts the (construction) schedule six months behind,” he said.

Financial close of the Minnesota Steel project is expected to take place in December of this year and hinges on completion of environmental review and the permitting process, according to Howard Hilshorst of Minnesota Steel.
It is unlikely that the timetable can be moved up, but infrastructure construction needs to begin this summer to keep the project on schedule. The question then for the county, said Michael, becomes how far the county wants to go in its financial commitment.

“How much does the county want to jump the gun to help meet the timeline?” Michael asked commissioners.
Michael suggested that going back to aerial photography vendors for potential reduction in price was one option which would potentially pose less risk to the county. The aerial photography would likely need to be completed by the end of April to keep the Minnesota Steel project on schedule for production to begin at the outset of 2009.
Commissioner Catherine McLynn also suggested that perhaps the county could look at aerial photography for the Minnesota Steel project only, which has a tighter timeline than Excelsior Energy. That move could bring the potential cost down to just more than $60,000.

Commissioner Rusty Eichorn questioned whether the county should be responsible for the aerial photography bill.
â??Are we assuming the county is going to be responsible for the aerial photography and how is it going to be paid for?â? questioned Eichorn.

The discussion ended with more questions than answers, however, SEH officials and commissioners did map out some actions.

County officials verbally agreed that local legislators would be contacted to determine if reimbursement costs could be written into the bonding bill once finalized. SEH will go back to the vendors to determine if some cost savings can be gained in the aerial photography bill.

In other business at the special meeting, the board:

â?¢ Listened to a report from SEH railroad expert Dave McKenzie, who updated the board on rail needs the two projects would have as well as a general outline of county options for that service. Railroad infrastructure carries a potential pricetag of $30 to $40 million. While McKenzie noted that state bonding was the countyâ??s best bet for funding, other sources are available including federal loans, county revenue bonds and shipper funds.

â?¢ Listened to an update on potential other funding sources for water, wastewater treatment and gas pipeline infrastructure for the projects from Dick Grabko of SEH. Funding for these elements is available from Iron Range Resources, the Minnesota Department of Employment and Economic Development, federal Rural Development loans and the federal Economic Development Authority.

â?¢ Reviewed the timetable and discussion topics for subsequent meetings, which will take place the first and third Tuesdays of each month through May. Upcoming topics include: wetland permitting, gas pipeline, roadways and shortline railroad.