Legalectric

Red Wing Mayor Dennis Egan has been hired to run a new lobbying and trade group for the frac sand industry, triggering consternation in his hometown just as it begins considering what position to take in a sand-mining debate that is emerging at the State Capitol.

Egan said Tuesday he sees no conflict of interest and won’t step down while he works as executive director of the Minnesota Industrial Sand Council.

But Red Wing City Council President Lisa Bayley, a lawyer, said she has received many “complaints, questions and concerns” from residents about the mayor’s new job as a paid advocate for an industry that is at the forefront of local ferment.

The situation comes as the sand-mining industry is raising its profile at the Capitol amid a boom in silica mining to supply the oil and gas industry with a vital ingredient for a drilling technique known as hydraulic fracturing.

The sand council, a consortium of aggregate, trucking and petroleum companies with interests in frac sand and gravel, has hired Twin Cities law firm Larkin Hoffman to lobby its cause. Egan, a professional lobbyist, also has registered in St. Paul to lobby for the sand council.

But Egan’s decision also occurs as debate rages up and down the Mississippi River corridor over the sand boom. In the past four years, more than 100 mines and processing facilities have been permitted in Wisconsin and Minnesota in a rush largely controlled by local units of government.

Bayley said the council will discuss the matter Monday at a regularly scheduled meeting.

“If the facts are as we think they are, it could prove to be a very serious matter,” she said, declining to elaborate.

Egan said he talked to City Administrator Kay Kuhlmann before signing his employment contract last week with the sand council. He declined to say how much the group is paying him.

“She didn’t raise any red flags at that time,” said Egan, who was re-elected in November to a four-year term.

Kuhlmann did not return a phone call Tuesday afternoon.

Egan said there are no applications pending before the city for frac sand facilities. The city ordinance that will regulate the industry was “put to bed” in October, and the sand council shares his position that “mining the bluffs on the Mississippi River is not a good idea.”

“In my mind, there’s not a conflict,” Egan said.

Bayley and fellow Council Member Peggy Rehder, however, said the frac sand debate is very much alive in Red Wing. The city is dealing with truck traffic issues and barge loading of frac sand from the city-owned bulkhead, or dock. Part of the agenda for Monday’s council meeting, Bayley said, is to discuss what position the city should take on frac sand issues that crop up at the Legislature. No bill has been introduced so far regarding frac sand mining, but there has been talk behind the scenes of possible statewide involvement in the issue.

“The issue of local control is very important to us,” Rehder said.

Throughout southeastern Minnesota and as far north as Scott County, local officials are trying to balance worries over air quality, water pollution, water depletion, truck traffic and noise against jobs and other economic benefits that the sand mining industry offers. Egan said part of the sand council’s mission is to advance the best practices for mining, processing and transportation.

“It’s not across the board that people are opposing” the frac sand industry, Egan said. “This group acknowledges there are issues, but that they can be dealt with.”

Rehder said she wants the city attorney to issue an opinion for the council as to whether the mayor has a legal conflict of interest. Rehder is a former lobbyist who worked in Washington, D.C., and who used to represent Hennepin County.

“Would I ever be a lobbyist and hold public office at the same time?” Rehder said. “No.”

She said Red Wing is “in the heart of frac sand mining country” and people are “very concerned” about Egan’s new position.

Tony Kennedy 612-673-4213

And in the Rochester Post Bulletin:

Red Wing mayor to represent silica sand industry

Brett Boese

Posted: Wednesday, February 6, 2013 7:21 am | Updated: 8:04 am, Wed Feb 6, 2013. RED WING — Four months after signing a local ordinance that essentially bans silica sand mining in his district, Red Wing Mayor Dennis Egan now finds himself representing — and advocating for — the controversial industry.

The peculiar situation has riled some.

Egan, who took office in 2011 and was re-elected in 2012, signed a contract Friday that installs him as executive director of the newly formed Minnesota Industrial Sand Council. The council is an organization of six Minnesota companies with an interest in mining silica sand, including the owner of a proposed St. Charles development, with Egan at its head. The council also represents the interests of companies involved in silica mining in an ancillary way, such as railroads, trucking and petroleum producers.

“The folks had gotten my name because that’s what I do,” said Egan, who has worked the last 10 years as a Capitol lobbyist. “It wasn’t tied to anything other than ‘Dennis, you’ve done this for 10 years and you have a good reputation.’ My approach is you need to work in collaboration to move projects forward.”

The new group has hired Minneapolis-based Larkin Hoffman law firm to serve as its lobbyist during the current legislative session, where Sen. Matt Schmitt, DFL-Red Wing, is expected to propose silica sand legislation later this week. Egan hopes to develop a list of best practices related to dust mitigation and other mining issues.

Southeastern Minnesota is at the forefront of the state’s silica sand controversy. The issue first surfaced just a few miles from Red Wing when Windsor Permian, an Oklahoma-based energy company, purchased 155 acres of land in 2010 and expressed an interest in mining silica sand. Concerns spread rapidly through the region since then, with Winona, St. Charles and Wabasha being the current hot spots.

There are just five active silica sand mines in the state, according to the Minnesota Department of Natural Resources, but many new ones have been proposed. Demand for the hard, round sand has exploded due to advances in hydraulic fracturing, or fracking, to extract oil and natural gas, particularly in North Dakota.

Egan, who has previously served as the Chamber of Commerce President in Red Wing and Rochester, said that he’s been brought in to resolve controversial situations in St. Louis and Ramsey counties, among others, in prior business deals. He’s since created his own company called Egan Public Affairs, which specializes in such endeavors.

“It’s another project in which you find passions on both sides of the aisle,” Egan said of his new role. “I don’t want to come across as downplaying that for southeast Minnesota. It’s a big issue; I recognize that.”

However, some aren’t convinced Egan’s new role is proper given his status as an elected official. Carol Overland, a Red Wing attorney, e-mailed the city council raising concerns about a conflict of interest and her concerns don’t appear to have fallen on deaf ears. Though council president Lisa Bayley declined comment and others didn’t return calls, council member Peggy Rehder expressed frustration that she wasn’t directly informed of Egan’s plans; the news was first posted online Friday evening by “Politics in Minnesota.”

Egan said he informed Red Wing City Administrator Kay Kuhlmann of the job offer prior to accepting; Kuhlmann was not available for comment.

“I’m puzzled,” Rehder said. “I think we need more information and we need a legal opinion from the city attorney.

“You’re absolutely right that people are concerned.”

While the situation is expected to be discussed further at Monday’s city council meeting, members of the citizen’s opposition group Save The Bluffs see it as a clear conflict of interest.

“How can you represent citizens and the industry at the same time?” asked John Tittle, a Red Wing resident and Bluffs member. “It seems like it would be a conflict. It seems kind of obvious.”

Egan responded to those challenges by saying the city ordinance had been approved for months by the time the sand companies approached him in late December. Should any new proposals be made, the mayor says he’d recuse himself from those discussions.