IRRRB is long overdue for redesign and reform

Residents of northeastern Minnesota are abuzz about the recent report from the Office of the Legislative Auditor regarding its comprehensive review of the Iron Range Resources and Rehabilitation Board (IRRRB). As the commissioner of the agency from 2003 to 2011, my hope — dare I say, my expectation — is that the interest from citizens and their state representatives will continue and the buzz will become a battle cry for long-overdue reform.

The full legislative auditor's report, released Friday, issued several findings and recommendations regarding the IRRRB's oversight of grants and loans as well as the growing subsidy of Giants Ridge, a year-round golf and ski resort in Biwabik, Minn.

The most significant finding, however, is beyond the purview of the commissioner. That is the auditor's extensive review of the makeup of the IRRRB board and the finding that the structure and powers are vulnerable to a legal challenge regarding its constitutionality.

The auditor's report details how the membership and powers of the board violate both the separation-of-powers and dual-agency provisions of the Minnesota Constitution. Essentially, the auditor, referencing the Constitution and court rulings, is spelling out the obvious. People elected to one branch of government (in this case, the Legislature) cannot properly also exercise powers in another branch (neither the judicial nor executive branches of government).

No other state agency in the governor's Cabinet has a board of legislators. No other commissioner must go before the Legislature for budget approval and then appear again before a smaller group of legislators back at the agency who determine how and when that budget is spent.

My perspective on the structure of the IRRRB stems from my 30-year career in business and community development and my unique relationship with the agency over that period. In the 1990s, I served as a chamber of commerce president and later as president of a regional economic development agency within the area served by the IRRRB. In 1999, the structure of the IRRRB was legislatively altered to include three citizen members. I was appointed twice by Steve Sviggum, then speaker of the House, to serve on the IRRRB board. Then, in 2003, I was appointed commissioner of the IRRRB by Gov. Tim Pawlenty and served for eight years in that role.

These vantage points gave me a front-row seat to witness the political influence that inhibited this economic development agency from accomplishing its mission to enhance and diversify the economy in the Taconite Assistance Area.

I will go so far as to say many of the shortcomings cited by the legislative auditor regarding agency oversight of policy and programs can be directly attributed to the legislator influence and disregard for the administrative functions of the commissioner. As one of my former University of St. Thomas business professors used to say: "Every system is perfectly designed to achieve the results it gets." In other words, if the IRRRB is not achieving its mission, look to how it is designed.

Dysfunction at the agency increases when the commissioner is appointed by a Republican governor, because Iron Range legislators — who sit on the board and approve all spending — are all members of the DFL Party.

In 1999, then-Commissioner Jim Gustafson asked Mitchell Hamline School of Law Prof. Neil Hamilton to review the structure of the agency. Hamilton's unpublished "Final Report on Organizational Improvements for the Iron Range Resources and Rehabilitation Board" concluded that the board was unconstitutional, because the legislative board members were usurping the power of the executive branch of government.

Hamilton's report received some attention and, in a landmark move to diversify the membership, Sviggum authored and passed the legislation adding the three citizen members to the board.

Those citizen positions were later removed by DFLers when they regained complete control of state government in 2013. Presently, the board is made up of nine legislators.

During my term as commissioner, I actually changed the name of the agency to Iron Range Resources, in part to differentiate the executive branch agency from the board. Pawlenty also supported efforts to pass legislation altering the structure of the board. These efforts were blocked by the Iron Range legislators.

Where do we go from here? Fortunately, the legislative auditor made four specific recommendations:

1) The Legislature could remove the board and retain the executive agency;

2) The Legislature could make the board an advisory commission;

3) The Legislature could retain the board and have the governor appoint its members, or

4) The Legislature could establish the IRRRB as a regional government organization and have voters from the Iron Range elect its board members.

The governance structure of a state agency should not be a partisan issue. Tens of millions of taconite production tax dollars pass through the IRRRB each year.

DFLers and Republicans alike should be concerned that an agency within the state of Minnesota is operating in violation of the state's Constitution.

Founded in 1941, the IRRRB is celebrating its 75th birthday this year. Significantly changing the structure of this long-standing agency should be given the full consideration it deserves. As a wise man once noted, "there is a time for everything, and a season for every activity under the heaven." Now is the time for positive change at the IRRRB.

Sandy Layman, of Cohasset, Minn., was commissioner of the Iron Range Resources and Rehabilitation Board from 2003 to 2011. She is a Republican candidate for the Minnesota House in District 5B.