Statewide: January 7, 2011 Archive
Posted at 6:30 AM on January 7, 2011
by Mark Steil
Filed under: Government
Minnesota's most numerous unit of government, townships, received high grades in their annual financial review.
State Auditor Rebecca Otto sees no major concerns in the fiscal health of the states nearly 1,800 townships.
The "Minnesota Town Finances Report" shows that state townships spent about $260-million in 2009, a 3.7 percent increase over the previous year. On the revenue side, Minnesota's 1,786 townships took in about $263 million, a 4.8 percent increase over 2008.
Most of the money goes for some very basic functions: road maintenance, snowplowing and bridge upkeep.
There's a lot of that sort of work to be done, since townships hold nearly 20 percent of the state's population, just under one million people. The state auditor says townships are generally thought of as the most efficient form of government, since most have no full-time staff. That means nearly all revenue goes directly for projects.
The most basic change in townships' finances over the last decade comes on the revenue side. Taxes have become more important for maintaining fiscal health. In 2000, taxes accounted for about 51 percent of all township revenue in the state, said Kent Sulem, general counsel and chief lobbyist for the Minnesota Association of Townships.
By 2009 that had risen to 70 percent. The main reason for that increase occurred in 2002, when the legislature ended direct state aid for townships, Sulem said. That forced them to pick up more of their budget needs through property taxes.
Given the state's budget deficit, Sulem doesn't see any chance that state legislators will restore that aid. He said that during the current legislative session townships will play "defense" and try to limit any state actions which could adversely affect their budgets.
All but 50 townships reported their finances to the state auditor for the 2009 report. There's no penalty for those who didn't, but Otto, the state auditor, said they will receive a letter reminding them that state law requires the annual information.
She said anyone can check out the resources of any township for themselves.
"When residents want to see the finances of their town they can find that on our website," Otto said.
We learned this week that an upstart Iron Range company, Magnetation, will push its iron recovery technology worldwide through international giant Cargill .
Magnetation is one of the more amazing stories coming out of Minnesota's Iron Range, a mining region that often produces rags rather than riches stories.
The company is using its patented technology, the Rev3 Separator, to recover marketable iron concentrate from old waste piles -- the stuff just left behind from northeast Minnesota's long natural iron mining industry. It's so promising that the people at Cargill's iron division, Cargill Ferrous International, recognize its worldwide potential -- enough to make an undisclosed investment into a partnership plan to explore how the process might be applied elsewhere.
Magnetation's heroes include long time Iron Range mining engineer Al Fritz, who came up with the process that apparently uses a lot of water and a big wheel to pull iron from not very magnetic hematite.
Larry Lehtinen is the company's CEO. Lehtinen's resume includes his part starting up Mesabi-Nugget, a partnership between Japan's Kobe Steel and lead partner Steel Dynamics Inc. in a new plant hear Hoyt Lakes, that company is producing iron nuggets with much higher iron concentration than today's taconite pellets.
Magnetation just inked an agreement to send concentrate by train from the Iron Range to a Mexican steel producer. When up and running, it will send 120 car unit trains of ore on a 1,500-mile journey to Mexico steel producer AHMSA. Even at that distance, Magentation can compete with ore from South America.
In fact, Lehtinen has said, Magnetation is the nation's lowest cost iron concentrate producer; beating out the taconite companies and rivals like Mesabi Nugget.
When founded a couple of years ago, Magnetation was envisioned as a warm weather producer that would work old waste piles in the sunnier seasons. Instead, the company put up a big bubble dome over the work site to allow year-round operations.
Magnetation has so far been working the old Mesabi-Chief Mine near Keewatin, turning out 160,000 metric tons a year.
While company officials haven't revealed terms of their deal with Cargill, they say they'll now be able to expand that operation to full production around 450,000 tons a year; and begin work on a second site, near the town of Taconite; which will help the combined operations approach one million tons a year.
There's so much recoverable ore laying around in waste piles, it could take 50 years to thin it out.
When done reprocessing waste piles, Magnetation plans to leave behind wetlands, that the company will be able to sell. Many companies need to purchase wetlands to mitigate wetland acres lost to new developments.
It's a good time to implement new ways to mine. Iron ore that sold for about $30 a ton in 2001, now trades at about $170 dollar a ton, according to Metal Bulletin Research's Iron Ore Index.
So, don't be surprised to see a bunch of Magnetation operations up north in the coming years, and quite possibly world-wide.