In addressing speculation from the Legislature about whether the lab still has money from T. Denny Sanford’s $70 million donation, Wheeler clarified that at least half of those funds are earmarked for the Sanford Center for Science and Education, and for DUSEL development, and cannot be touched until the federal project becomes a reality. Sanford’s donation included $35 million for mine re-entry and early lab development at the 4,850-foot level; $20 million for the development of a science and education center; and $15 million for lab development down to the 8,000 foot development if the National Science Foundation approves the proposal for a deep underground science and education center.

Wheeler said it is Sanford’s $35 million that the lab is spending now, and that money will run out this year.

Additionally, Wheeler explained that while the state of South Dakota appropriated $35 million to the project in 2004 and 2005 respectively, not all of that money was for direct re-entry and lab development. In fact, he said $10 million is reserved for the indemnification of Homestake, a requirement of the state’s property donation agreement with Barrick Gold. Another $2 million, Wheeler said, is reserved as a mine closure fund in the event that the project does not go through. Those funds, by contract with Barrick Gold Corp., cannot be touched.

The remaining $23 million from the state, Wheeler said, has been used on mine re-entry efforts and pumping water. Currently the lab spends about $900,000 a month on operating costs, including insurance, power, payroll and other expenses.

Additionally, Wheeler said the lab is spending about $27.5 million of Sanford’s donation for capital projects such as rebuilding substations at the mine, installing new ventilation systems, running power cables down the shaft, and upgrading and improving the Ross and Yates Shafts. Of that money, he said, about $7.5 million is being used to excavate and construct lab space at the 4,850-foot level.

When the state appropriated nearly $35 million for the lab project it was with the understanding that the federal government would take over funding by December of 2010. However, due to various factors — including a presidential mandate that the Department of Energy and the National Science Foundation work more closely together — that timeline got pushed back to May of 2011, leaving a six-month funding gap for the lab. If the state is not able to close that gap, Wheeler said the Sanford Lab will have to start making plans to close down in June. That, he said, could be very detrimental to the prospect of a DUSEL.

“If we shut down and mothball then it would limit the ability of DUSEL to ever come into being simply because as the water starts to rise we would very quickly lose $25 to $30 million in investment, which would mean DUSEL would have to add that to their costs,” Wheeler said.

Additionally, Wheeler said if the Sanford Lab is forced to shut down that could complicate relationships between the state and Homestake — a wholly-owned subsidiary of Barrick Gold.

“(With the property donation agreement) they were always rightfully concerned about what if this doesn’t happen,” he said. “I think we’ve established a really good credibility and relationship. Homestake has been a wonderful corporate partner. I think if this got mothballed they would … lose confidence that it is going to build up over the years.”

On Tuesday South Dakota Democrats again blocked HB 1083, which would use the state aeronautics fund, the state tax relief fund that receives voluntary payments from Internet businesses, the state petroleum release compensation fund, the private activity bond fees fund, and the telecommunications services for the deaf fund to make up the $5.4 million for the lab. Democrat opinions ranged from not holding the project up as a priority in the face of other budget shortfalls, to wanting the money to come from the governor’s discretionary funds such as the REDI fund. Some legislators even questioned whether the $5.4 million really would be “one time” money.

But Wheeler said he is confident that this will be the last time lab funding becomes a legislative issue in the state. That’s because the federal government is expected to decide in May whether to build the DUSEL. If the decision is favorable, that will trigger another $15 million of T. Denny Sanford’s donation, which can be used for operating costs.

If the Sanford Lab runs out of money in December, Wheeler estimated that at least 150 local jobs would be lost. But if the Legislature finds the money to bridge the gap, and the NSF approves the DUSEL proposal, Wheeler estimated 5 to 10 percent job growth over the next three years, and approximately 300 to 400 lab-related jobs over the next five years.

“I think that is significant,” he said.

In 10 years, if the lab project goes forward, the jobs related to the science and support programs would increase even more, Wheeler said.

“That doesn’t even count the impact on the educational system,” he said. “I have to believe that our local universities would be getting funding from the federal levels to do more research and to collaborate (on science projects.) We would see growth in the universities.”

Before HB1083 failed in the House, Wheeler said he spent a lot of time educating legislators about Sanford Lab facts. Additionally, Dr. Kevin Lesko, principal investigator for the DUSEL proposal, appeared before the Legislature to answer questions about the project.

Rep. Darrell Solberg, D-Sioux Falls, said though he supports the lab project he is not totally convinced that its future hinges on the $5.4 million in funding. Solberg called the suggestion that the lab would shut down if this funding is not appropriated a “scare tactic.” Solberg also disagrees with Rounds about where the funds should come from.

“Because of its importance to the state, maybe tourism funds would be a good place to look for one-time funding,” Solberg said. “I am sure that because of the importance the governor has placed on it that he not only has the ability, but he will find needed monies for this project other than raiding those that could help children, the deaf, etc. I am disappointed in the funds that they chose to sweep for this one-time funding, as they call it. “

Overall, Wheeler said he does not care where the lab’s bridge funding comes from, as long as it comes.

“I assume that the governor really looked at all the different (funding) alternatives and chose the ones they wanted or that they thought were most appropriate,” Wheeler said. “I don’t know what the other fund balances are, or what other commitments are made on them. I really don’t have a position on where the funds come from.

“In my view, if we don’t bridge the gap and the mine starts filling with water and we start losing the infrastructure and all the costs, I would suspect that they (the NSF) would start to lose interest.”