Dakota Resources 2016 Annual Report

2 0 1 6 D A K O TA R E S O U R C E S A N N U A L R E P O R T

MAK ING CON NEC TION S

In 2016, Dakota Resources engaged 619 resident leaders in 3 learning networks and 53 initiative teams.

This engagement is transforming rural communities by raising up diverse groups of leadership, implementing new strategies, and completing projects based on community-selected priorities.

The communities engaged are benefiting from the impacts of this work, ultimately affecting 46,526 people.

14 communities participated in 3 program areas and learning networks

South Dakota is a small rural state where you can make a connection with just about anyone if you talk to them long enough. Those connections are vital to our way of life — and a key component of Dakota Resources’ mission of enriching communities and empowering people.

Because we believe so strongly in the power of connections, Dakota Resources made a commitment in 2016 to help facilitate more rural networking opportunities than ever before. Nowhere was this more evident than in the launching of our inaugural RuralX Summit in Aberdeen last July. This two-day summit was designed to bring rural “thinkers and doers” together for motivational learning, idea sharing and community collaborations. Fifty-seven sponsors and over 200 people were able to connect with valuable resources and each other throughout the successful event, but the true measure of the event’s success happened after attendees put their inspiration into action. We shared a few of their stories inside this annual report.

In addition to our work with RuralX, Dakota Resources took a hard look at our initiatives and challenged ourselves to find new ways to strengthen existing relationships and partner with even more communities.

From this, we created The Learning Network, which includes a host of resources and tools, including an online learning network, retreats, face-to-face conferences, peer-to-peer video conferences, webinars and training—all accessible to any community at any time. By joining The Learning Network, any rural community can connect with other rural communities to focus on one or more topics, such as housing, entrepreneurship/business development, leadership/civic engagement and financial development. A deeper level

of community coaching is always available to the communities that need it.

Making all these new connections with rural community leaders, entrepreneurs, business owners and economic development teams has certainly kept Dakota Resources busy, and as our work continues to change and grow, our dedicated team is rewarded with increasing excitement as we continue to “ruralize the potential” of even more communities all across the state.

Every person we meet and every connection we make is a new opportunity.

Out here, you never know what the next connection might bring. More often than not, it’s someone or something truly amazing.

Isn’t it great to be rural?

LEF T: BE TH D AV IS // President

RIGH T: RA C H A E L S H ER AR D // 2016 Board of Directors Chair

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dakota rising 2016

Building on the Dakota Rising Experience B R A D H A H N A N D J AY Y O H N E R

With a passion for construction and a deep love of their rural roots, Jay Yohner and Brad Hahn teamed up in 2015 to launch a post-frame manufacturing business in their hometown of Martin, South Dakota. Jay and Brad had already been working together through Jay’s construction company, Yohner Construction, and the partnership was a natural progression for a couple of guys with a big idea.

“I actually left Martin and moved to Oregon to enroll in a structural engineering and architectural design program,” says Jay. “I moved back to Martin and started my own construction business. I hired Brad and we really clicked.

We both love construction. We both have big dreams. And we both believe we can make those dreams happen right here.”

As business partners, Brad and Jay established Pioneer Buildings, Inc. with a vision for creating high quality, pre-fabricated post frame buildings that require no on-site cuts, low overhead and very little waste. The buildings are pre-cut and pre-marked, and come with a step-by-step building plan that can be quickly built on-site

by Pioneer Buildings, Inc. or can be shipped and built by other contractors.

“The idea is to build and grow an indoor manufacturing facility that will create more jobs for people in our area,” says Brad. “Martin doesn’t have any kind of manufacturing industry. If we grow like we hope to grow, we’ll bring new opportunities to our hometown and give it a boost.”

That desire for progress is what led Brad and Jay to Dakota Rising.

“We were looking through our electric cooperative newsletter and there was a story about Dakota Rising,” explains Brad. “It was exactly what we were looking for, so we called them and decided to go for it. We’re good at what we do, and we know where we want to go, we just need help with some of the business knowledge, resources and people skills.”

In 2016, Brad and Jay were accepted into the Dakota Rising Fellowship and are already making progress on their ambitious business plan.

“We bought a junky abandoned lot in Martin and our plan is to clean it up and start a manufacturing site in that location,” explains Brad.

Eventually, the men hope to grow that manufacturing facility into a multi-million dollar industry for Martin, where affordable, high quality pre-fabricated post frame buildings are shipped to contractors across the country.

They are both confident the Dakota Rising Fellowship will help guide them toward success.

“So far the Fellowship is pushing us out of our comfort zones, but we are seeing the value of different perspectives. All the Dakota Rising entrepreneurs come from backgrounds way different than ours, but we all have the same questions and share the same struggles. Jay and I are motivated and we want to learn. It feels like we’re in the right place,” says Brad.

So far the Fellowship is pushing us out of our comfort zones, but we are seeing the value of different perspectives.

All the Dakota Rising entrepreneurs come from backgrounds way different than ours but we all have the same questions and share the same struggles.

Dakota Rising Fiscal Year 2016 Outcomes: – 3 Dakota Rising communities created volunteer teams dedicated to local business support – 296 business owners participated in local business training – 197 business owners attended networking events

– BRAD HAHN pag e

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HOME ADDRESS PLUS 2016

C H E Y E N N E M C G R I F F, ECONOMIC DEVELOPMENT DIRECTOR, WEDC

New city ordinances in Wall are inspired by the Home Address Plus learning network Wall, South Dakota’s tagline is “Window to the Badlands.” Thanks to the efforts of a forward-thinking city council and a progressive economic development corporation, that window is opening to dozens of new opportunities for this tourism-based community.

One of those opportunities includes a strategic focus on housing development to help overcome Wall’s dire lack of available housing. To help generate new ideas and access more housing resources, the Wall Economic Development Corporation (WEDC) joined the Dakota Resources Home Address Plus learning network in 2016 to help connect with other rural communities and learn from their successes. The network offers online support for housing questions, monthly webinars, access to tools and resources and bi-annual Home Address Plus learning network gatherings.

6 Home Address Plus Network Members Reported Fiscal Year 2016 Outcomes:

– 9 new homes were constructed – 6 homes were renovated or rehabbed – 10 dilapidated properties were cleared – 31 new lots were open for housing development – 103 homes or multi-family units were sold

L E F T: T H E E C H O V A L L E Y H O U S I N G DEVELOPMENT NEAR WALL ABOVE: THE WALL HA+ TEAM

Home Address Plus is a collaborative partnership between Dakota Resources, GROW South Dakota and NeighborWorks Dakota Home Resources. Thanks to this partnership and the support of Citi Foundation and NeighborWorks America, Home Address Plus learning network communities can gain extensive support, resources and assistance with their rural housing solutions.

“For just $.75 a square foot, the city will provide labor and equipment to demolish a residential property in Wall,” explains Cheyenne. “That will clear space for new construction while cleaning up some of the old abandoned properties around town.”

“We were invited to try the network before we joined. The first gathering we attended was very inspiring. We could see the positive things happening in other communities,” says Cheyenne McGriff, Economic Development Director for the WEDC. “We joined the learning network and took a housing “learning journey” that included tours of Howard, De Smet, Redfield, Doland and Faulkton. It was a real eye-opener for us and spurred us to think in new directions.”

In addition to the new ordinances, the WEDC and the City of Wall were inspired to move forward with other projects designed to help alleviate the community’s housing shortage. These included: –––––––––––––––––––––––––––––––––––––––––

A housing study detailing Wall’s future housing needs and specific recommendations for housing development, which was implemented with the help of the South Dakota Housing Development Authority.

–––––––––––––––––––––––––––––––––––––––––

With access to the online learning network, Cheyenne decided to post an inquiry about housing incentives to the other rural communities.

“We got an absolute flood of information,” she says.

“People told us what was working in their communities and even pointed us to other places and resources that might be helpful. In the end, it was a connection we made in Canton that helped the WEDC create a new municipal tax rebate plan and initiate a proposal to the city council in November.”

The city council moved to approve two initiatives.

The first involves a five-year municipal property tax rebate for newly occupied single-family, two-family, multi-family and factory-built homes. This rebate is designed to help encourage new housing development.

The second initiative evolved from an idea that came from a learning network connection in Phillip and will help enhance dilapidated properties and create opportunities for new construction.

The formation of a housing committee, tasked with setting specific housing development goals and plans.

–––––––––––––––––––––––––––––––––––––––––

Community Housing Conversations where business owners, landlords and contractors gather to discuss solutions for seasonal and rental housing.

–––––––––––––––––––––––––––––––––––––––––

The formation of an online housing database, which lists available rentals, homes for sale and available lots.

–––––––––––––––––––––––––––––––––––––––––

The creation of a “Housing Toolbox” which includes incentives designed to help encourage housing development or rehabilitation.

“Being a part of the Home Address Plus learning network is vital because of the relationships we’ve made and the valuable experience of other rural communities. Their support is incredible. They realize that helping us helps all of South Dakota,” says Cheyenne. “I have learned so much and feel like we are taking incredible strides in a short amount of time. We are excited about the future of Wall!” pag e

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empower dakota 2016

NICK FOSHEIM, EXECUTIVE DIRECTOR, LINCOLN & MINNEHAHA COUNTY E C O N O M I C D E V E L O P M E N T A S S O C I AT I O N S

Empower!

Dakota helps Lincoln and Minnehaha counties plan for the future Sometimes, a move forward requires a step back.

That’s exactly what Nick Fosheim, Executive Director of the Lincoln and Minnehaha County Economic Development Associations, decided to do in 2016.

“We have been a regional economic development collaborative for about fifteen communities around Sioux Falls for twenty-five years,” says Nick. “Many things have changed since we started, and we decided it was time to take stock of where we’ve been and where we want to go. We wanted some clear perspective, and that’s what Dakota Resources helped provide.”

Nick knew about the value of Dakota Resources because of his previous employment with economic development in Webster and their involvement in Dakota Rising.

“I respected the process and their ability to engage a community,” he says. “We decided to partner with Dakota Resources through Empower! Dakota in an effort to build a strategic plan for Lincoln and Minnehaha counties.”

Empower! Dakota Fiscal Year 2016 Outcomes: – 38 active initiative teams – 402 local people involved in initiative teams – 1158 total attendance for gatherings, celebrations or listening sessions – 27 additional outside volunteers/ stakeholders

The Lincoln County Economic Development Association (LCEDA) and the Minnehaha County Economic Development Association (MCEDA) are in a unique cooperative designed to serve fifteen communities in the two counties. The development associations worked with Joe Bartmann and John Beranek of Dakota Resources to host four community listening sessions in each county, gather feedback from community members, make strategic recommendations and formulate a plan.

“It’s never easy for any organization or community group to take the time and effort to step back and do a lot of listening to the people they serve, but it can be such a breakthrough experience for them when they make the commitment to do it,” explains Joe Bartmann, community coach for Empower! Dakota, “Once they listen to what their community wants and needs from them, deciding what projects to do and what approaches to shift becomes much more clear.”

That clear vision is a vital step to empowering an economic development corporation to make informed, trusted decisions.

“On the outside it may have seemed like a long process, but it’s an investment,” explains Nick. “We learned the importance of taking the time to do the steps right and to have an open mind. For me, the biggest benefit is taking all that conversation and moving it to action.”

INNOVATIVE SITE OF THE YEAR 2016

Faulkton named 2016 Dakota Rising Innovative Site of the Year In 2010, the Faulkton area began rewriting its story with an “all-in” dedication to growth and a positive community atmosphere. The ambitious rural community has been adding exciting new chapters to their story ever since. Their latest ends with Faulkton being named the 2016 Dakota Rising Innovative Site of the Year, which was awarded for a long list of community accomplishments as well as innovative plans for the future.

“All of our growth and development started with Dakota Rising,” says Trevor Cramer, Economic Development Director for Faulkton. “We are far from done…in fact, we’re just getting started. Our latest venture is the collaboration between the Faulkton Business and Professionals Association and the Business/Entrepreneurship pillar of the Faulkton Area Economic Development Corporation (FAEDC)—which comes directly from Dakota Rising.”

That collaboration grew from a brainstorm session being led by Dakota Rising Community Coach Kristi Wagner. A group of Dakota Rising alumni took the idea and ran with it, bringing the two groups together and putting the right people into place.

“Cindy Kopecky, Kelly Melius and Cheryl Schaefers, all Dakota Rising alumni, were instrumental in helping build this collaboration,” says Trevor. “The idea is to supply new and existing businesses in Faulkton and surrounding areas like Miller, Gettysburg and Ipswich with more education, support and confidence. That in turn will support a pipeline for more Dakota Rising fellows.”

The Faulkton Business and Professionals Association hosts six meetings each year, and now five of those meetings will include additional programming supported by FAEDC and their partnership with Dakota Resources.

“We’ll cover topics on everything from running an effective meeting, to using Quickbooks, to improving customer service, to finding resources to sustain and grow your business,” explains Trevor. “Our goal is to help build capacity for economic growth in the Faulkton area while at the same time mentoring younger business owners and community leaders.”

That goal is one this rural community is used to achieving.

“It’s easy to make things happen in a community that wants to be involved. It’s hard to work uphill. We are really proud of everything we’ve done,” says Trevor.

Faulkton Believes In Possible Below is a list of some of the achievements by the community of Faulkton since joining Dakota Rising in 2010: Graduation of nine Dakota Rising Fellows –––––––––––––––––––––––––––––––––––––––––

Construction of an 8-unit apartment complex –––––––––––––––––––––––––––––––––––––––––

Completion of a retail center featuring five local businesses –––––––––––––––––––––––––––––––––––––––––

Establishment of a full-time economic development director and office on Main Street –––––––––––––––––––––––––––––––––––––––––

Construction of a new jail –––––––––––––––––––––––––––––––––––––––––

Expansion of the hospital for the second time –––––––––––––––––––––––––––––––––––––––––

Development of a new residential neighborhood –––––––––––––––––––––––––––––––––––––––––

Building of a new industrial park

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RURALX 2016

PICTURED CLOCKWISE: E I L E E N B R I G G S ; E M I LY PILLOTON; HUGH WEBER; HEIDI MARTTILA-LOSURE AND KORY ANDERSON

RuralX helps to overcome rural’s challenge: The distances between us

By Heidi Marttila-Losure

For those of us who choose to live on the Great Plains, the wide-open spaces are both our greatest opportunity and our greatest challenge.

The opportunity isn’t obvious to everyone—the ones who call our home “flyover country” aren’t seeing it—but many of us who live here can feel it when we take in a long view toward the horizon: There is possibility in that open space between ground and sky, and part of the meaning of our lives is imagining what that space could be and doing the work we are called to do to make those beautiful visions real.

And here is where RuralX shows its power.

The first RuralX Summit brought together 222 participants from across South Dakota and beyond. Many of us who attended are pretty good at looking at open spaces and imagining beautiful possibilities, and many of us are “doers” and are already working to make our visions real.

But most of us have also run into the challenge of open spaces in one way or another.

For two days, RuralX put a fold in the distance between us possibility-thinking people—people who, it turned out, often had the resources (the ideas, the expertise, the encouragement) that others were seeking. We were encouraged to get out of our comfort zones to really connect with one another. And once we had made a connection on one thing, we could share even more resources to help make one another’s visions real.

At the end of the day, RuralX made one thing clear: What we need is already out here. And that keeps us imagining and building a better home for us all.

Heidi Marttila-Losure is owner of Dakotafire Media LLC, based in Frederick, S.D., where she helps make ideas more powerful through writing, design, and consulting services.

She can be reached at heidi@dakotafire.net.

RuralX is a success for rural South Dakota

The RuralX Summit, organized by Dakota Resources with the help of 57 generous sponsors, was a rural economic and community development summit held in July of 2016 to help rural innovators connect with new ideas, innovative people and forward-thinking collaborations. The two-day event was attended by over 200 people who were motivated by: National rural advocates and celebrated speakers –––––––––––––––––––––––––––––––––––––––––

Networking with key organizations, resources and rural leaders –––––––––––––––––––––––––––––––––––––––––

A farm-to-fork dinner celebration with entertainment –––––––––––––––––––––––––––––––––––––––––

Breakout sessions focused on rural agendas –––––––––––––––––––––––––––––––––––––––––

Inspirational success stories The following rural successes were a direct result of the 2016 RuralX Summit and can be attributed to the hard-working, visionary people who came to us representing their communities, their organizations and their dreams.

Two high school boys from Miller, Dylan Fulton and Camden Breitling, attended the RuralX Summit with the help of a scholarship from Dakota Resources. The two boys, who are Youth Leaders for On Hand Development, returned to their community full of ideas, including a small business development idea that took hold in the form of small holiday pop-up shops featuring local makers and their products. The “Cozy Cabin Christmas” project allowed local entrepreneurs to try

running a business without committing to brick and mortar buildings, and was met with great enthusiasm and success in the community.

Karla Brozik, Executive Director of the Winner Area Chamber of Commerce and the South Central Development Corporation, took on keynote speaker Emily Pilloton’s challenge to “start something” by helping create a new work skills program for youth in Winner. Winner kicked off the Tripp County Skills for Tomorrow program in January 2017.

Anita Holan, Economic Development Director in Kimball, was inspired to make a difference in Kimball after hearing a motivational talk by John Beranek, a Community Coach at Dakota Resources. She went back to her hometown and urged her City Council to form an Economic Development Board. Anita was also motivated to help launch a Community Development Foundation after connecting with Buddy Seiner from the South Dakota Community Development Foundation at RuralX.

Helen Merriman, Director of SD Center for Enterprise Opportunity (SD CEO) at Black Hills State University, attended last year’s RuralX Summit to learn, connect and be inspired. She left the event feeling confident about expanding the SD CEO’s Women’s Business Conference to northeast South Dakota.

The first inaugural Northeast Women’s Business Conference is planned for March 9, 2018 in Aberdeen, featuring keynote speakers, activities and successful businesswomen.

Nichole Cross attended last summer’s RuralX Summit as a volunteer and was inspired to move forward with her idea to help launch a girl’s maker day after hearing keynote speaker Emily Pilloton. The EmBe Girl’s Maker Day became a reality last October, bringing together a dozen like-minded volunteers, amazing hands-on corporate sponsors and over 150 participants.

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dakotas americ a 2016

Dakotas America Board finds inspiration in the Black Hills

In the fall of 2016, a group representing Dakotas America gathered inside Rockyford School’s Cultural Heritage room to listen as teachers told stories of hope for the future of Pine Ridge.

“Principal Monica Whirlwind Horse and her staff took us on a wonderful tour of the school and then brought us together in their Cultural Heritage room, a large circular space filled with artifacts and cultural displays.

She told us the meaning behind the buffalo hide in the center of the circle,” explains Lin Van Hofwegen, Managing Director of Dakotas America. “In the past, the buffalo provided everything they needed – food, shelter, warmth. Today, she told us, education is our buffalo.”

Learning more about the projects Dakotas America and its investor partners help finance through the New Markets Tax Credit program is important to the governing board and advisory board members of Dakotas America. The members come together once a year to tour projects financed by the organization, which focuses on providing investment capital for projects designed to improve the quality of life for persons in low income communities.

This was an investment for our future and was an important project for all of South Dakota. We are proud of our school and that pride shows up in our classrooms, in our community and in surrounding communities. It’s making a difference.

– COY SASSE

DA TEAM MEMBERS TOURING ROCKYFORD SCHOOL A N D E N J O Y I N G T H E B U F FA L O R O U N D U P

“There is nothing like seeing results in person and talking to people face-to-face,” says Lin. “You can read about it or watch a video, but seeing it with your own eyes is so much more powerful.”

The 2016 Dakotas America tour featured several highlights, including a visit to Mt. Rushmore, a tour of a potential new project in Rapid City, a tour of the Rockyford School on the Pine Ridge Indian Reservation and a day at the buffalo roundup in Custer State Park.

Rockyford School was an especially important stop, since Dakotas America partnered with Citi Community Capital and Grow SD to help provide financing to expand the school with a 76,000 square foot addition. The new annex, which was completed five years ago, includes a gym that seats 750, an updated kitchen, a multi-functional area, a legends room, twelve new classrooms, a bus garage, a storage shed and a playground.

The Dakotas America group also toured the Youth and Family Services center in Rapid City, which provides programs and services primarily to underprivileged youth in western South Dakota. The organization, which currently serves 14,000 children and families each year, is seeking to expand its scope through a capital campaign that could potentially be supplemented with Dakotas America New Market Tax Credit allocations.

“The Dakotas America Advisory Board helps ensure the types of transactions undertaken by the organization create high community impact in qualifying low-income communities,” explains Lin. Finally, Dakotas America topped off its Black Hills tour with a day at the annual Custer State Park Buffalo Roundup.

“While the focus of our trip was to see the people and places Dakotas America helps support through the New Market Tax Credit program, the roundup was a great way to end our time together,” says Lin. “Knowing that the buffalo is such a significant symbol of survival to Rockyford School and Pine Ridge was a unique way to bring our trip full circle.”

“This was an investment for our future and was an important project for all of South Dakota,” says Coy Sasse, Business Manager at Oglala Lakota County School District.

“We are proud of our school and that pride shows up in our classrooms, in our community and in surrounding communities. It’s making a difference.”

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c apital investment fund 2016

Dakota Resources partners with USDA in $10 Million Re-lending program L E F T T O R I G H T: J E F F L A K N E R , T I M P O T T S , J AY H E A D L E Y A N D L I N VA N H O F W E G E N WITH USDA RE-LENDING AWARD

Ask Jay Headley what Dakota Resources’ biggest accomplishments were for 2016, and he will rattle off a list that includes providing capital to assist with rural building projects, new housing developments, land purchases, the opening of new businesses and collaborative partnerships.

However, one of his favorite highlights was finalized at the end of the year and involves a partnership between Dakota Resources and US Department of Agriculture Rural Development (USDA). USDA named Dakota Resources as a “re-lender” of $10 million in federal funds to help spur economic development opportunities and reduce rural poverty in South Dakota communities. The funds will be used to improve essential facilities in low income rural areas, such as health care facilities, child care centers, town halls, assisted living centers, transitional housing, street improvements and educational facilities.

“Dakota Resources is only one of a handful of Community Development Fund Institutions (CDFIs) in the nation to be named a partner in the Community Facility Direct Re-Lending program,” says Jay, VP of Finance at Dakota Resources.

“Being involved in this endeavor is important to us as a CDFI—it brings us more exposure and allows us access to a bigger network of experts at the federal level. On a local level, the re-lending program gives us another resource for helping us meet the needs of our rural communities.”

Dakota Resources will be working alongside USDA Rural Development, private financial institutions and community development organizations to help in the distribution of the loan funds, which need to be utilized in the next five years.

“This is a unique opportunity for Dakota Resources and should only further our mission of enriching communities and empowering people,” says Jay.

Capital Investment Fund Community Spotlight: Yankton The Dakota Resources Capital Investment Fund (CIF) builds financial capacity of South Dakota’s Economic Development Corporations and Revolving Loan Funds who finance local development projects. Our 2016 Community Spotlight is just one example of how the CIF is working to help make rural South Dakota a better place to live and work.

The Capital Investment Fund provided the Yankton Area Progressive Group with a loan to purchase 32 acres of land and help fund construction of an affordable housing development. In 2016, development began in earnest at Westbrook Estates with 29 single family home sites, 4-plex and duplex units and the construction of a 72-unit apartment complex. The new Westbrook Estates apartment complex filled to near occupancy and almost all the home sites were sold, with all of them boasting newly constructed homes. The goal of the project was to help alleviate a drastic shortage of affordable housing in the Yankton area—a goal that is being met with overwhelming success as plans for Phase II are years ahead of schedule.

Capital Investment Fund Impacts in 2016: – Total Portfolio - 27 loans outstanding for a total of $15.4M – 2016 Impact - Four new loans disbursed totaling $2.1M

S U M M ARY OF CA PI TA L I NV E ST ME NT F U N D D E MAN D GR OW TH Cumulative Fiscal Year Ending

2013

2014

2015

2016

Total Assets

14,972,234

14,906,136

16,818,803

18,296,589

CIF Loan Capital

13,865,000

13,855,000

15,990,000

16,830,000

# of CIF Loans Outstanding

25

24

26

27

CIF Loans Outstanding

12,484,557

12,783,183

15,295,225

15,374,358

CIF Loans Committed

-

-

570,000

-

CIF Loans Approved

-

-

1,700,000

1,400,000

4,250,000

7,869,000

CIF Loans Pre-Approved

% of CIF Loans Outstanding, Committed, Approved, & Pre-Approved % of CIF Loans Outstanding, Committed, Approved, & Pre-Approved FYE

3,525,000

16,009,557

2,575,000

15,358,183 21,815,225 24,643,358

115%

111% 122% 138%

T RAC K RE COR D OF ST E A DY G R OW T H (in Million $)

$18 Total Assets

$17

CIF Loan Capital

$16

CIF Loans Outstanding FYE

$15 $14 $13 $12 $11 $10 2013 2014 2015 2016

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financial summary

Statements of Financial Position

FISCAL YE A R ENDI NG DECEM B ER 31, 2 0 1 6 & 2 0 1 5

AS S E T S

C U RRE NT A SSE T S Unrestricted Current maturities of loans receivable Distribution receivable from Dakotas America, LLC Grants receivable Other receivables Prepaid expenses

Total current assets

2016 2015

$

415,959 2,522,000 153,354 106,000 75,334 6,649

$

117,192 1,511,000 269,651 46,638 53,568 4,004

3,279,296

2,002,053

I N V E S T M E NT S A ND OT HE R A S SE T S

RBEG loans receivable, net

Capital Investment Fund loans receivable, net

Opportunity Fund

Investment in Dakotas America, LLC

Investments available for Capital Investment Fund lending

Investments available for RBEG lending

Other investments

South Dakota Community Foundation

Other assets

529 12,398,077 62,834 405,764 1,455,642 141,007 516,477 13,344 500

35,560 13,334,883 62,834 287,051 694,775 113,789 269,409 12,284 500

Total investments and other assets

14,994,174

14,811,085

23,119

5,665

$ 18,296,589

$ 16,818,803

P RO P E RT Y A ND E QUI P ME NT Property and equipment, net of accumulated depreciation

Total assets

L IABILI T I E S AN D N E T A SSE T S C U RRE N T LI AB I LI TI E S

Accounts payable

Sales tax payable

Current maturities of notes payable

Total current liabilities

L ON G - T E RM LI AB I L I T I E S

Notes payable, net of current maturities

Equity equivalent notes payable

2016

$

50,090 2,384 310,000

2015

$

51,970 3,496 60,000

362,474

115,466

1,920,000 9,336,550

1,405,000 9,336,550

Total long-term liabilities

11,306,550

10,741,550

Total liabilities

11,669,024

10,857,016

6,180,682

5,724,555

256,883 190,000

47,232 190,000

6,627,565

5,961,787

$ 18,296,589

$ 16,818,803

N ET AS S E T S

Unrestricted

Temporarily restricted Permanently restricted

Total net assets

Total liabilities and net assets

Rural i s our connec t ion

to t he l a n d,

to t he p eop l e and to t he p rom ise

o f a n a b u n da n t to mo r row.

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financial summary

Statements of Activities

FISCAL YE A R ENDI NG DECEM B ER 31, 2 0 1 6 & 2 0 1 5

2016

2015

RE VE N U E AN D OT HE R SUPP ORT

Grants, pledges and sponsorships

Interest income on loans receivable

Dakotas America, LLC income

Net investment return

Management income

Registration and miscellaneous income

Forgiveness of debt

$ 724,693 575,710 948,401 24,627 350,070 119,039 25,000

$ 390,638 483,032 336,389 13,781 217,891 190,281 25,000

Total Revenues

2,767,540

1,657,012

EXPENSES

General and Administrative

Program Expense

Interest Expense

$ 1,405,735 436,386 259,641

$ 1,059,563 282,193 219,389

Total Expenses

2,101,762

1,561,145

Change in Net Assets Net Assets - Beginning of Year

665,778 5,961,787

95,867 5,865,920

$ 6,627,565

$ 5,961,787

Net Assets - End of Year

MAK ING CON NEC TION S

w e’r e p rou d to pa rt ner w it h p eop l e w ho love ru ra l

as much as we d o.

Supporters Aberdeen Area CVB Aberdeen Hotel Alliance Ag Processors AGP American Bank & Trust Anderson Industries Avera Health CBG BankWest Black Hills Energy Bush Foundation Cammack Ranch Supply Chris Malo Christensen Land and Cattle, Ltd. Citigroup CoBank Cortrust Bank Investment US Bank - Aberdeen Dacotah Bank Deadwood Chamber East River Electric Power Cooperative Farm Credit Services First Bank & Trust First Interstate Bank First National Bank of South Dakota First National Banks First National Bank Sioux Falls First Premier First State Bank of Roscoe Full Circle Ag Gloria Pluimer Governor’s Office of Economic Development Great Western Bank Heartland Consumer Power Highmark Federal Credit Union Horizon Health JGE Jon Farris Kesslers Lakner Farms LLC Maximizing Excellence Midco Richard Molseed NeighborWorks North Central Farmers Elevator Northern Valley Communications Paulsen Marketing Pioneer Bank & Trust Plains Commerce Bank Prairie Family Business Association Scull Construction

SD Rural Electric Association SD Telecommunications Association SDN Communications South Dakota Farm Bureau Venture Communications Von Wald & Assoc Consulting Wells Fargo Regional Marketing West River Electric West River Foundation Wheat Growers Total Program Sponsorship and Operations in FYE 2016 – $724,693

Capital Grants Avera Health Black Hills Corporation CDFI Fund (US Dept. of Treasury) Citi Foundation Opportunity Finance Network US Bank Xcel Energy Total Capital Grants as of FYE 2016 – $3,850,910

Capital Investment Fund Borrowers (2016) Aberdeen Development Corporation Arlington Development Corporation Beadle and Spink Enterprise Community Beresford Economic Development Corporation DeSmet Development Corporation Greater Huron Economic Development Corporation Lake Area Improvement Corporation - Madison Northeast South Dakota Community Action Program Pierre Economic Development Corporation Rural Electric Economic

Development, Inc. Sturgis Economic Development Corporation Vermillion Area Chamber of Commerce& Development Company Webster Area Development Corporation Yankton Area Progressive Growth Total CIF Borrowers FYE 2016 – $15,374,359

Capital Investment Fund Investors (2016) 1st Financial Bank USA Avera Health Bank of the West BankWest, Inc. Black Hills Corporation CDFI Fund (US Department of the Treasury) Citi Foundation CorTrust Bank Dacotah Bank First Bank & Trust First Dakota National Bank First National Bank in Pierre First National Bank in Sioux Falls First National Bank South Dakota First National of Nebraska, CDC First Interstate BancSystem First PREMIER Bank Great Western Bank Home Federal Bank Midcontinent Media, Inc Opportunity Finance Network Sanford Health SDN Communications Sioux Falls Development Foundation Target National Bank US Bank Wells Fargo CDC Xcel Energy Total CIF Investors FYE 2016 – $16,830,000

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25795 475th Avenue Renner, SD 57055

MAK ING CON NEC TION S 2016 Dakota Resources Board of Directors CHAIR

Rachael Sherard

Senior Vice President Avera Rural Health Services VICE-CHAIR

Ruth Christopherson

Senior Vice President Citibank Community Development SECRETARY/TREASURER

Jeff Lakner

Owner-Operator Lakner Farms

Kory Anderson

President Anderson Industries

Gary Cammack

Owner Cammack Ranch Supply

Jon Farris

Terri Haverly

Executive Director Black Hiills Business Development Center

Carrie Law

Director of Communications and Government Relations Sioux Valley Energy

Mark Litton

Beth Davis President

Joe Bartmann

Vice President of Community Innovation

Jay Headley

Vice President of Finance

Executive Vice President and Chief Credit Officer BankWest

Paula Jensen

Chris Malo

Connector and Senior Community Coach

President Black Hills Urethane

Brad Moore

Vice President of Advancement

Kristi Wagner

Cheryl Leasure

Communication and Event Coordinator

Mid Dakota Regional President Dacotah Bank

Misty Cordell

Scott Parsley

Lin Van Hofwegen

Retired Assistant General Manager for Member Services East River Electric Power Cooperative

Gloria Pluimer

Director of Education and Workforce Development Black Hills Special Services Cooperative

Greg Von Wald

Executive Leadership Coordinator Managing Director, Dakotas America

Dustin Ludens

Senior Portfolio Manager, Dakotas America ASSOCIATES

Dick Werner Credit Officer

Retired President Mitchell Technical Institute

Mike Knutson

Heidi Zeller-Crawford

John Beranek

Independent Sales Director Mary Kay Cosmetics

Community Coach Community Coach

2017 New Board Members

Jason Ketchum

Director of Utility Business Development Black Hills Corporation

Lending Program Specialist BankWest

Kelly Melius

Justin Gray

Marty Huether

Business Banking Manager Wells Fargo

STAFF

Owner and CEO Common Sense Manufacturing Outside Plant Engineering Manager Golden West Telecommunications

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