IQ Magazine, 3rd Quarter 2016 by Initiative Foundation

1ST 3RD QUARTER QUARTER 2015 2016

ECONOMY

A Clean Start— An innovative work-release program provides job training to jail inmates. Pg. 14

COMMUNITY

Energizing Communities— How Central Minnesota utilities support economic development. Pg. 46

CELEBRATING 30 YEARS OF COMMUNITY INVESTMENTS.

STILL GROWING Central Minnesota’s family farms thrive with a mix of entrepreneurship, innovation and grit. Pg. 22

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Initiative Foundation Quarterly 3RD QUARTER 2016

Contents FEATURES

DEPARTMENTS

A Legacy of Leadership

St. Cloud State University President Earl H. Potter was an advocate for education, and economic and social change.

Still Growing

Central Minnesota’s family farms thrive with a mix of entrepreneurship, innovation and grit.

Job Engine

Punching through Poverty

Regional Highlights

Get the latest economic and community development highlights from the 14-county area.

Business:

Anderson Center Forums

Grow yourself. Grow your organization. Here’s how.

Economy:

A Clean Start

An innovative work-release program in Pine City provides job training to jail inmates and helps local businesses meet workforce challenges.

How creativity and openness are creating job opportunities across the region.

How Staples and Motley are making sure a community-based solution will introduce awareness— and change.

Initiatives:

Philanthropy:

Lessons in Generosity

Education Foundations encourage excellence in schools across Central Minnesota.

Community:

Energizing Communities

How Central Minnesota utilities support economic development in the towns they serve.

Home Made:

Cross-Tech Manufacturing

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WHAT’S ON YOUR WISH LIST? 3RD QUARTER 2016

Dear Friends, When a job doesn’t feel like a job, you know it’s something special. Serving as president of the Initiative Foundation has been a rewarding, challenging and joy-filled opportunity. Together we have helped people build their communities, grow companies and envision a better future for the next generation. We’ve created a resilient and vibrant Central Minnesota that is poised to meet the challenges that lie ahead. I couldn’t be more grateful for the opportunity to work side-by-side with you for all these years. After 30 years in this amazing role it is time to transition into a new season of serving. I will be stepping down from my position at the end of the calendar year. My husband Neal and I look forward to focusing on our grandchildren and will be increasing our mission activity in Central and Eastern Europe. I will also continue my work as a doula (birth coach), remain active in community activities in the Brainerd Lakes area, and perhaps do some consulting. Kathy Gaalswyk, As I make this transition, I’ve had an Initiative Foundation President opportunity to reflect on the many gifted leaders who have stepped up to take action and the many partners who have helped to bring about change. If you are reading this, chances are you are among those who made it a priority to improve your community, region and state. Whether you were a farmer who had to find a new livelihood, an elected official who had to balance budgets, a provider or educator who cared for and educated our children, or an employer who made sacrifices to make payroll during hard times—thank you! At a time when events in our nation and world rock us daily, I am thankful to live in a place where people give their whole self to making a better future in the place they live. Enjoy the magazine.

VOLUME 21, 3RD QUARTER 2016

Kathy Gaalswyk PRESIDENT

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P.S.—Special thanks to Legacy Sponsors Bremer Bank and Schlenner Wenner certified public accountants and Gray Plant Mooty, Reception Sponsor, for supporting the Foundation’s 30-year celebration on Friday, Oct. 7, at the River’s Edge Convention Center. Additional sponsorships, including full and half tables, are available. Join us for an evening of fellowship, courage and congratulations. Visit ifound.org/whatifmn or call (877) 632-9255 for details.

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WESTERN MORRISON COUNTY | One Roof, Many Vendors: The Shoppes of Little Falls The Shoppes, a resident-driven project and an offshoot of Town 101, the Foundation’s Thriving Communities Initiative in Little Falls, is open for business and making an impact on main street. Formed with the goal of retaining local retailers, the Shoppes provide a shared space where community members can interact with up to 30 vendors while supporting local businesses.

TODD COUNTY | Hilltop Regional Kitchen Climbs Toward Its Goal The former Eagle Bend High School can be used to prepare senior meals for delivery throughout Wadena and Todd counties, according to a Initiative Foundation-supported feasibility study. For decades, meals were prepared in a cramped kitchen at the local senior center. With demand for more than 4,000 monthly meals, space is at a premium. Organizers hope to have the new Hilltop Regional Kitchen operational by mid-2017.

WADENA COUNTY | Spotlight Shines on Community, Early Childhood Initiatives MORRISON: Shoppers can peruse up to 30 local vendors at the Shoppes in downtown Little Falls.

A countywide planning session supported by an Initiative Foundation grant is giving shape to a revised strategic plan for the Wadena County Early Childhood Coalition. Priority areas include literacy; quality care and education that contributes to kindergarten readiness; increased resources for families with children; and strengthened relationships with professionals in the early childhood field.

NORTHERN CASS COUNTY | Solar Array to Alleviate Minnesota Energy Poverty Backus-based Rural Renewable Energy Alliance, a longstanding Initiative Foundation partner, has been awarded a grant to build a 200kW shared solar array in the Leech Lake Band of Ojibwe community—the first such installation on U.S. tribal lands. Power from the array will be used to combat Minnesota energy poverty.

CROW WING COUNTY | Charting the Course for Crosslake’s Future Business startup and retention, affordable housing, senior transportation and making the community attractive to young families are emerging themes as Crosslake prepares for a fall visit from the Minnesota Design Team. The project is funded in part through Crosslake’s participation in the Thriving Communities Initiative, a program of the Initiative Foundation.

MILLE LACS COUNTY | Five Communities Focus on Kids, Oral Health

CASS: A shared Leech Lake Band solar array will help to combat energy poverty.

6 Initiative Foundation Quarterly ifound.org

Early childhood oral health in five communities—Isle, Mille Lacs, the Mille Lacs Band of Ojibwe, Onamia and Princeton—will receive focused attention as area leaders partner with the Initiative Foundation on a yearlong project to improve dental hygiene for kids. The effort targeting children from birth to age 5 is supported by grants from Delta Dental of Minnesota Foundation and the Otto Bremer Trust.

“ I grew up knowing that I wanted to stand up and advocate for voices that were minimized at times. I would encourage more young people to want to show up at the table to have our voices heard and represented.” – Quinn Nystrom, Initiative Foundation Emerging Leaders participant,

Baxter City Council member and candidate for state office

SOUTHERN BENTON COUNTY | Foley Puts a Spotlight on Pre-K through Grade 3 Alignment The town of Foley was recently awarded an Initiative Foundation grant to assist with Pre-K through Grade 3 alignment. The grant, intended to incorporate Parent Aware-approved curriculum to guide Foley-area early education childcare programs, will help to ensure that children are ready to succeed when they enter kindergarten.

SHERBURNE COUNTY | Paving the Path for Sherco Coal Plant Transition A plan to idle two coal-burning units at Xcel’s Sherco in Elk River is a decade away, but important work is being done to update the region’s Community Economic Development Strategy—an essential move to be eligible for up to $1 million in U.S. Economic Development Administration funding for coal-reliant communities. The Initiative Foundation is the largest funder of this planning effort, which also includes Sherburne, Wright, Stearns and Benton counties.

STEARNS COUNTY | Satellite Office Gives Foundation a Foothold in St. Cloud The Initiative Foundation, along with the Greater St. Cloud Development Corporation and the Downtown Council, held an Aug. 11 open house to celebrate their new shared office space in downtown St. Cloud. The historic location in the First National Bank Building provides an opportunity for the three organizations to unite around shared initiatives in the greater St. Cloud area.

STEARNS: A well-attended open house celebrates the opening of an Initiative Foundation satellite office in St. Cloud.

WRIGHT COUNTY | VISTAs Provide Some Serious Summer Service More people are being served in better ways at Wright County Community Action thanks to the efforts of two VISTA summer associates. Through marketing and outreach efforts, including a community organization database, an additional 132 recipients were served in June and July. The Volunteers in Service to America (VISTA) program is sponsored by the Initiative Foundation.

EASTERN CHISAGO COUNTY | Small Engine Program Powers Skills, Sales Using donated small engine equipment to provide high-schoolers with hands-on repair experience, Tried & True Small Engines, a program of the Lakes Area Youth Service Bureau (LAYSB), has racked up its first sales while teaching valuable career skills at its Wyoming shop. The program received support through the Initiative Foundation’s Financial Resiliency Through Social Enterprise program.

ISANTI COUNTY | Cambridge Plans to Capitalize on Community Improvements To capitalize on its assets and make it more vibrant for residents, the community of Cambridge recently hosted the Minnesota Design Team as part of its participation in the Foundation’s Thriving Communities Initiative. Key initiatives include downtown improvements, a thriving business initiative and an increase in mixed-use housing.

KANABEC COUNTY | Countywide Economic Development Gains Traction The newly formed Kanabec County Economic Development Authority (KCEDA) is searching for a director. Created in early 2016 by the Kanabec County Board, KCEDA will focus on countywide economic development opportunities. Throughout the planning process, KCEDA leaders consulted with the Initiative Foundation to craft the position description and identify key partners.

CHISAGO: Sales and skill-building are on the rise at Tried & True Small Engines.

PINE COUNTY | Market Study Shows Support for New Hotel A new hotel could be coming to Pine City following a market study supported by the Greater Pine Area Endowment and the Initiative Foundation. The study cites a 6.5 percent increase in area lodging since 2009 as evidence that the market can support another hotel. Recommendations call for a 42-room facility with a business center, banquet room, fitness room and pool.

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3RD QUARTER 2016

special memorial

DR. EARL H. POTTER: 1946 - 2016

A Legacy of Leadership As the president of St. Cloud State University, Earl H. Potter advocated throughout Minnesota not only for education, but also economic and social change. By Lisa Meyers McClintick

During Initiative Foundation Board of Trustees meetings, St. Cloud State University President Dr. Earl H. Potter III would occasionally close his eyes while others were discussing the region’s economic and social challenges. Given his demanding work schedule and ambitious involvement with local, regional and state organizations, it was easy to assume Potter was taking a rest. But then he would open his eyes and perfectly sum up the key points, deftly crafting a way to move an issue forward with a solid solution. “He had such a knack for identifying common themes, summarizing the work and inspiring people to action,” said Initiative Foundation President Kathy Gaalswyk. “He was a higher-level thinker and was able to bring people together, which made him a sought-after contributor to every organization he was involved with over a decade 10 Initiative Foundation Quarterly ifound.org

in Central Minnesota.” Tragically, the region said an unexpected farewell to Potter when he died in a one-vehicle rollover on Monday, June 13, while traveling to a Twin Cities meeting for the SCSU Foundation. “President Potter came to St. Cloud State because he felt this was the type of place where he could make a difference,” said his wife, Christine. “He was incredibly proud of St. Cloud State University and its students, faculty and staff. And he likewise was proud of the greater St. Cloud community.”

A Career of Service

Potter served in the Coast Guard before retiring as a captain in 1993 and starting a second career in higher education. He came to St. Cloud from Southern Oregon University in 2007 and signed a contract this year that extended his term until at least June 2019. At age

“ We lost a tremendous force for good in the world.” 69, he had no plans to slow down. As the university’s 22nd president, Potter improved neighborhood relations by cracking down on raucous student behavior. He also created a dedicated police presence on campus, championed low tuition and access to education for everyone, helped to establish a campus welcome center and navigated significant budget crises and cutbacks. Many projects rippled into the regional economy and beyond, including Fifth Avenue redevelopments, renovations to the Herb Brooks National Hockey Center and the opening of St. Cloud State’s Integrated Science and Engineering Laboratory Facility (ISELF), which brings together businesses, students and staff for projects and cutting-edge research on everything from medical advances to three-dimensional mapping of public places for heightened safety and security. Potter traveled to several countries—including China, India, Nepal and South Africa—to strengthen the university’s global outreach, which sends U.S. students abroad and brings students from more than 80 nations to Central Minnesota. He also was among 36 delegates chosen to accompany Gov. Mark Dayton to build business relationships in Mexico, which is Minnesota’s second-largest export market. “He brought international connections back to the St. Cloud area,” Gaalswyk said. “I don’t think people realize how much he did for statewide economic development.”

Supporting the Community

In addition to building those bigger bridges, Dr. Potter was widely known as a strategic thinker. He worked tirelessly to find better ways for education to meet the needs of the state’s economy by providing skilled employees. He also advocated for communities to encourage families to stay in the region and contribute as future leaders. He was known for embracing diversity and making everyone feel welcome. “He wanted us to think about those in our community who don’t have access to things they need and who face barriers in their lives,” said Rick Bauerly, managing partner with Granite Equity Partners in St. Cloud and a member of the Initiative Foundation Board of Trustees. “We lost a tremendous force for good in the world,” added John J. Babcock, former Rotochopper president and a member of the Foundation’s Board of Trustees. “He fought ignorance and intolerance. He was a fantastic leader in the St. Cloud area.” Among the bigger projects Potter helped launch was the Greater St. Cloud Community Pillars program (which began as Community Priorities). The wide-reaching effort goes beyond strengthening the

business economy. It seeks to fortify the community at large with improved wellness, recreation, arts and culture and education programs, as well as create a sense of belonging and engagement to bolster the area’s appeal as a desirable place to live. That effort included the creation of the Greater St. Cloud Development Corporation (GSDC), a multi-county economic development organization that champions business and community development. Supported by the Initiative Foundation and many public and private-sector partners, the GSDC connects business and nonprofit organizations to move goals forward and bring vitality to the region. “Earl raised the expectation of business leaders and the academic community to work together for the betterment of the region,” said Larry Korf, chair of the Initiative Foundation Board of Trustees and the former CEO at DeZURIK. “He drove integration and involvement in the community to improve our region in terms of quality education, quality workforce and long-term decision-making, ultimately improving the quality of life for our communities.”

A Lasting Perspective

Potter’s big-picture perspective went beyond business and community. He also used that gift to build relationships with people, according to Gaalswyk, who said he never failed to look beyond a person’s position and ask about their family and personal life. “I felt affirmed every time I talked with him,” Gaalswyk said. “And I always felt encouraged by our conversations as he helped and coached me through complex issues. He stayed steadfast and was a really wise man.” That personal touch went beyond individual relationships. Many community leaders who gathered for a June 14 press conference praised Potter’s belief that communities, universities and businesses are connected and should cooperate to help one another thrive and move forward together. “He will truly be missed by so many,” said St. Cloud Mayor Dave Kleis, “but his impact—his leadership—will live on in this community.” The Initiative Foundation awarded a $1,000 memorial grant to the St. Cloud State University Foundation, which helps a diverse group of students with a variety of scholarships.

PASSING THE TORCH

How the Initiative Foundation is supporting the next generation of Central Minnesota leaders. Dr. Earl H. Potter’s passing is a sobering reminder of the vital importance of nurturing the region’s future leaders. It’s a priority for the Initiative Foundation, which supports several efforts, including the Emerging Leaders program, the Paths to Civic Engagement workshop series and the Initiators Fellowship program. The Foundation’s Board of Trustees includes regional leaders with diverse backgrounds who work to strengthen the regional economy with grants, loans and programs that support families and communities. For more information on the Initiative Foundation’s ongoing commitment to leadership training and support, contact Don Hickman at dhickman@ifound.org or Jeff Wig at jwig@ifound.org.

3RD QUARTER 2016

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economy

MAX BLAUFUSS: “I have just as many successes and failures hiring people off the street.”

A Clean Start An innovative work-release program in Pine City provides job training to jail inmates and helps local businesses meet workforce challenges. By John Reinan | Photography by John Linn

Today’s community foundations often talk about impact investing. An innovative program at Lake Superior Laundry in Pine City is helping to make the most profound kind of impact. In the words of Max Blaufuss, the laundry’s owner, “We’re fixing broken souls.” Lake Superior Laundry isn’t your typical washeteria. The company specializes in cleaning medical laundry: sheets, uniforms and more than 25 other items. It’s a high-tech enterprise using precision machinery and operates under strict government regulations for infection control. With demand for healthcare services growing, so is demand at Lake Superior’s plant, which employs about 50 workers. The Initiative Foundation recently assisted the laundry with financing for new largescale washers and folding equipment. In discussing the financing, Foundation officials learned about an aspect of the business that made them even more eager to invest. For three years, Lake Superior has taken part in a work-release program through the Pine County Jail. Qualifying inmates, all of whom are serving sentences of one year or less, are released to work during the

day. This isn’t a case of inmates stamping out license plates for pennies an hour. They’re paid prevailing wages at area businesses and given the opportunity to learn new skills through on-the-job experience. “The goal is to get people up and running,” said Brent Jahnz, program coordinator for the jail. “We like to see that people will be fully self-sustaining after their release.” Many of the prisoners are in legal trouble because of drug and alcohol abuse, Jahnz said, and a number are ready to put the past behind them. “A lot of them don’t really want to go back to what they were doing,” he said. “They just want a normal life. They’ve lived in the darkness of drug addiction and they don’t want to go back to that.”

Service to Society

Lynn Bushinger, treasurer and chief financial and operations officer at the Initiative Foundation, said the program provides a great opportunity to take impact investing to the next level. “When we sat down to talk to Lake Superior Laundry about their workforce, I got super jazzed up,” she said. “What a great service to CONTINUED ON PAGE 16

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economy, continued from page 14

provide to society: to help people who have found themselves in less than desirable situations and provide them with a chance to build job skills. Traditionally we have focused on creating and retaining quality jobs, which is innately important, but more and more we seek impacts from our local investments that provide additional social returns by elevating the importance of who businesses serve, who they employ and how they are improving the community, environment or world.” The inmates working at Lake Superior are paid between $9 and $10.50 an hour. They’re carefully supervised and must undergo weekly testing for drug and alcohol use. In three years, Jahnz said, not a single inmate worker at Lake Superior has returned a positive drug test. A key element of the program’s success, Jahnz said, is that he doesn’t recruit prisoners. He waits for them to come to him. “The real change comes from within,” he said. “People decide they want a different life. And when they come forward, we are prepared to help them move in that direction.” Though the program is focused on building work skills, Jahnz will sometimes help inmates find housing after their release, or even help with opening a bank account. Blaufuss, the laundry owner, has employed more than 30 inmates over the past three years, with six to eight working at any given time. He called it “a very worthwhile program that has helped the inmates.” It also helps his business keep growing at a time when good workers can be hard to find. Many inmates have continued working at the laundry for six months to a year after their release, Blaufuss said. The work is demanding, and he doesn’t really expect employees to remain permanently. But they learn skills and habits that they can take with them to their next job. His regular employees readily accept the jail workers, he said. “There is no issue,” he said. “They accept them as another human being.”

“ Almost everybody who goes to jail ends up back in the community. And if we strengthen these links, we strengthen the community.”

16 Initiative Foundation Quarterly ifound.org

Strengthening Communities

Dan Bullert, the Foundation’s business finance manager, said the work-release program could be readily adopted in other areas facing a challenging labor market. “I think it tells an interesting story about workforce development and providing training to individuals who may not otherwise get it,” he said. “It’s part of the corrective process. The business meets its workforce challenges and provides a benefit to the employment base.” Job training is a crucial element of the program, Bushinger agreed. “Jobs lead to a life,” she said. “When you improve a life, you improve a community. And that’s what we’re all about.” Not every jail worker grabs their chance and runs with it. Some of them find the demands of hard, steady work too much to handle. But the situation is no different with his regular workers, according to Blaufuss. “I look on it as, there are successes and failures,” he said. “And I have just as many successes and failures hiring people off the street.” It’s not the first time the Initiative Foundation has worked with the Pine County Jail. The Foundation recently gave the jail a grant that allowed it to offer parenting classes to inmates in Pine City and other areas of Central Minnesota. For Jahnz, such programs represent the ideals of the justice system coming to life. “People don’t change when a judge says so. They do it when they want to do it in their heart,” he said. “And we are able to offer them an opportunity when that time comes. “Almost everybody who goes to jail ends up back in the community. You and I pass them in Wal-Mart or the grocery store. And if we strengthen these links, we strengthen the community.”

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A NATURAL FIT: Last May, the Cuyuna Lakes Education Foundation sponsored a butterfly release field trip for second-graders at Cuyuna Range Elementary School.

Lessons in Generosity Education Foundations encourage excellence in schools across Central Minnesota. By Marian Rengel | Photography by Andrea Baumann

On a sunny day last May, second graders at the Cuyuna Range Elementary School in Crosby enjoyed the thrill of watching science come to life. That’s when, after tending to them since they were caterpillars, the students released 20 monarch butterflies into a nearby park, learning valuable lessons about the process of metamorphosis and the crucial importance of pollination to the life cycle of plants and foods. The event, which included a second day of scavenger hunts and nature walks at the Northland Arboretum in Brainerd, was sponsored by the Cuyuna Lakes Education Foundation (CLEF) in memory of Edward “Terry” Skone, a graduate of Crosby-Ironton High School who during his life wanted to raise awareness of the challenges of declining bee populations. To serve children and to bring hope while inspiring innovation and imagination, people across Central Minnesota are contributing time, talent and passion to education foundations, which support a community’s public school district. “Education funds add so much value to the communities they serve,” said Carrie Tripp, vice president for external relations at the Initiative Foundation. “They

encourage excellence and innovation in our schools, and they provide opportunities for community members to support our next generation through board service and financial contributions.” Several education foundations across Central Minnesota are supported by the Initiative Foundation, which establishes designated funds for the money they raise. The Foundation also offers consulting on board development, fundraising, marketing and other best practices. When CLEF’s board decided to reorganize in 2012, its members established a relationship with the Initiative Foundation, instilling confidence that, even when there were inevitable transitions, CLEF would continue to serve students well into the future. Regional education foundations are supporting students not just in Crosby but also in Pillager, Sauk Rapids and beyond. Retirees, alumni, parents and teachers are working together to bring extra funding to schools so they can try new ideas and provide opportunities that just aren’t possible with the current school funding climate. “We feel an affinity for our schools,” explained Clark Marshall, the chair of CLEF. An alum of Crosby-Ironton, Marshall remembers the support he received from his school and wants to ensure that today’s students have a similar experience. “We CONTINUED ON PAGE 20

18 Initiative Foundation Quarterly ifound.org

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understand the pressures on schools now that didn’t exist when we went there,” he said.

CLASS ACTS

School Spirit

Initiative Foundation education funds support learning in and out of the classroom. Here’s how:

School bonds go deep, especially in small towns, where sporting events and plays can also be the center of a community’s social activity. “A lot of people have allegiances to their schools,” explained Dan Cairns, chair of the Sauk Rapids-Rice Education Foundation, “and at some point they give something back. It’s a part of who they are.” That community connection means education foundations are natural partners when it comes to understanding district priorities. “Part of our charter is to be guided by the community,” said Steve Uban, chair of the Pillager Education Fund, who moved to the Pillager area with his family five years ago primarily for the school. Uban became the inaugural board chair in 2012. In a town of just 450 people, involving the whole community is essential. Education foundations seek innovation in the programs they fund. While that may look different in a small town than it does in a larger city, all are looking for proposals that provide students with the “opportunity to do something they wouldn’t have gotten to do without us,” said Little Falls Education Foundation Board Chair Carl Rydeen, a newly retired air traffic controller who moved with his family to Little Falls in 1999. The Little Falls Education Foundation, formed in 2015, is finishing work on its mission and is sorting through ideas gathered while attending Initiative Foundation-hosted networking meetings with other education foundation members. “We’re following the trail they’ve blazed,” said Stephen Jones, Little Falls Community Schools superintendent.

Beyond the Classroom

To inspire creative thinking, the Little Falls Education Foundation is partnering with the Morrison County Area Foundation to host a September showing of “Most Likely to Succeed,” an independent film about the rethinking of American education and the role of innovation in the classroom. Teachers will see the film on a workshop day and the community will also be invited to a showing. “We are hoping this will spark ideas,” said Rydeen. In Crosby-Ironton, CLEF has sponsored a traveling planetarium and field trips, which can bring new perspectives to students who don’t have the opportunity to travel far from home. “We are creating a space where faculty and staff can go and develop a culture of innovation,” said Uban, and that includes not being concerned with risking tax dollars. “We hope that generates a reputation for trying cool stuff.”

CROSBY-IRONTON The Cuyuna Lakes Education Foundation helped bring the ExploraDome, a portable planetarium, to the elementary school. Nearly 600 kindergarten through sixth-grade students were able to participate. All Crosby-Ironton seventh-graders participated in a wintertime field trip guided by Wilderness Inquiry. Students participated in team-building activities and explored the Cuyuna Country State Recreation Area. LITTLE FALLS The Flyers Pride Pack project funded by the Little Falls Education Foundation sends weekend food home with kids who may be at risk of going hungry. The project was inspired by studies that show students are more engaged and socially involved when they receive proper nutrition. PILLAGER A grant helped 75 sixth-graders design and build remote-controlled cars using concepts learned in a physics and engineering unit. Funding for a fifth-grade simple machines project enabled the school to purchase equipment for the creation of Rube Goldberg machines—over-engineered contraptions that perform a simple task, such as popping a balloon. SAUK RAPIDS Grant dollars helped to fund the purchase of two kinetic machines for the Early Childhood Center. The machines help kids playfully explore science and math while strengthening social skills and preparing them for kindergarten. Six Bee-Bots are being used to boost Rice Elementary kindergarteners’ skills in the areas of coding, sequences, estimation and problem-solving.

3 Matchmaking Opportunities Matching grants are a can’t-miss opportunity. And 15 school districts in Cass, Crow Wing, Morrison, Todd and Wadena counties are eligible for up to a $5,000 National Joint Powers Alliance matching grant as part of the NJPA’s Innovative Schools Project. For details, or to start a conversation about creating a local education foundation, contact Kristi Ackley, Initiative Foundation Turn Key Partner Fund specialist, at kackley@ifound.org or (320) 631-2062. 20 Initiative Foundation Quarterly ifound.org

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3RD QUARTER 2016

By Laura Billings Coleman | Photography by John Linn

ALL IN THE FAMILY: (From left) Grant, Aaron, Louise, and Shayne Johnson at their farm stand.

Thirty years after the farm crisis that launched the Initiative Foundation, Central Minnesota’s family farms survive with a mix of entrepreneurship, innovation and grit.

he 140-acre farm off highway 210 in Pillager has

been part of Shayne Johnson’s family legacy for nearly 100 years, but some days even he’s surprised by the abundance of vegetables pushing their way up from the ground that his grandfather George first started cultivating back in 1916. “The satisfaction of nurturing something from a seed and watching it germinate and grow is still just an amazing process to me,” said Johnson, who also works for the Minnesota Department of Natural Resources in Baxter. “Right now we’ve got head and leaf lettuces, radish and green onions, snow peas, rhubarb, swiss chard and carrots,” all ripe for the picking, he said. And with corn just around the corner, “there’s no time for fishing.”

BACK TO THE LAND: 97 percent of agricultural establishments in Minnesota are run by sole proprietors, families and small partnerships.

A relaxing summer vacation is out of the question for Johnson and his wife Louise, who spend their evenings and weekends tending the three-acre green garden they planted four years ago on the family’s legacy farm in Central Minnesota. Named for Shayne’s father, Grant, and his grandfather, George Gerrels, Grampa G’s Gardens, Greenhouse, Good Eats and Gifts is committed to many of the conservation-minded practices in play nearly a century ago, from fertilizing with livestock manure to harvesting crops by hand.

3RD QUARTER 2016

But making the farm work as well for the third generation—and with any luck, the fourth—requires a different business model. While the farm is debt-free, the Johnsons— who first met in horticulture class at North Dakota State University—also are diversifying with new fruit trees and livestock, extending the growing season with carbon-saving solar high tunnels, and passing on what they know to their 31-year-old son, whom Shayne notes proudly, “can’t get enough of this stuff.” Regulars at regional farmers markets, they also provide produce to the Pillager schools and the new green market co-op at Ideal Corners. To help pay for improvements, the Johnsons tapped into an Environmental Quality Incentives Program grant from the National Resources Conservation Service that helped with pasture mixes, fencing and irrigation designed to minimize environmental impact. And like any sustainable small farm on the rise, they also maintain a mobile-friendly website and welcome curious customers to stop by for Saturday farm tours. “People seem to care about where their food comes from, and that’s a good trend. But we don’t want to treat it as a hobby—we’d rather run it as a full-time business,” said Johnson. While he’s encouraged by the loyal customers he encounters at the family’s farm stand, Johnson said, “I think the idea of the family farm means a lot to people around here and they don’t want to see them go away, that’s for darn sure—but they don’t always realize what it takes to keep them going.”

“ If you can survive through the tough times, then you can grow the through the good times.” SUCCESS IN SURVIVAL

While Johnson would be the first to admit “farming isn’t going to make you a millionaire,” the survival of family farms like his across Central Minnesota is its own success story. Though the total number of farms in the state has declined from 74,542 in 2012 to 73,600 in 2015, 97 percent of agricultural establishments in Minnesota are still run by sole proprietors, families and small partnerships—a farming landscape that once looked like it would be lost forever. “Thirty years ago, during the worst of the farm financial crisis, the whole notion of the family farm was in real jeopardy,” said Kathy Gaalswyk, president of the Initiative Foundation. Hit by the joint forces of globalization, falling commodity prices, a deep recession and soaring interest rates, many of the state’s farms fell into debt or were lost to foreclosure. “I bought my father’s farm in 1982 and by 1984 it was worth half of what I paid,” said Bob Rick, now a Farm Business Management instructor at Central Lakes College in Staples. “Coming off what had been kind of a golden era in agriculture in the 1970s, with some high times, there was a good crash in the 80s. And it’s the low points that take out family farms.” To cope with the crisis, the trustees of The McKnight Foundation, then the largest philanthropy in the state of Minnesota, set out on a listening tour, visiting family farms and main streets across Minnesota to find solutions. In 1986, they launched the Minnesota Initiative Foundations—six regional entities, each designed to make the rural communities they served more resilient. In Central Minnesota, grants from the Initiative Foundation’s Family Farm Fund have helped support everything from family farm tours to draw attention to the abundance of local growers in the region, to the feasibility study behind the new Sprout Food Hub in Little Falls, which is allowing more than 50 small growers to sell produce to large institutions, including school districts and restaurants. The Foundation’s CONTINUED ON PAGE 26

24 Initiative Foundation Quarterly ifound.org

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3RD QUARTER 2016

STILL GROWING CONTINUED FROM PAGE 24

community lending programs have also invested in a variety of value-added agriculture projects like Smude’s Sunflower Oil, a family run business in Pierz, and Ever Cat Fuels, a biodiesel fuel company that’s also exploring how to convert non-food crops into fuel. “Farming is so much a part of our rural identity that we’ve always had an interest in advancing local foods projects and farm technology,” said Gaalswyk, noting that four of Minnesota’s top 10 counties for farm acreage—Stearns, Morrison, Todd and Wright counties—all fall within the 14-county region the Initiative Foundation serves. “Farmers are the same people who are serving on our school boards and county planning commissions, and so keeping family farms vibrant is important to all of us.” Dave Gruenes, CEO of Stearns Electric Association and a former trustee at the Initiative Foundation, agrees. “Farms provide a tremendous benefit to the economy of the region. If you consider just greater St. Cloud, Stearns County is the top county for agricultural receipts in Central Minnesota, in excess of $1 billion every year, and most of that new money gets spent locally and goes to cover their operations,” he said. “And when you consider all the risks that are out of a farmer’s control, from the weather to market forces, a lot of people may not appreciate just how good a business person you have to be to be successful at farming.” Last year’s annual farm income analysis shows just how volatile farming can be, with median net crop farm incomes dropping from $260,940 in 2012 to just over $26,000 in 2015—a 90 percent fall across three growing seasons. Livestock and dairy farms have seen a similar roller coaster effect—with median net incomes for livestock farms down by nearly 80 percent between 2014 and 2015, while milk prices are down by as much as a third off the 50-year high they saw two years ago. But one silver lining from the 1980s farm crisis, according to Dale Nordquist, associate director of the University of Minnesota’s Center for Farm Financial Management, is that many farmers are better prepared for the inevitable downturns. “After the farm crisis, everybody got a lot more conservative about taking on debt,” he said, noting that while interest rates have stayed low, falling commodities prices are still a challenge for Minnesota farms. “It’s a tough situation right now, but there are a lot of very entrepreneurial people out there, bringing in new income, sharpening their pencils, and finding new ways to make it work.”

“ There are a lot of very entrepreneurial people out there, bringing in new income, sharpening their pencils and finding new ways to make it work.” FRESH CROPS

In fact, in spite of the hardships, nearly one in five farmers in the state is new to the field, with 17 percent of farms in the hands of operators with less than 10 years of experience. “One of the things that’s really changed over the last 30 years is that increasingly, new farmers are not necessarily coming from farm families,” said John Mesko, executive director of the Sustainable Farming Association of Minnesota (SFA), which now runs the Deep Roots Farmer Development Program aimed at teaching “Farming 101” to agricultural newcomers. “We’re seeing more millennials who are looking to match the CONTINUED ON PAGE 28

26 Initiative Foundation Quarterly ifound.org

BIOSCIENCE BOOM Commodity crops aren’t the only agribusiness growing in Central Minnesota. According to a recent report prepared by the Agricultural Utilization Research Institute (AURI) and the University of Minnesota Extension Center for Community Vitality, agricultural bioscience efforts are reaping big returns for the region, with forecasts for $3.1 billion in output, 9,840 jobs, and $521.5 million in labor income in 2016. Here are a few trailblazers: ANDERSON CUSTOM PROCESSING: This family-owned Little Falls business began by using an idle creamery dryer to process whey, a high-protein waste byproduct of cheese, into a product that could be used as a baking ingredient. Today, the company’s three production facilities produce millions of pounds of specialty products including coffee creamers, cocoa mix, infant formula and pharmaceuticals. PROLIANT DAIRY INGREDIENTS: Located in Stearns County, Melrose’s Proliant Dairy Ingredients produces VersiLac®, a low-cost dairy solid that can take the place of costlier sodium, sugar, cocoa and cheese powders in a variety of foods and formulations. GREEN BIOLOGICS: This U.K.-based company is converting Central Minnesota Ethanol Cooperative’s 21-milliongallon-a-year ethanol plant into a chemical manufacturing site in Little Falls that uses corn and other ag products to create noncarcinogenic normal butanol and acetone—chemicals used in paint coatings, adhesives, inks and nail polish. – LBC

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Improving their stock. A quick walk around the Bartchelle Dairy reveals a pretty typical Central Minnesota farm — until you reach the barn and chat with owners Greg and Michelle Blaine. There you’ll discover a visionary couple who took their farm, the health of their herd, and their commitment to community to the next level thanks to high-tech robotic milking technology. Between their farm, full time work, and community commitments the Blaines are always on the go. So when they were looking to expand, they researched the up-and-coming technology of robotic milking systems. They also turned to Farmers & Merchants, where they found a bank with an equally strong sense of community and the hands-on approach they needed to finance the hands-off business plan they’d envisioned. Today the Blaines enjoy the success of healthier, more productive cows and a flexible milking system that fits their schedule. If you’ve got a unique business plan that needs a hand, we’re eager to listen.

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SWIMMING ALONG: The Four Seasons Shrimp Company in Pierz harvested its first catch in 2015. Photography by Andrea Baumann

STILL GROWING CONTINUED FROM PAGE 26

time they spend on work with their values. And we’re also seeing mid-career people who may have spent 15 or 20 years working in a corporate environment and who now have the wherewithal to find work they connect with a little more deeply.” The SFA also sponsors field days and on-farm events, encouraging farmers to share knowledge and create networks that can boost everyone’s yield. “The way forward in agriculture will be to identify that regional brand, whether that’s tied to a special community or a special product, and then encourage all of the farm businesses to contribute to it and promote it,” said Mesko, who points to Napa Valley wine as a good model. Eliminating the middle man and selling directly to consumers is another strategy the SFA advocates. “To put more dollars in their pockets, farmers need to pick up another skill set,” Mesko said. “The ‘Eggs for Sale’ sign is step one—but to be successful at marketing takes a lot more than that.” That’s a lesson that Alise Sjostrom, 30, took to heart as a young 4-H’er, after a field trip to a Wisconsin creamery inspired her to launch Redhead Creamery two years ago with her husband and parents, who own Jer-Lindy Farms in Brooten. A food marketing major in college, Sjostrom spent a study abroad term in Switzerland’s Emmental cheese region, and visited more than 50 creameries, microbreweries and wineries while she and her husband lived in Vermont before moving back to Minnesota. A successful Kickstarter campaign helped the couple raise $42,000 toward launching the creamery, publicity that also helped open up markets in the Twin Cities that now sell the creamery’s “Little Lucy” brie (named for her 3-year-old daughter) and “North Fork,” a munster spiked with Minnesota 14, a whiskey made by Panther Distillery in Osakis. Currently, Redhead Creamery uses about 5 percent of the milk produced by Jer-Lindy Farms, said

Sjostrom, “but it does help that we can diversify and have another avenue if things get really ugly with dairy prices. Artisan cheese prices don’t fluctuate that way.” Market risks like that are one reason that Kevin Smude, 32, who grew up on a dairy farm, decided to test the waters with raising shrimp at the Four Seasons Shrimp Company in Pierz, an aquaculture operation that harvested its first catch in late 2015. “I just needed a shed and a shop and some knowledge to get started,” he said. When he brought the idea to his dairy farmer father, “I thought he’d be critical, but he was for it right away. People love shrimp.” Now that the average Minnesota farmer is 57 years old, Norman Krause, a crop farmer near Staples for more than 30 years, said he’s looking forward to seeing what the next generation brings to Central Minnesota’s family farm tradition. “It gives me hope to see young people like this coming into the business and defying all the odds. How else are you going to feed 9 billion people?” That argument helped convince his son, Jon, 26, to begin a farming partnership with him two years ago—but only after a few months of careful thought. “What kept me awake at night was wondering how I’d even get started,” Jon said, but working closely with Bob Rick through the Farm Business Management program and meeting with bank officers in the area convinced him of the “honest truth of the business,” growing field corn, soybeans, kidney beans and malting barley. Today, he’s paying close attention to the advice he gets from his father, who held on to the farm through the worst of the crisis with the help of income earned off the farm. “I’m starting small, and I work for a construction company in the winter and I’m trying to get into trucking. With farming, it pays to listen to the older people who have been through the hard times. If you can survive through the tough times, then you can grow the through the good times.” CONTINUED ON PAGE 30

28 Initiative Foundation Quarterly ifound.org

FARMERS OF THE 14 COUNTIES 56.8 Average age of farmer:

(Thatâ&#x20AC;&#x2122;s almost two years younger than the national average.)

Average size of farm:

208 ACRES 15,912

(Land upon which nearly six new Minnesota Vikings stadiums could be built.)

The number of total farms in the 14-county area:

(More than the states of New Hampshire, Vermont, Delaware and Rhode Island combined.)

Average revenue per farm in 14 counties:

$117,391

(More than two times the income of the average American family.)

The share of livestock raised in the 14-county area:

58%

(Minnesota counties, on average, raise 35% livestock and 65% crops.)

Total crop revenue from 14-county area:

$993,000,000 (Minnesota is a Top 5 crop-producing state.)

3RD QUARTER 2016

JOE BORGERDING AND FAMILY: “When I bought this farm from my dad in the 1970s, there were about 25,000 dairy farms in the state. Today there are just around 3,400.”

LESSONS LEARNED Advice from a large-scale farmer. By Laura Billings Coleman

By 1980, dairy farmer Joe Borgerding decided it was time to buy a new tractor for his family farm in Elrosa. “With doubledigit inflation, every year I waited, the cost of that tractor went up and up,” he said. “With inflation higher than interest, you start to think, ‘Why wouldn’t you borrow the money?’ ” Following the same logic, Borgerding and his wife Toni invested in a new shed, a silo, and a harvester—capital improvements they soon struggled to pay for when interest rates shot as high as 17 percent during the worst of the 1980s farm crisis. “Pretty soon, the whole system inverted and we were underwater,” Borgerding recalled. “That’s when we learned to how to swim.” Nearly 40 years later, the Borgerding family is still in business, running an 1,100-acre, 180-cow organic dairy operation in Stearns, the state’s leading dairy producing county. While the farm is thriving, employing three of their five grown children and five additional workers, Borgerding says succeeding in farming still feels like swimming against the tide. “When I bought this farm from my dad in the 1970s, there were about 25,000 dairy farms in the state, and today there are just around 3,400,” he said. “That’s a loss that’s had a tremendous economic drain on our schools, our hardware stores, our feed stores. When we had those farms, everybody benefited from the wealth generated by farmers.” Now beginning a succession plan that will shift ownership of the dairy herd and rotational crop farm into the hands of his children, Borgerding also hopes to hand down some of the hardearned lessons he and many other Central Minnesota farmers learned by surviving the farm crisis. Among them: 30 Initiative Foundation Quarterly ifound.org

TRACK THE DATA: FINPACK, a farm business management software developed by the University of Minnesota Extension program in the wake of the farm crisis, collects fine-grained data about the financial health and harvests of Minnesota farms, statistics that Borgerding believes every farmer should study. He’s also relied on the meticulous records kept by Toni, a trained accountant, to make clear-headed decisions about which farm practices are working, and to take new business plans to the bank. “A banker might say ‘you’re a dairy man—you don’t need a combine,’ but I could go back to the records and show them that some years the herd isn’t making money, but the custom work we’re doing for neighbors is making a difference,” he said. “Keeping good records helps make your case.” GO WITH FIXED RATES: Raised by a father who taught his 12 kids how to straighten nails, Borgerding says those early lessons in frugality came in handy during downturns. Though the family succeeded in paying off high-interest loans, Borgerding says the fixed-rate contract for deed on his father’s farmland was critical to surviving the crisis. “Ever since then, we have fixed our interest on almost any loan we’ve done.” WATCH WHAT GROWS: Borgerding got good results from conventional farming early on, but herbicides sprayed on the muddy, tight-packed soil on his acreage built up over time and reduced his yields. In his search for solutions, Borgerding began studying biological farming, exploring how turn-of-the-century techniques like plowing down cover crops could improve yield. He eventually made the leap to certified organic farming, earning a premium for the milk he began supplying to Organic Valley in 2004. GO LOCAL: “Another benefit of organic is that you can also generate more dollars and keep them close to home,” Borgerding says, noting that even the crews of neighbor kids the farm hires to pull mustard and ragweed add to the economic vitality of his corner of Elrosa. “It’s a lot more work than spraying, but I’d much rather pay the kids and keep that money in my own community.”

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Anyone can provide advice. At Edward Jones, our goal is to provide advice and guidance tailored to your needs. That’s why we live and work in your community. When it comes to your financial needs and goals, we believe you deserve face-to-face attention. You talk, we listen, and we get to know you.

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Call or visit any of our financial advisors in the central Minnesota area. To find an Edward Jones office near you, visit www.edwardjones.com

Baxter Kevin Peterson, AAMS®, CFP ® 15354 Dellwood Drive Ste. 105 218-829-5752 kevin.peterson@edwardjones.com

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St. Cloud Jana Festler 204 Waite Avenue South 320-251-8823 jana.festler@edwardjones.com

Nisswa Jason R Martinson, AAMS® 25537 Main Street 218-963-0020 jason.martinson@edwardjones.com

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JOB ENGINE Central Minnesota is booming. But its employee pool is shrinking. Hereâ&#x20AC;&#x2122;s how creativity and openness are leading to continued prosperity. By Gene Rebek | Photography by John Linn

32 Initiative Foundation Quarterly ifound.org

QUALITY OF LIFE: Microbiologics CEO Brad Goskowicz (center) persuaded Brian Beck and Linh Nguyen to move to St. Cloud to pursue opportunities with the growing company.

In 2009, the year Brad Goskowicz became CEO of Microbiologics, the St. Cloud-based bioscience firm had 55 employees. It now has 120, and as of late June he had five openings to fill. Microbiologics has a distinctive product— microbial biomaterials such as bacteria, viruses and microscopic parasites that are freeze-dried but still viable. These biomaterials are shipped worldwide so that customers such as food-production laboratories and hospitals can make sure the quality control of their systems is operating at peak efficiency, without potentially dangerous bugs slipping in. It’s a business that requires specialized scientific talent, which Goskowicz has been able to find and attract to Central Minnesota. And his company is just one of the reasons why Central Minnesota has evolved from a region that was economically struggling just 30 years ago to one that’s second only to the Twin Cities metropolitan area as a job-creation leader. According to data gathered by Minnesota Compass, a demographics project of the St. Paul-based Wilder

Foundation, the number of jobs in Central Minnesota grew by 12 percent between 2000 and 2014. That’s compared to 4.6 percent statewide during the same period. Though the Twin Cities metro has a national reputation as an economic powerhouse, its job creation rate over those years was just 1.6 percent. What’s more, the metro area’s total increase in jobs was actually less than Central Minnesota, though the Twin Cities employs far more people. It’s a remarkable turnaround for the region. But success also brings challenges. Today, many employers across Central Minnesota are finding it increasingly difficult to attract the skilled workers they need to grow and meet customer demand. Along with competition from other burgeoning businesses, employers also are contending with the retirements from the Baby Boomer generation—a demographic wave that isn’t even near its crest.

At the same time, Central Minnesota, like many regions throughout the Midwest, is competing with other states for good workers; midwestern states in general have been losing population to warmer climes. Among other things, that means Minnesota needs to attract and train immigrants and other newcomers. Failing to do so could overshadow the generally sunny economic conditions Central Minnesota has been savoring for the past decade and a half.

Why Here? First off, why has the region become so strong? In a word: connectivity. “Central Minnesota is uniquely situated to benefit from different types of economic activity, and the labor force in Central Minnesota continues to grow faster than any other region of the state,” said Luke Greiner, the St. Cloud-based central

3RD QUARTER 2016

and southwest Minnesota regional analyst for the state’s Department of Employment and Economic Development (DEED). Greiner notes that the region’s highway network, notably Interstate 94, and access to a regional airport are important lines of connection, as is the proximity to the Twin Cities and its international airport. “The transportability of the area bodes well for moving goods and accessing labor,” he said. Meanwhile, customers across the globe are discovering (often via the Internet) that the region has products that are hard to find elsewhere. Among other things, this means that companies like Microbiologics that were founded in Central Minnesota don’t need to move elsewhere as they grow. “We’re doing well in the United States, but we’re growing much faster outside the United States,” Goskowicz said. The company, an Initiative Foundation loan client and winner of the 2013 Outstanding Enterprise Award, distributes its products in 142 countries and has sales offices worldwide. But most of his workforce is in St. Cloud—even as his company (like many others in the region) connect with markets far beyond Central Minnesota. The region also has attracted employers from outside the United States to expand here, including German agricultural machinery maker Geringhoff and Canadian bus manufacturer New Flyer. Whether immigrant or homegrown, manufacturing firms have long been a keystone of the region’s economic strength. According to Greiner,

“ Central Minnesota is uniquely situated to benefit from different types of economic activity, and the labor force in Central Minnesota continues to grow faster than any other region of the state.” Central Minnesota manufacturers added the most jobs among the major industry sectors with 1,156 new jobs during the first three quarters of 2015 compared to the same period in 2014. The construction industry is right behind, adding 998 jobs during the same timeframe. DEED projects that the labor force will grow by 4.1 percent from 2015 to 2025, which is slower than the 6.9 percent job growth from 2004 to 2014. “It’s near certain CONTINUED ON PAGE 40

ON THE JOB Keeping the region’s businesses staffed is a challenge that Central Minnesota organizations, including the Initiative Foundation, are addressing head on. “We consider quality job creation a charitable activity,” said Kathy Gaalswyk, who has been the Foundation’s president since its founding in 1986. And she believes that the region is, overall, getting better at attracting and training employees and working collectively to address a barriers to economic development through several initiatives, including: The GREATER ST. CLOUD DEVELOPMENT CORPORATION n

has created GreaterStCloudJobSpot.org to serve as a one-stop connecting point for employers and employees. The effort replaced as many as six separate systems and has the additional benefit of helping “trailing spouses” also find employment opportunities in the region.

n LAKES IGNITE was formed by a group of millennials in the Brainerd Lakes area who gather to build social networks and friendships while advocating for policies and activities that help make the region more welcoming to young workers.

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sponsor the construction of affordable housing for employees as an incentive to attract new employees and young families.

Former Duluth Mayor Don Ness, a guest speaker at the Initiative Foundation’s Paths to Civic Engagement workshop series, recognized that OUTDOOR CULTURE played a pivotal role in attracting young professionals to his city. Ness invested heavily in expanding recreational opportunities. It worked, and others have since followed in his footsteps. Regional examples include the Paul Bunyan, Lake Wobegon, Heartland, Soo Line and Central Lakes trail systems, as well as the Cuyuna Range Recreational Area mountain bike park and Sandstone’s ice climbing park.

TRANSPORTATION CENTRAL: Luke Greiner, Department of Employment and Economic Development analyst, said highway, interstate and airport access give the region an edge.

34 Initiative Foundation Quarterly ifound.org

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Combatting one of our region’s most intractable challenges takes courage and conviction. Here’s what the residents of Staples and Motley are doing to make sure a community-based solution will introduce awareness—and change. By Elizabeth Foy Larsen | Photography by John Linn

36 Initiative Foundation Quarterly ifound.org

TEAM EFFORT: Members of Staples-Motley Beyond Poverty include (Back) Mark Anderson, Mike Schmidt, Kimberly Pilgrim, Tabatha Lindula, Darla Hoemberg (Front) Ted Lelwica, Marge Lelwica, Marty Theuer, Gail Honek, Steve Sveom.

When Ted Lelwica moved his young family to Staples in 1965 to become the town’s doctor, he expected to be immersed in the everyday hardships and crises—from broken bones to cancer diagnoses—that are part of life in any town. But when he started making house calls, Lelwica discovered that many of his new neighbors were suffering in ways that often went unnoticed by their fellow townspeople.

“We’d been told that Todd County had one of the lowest incomes per capita in the state,” Lelwica said, referring to when he and his wife, Marge, moved to Staples from California for his new job. “But when I went in people’s homes, I saw it firsthand. Some houses had dirt floors. Other families had beds with no sheets, just bare mattresses and pillows without cases. It was common for people to pay their medical bills with raspberries or chickens or eggs.” Today, this town of just under 3,000 people near the Crow Wing River is an attractive option for families and retirees who

want to enjoy the benefits of small-town living. With the longest fishing pier in the state and easy access to lakes and forests, Staples is an outdoor enthusiast’s dream. It’s home to several thriving businesses, including Lakewood Health Systems, Stern Rubber Company and National Joint Powers Alliance—all of which are expanding and hiring new employees. Central Lakes College has a campus on the edge of town. And a new Staples Timberlake Hotel is set to open in early 2017, which will increase the demand for restaurants and services that cater to travelers. Yet even this good economic news can create challenges: As newcomers arrive and purchase existing housing stock, the tight market may price out long-time residents. That’s an issue when you consider that Todd County ranks fourth from the bottom of Minnesota counties when it comes to the number of residents living below the poverty line—17.8 percent, according to Minnesota Compass, which tracks trends in the economy, education, housing and other indicators that impact Minnesotans’ wellbeing. In Wadena County, which shares Staples with Todd

3RD QUARTER 2016

County, 15.8 percent of residents live below the poverty level. Fifty-six percent of the 1,200 students in the Staples-Motley School District qualify for free and reduced lunch, a strong indicator that families are experiencing economic hardship. These statistics tell stories of real lives under real pressures. Homes across town have fallen into disrepair because their owners—many of whom are retired and on fixed incomes—can’t afford to maintain them. Drugs, particularly methamphetamine, are an issue with the town’s youth, especially those who have time on their hands because their families are hard-pressed to pay the fees for after-school sports or activities. Some people who live on the south side of town say they feel looked down upon by residents of the wealthier north side. Many desperately want to work but can’t afford the cost of transportation, much less the price of food and childcare once their assistance goes away because they are now employed. Others can’t pay for badly needed dental care, and because so few dentists accept patients receiving medical assistance, endure pain every time they bite into a meal and worry that their discolored teeth will make them unattractive to potential employers. Still others struggle with crushing mental illnesses for which they can’t afford treatment. Too many suffer unbearable isolation. Staples is far from the only community in Central Minnesota that’s wrestling with the legacy of poverty. What sets it apart is a group of leaders who have made a commitment to address challenges other communities may not want to face. “Overall, Minnesota has recovered from the recession in better shape than most states,” said Don Hickman, vice president for community and workforce development at the Initiative Foundation, “But incomes

in Central Minnesota have remained flat, while in some parts of the region housing costs have soared.” In fact, the number of homeless people in Central Minnesota has jumped 30 percent since 2012, according to a study conducted by Wilder Research. About a third of the region’s homeless population are children. “Poverty is not an invisible issue to us,” said Mary Klamm, superintendent of the Staples-Motley School district, who notes that it’s not uncommon for students to have unstable and rapidly changing housing arrangements. She notes that children living in poverty are more likely to have lower attendance rates, which further CONTINUED ON PAGE 42

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“ I’m very confident we’ll keep growing where we are, mainly because of that river of talent that flows right by our doorstep.” that population and labor force growth will be slower in the next decade than it has in the past,” Greiner said. “It’s a future where success will depend on high participation rates of labor, and more efficiently aligning educational paths with the demands of the local economy.” Finding workers has become increasingly tough now that unemployment rates have decreased. In fact, the most recently reported unemployment rate for Central Minnesota is 4.1 percent for June, which means that just 15,899 workers are looking for work. “It’s a great thing from a social standpoint, but it can create challenges for any organization looking to fill vacancies,” said Grenier. DEED’s data shows that the region had 11,176 job

vacancies in the fourth quarter of 2015, nearly 2,500 more than the previous year. Some of this growth may not be new jobs, Greiner said, or represent a larger amount of job openings that aren’t being filled, or are taking longer to be filled. Based on these numbers, the region faces a significant challenge in keeping its businesses fully staffed. But as Greiner also observed, “What that data doesn’t tell us is the skill levels of the unemployed population, or the barriers they might be facing.”

Central Minnesota and the World

Minnesota State Demographer Susan Brower noted in a recent presentation

to the Initiative Foundation’s Emerging Leaders Program that while employment is growing vigorously in the St. Cloud area, so is the number of older workers relative to the rest of the population. In short, to keep its job-creation engine humming, Central Minnesota needs more people and will need to be more welcoming to newcomers. And newcomers of all kinds want to come to Central Minnesota. Immigrants from Mexico and Africa are filling jobs in many parts of the region, and their numbers have been growing. And people from elsewhere in the United States also are finding the region’s quality of life appealing. In 2013, Microbiologics hired Brian Beck to be its new vice president of molecular products. Beck came to St. Cloud from the Washington, D.C., area. Another émigré is Linh Nguyen, a Vietnam-born biomedical scientist who was lured to Microbiologics from the Charlottesville,

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Va., area. (Goskowicz himself was born in Wisconsin and spent much of his career in the Twin Cities.) Goskowicz acknowledged that finding the highly specialized people his company needs is “always a challenge.” On the other hand, “I’m very confident we’ll keep growing where we are, mainly because of that river of talent that flows right by our doorstep,” primarily from St. Cloud State, the College of Saint Benedict and Saint John’s University. Goskowicz also noted that his company’s headcount is more than 80 percent female—women represent another potential pool of skilled employees. All told, Goskowicz said, “I think we’re positioned very nicely to fill those positions.” Now the region needs to keep that river flowing—and tap sources that might still be underground.

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Punching through Poverty CONTINUED FROM PAGE 38

increases the achievement and opportunity gap between them and their middle- and upper-class peers. “The poverty in our region is far reaching and impacts many of our residents.” It’s an issue that’s galvanizing not just the forward-thinking residents of Staples and Motley but also civic leaders, faith communities, educators and nonprofits across the region, including the Initiative Foundation, which spearheads a host of programs to create and sustain prosperity in Central Minnesota, including being a sponsoring organization for an AmeriCorp VISTA program and supporting job training initiatives. “Central Minnesota’s economy is growing rapidly enough that we can’t afford to leave potential workers sidelined.” Hickman said. "Even more importantly, we have a moral obligation to help our neighbors. The help can be skill training or access to treatment, or other forms of self help. There aren't many people who haven't had first-hand experience or seen a family member who was able to avoid or recover from a crisis when they received a hand up.”

JODI PFARR: “Class impacts everything we do, from how we set up our office to how we hear things and how we react to public policies.”

“ The number of homeless people in Central Minnesota has jumped 30 percent since 2012.”

CONTINUED ON PAGE 44

a head start on higher wages

In 2012, the Initiative Foundation spearheaded an urgent effort with the Leech Lake Band to fast-track associate’s degree credentials for employees of the Leech Lake Early Childhood Development program. At the time, a local institution State had dropped its early childhood associate’s degree program just as Head Start was requiring postsecondary credentials for programs that receive federal assistance. The nearly $14,000 grant helped eight employees gain the credentials they needed. It also resulted in Leech Lake retaining its Head Start funding (they even received an increase in funding) and resulted in higher wages for the childcare workers.

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Initiative Foundation grants and programming are powered by your generosity. Support the Initiative Foundation’s poverty fighting efforts by making a contribution to the general endowment. Your support, paired with grants received from state and national funders, provides the necessary resources for powering possible in Central Minnesota. Visit ifound.org to or call (877) 632-9255 to learn more. 42 Initiative Foundation Quarterly ifound.org

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Punching through Poverty CONTINUED FROM PAGE 42

Myths and Misinformation

Ordinary citizens are getting involved, too. In Staples and nearby Motley, a town of 671 people a few miles east on Highway 10, a group of residents founded Staples-Motley Beyond Poverty (SMBP), a 501(c)(3) nonprofit dedicated to raising awareness and reducing poverty through educational events and a mentorship program that promotes social connectedness, especially among the elderly, who are often isolated. “I don’t know anyone who lives in poverty because it’s their fault,” said Gail Honek, a retired social worker who has lived in Staples for 42 years and is one of the group’s founders. “There are so many false perceptions and myths around this issue,” she said, referring to the common misperception that a person receiving welfare is somehow cheating the system. According to data from 2012 analyzed by the Institute for Research on Poverty at the University of Wisconsin-Madison, 30.9 percent of all femaleheaded families in the United States are poor, compared to 6.3 percent of married-couple families. Retirees on fixed incomes also are vulnerable. One in five children in the U.S. live in households without consistent access to food, according to Share Our Strength, a national organization working to end childhood hunger.

Working with the Blandin Foundation’s Leaders Partnering to End Poverty (LPEP) program, SMBP did a training session

“ People living in poverty are more relationship-based. People in the middle class are more focused on accomplishments.” called “Bridges Out of Poverty” with the aha! Process, a company that runs training sessions to help communities understand the dynamics that cause and maintain poverty from the individual to the systems level. “Many communities bring diverse groups of people together and expect to come to a solution,” said Jodi Pfarr, who conducted the training for SMBP. “But every member of the group needs to understand how growing up in the class you did affects you. Class impacts everything we do, from how we set up our office to how we hear things and how we react to public policies. If you don’t have that awareness, there are too many opportunities for misunderstandings. One person could think that poverty could be taken care of if someone works harder and budgets better. Another person would know from experience that it’s not that easy.” It’s challenging work, but the training was an eye opener for many participants, especially when Pfarr explained that poverty isn’t just about material deprivation. “There are many kinds of poverty,” said Marge Lelwica, Ted Lelwica’s wife and one of the driving forces behind SMBP. “Spiritual, social, emotional—there are a lot of ways that people can be without something they need.” That insight helped the group see that each one of them was on a spectrum of poverty, instead of just being divided between the financial haves and have nots. Other key insights came to light, including how people living in poverty are more focused on the here and now. By contrast, if you are middle class or from wealth, you are taught from an early age to project into the future, whether it’s getting enough sleep for the big soccer game or charting a career trajectory. “People living in poverty are more relationship-based,” explained Pfarr. “People in the middle class are more focused on accomplishments.” The Blandin training led to the formation of several task force initiatives, including a play called “Poverty: What’s YOUR Baggage?” which was performed by the Lamplighter Community Theater in Staples. The performance included vignettes that explored common myths and misperceptions about poverty. For example, one showed a single mom getting a well-paying job with benefits, which she couldn’t take because it was the second shift and her community didn’t have off-hours childcare options. Still there were challenges, not to mention well-intentioned missteps. During a get together between a few members of SMBP CONTINUED ON PAGE 48

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community

COMMUNITY PARTNERS: Steve Shurts of East Central Energy and Braham Community Center volunteer Tim Nelson are invested in electrifying their community.

Energizing Communities How Central Minnesota utilities support economic development in the towns they serve. By Gene Rebeck | Photography by John Linn

With fewer than 2,000 people and miles from Interstate 35 and St. Cloud, Braham doesn’t have a particularly central location. But it does have a community center, which opened in 2012. And residents will tell you that it has breathed new life into the town. The decade-long effort to bring the dream of a community center to reality was driven by a tireless group of citizen volunteers. But in addition to support from regional nonprofits, including the Initiative Foundation, there was essential assistance from what might strike many as a remarkable source: East Central Energy, the Braham region’s electric cooperative. “It’s a wonderful, wonderful addition to our community,” said East Central Energy CEO Steve Shurts, who also is a member of the Initiative Foundation’s Board of Trustees. The 80-year-old cooperative kicked in $25,000 to help get the project built. It also provided expert advice on energy-efficient lighting and power. “We’ve been using it as a resource ourselves for meetings,” Shurts added.

46 Initiative Foundation Quarterly ifound.org

Utilities like East Central Energy have long played a large but not-so-visible role in local community and economic development, from grants and loans to helping communities lure and land new businesses. And as the Braham Community Center demonstrates, such efforts reinforce the important role of engaging economic development partners across sectors.

Making Connections

“Central Minnesota electric cooperatives are strong partners in financing, particularly manufacturing businesses,” said Jeff Wig, vice president for economic and business development at the Initiative Foundation. Utilities, Wig said, routinely help new business ventures minimize their energy bills right from the start. “They’re part of the Welcome Wagon, if you will.” Why do electric and telecommunications cooperatives provide this kind of help? “It’s in the nature of our business,” said Dave Gruenes, ormer Initiative Foundation Trustee and district manager with Stearns Electric Association, a St. Joseph-based electric cooperative. Providing and maintaining electrical service is “really

“ We want the communities we serve to do well. A strong community is a good place to do business.” important to having a vibrant community of businesses and farms that can grow.” Supplying economical energy is just one of the ways Stearns Electric has contributed to its territory’s economic welfare. Like East Central Energy, it administers funds from the U.S. Department of Agriculture’s Rural Economic Development Loan and Grant (REDLG) programs for building communities and businesses. Stearns Electric’s loans have been used to build fire halls and acquire firefighting equipment. The cooperative also has helped to build a water treatment plant that benefits area residents and some of the region’s larger agri-processing facilities. In addition, Stearns Electric operates a $1.5 million revolving loan fund to support Central Minnesota businesses—mostly in small, rural towns. “Job creation is just one consideration we would look at,” Gruenes added. For instance, the cooperative recently provided a loan that allowed a business to purchase a specialized piece of equipment that would allow it to expand into new markets.

Building Business

For-profit utilities are equally active in the region’s economic development. “We want the communities we serve to do well,” said Laura McCarten, vice president for state affairs for Xcel Energy, which provides electric and natural gas service in several Central Minnesota counties. “A strong community is a good place to do business.” One of the communities in which Xcel Energy has been notably active is Becker. Xcel Energy provided a grant in conjunction with the Initiative Foundation to help develop a long-term plan to diversify Sherburne County’s tax base. Xcel also has provided seed money to develop a comprehensive community economic development strategy covering Becker and four surrounding counties that Xcel serves. Xcel also supports community efforts to attract businesses to the region by supplying information on site selection and energy requirements. In addition, McCarten noted that more and more businesses are seeking low-carbon sources of energy—one of the reasons why Xcel is converting its Sherburne County Generating Station from coal to natural gas. Another privately held utility, Minnesota Power, has provided similar services to the counties it serves in the Brainerd Lakes area, including Crow Wing, Morrison and Benton. Nancy Norr, director of regional development for the Duluth-headquartered utility, said that Minnesota Power had a loan program that helped area businesses

expand, and provided capital to communities to help them convert unused facilities into new business sites. Though the loan program ended in 2003, Minnesota Power continues to invest in county economic development organizations and helps those organizations make pitches to businesses considering relocation or expansion.

Energy Sources

In many cases, regional utility loans and grants support the Initiative Foundation’s business finance and Thriving Communities Initiative programs. Xcel Energy has a staff member dedicated to community and economic development in it’s St. Cloud office. Such investments are providing fresh jolts of emotional electricity throughout the region. Staples will use its grant for economic development, workforce development and quality of life projects (see page 36). Melissa Radermacher, the executive director of the Staples Economic Development Authority, said one of the goals was simply “to change the perception of our community from the inside out.” Minnesota Power is also doing its part. Little Falls, for instance, received its third Thriving Communities Initiative grant for $10,000, which it plans to use for several resident-driven projects, particularly downtown beautification and a business incubator. Kris VonBerge, executive director of the Little Falls Convention & Visitors Bureau, said projects like these are “bringing the community together.” The citizens of Braham are certainly feeling that kind of energy and excitement thanks to their new community center, which was a finalist in 2015 for the Bush Foundation Prize for Community Innovation. It didn’t win the big grant, but it did receive $10,000 for being a finalist—a nice addition to the funding it has received from sources like East Central Energy. “We had no place in town for any organization to meet,” said Dorothy Johnson, a Braham resident and one of the key volunteers who helps run the center. Today, three different high schools hold their proms in the center, which can accommodate more than 300 people and is handicapped accessible. Numerous businesses, nonprofits and social organizations have hosted meetings there— not to mention all the wedding receptions, anniversary parties, memorial services and bingo games. Braham would like to hire a full-time director to manage the busy center. “I’m amazed how many people who were naysayers are now volunteering and are so proud of it,” Johnson said. When friends and relatives visit, she added, residents “want to show it off.”

3RD QUARTER 2016

Punching through Poverty CONTINUED FROM PAGE 44

and three women living in poverty, Marge Lelwica remembers asking if they were eating healthy foods. The women explained that when they have $4, their priority is to buy as many boxes of macaroni and cheese as they can to feed their families, not a head of lettuce or broccoli. At first, people in poverty didn’t want to attend any community events, saying they felt judged and intimidated. After some soul searching, SMBP regrouped and looked at what kinds of events would benefit the entire community.

Taking Action

Armed with fresh insights, SMBP was ready to start new initiatives, including a yearly education forum—the first was a wellattended community conversation about methamphetamine. Last October SMBP sponsored “Community Connect,” a free, one-day event held in the Staples Motley High School gym showcasing 40 organizations that provide services to people in need. Free meals and childcare were provided at the events. SMBP has hosted groups to paint dilapidated homes and participated in National Night Out. They’ve also started a mentoring group, made up of women of varying ages and from across the economic spectrum. And the work doesn’t stop with SMBP. Businesses, including Lakewood Health Systems, and several area churches have gotten

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48 Initiative Foundation Quarterly ifound.org

Cragun’s Resort on Gull Lake | October 26, 2016 | ExploreBrainerdLakes.com

involved. And the towns have also started a year-long engagement with the Initiative Foundation’s Thriving Communities Initiative, which helps entire communities identify their unique assets, goals and challenges. The Staples area Thriving Communities (TCI) Team is working together on a number of projects that can potentially improve the quality of life of local families through new activities, improved facilities and a downtown business environment that supports small businesses. The Work Force Task Force is working with local schools, businesses and Central Lakes College to help prepare local residents for better job opportunities that are coming to the area over the next several years. “There is no better way to lift people out of poverty than good job opportunities and the skills to successfully compete for those jobs,” said Dan Frank, senior program manager for community development at the Initiative Foundation. That momentum puts Staples and Motley in a strong position to energize their towns and make changes that will hopefully benefit the entire community. “They have a ton of passion there,” said Pfarr. “It’s primed for change because people are receptive and passionate and they are willing to come together.”

resources

Blandin Foundation Leaders Partnering to End Poverty (LPEP) Designed for community members of all income levels who are engaged in their community and who are passionate and committed to ending poverty. For more information, check out leadership.blandinfoundation.org/programs/lpep.

aha! Process A national training and publishing company that provides workshops, publications and consulting services to help improve lives and build sustainable success in communities, schools and higher education; ahaprocess.com.

Improving the Way ANNOUNCING OUR DATES FOR THE 2017 EXECUTIVE FORUM

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3RD QUARTER 2016

home made

Cross-Tech Manufacturing Crosslake, Minn.

By Maria Surma Manka | Photography by John Linn

When thick brush needs to be cleared, there’s a good chance the equipment needed to do the job comes from Cross-Tech Manufacturing. Used for anything from agriculture to construction to disaster recovery to landscaping, Cross-Tech’s hydraulic rotary brush cutters—along with grapple buckets, tractor mowers and other brush-clearing machinery—are shipped to nearly every corner of the world. The Los Alamos National Laboratory recently purchased one of CrossTech’s new brush cutters to help manage the surrounding land. Best known for its Brush Wolf line, Cross-Tech makes equipment designed to fit skid-steers, mini-utility loaders, tractors, backhoe loaders, site-prep tractors and excavators. President Scott Freiberg and CEO Roger Roy purchased the company in 1999 and have fostered its growth and close partnership with some of the largest original equipment manufacturers (OEMs) in the market, as well as distributors and dealers. “These companies make expensive machines, and our products help their customers maximize their investment by being able to use them in different scenarios,” explained Freiberg. We asked Roy and Freiberg what makes Cross-Tech and its Brush Wolf line the leader of the pack.

50 Initiative Foundation Quarterly ifound.org

CLEARING A PATH FOR BUSINESS: Cross-Tech Manufacturing’s Scot Freiberg (left) and Roger Roy.

•T eam Effort In 2014, a fire caused extensive damage to Cross-Tech’s plant. The cause was never determined, but employees sprang into action. They outsourced processes, rented a shop, and squeezed several departments into the remaining space. “Because of the all-out effort by employees, we still shipped out products on time,” said Roy. “Scott and I are very, very proud of them.” •W orkforce Training As an advisor to the Central Lakes College welding program, Roy works with instructors to ensure what’s taught in class translates to the manufacturing shop floor. “We used to have trouble finding good welders,” he said. “Now we have an excellent source of well-trained young employees.” •B ig Plans A $560,000 debt financing loan from the Initiative Foundation, in addition to primary financing from Bremer Bank in Brainerd, will help Cross-Tech expand its building to keep up with customer demand. “This is our fifth addition!” noted Freiberg. The company also plans to expand its fabrication, welding and engineering areas in the new space, along with the addition of a machine shop to help contain costs.

•G rowing Workforce The company cut back to just four employees during the Great Recession, but has since rebounded. Today, 25 welders, machinists, assemblers, engineers and many others keep Cross-Tech running. The company expects to add at least five more in the next year. According to Freiberg, Cross-Tech is expanding at about 10 percent each year on average. “We’re growing faster than we ever have,” he said.

•S peedy Delivery Cross-Tech fills about 600 orders per year and manufactures about 1,200 units annually across all of its lines. Units are usually made within two weeks.

Comfort Cares With arch support and wood that absorbs moisture, wearers’ feet stay cool and dry. Any Size While Sven does a strong online and storefront business, they also take custom orders. Rivers’ teams of seamstresses and die cutters can make custom shoes that fit near any foot shape or size. “I have the most incredible staff I could imagine,” she said.

•H igh Tech The structural parts of the brush cutters and grapple buckets, such as the plate and sheet metal, are cut with a high-definition plasma cutter for enhanced precision. The plasma cutter is a 20-foot long, 10-foot wide table with a bridge over it on which the cutting head tracks. The unit’s design is sent to the cutter’s computer, where it automatically tells the head where to cut.

•P rocess Makes Perfect After an order is received, the steel is cut and sawed, bent and formed. Next, the piece goes through welding, sandblasting and a powder coat station before being placed in an oven to finish. After assembly, the piece is loaded onto a delivery truck – and eventually onto a ship if it’s going overseas.

•T he Ultimate Power Tool The company’s newest release is the 192 Super M-AX Flex Wing Brush Cutter. At 192 inches wide (16 feet!), it’s the largest hydraulic rotary brush cutter in the world and can cut through trees up to eight inches in diameter.

•Q uality, Quality, Quality Machinery is as much about quality as it is about power. High horse power is important, but structural integrity and performance are what keep customers coming back. “It’s all about precision,” said Freiberg. “If it’s a sloppy fit, it won’t work.”

3RD QUARTER 2016

where’s IQ?

THINK YOU KNOW? Send your best guess to IQ@ifound.org by Oct. 15, 2016. Three winners will be chosen, at random, to receive a $25 GiveMN.org gift code to support the charity of their choice. HINT: Babe the Bluegill was permanently moved to its current location following the 2008 Governor’s Fishing Opener at Pequot Lakes and Breezy Point. Congratulations to everyone who correctly recognized the statue representing the founder of Braham Pie Day, who arranged for former Gov. Rudy Perpich to declare her town the “Homemade Pie Capital of Minnesota.” Gladys Behymer, Mary Sperley and Joni Sundeen are the lucky winners of GiveMN.org gift codes.

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