Prairie Business December by Prairie Business Magazine

Start up businesses face challenges pg. 16

China partnership pg. 48

Tax planning for 2010 pg. 53

Under 40

Otter Tail Community oriented pg. 18 At the forefront of innovation pg .22

www.prairiebizmag.com

pg. 40

FARGO/MOORHEAD 1111 Westrac Dr, Ste 108 | Fargo, ND 58103 | 701.281.3414 / 866.419.3414 MINOT 1324 20th Ave SW | Minot, ND 58701 | 701.837.4949 / 800.361.3264

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CONTENTS

Volume 11 No. 12

are at the 22 Entrepreneurs forefront of innovation. By Alan Van Ormer

Chinese company 48 EERC, partnership starts Recent partnership has many regional and national news outlets buzzing. By Sarah McCurdy

49 Biotechnology improves human life Those who work with biotechnology believe that it can contribute to various industries that improve a human’s life, be it food, fuel, health or environment. By Alan Van Ormer

Cover Story: 40 under 40 Check out who is being honored in this year’s 40-under-40 in Minnesota, North Dakota and South Dakota.

Company Profile: 18 Otter Tail Power

53 Start 2010 Tax Planning Giving mood for the 53 Holiday season In something that has never been done across the nation, the state realtor’s group is going to be covering all the kettles in North Dakota. By Alan Van Ormer

Company

Otter Tail Power Company serves an area of rural communities as large as the state of Wisconsin. By Alan Van Ormer

Community Profile: 34 Wahpeton-

forces drive 40 Market building energy costs

Breckenridge

down

Building TWO communities. By Alan Van Ormer

Energy consumption costs for buildings represent a significant line item expense for many companies and organizations.

A move 42 inE-15theapproval: right direction.

IN THIS ISSUE 6 From the Editor’s Desk 8 Women in Business 8 Matthew Mohr

10 Prairie News 14 Prairie People 16 Q&A: Tim Weelborg

NEXT MONTH In January, Prairie Business magazine will begin looking at two to three different topics each month. The first issue discusses what is happening with electronic health records in the region and how Clean Energy Technology could be a jobs leader in the future.

December 2010

52 Viewpoint 54 By the Numbers

ON THE AIR Join Prairie Business magazine Editor Alan Van Ormer and host Merrill Piepkorn on Tuesday, Dec. 14 at 3 p.m. on any Prairie Public radio station to hear more about the December cover story. To listen to Prairie Public, visit www.prairiepublic.org/radio/hear-it-now.

Experts agree approval will not promote ethanol use or stimulate industry expansion.” By Loretta Sorenson

44 Minnesota PUC interview Demand for energy expected to increase.

46 War on Talent

North Dakota’s energy industry workforce is demanding more. By Maxine Herr

ALAN VAN ORMER

FROM THE EDITOR’S DESK

An economic recovery underway? I n the past two months, I have had the opportunity to listen to economic experts talk about the economy and how it is shaping up as we move into 2011 and beyond. Most seem to believe that our economy is moving forward. However, most seem to also believe that the economy is recovering at a slow pace. Regionally, there are positive signs of recovery. North Dakota and South Dakota jobless rates continue to be the lowest in the nation and Minnesota is also seeing some decrease in the jobless rates. Individual communities in each of the states are also seeing the jobless rates decrease. However, there is one indicator that is concerning those who look at economics for a living. And that involves consumers. It is said that consumer spending usually leads the recovery efforts. However, according to Dr. Ralph Brown, Professor Emeritus of Economics at the University of South Dakota, in his Economic Outlook Seminar in Sioux Falls, consumers are not leading the recovery this time. He states that deleveraging, de-risking, loss of wealth, and high unemployment will keep consumer spending weak into 2012. According to Dr. Brown, the GDP’s growth in 2011 is expected to be 2.2 percent and inch up to 3.1 percent in 2012. He also sees a modest 2.2 percent increase in consumer spending in each of 2011 and 2012. Dr. James Paulsen, Chief Investment Strategist for Wells Capital Management, in his talk in Fargo recently, calls it ‘Armageddon Hypochondria’. In a nutshell, he is saying that consumers are not buying because there is a feeling that the end is near. In one slide, he listed at least 23 items that have caused ‘Armageddon Hypochondria!’ anything from banks being broken to runaway deflation to small companies not being able to get credit. However, what Dr. Paulsen does point

December 2010

out is that all the remaining economic indicators show that this most recent recession is ahead of the last two recessions. The positive job indicators that he mentioned all seem to be doing well. In South Dakota, Dr. Brown made several conclusions including the South Dakota economy is growing again, but slowly; the recession did not hit the state as hard as the nation; private sector deleveraging has a way to go; and public sector debt outlook is extremely serious. What does this all add up to? I think that we will get a better sense of consumer spending after the Christmas season. Then we will know if consumers are going to have more confidence in the economy by the amounts of items that are purchased. I’m not an economist by any means, but I do try to live within my means; which is what most consumers and businesses do in this neck of the woods. In addition, like I have said in past columns, there is a lot of positivity in the three states that this magazine covers. We hear all the time how Prairie Business magazine is a breath of fresh air, partly because of what our magazine stands for: a catalyst for positive growth on the Northern Plains. But more importantly this positive atmosphere is happening because of those who work hard each day to make their businesses successful. We are aware that the economy in 2011 will continue to have slow growth. But, we at this magazine will continue to tell those positive stories that are out there. It is our way to help with this economic growth by letting readers know that the economy is recovering and there is hope in sight. Those of us that work at Prairie Business magazine see it happening each and every day. Happy Holidays and onward to 2011!

An SBA Award Winning Publication Mike Jacobs, Publisher Alan Van Ormer, Editor Scott Deutsch, Sales Manager Tina Chisholm, Production Manager Jen Braaten, Marketing Coordinator Beth Bohlman, Circulation Manager Kris Wolff, Layout Design, Ad Design

NATIONAL ACCOUNT SALES/SALES MANAGER:

Scott Deutsch

SALES:

Brad Boyd

701.232.8893 Grand Forks/Fargo/Moorhead/northwestern MN

800.641.0683 Bismarck-Mandan/ west central ND/north central SD

John Fetsch

701.232.8893 Fargo/Moorhead/eastern ND/western MN

Jeff Hanson

605.212.6852 Sioux Falls/southern SD/southern MN

EDITOR: Alan Van Ormer

Editorial Advisors:

701.232.8893 avanormer@prairiebizmag.com

Ann Reich, North Dakota Bankers Association, Bismarck; Hiram Drache, Historian-In-Residence, Concordia College - Moorhead; James Ferragut, Fargo,ND; Tom Shorma, President, WCCO Belting - Wahpeton; Karen Froelich, Professor, College of Business Administration, NDSU Fargo; Bruce Gjovig, Director, Center for Innovation, UND - Grand Forks; Steve Rendahl, Associate Professor, UND School of Communication Grand Forks; Matthew Mohr, president/CEO, Dacotah Paper Company Fargo; Julie Fedorchak, Communications Manager, North Dakota Department of Commerce - Bismarck, ND; Mary Batcheller - Greater Fargo Moorhead Economic Development Corporation, Fargo, ND;Megan Olson, President/CEO, Watertown (SD) Area Chamber of Commerce Prairie Business magazine is published monthly by the Grand Forks Herald and Forum Communications Company with offices at 808 3rd Ave. S., Ste. 400, Fargo, ND 58103. Qualifying subscriptions are available free of charge. Back issue quantities are limited and subject to availability ($2/copy prepaid). The opinions of writers featured in Prairie Business are their own. Unsolicited manuscripts, photographs, artwork are encouraged but will not be returned without a self-addressed, stamped envelope.

Subscription requests: Free subscriptions are available online to qualified requestors at www.prairiebizmag.com.

Address corrections:

Prairie Business magazine PO Box 6008 Grand Forks, ND 58206-6008 bbohlman@gfherald.com

Online: www.prairiebizmag.com On the cover: Check out who is being honored in this year’s 40-under-40 in Minnesota, North Dakota and South Dakota.

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WOMEN IN BUSINESS DANA BADGEROW - PRESIDENT AND CEO OF MINNESOTA AND NORTH DAKOTA BETTER BUSINESS BUREAU What is the Better Business Bureau? The Better Business Bureau was founded nearly 100 years ago by business owners who wanted to stop inappropriate advertising. Our mission has expanded greatly since then, but our primary focus is still the maintenance of a marketplace where businesses and consumers can trust each other. The very first BBB was founded in Minnesota, and today there are over 100 BBBs in the U.S. and 13 in Canada. The Minnesota and North Dakota Better Business Bureau handles between 24,000 and 26,000 complaints per year. There are 6,800 businesses who are members of the Better Business Bureau of Minnesota and North Dakota. Why is the Better Business Bureau placing a larger investment in North Dakota? North Dakota was added to our service area in 1997. We feel it is an area that has been under-served, and by opening an office in North Dakota, weâ&#x20AC;&#x2122;re looking to address and correct that. North Dakota has a low unemployment rate, high personal income growth, and the

state is often cited as a hotbed for new entrepreneurial high-tech businesses. It is really a market made up of good, ethical businesses and we believe that once more businesses get to know us, they will support our initiatives. What trends are you seeing in business? We are starting to see an uptick in optimism and companies investing in the future by making new hires. Some of our members, who dropped their membership because of hard times, are renewing again. When competition is fierce, companies want to distinguish themselves. One way they can distinguish themselves is by displaying the BBB seal that signifies to consumers that they both have been accredited by the Better Business Bureau and have a solid track record in the marketplace. Unfortunately, when hard times hit, we also often see a proliferation of unscrupulous people preying on people in distress. What is the synergy between the Better Business Bureau and businesses? The synergy is that we have the ability to help businesses attract consumers, as well as programs and services that benefit both businesses and the public. We will drive consumers to those good businesses by virtue of their accreditation with us and by virtue of their good track record. We also work to expose and root out those shady operators and businesses that are ruining the reputation of others. What has prepared you for this position? I have a wide array of business experience. I know what customer service is and what it should be. I also know the importance of ethics and integrity, and how businesses have to make those things their focus if they wish to grow and have long-term success. Finally, I believe I have delivered results. All organizations today need leadership that can deliver results.

MATTHEW D. MOHR

Wage policies s business managers struggle to determine employee pay scales, three main factors often are evaluated. First is present pay rate, next is business profitability, and third is often individual employee needs. Nearly every entrepreneur I know faces a challenge when deciding what the right pay is for any given job. Local and national wages comparisons help, but every pay rate within an organization must be fair relative to other pay rates. If one group of employees is being paid minimum wage, a similar responsibility canâ&#x20AC;&#x2122;t be too different. Naturally a business must offer competitive pay and benefits or it will not attract qualified employees, but pay scales across an organization must have a balance. Personally, I think every great entrepreneur wants to be able to justifiably pay every employee as much as possible. Great business leaders want every employee to grow and achieve more in their lives. One employeeâ&#x20AC;&#x2122;s needs are often different than that of another and many entrepreneurs have great empathy for each employee, but just because one individual has bigger needs or has chosen a certain lifestyle different than another does not mean pay can or should be adjusted to meet one particular need. How much to pay employees is a great problem compared to having to worry about meeting payroll however.

Mohr can be reached at mmohr@dacotahpaper.com. 8

December 2010

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PRAIRIE NEWS

(Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration)

RE-DEDICATION ON MOORHEAD CAMPUS The Oscar Bergos Center was rededicated on the Minnesota State Community and Technical College campus in Moorhead, MN. A painting of Oscar Bergos was also unveiled outside the classroom. The $400,000, 4,500-square-foot project included improved lighting, sound, and room accessibility, flexible configuration of up to four individual rooms, and new entrances to the commons area.

BIG LOTS OPENS IN WEST FARGO A ribbon cutting celebration and check presentation to the West Fargo High School were highlights in the grand opening of Big Lots in West Fargo. Big Lots is a Fortune 500 company with more than 1,300 stores in 47 states. The broad line closeout retailer offers consumers a wide range of bargain-priced merchandise, including brand-name closeouts, seasonal products, consumables, furniture, housewares, toys, and gifts.

SANFORD OPENS SIMULATION TRAINING CENTER Sanford Health has opened a new training center for employees that will pioneer a new method of simulation-based learning in healthcare for the region. The new Sanford Simulation Center will allow Sanford employees to use the newest high-tech methods to receive hands-on training in a safe, no-risk environment. By utilizing a combination of task trainers, mannequin simulators and standardized patients, Sanford employees will have a chance to learn new skills and improve the process, accuracy and delivery of every aspect of patient care. Two simulation suites, two high-tech debriefing rooms and a multi-faceted task trainer room make up the 2,400 square-foot facility located at the Sanford Health Center for Learning in the Sanford Stevens Center. The Sanford Simulation Center will also be made available in the future to community members, such as firefighters, emergency medical technicians and first responders as well as other organizations and companies that have simulated learning needs.

M STATE STUDENTS REAP BENEFITS OF PARTNERSHIP During this fall harvest season, the Diesel Equipment Technology program at Minnesota State Community and Technical College – Moorhead is again reaping the benefits of its partnership with Case New Holland. The agricultural equipment manufacturer recently provided a Magnum 215 tractor valued at nearly $150,000 to the program, the latest in a series of donations that allows M State students to train on the most current technologies. The Magnum 215, equipped with a continuously variable transmission, only recently advanced into commercial production, and its acquisition enables students to learn on its new style of transmission and on the new tractor’s engine, hydraulics, electrical, HVAC and GPS systems. CNH has donated more than $1 million in equipment to the M State program in the past five years. 10

December 2010

EAPC ARCHITECTS ENGINEERS UNVEILS CORPORATE LOGO EAPC Architects Engineers have unveiled a new corporate logo that shows the company’s diversity in the building, industrial and wind energy sectors. The new corporate logo includes color upgrade and a reinterpretation of the existing logo. It is a modern representation of the sectors within the company’s expertise. Alan Dostert, President and one of six partners, says the new corporate logo has allowed EAPC to reintroduce itself to existing customers showing them that the company has grown, merged, and adapted to the changes in the industry, as well as opened doors for new clients. “Our tag line for this effort is Progress doesn’t just happen, it must be made – This effort shows our present and future clients, as well as our staff, that EAPC is a progressive company leading the way,” Dostert explains.

‘GREEN’ HIGH-EFFICIENCY GEARBOX DEVELOPED Hub City Inc., headquartered in Aberdeen, SD, has unveiled a new concept in gear drive units. HERA, or High Efficiency Right Angle gear drive is a new product that can efficiently convert 90% of the energy required to drive the unit to usable power. Worm Drive gearboxes are found in nearly every sector of the economy wherever motion is required and transferred along a production system. Such systems can include any type of conveyor, manufacturing of products for recreation, transportation, military, packaging, construction, communication, material handling, medical and food processing equipment, and hundreds of other factory situations. Hub City currently engineers, machines and builds nearly 120,000 gearbox transmissions a year. Some are standard units, while many are custom built. HERA’s unique (Patent Pending) technology uses a completely re-thought concept of delivering torque while increasing the unit’s efficiency. In fact, HERA can deliver twice the torque (more drive power) with less energy. When paired with a highefficiency electric motor, or not, HERA actually allows the motor to work less while HERA delivers more power.

PRAIRIE NEWS

(Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration)

CNA SURETY BREAKS GROUND IN SIOUX FALLS Ground has been broken for the new CNA Surety building in downtown Sioux Falls. The 130,000 square foot, $25 million facility will have parking available for 540 cars, a fitness center, and a walking path along the Big Sioux River. The completion date is June 2012. The facility is expected to employ 425 people, with an additional 125 employed by other tenants. CNA Surety is the nation’s largest publicly traded surety company, providing a full range of surety and fidelity bonds in all 50 states, Canada and Puerto Rico. The company’s subsidiary, Western Surety Company, was founded in Sioux Falls in 1900 and is now CNA Surety’s national underwriting center for small commercial and surety products.

AVENUE RIGHT REGIONAL WINNER OF FUNDING POST COMPETITION FOR EMERGING COMPANIES Avenue Right provides the first on-demand software to streamline and automate the process of planning, evaluating, and buying local advertising, across multiple media channels. The company has been recognized as an innovator in the marketplace as regional winner of FundingPost’s Pitching Across America™ competition. The competition was judged by a panel of 100+ venture capitalists and angel investors whose goal was to select the top 50 emerging companies nationwide. Judging criteria included professionalism, development stage, customers and revenue, competitive advantage, marketplace need, probability of success, and whether the company is “VentureWorthy™.”

(Brian Gramer)

INSIGHT WINS MARCOM AWARDS Insight Marketing Design received seven MarCom Awards from the Association of Marketing and Communication Professionals. Platinum Awards, the highest distinction, were awarded to Insight Marketing Design for the Office Peeps brochure/calendar, created for Office Peeps in Watertown, SD; for Downtown Sioux Falls Moonlight Movies #2, a video; and for the Sioux Empire Community Theatre “Sound of Music” TV spot. Insight received Gold Awards for Start Your Journey, a view book for Lake Area Technical Institute and for Launch, a game created as a self-promotion piece for Insight. Honorable Mentions were awarded for the Office Peeps identity package and Chip TV, the Sequel, a TV spot created for Kilian Community College. The MarCom Awards are an international competition for marketing and communication professionals involved in the concept, writing and design of marketing and communication programs and print, visual and audio materials.

RESULTS UNLIMITED GARNERS TWO EMMY AWARDS The Upper Midwest Chapter of The National Academy of Television Arts & Sciences has awarded two Emmy Awards to Results Unlimited, an advertising and marketing agency with offices in Minot and Fargo/Moorhead. The Emmys were awarded to Results Unlimited in the categories of Short Form Photography Composition and Lighting Composite, citing the agency for excellence in both of these categories in the production of several television commercials. Results Unlimited was the only advertising and marketing agency in North Dakota to be nominated for this year’s award, garnering an additional two nominations for Short Form Editing Composition and Total Marketing Campaign. There were over 800 entries in this year’s competition resulting in 300 nominations. Marketing and media businesses from North and South Dakota, Montana, Nebraska and Minnesota entered the competition this year and 100 were given the prestigious Emmy award. A complete list of all winners can be found at www.midwestemmys.org. 12

December 2010

LAKEWOOD HEALTH SYSTEM RECEIVES FUNDING TO SUPPORT INITIATIVES Lakewood Health System recently accepted federal grant funds administered by the Minnesota Department of Health (MDH) Office of Rural Health and Primary Care’s (ORHPC) for the federal Small Rural Hospital Improvement grant program in the amount of $8,280. The funding will be used to support quality improvement and care coordination through the creation of a fullyinteroperable electronic health records system to provide more comprehensive, efficient patient care. Efforts are focused on improving quality outcomes for patients and the interoperability of Lakewood’s systems from care setting to care setting. Projected outcomes of the initiative will include improved patient safety; increased patient, physician and staff satisfaction; increased ease of use; and improved access to patient data, ultimately helping to reduce healthcare costs and prevent rehospitalizations.

NORTH DAKOTA, MINNESOTA DEALERS KICKOFF SCHOLARSHIP PROGRAM The West Dakota and Heartland Chevy Dealers of North Dakota and western Minnesota have combined forces to launch a new scholarship program for high school juniors and seniors. The Chevy Scholar Program (www.chevyscholar.com) invites nominations for outstanding high school juniors and seniors in the market area to compete to receive four $5,000 college scholarships. Nominations will end on Feb. 20. Students can nominate themselves or be nominated by family, friends, parents, teachers or coaches. Nomination forms can be downloaded at www.chevyscholar.com or picked up from local Chevy dealers. Nominators fill out basic information including community involvement, academic achievements, extracurricular activities and volunteer work. Nomination forms can be submitted at any Chevy dealership. At the end of the process, one nominator will win a $500 gift card through a random drawing. To learn more or to nominate a student, go to www.chevyscholar.com or visit your local Chevy dealer.

PRAIRIE PEOPLE

(Please e-mail photos and press release announcements of hirings, promotions, awards and distinctions received by business leaders in North Dakota, South Dakota and western Minnesota to rschuster@prairiebizmag.com for consideration)

MARS RESEARCHER RECEIVED MINES MEDAL Steven W. Squyres, Ph.D., has been named the 2010 recipient of the South Dakota School of Mines and Technology’s prestigious Mines Medal. School of Mines President Robert A. Wharton, Ph.D., established the Mines Medal to bring tribute and recognition to a leader in engineering or science. Squyres is the Goldwin Smith Professor of Astronomy at Cornell University and the principal investigator for the science payload on NASA’s Mars Exploration Rover Project. Squyres successfully conceived, organized and led the exploration of the planet Mars with two small rovers, Spirit and Opportunity. He is also a co-investigator on the Mars Express mission and on the Mars Reconnaissance Orbiter’s High Resolution Imaging Science Experiment. His research focuses on the large, solid bodies of the solar system: the terrestrial planets and the satellites of the Jovian planets. His work involves analysis of data from spacecraft and ground-based telescopes, as well as geophysical modeling.

DE KOK JOINS FREDRIKSON & BYRON Amy De Kok has joined Fredrikson & Byron’s Bismarck office as an associate in the Litigation, Energy, and Oil & Gas Groups. De Kok primarily represents large and small oil and gas exploration companies in a wide variety of oil and gas litigation matters in North Dakota state and federal courts, including complex real property and contract disputes. She also has experience in the areas of business, civil, and commercial law and litigation, as well as construction law and litigation, distribution and franchise law and litigation, employment and labor law and litigation, alcohol beverage law and litigation (distributors/wholesalers), estate planning, and probate and trust litigation and administration. Fredrikson & Byron is a 240-attorney law firm based in Minneapolis, with offices in Bismarck, Des Moines, Fargo, Monterrey, Mexico, and Shanghai, China.

MEDCENTER ONE WELCOMES PHYSICAL THERAPIST Erica Becker, a physical therapist, recently joined Medcenter One Occupational Health Clinic. Becker received her doctorate degree in physical therapy from the University of Mary in Bismarck. At the Medcenter One Occupational Health Clinic, Becker evaluates and treats work-related injuries and assists in the patient’s rehabilitation. She also performs preplacement testing, pre-injury screening, work-conditioning programs, jobsite analysis and ergonomic assessments. 14

December 2010

PHYSICIAN IS FIRST TO RECEIVE CPI CERTIFICATION IN SOUTH DAKOTA Thomas Repas was recently awarded the title of Certified Physician Investigator (CPI). He is the first physician to receive this certification in South Dakota. A physician investigator accepts responsibility for the safe and ethical conduct of a clinical trial, defined as a systematic experiment designed to evaluate the pharmacokinetics, pharmacodynamics, pharmacoeconomics, safety, efficacy, and effectiveness of a drug, biological, medical device (therapeutic or diagnostic), procedure or other intervention involving human subjects. Certification is granted by the Academy of Pharmaceutical Physicians and Investigators (APPI) in recognition of a physician’s education, training and experience as a primary, sub- or co-investigator, monitor, supervisor, and/or designer of clinical trials and is based upon training and experience as well as successful completion of the written CPI examination.

KAPASKA NAMED AVERA MCKENNAN REGIONAL PRESIDENT Dr. David Kapaska, DO, has been named Regional President and CEO of Avera McKennan Hospital & University Health Center. Dr. Kapaska succeeds Fred Slunecka, who has been appointed Chief Operating Officer. Dr. Kapaska is a graduate of the United States Air Force Academy, and went on to earn a Master of Business Administration degree from Southern Illinois University, and a medical degree from the University of Osteopathic Medicine in Des Moines, IA. He served as pilot in the United States Air Force before embarking on a career in both business and medical realms. The Avera network consists of 31 hospitals and 161 primary and specialty care clinics, as well as long-term care facilities and home medical equipment outlets at more than 300 locations in 97 communities in five states.

MCKNIGHT NAMED LABOR AND EMPLOYMENT LAWYER OF THE YEAR Michael S. McKnight, a partner at Boyce, Greenfield, Pashby & Welk, has been named “Labor and Employment Lawyer of the Year” in Sioux Falls by Best Lawyers. After more than a quarter of a century in publication, Best Lawyers is designating “Lawyers of the Year” in high-profile legal specialties in large legal communities. Only a single lawyer in each specialty in each community is being honored as the “Lawyer of the Year.” The lawyers being honored as “Lawyers of the Year” have received particularly high ratings in peer review surveys in the areas of ability, professionalism and integrity. Boyce, Greenfield, Pashby & Welk has 16 attorneys with extensive experience in 22 areas of transactional and litigation practice. The firm is one of the oldest law firms in South Dakota, established in 1878 by founding partner Frank L. Boyce.

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TIM WEELBORG

Q&A:

Start-up

businesses

face challenges By Alan Van Ormer s Executive Director of the Enterprise Institute, Tim Weelborg has the opportunity to work with researchers, inventors, and entrepreneurs to help them commercialize their innovations and create successful companies in South Dakota. “I think that innovators (inventors, researchers, anyone with the creative idea) are at the forefront of innovation. I believe there is a big difference between innovators and entrepreneurs,” Weelborg explains. “Entrepreneurs are the individuals who take these innovations and create a business. Both ingredients are important, but entrepreneurs are a special-type of business person – one willing to take major risk, assemble a management team and go to market.” Weelborg grew up in Redfield, SD, graduating from South Dakota State University in Brookings, SD, with a Bachelor of Science degree in Business Economics. He spent the first few years of his professional career in working for a technology company in Minneapolis in a new business development role. He returned to South Dakota in 2002 and worked briefly as a director of sales and marketing for Med-Pac, Inc. based in Detroit Lakes, MN and as a corporate financial analyst for John Morrell in Sioux Falls. He began with the Enterprise Institute in 2003. In addition to his role as Executive Director of Enterprise Institute, Weelborg is also an adjunct professor at South Dakota State University, teaching finance and business plan courses in the Entrepreneurship curriculum. Weelborg took time to address issues involving the Enterprise Institute and the

December 2010

challenges that entrepreneurs face. The following are Weelborg’s comments: Explain what Enterprise Institute does? The Enterprise Institute was formed in May 2001 to help create high-growth companies in the region. The company was started by Dr. Duane Sander, co-founder of Daktronics and several other private business leaders and successful entrepreneurs. These founders pooled capital and expertise to launch Enterprise Institute as a project of the South Dakota State University Foundation. The company is organized as a private, 501 (c) 3 non-profit corporation. Since its inception, Enterprise Institute has assisted more than 1,400 clients and is credited with creating a formalized Angel Investment Network in South Dakota. How can Enterprise Institute help? The Enterprise Institute can help clients (researchers, inventors, entrepreneurs, etc.) commercialize their innovations and create successful companies. Enterprise Institute can assist in determining feasibility, business planning and capital sourcing – including both debt and equity financing. The equity financing is sourced primarily through its relationship with RAIN funds© Regional Angel Investment Network). Enterprise Institute is a Certified Rainmaker with RAIN Source© Capital in St. Paul, MN and is responsible for creating and administering these angel funds in South Dakota. The RAIN Fund© Network is a network of 23 Angel Investor funds with over $20 million in committed capital that currently spans six states and is growing.

THE WEELBORG FILE Name: Tim Weelborg Title: Executive Director Company: Enterprise Institute Age: 32 Hometown: Redfield, SD Years with the Enterprise Institute: 8 What challenges do businesses face? How can Enterprise Institute help them with this challenge? Start-up businesses face incredible challenges. Most start-ups fail. The Enterprise Institute can help businesses by planning at the beginning and helping to create a business model that allows for challenges. Where do you see Enterprise Institute going in the future? I think that the Enterprise Institute has a bright future and will continue to focus on assisting high-growth entrepreneurs. We will continue to expand our network of RAIN funds© throughout South Dakota. We believe that having a supply of equity capital from these community-based funds is a critical component for business development – especially early-stage ventures. I also believe that Enterprise Institute will continue to grow its relationships with universities and other research institutions in the region. These organizations, through their research and technology transfer operations, will continue to be a huge economic engine and provide many opportunities for start-up companies. Tell Prairie Business magazine readers something about Enterprise Institute that the people might not know? The Enterprise Institute has a strategic alliance with the South Dakota Small Business Development Center. Enterprise Institute partners with SD SBDC to offer the core business planning/consulting services through this network and offers specialized fee-based services to entrepreneurs seeking equity financing and to researchers and inventors that need preliminary commercialization assistance.

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COMPANY PROFILE - OTTER TAIL

Otter Tail Power Company community oriented

By Alan Van Ormer

(Central Dam in Fergus Falls. All photos are courtesy of Otter Tail Power Company)

tter Tail Power Company might be an investor-owned utility located in the smallest community of any of the other 60-plus investor-owned utilities in the nation, but the energy company serves an area of rural communities as large as the state of Wisconsin. “As a service provider, we are invested in the communities we serve,” states President/CEO Chuck MacFarlane. “If they do well, we’re going to do well.” What sets Otter Tail Power Company apart from most other types of businesses is that as a utility it has defined service territories. In addition, the company encourages employees to be involved in their communities. “We have a lot of employees that are on school boards and other associations, trying to make our communities good places to live,” MacFarlane explains. “Vibrant communities benefit us and everyone involved.” Commitment to the community includes employee volunteerism and financial contributions. A program that combines these is The Power of Two. Employees who contribute a minimum of 24 hours of personal volunteer time within the year to a nonprofit organization are eligible for a $100 donation to that organization. Last year, Otter Tail Power Company contributed to 45 organizations through The Power of Two. This was in addition to the 760 organizations that received grants through the company’s regular charitable giving of nearly two percent of its net income.

customers are in northeastern South Dakota. Headquartered in Fergus Falls, MN, Otter Tail Power Company has customer service centers in Minnesota (Fergus Falls, Bemidji, Crookston, and Morris), North Dakota (Devils Lake, Garrison, Jamestown, Oakes, Rugby, and Wahpeton), and South Dakota (Milbank). More than half of the 730 employees – about 480 – are located in Minnesota, while there are about 170 employees in North Dakota and about 70 employees in South Dakota. Otter Tail Power Company was incorporated in 1907 but started producing electricity in 1909. In the late 1980s, because of limited growth opportunities in electric utility operations, Otter Tail Power Company implemented a diversification strategy designed to provide shareholders with dependable earnings growth over the long term. Mid-States Development, later renamed Varistar, was formed in 1989 to own and oversee the diversified businesses. In 2001, the corporate name became Otter Tail Corporation, and since then Otter Tail Power Company has been the utility operation of Otter Tail Corporation. While Otter Tail Power Company has relied heavily on coal generation, the company is increasingly moving toward a more balanced

100 YEARS PLUS OF PRODUCING AND DELIVERING ELECTRICITY In 2009, Otter Tail Power Company celebrated its 100th anniversary of producing and delivering economical, reliable electricity in an environmentally responsible way to more than 129,000 customers in 423 communities and rural areas in 50,000 square miles of western Minnesota, eastern North Dakota, and northeastern South Dakota. More than 60,000 of those customers are located in Minnesota, another nearly 57,000 reside in North Dakota, and the remaining nearly 12,000 18

December 2010

(continued on page 20)

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Prairie Business

COMPANY PROFILE - OTTER TAIL

(continued from page 18)

(Reattaching power lines)

energy resource plan, adding 180 megawatts of wind energy within the last five years. In its most recent integrated resource plan filed in 2010 to cover the next 15 years, Otter Tail identifies adding 213 megawatts of natural gas peaking capacity, 70 megawatts of energy efficiency and demand response, and 50 megawatts of wind generation. MacFarlane says that in 2004 North Dakota and South Dakota had 5,500 megawatts of coal generation. “In the last five years, 2,000 megawatts of wind have been added,” he states. “The major trend in the region is adding renewable energy to the existing fossil-based fuels. Wind is intermittent, and utilities are learning to efficiently integrate those resources while maintaining system reliability.” Otter Tail Power Company operates two coal-fired power plants that it co-owns with other utilities—the 475-megawatt Big Stone Plant near Milbank, SD, and the 414-megawatt Coyote Station is near Beulah, ND. The company also owns and operates a 129-megawatt coal-fired power plant in Fergus Falls, MN, called Hoot Lake Plant, six small hydroelectric plants in Minnesota, and combustion turbine peaking units in Jamestown, ND; Lake Preston, SD; and Solway, MN. Moving electricity from power plants to loads requires expertise in another part of the utility business: transmission. Otter Tail Power Company participates in CapX2020, a named derived from “capacity expansion by the year 2020.” This is the effort of 11 transmission-owning utilities in the region to expand the electric transmission grid to ensure continued reliable service. Planning studies show that customer demand for electricity is expected to increase between 4,000 and 6,000 megawatts by 2020, which is more than the current transmission grid can handle. The new transmission lines will be designed to meet this increased demand as well as to support renewable energy development.

ENVIRONMENTAL STEWARDSHIP IMPORTANT Otter Tail supports cost-effective wind energy development and is ahead of milestones set in a Minnesota renewable energy standard to provide 25 percent of the electricity sold to Minnesota customers from renewable sources by 2025. The company also is ahead of North Dakota and South Dakota voluntary objectives to provide 10 percent renewable energy to customers by 2015. To help meet those needs, Otter Tail Power Company owns 40.5 megawatts of wind energy at the Langdon Wind Energy Center in northeastern North Dakota, 48 megawatts of wind energy at the Ashtabula Wind Center in east-central North Dakota, and 49.5 megawatts at the Luverne Wind Farm, which is near Lake Ashtabula. The company also has purchased an additional 20 megawatts of output from the Langdon Wind Energy Center and 21 megawatts at North Dakota Wind II near Edgeley, ND. In its 2009 Wind Technologies Market Report, the U. S. Department of Energy ranked Otter Tail fourth in the nation in the percentage of electric plant invested in wind energy. Demand-side management and energy efficiency also plays an 20

December 2010

(Resetting poles during a winter storm)

important environmental and economic role. Between now and 2020, demand-side management will account for almost 14 percent of the company’s resource acquisitions. Demand-side management programs encourage customers to partner with the company to reduce heating, cooling, and water heating system use during periods of peak energy demand. About one third of Otter Tail Power Company customers participate in demand-side management programs in exchange for lower rates, ranking Otter Tail among the top utilities nationally in the level of customer participation in demand-response programs. Through its energy efficiency programs, Otter Tail Power Company has helped customers conserve 381 megawatts of demand and more than 1.77 million cumulative megawatt-hours of electricity since 1992. That’s roughly equivalent to the amount of electricity 137,000 homes would use in a year.

A CHALLENGING FUTURE The company’s main challenges involve permitting power plants and transmission lines, addressing changing environmental regulation, and managing increasing customer costs. MacFarlane says that uncertainty and changes will come with emissions regulation. “There is a lot of talk about cap and trade, and there are a lot of rules being propagated under the existing Clean Air Act,” he explains. That also leads to uncertainty on generation. “Any change generally comes with a cost,” MacFarlane adds. “If we had better national energy policy direction, it would be easier. But there is no guarantee that policy will be forthcoming, so we must remain flexible.” Despite the challenges, MacFarlane says the company works to minimize the impact on the customer. MacFarlane states that the company has scored high on satisfaction surveys. To do that the company has to keep prices low as possible, remain reliable and dependable, have knowledgeable people to answer customer questions, and be sure that bill statements are correct. In 2009, the commercial load dropped by 15 percent because of the recession. However, MacFarlane states, this region fared better than other parts of the country. Load growth is starting to rebound,” says MacFarlane. “We are seeing a steady, progressive improvement in the commercial and industrial areas.”

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Prairie Business

Entrepreneurs are at forefront of innovation By Alan Van Ormer t is possible that entrepreneurs are at the forefront of innovation because they tend to see the world around them differently. Bruce Gjovig, Entrepreneur Coach and CEO of the University of North Dakota Center for Innovation in Grand Forks, ND, states that ideas, innovation, and entrepreneurship have been the backbone of America’s economic success since the frontier days. “Our brightest business successes are not from outsiders coming to bring branch offices to North Dakota, but North Dakotans building business success around innovation creating viable and valuable ventures in agricultural, energy, finance, manufacturing, and technology,” he says. “Entrepreneurs and business leaders have a high appreciation for the advantages of innovation and reinvention to save or grow the company through a competitive advantage. It is only through innovation that real economic growth occurs, as resources are made more productive, which creates wealth for the owners, new jobs are created, and society benefits.” Mark Luecke, Managing Director and Chief Executive Officer for South Dakota Innovation Partners in Brookings, SD, says that new ideas are the fuel for knowledge-based economic development, which leads to higher-paying jobs and wealth creation throughout the region. “The best new ideas are disruptive in the market, completely changing the way the market operates to be significantly more efficient,” he explains. “A good new idea will solve a market problem. This is one of the first questions that a potential investor will ask an inventor – what does your idea solve in the market?” Entrepreneurship and innovation work together. Innovation is the concept or the new way of thinking or doing something. Entrepreneurship is the act of making innovation happen. “The essential element of entrepreneurship is the human talent required to take on the risk of innovation, which is usually something that hasn’t been done before, and its execution,” Luecke states. Gjovig adds that innovation may occur in old (corporate) or new (entrepreneurial) companies as well as in nonprofit or governmental entities, while entrepreneurship is the ability to start and grow ventures that incorporate innovation for a competitive advantage. “There is very little entrepreneurship without innovation, but there is some innovation without entrepreneurs,” he says.

December 2010

Business success often hinges on innovation, but many entrepreneurial opportunities don’t hinge on innovation. Luecke agrees with that comment. “There are a number of entrepreneurial opportunities in our region and around the world that do not require innovation,” he states. “However, entrepreneurship requires human talent accepting risk and executing to be successful. Successful entrepreneurs understand that being innovative will lower execution risk and increase the opportunities for success.” Talent is one reason entrepreneurs are at the forefront of innovation. “Successful entrepreneurs have an ability to see things before they happen,” Luecke says. “They anticipate the direction of the market and then work equally hard to manage that direction with innovative concepts.” Another aspect is necessity. “Entrepreneurs understand that to be successful, they have to be innovative and adaptive to their environment, including their use of resources to accomplish an objective,” he states. “These lessons provide invaluable experience to a serial entrepreneur.” A third reason is that entrepreneurs think about opportunity all the time and how to capture it. “That opportunity comes from solving problems, meeting unmet needs, and innovation to capture on opportunity – often offering us something we did not know we wanted,” Gjovig explains. “Entrepreneurs live in the future while in the present.” Innovation by nature is a high risk, potentially high return endeavor that is difficult to manage or predict, and by nature is fundamentally uncertain, Gjovig says. “Not every new idea or invention is a worthy innovation,” he states. “However, innovation is worth the risk since innovation creates value for users and valuable competitive advantage for their owner or producer, as well as provides the economic rewards. Through innovation, a venture may catch up if they are behind, or take the lead. Adapting to innovative change is the only way to survive.”

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COVER STORY -

By Alan Van Ormer

40-under-40: Business leaders that are making it happen or the past three months, Prairie Business magazine has received information from our readers in North Dakota, South Dakota, and western Minnesota nominating business leaders for our 40-under-40 section in the December issue. It started in 2008 honoring the region’s best and brightest. And like those first two issues, there were many qualified people to choose from. In fact, the Prairie Business magazine staff received more than 100 submissions. After browsing through many incredible submissions, here are the young leaders that were selected for this third annual celebration of 40 of the top business professionals under the age of 40:

Jeff Olson (33) PGA, Head Professional Golf Thumper Pond, Otter Tail, MN

Eric Carlson (39) Chief Financial Officer/ Executive Vice President Alerus Financial, Grand Forks, ND

Along with serving as president of the Dakota Chapter of the Minnesota Section of the PGA, Olson has been awarded Teacher of the Year in 2009 and Facility Promoter of the Year in 2010 from the Dakota Chapter PGA. He has worked in the golf business since he was 16 starting as a driving range worker, helping with junior programs, and becoming head golf professional with PGA member status. Jeff has also finished in the top 40 for player of the year points for the Minnesota Section PGA.

As Chief Financial Officer, Eric is responsible for the financial health of the organization and plays an important role in developing strategic plans for the short, medium, and long-term growth of Alerus Financial. He also develops the budgets for all entities that make up Alerus Financial Corporation and works with other members of the senior management team to develop the strategies to ensure goals are met. Eric received his bachelor’s degree in Business Administration from North Dakota State University in 1989. In 1994, he earned his MBA from NDSU.

Alex Warner (36) CEO/Founder Pedigree Technologies, Fargo, ND Alex is a wireless technology and marketing professional, M2M advocate, and online software service proponent. Before Pedigree Technologies, he was a Strategic Account Manager for a major vender of Microsoft’s ERP division, helping pioneer that account into a new business division that evolved into one of the largest accounts in the company’s 36-year history. Alex has a diverse background in technical operations, technical sales, and consulting for data communication and networking services. He has also held sales positions for Competitive Local Exchange Carrier, McCleod USA.

Nathan Reede (38) President/CEO Upper Plains Contracting, Inc., Aberdeen, SD Nathan is the President and CEO of a heavy highway construction company with job projects in seven states in the Midwest. In 2001, he was named vice president of Upper Plains Contracting, Inc, and then in 2007 became President and CEO. He is the current Vice President of the Associated General Contractors of South Dakota, has served on the Board of Directors for the National ACPA, is current Vice President and board member of the Heartland Group, and was past Chairman of the South Dakota American Concrete Paving Association, and past Vice Chairman of the North Dakota Paving Association.

Katie Anderson (29) Mayor, Jamestown, ND Besides being mayor of Jamestown, Katie is also the owner of Martinizing Dry Cleaning and is a real estate agent for Dardis Realty. As mayor of the community, she is involved with many committees including but not limited to the Chamber of Commerce Ambassadors. She also sings at different events and weddings in the area. Katie graduated from Jamestown High School in 1998 and then from South Dakota State University in Brookings, SD with a bachelor’s degree in Political Science.

Sara Bovil (27) Owner Blooms-N-Lattes, Beresford, SD Sara is not only the owner of the BloomsN-Lattes in Beresford, she is also the Beresford Chamber President. Blooms-N-Lattes carry a wide variety of unique gifts, cards, children’s gifts, coffees, lattes, and serve a variety of meal options and also have a flower arrangement. Sara was a key player in Beresford’s first annual Wheels & Squeals celebration that included a barbecue contest, bands, family events, and car show-n-shine. Sara and another business owner in Beresford have started a farmer’s market at their business complex.

Cory Vaughn (32) Electrical Engineer EAPC Architects Engineers, Bemidji, MN Cory is registered to practice engineering in North Dakota, Minnesota, Montana, Kansas, Iowa, and Missouri. He is a graduate of the University of North Dakota, receiving his Bachelor of Science degree in Electrical Engineering in 2001. He started with EAPC in the Bemidji office in 2005. Some of Cory’s recent projects include multiple accessible and elderly housing complexes around the region including an 81-unit, 3-story apartment building for the elderly in Fargo. He has also worked on a variety of roadway and trail lighting projects including the Bemidji City/Skate Park. (continued on page 26)

Month 0000 December 2010

(continued from page 24)

Lance Yanish (31) Owner Yanish Custom Exteriors, Bismarck, ND

Tom Hurlbert (33) AIA, LEED AP/Principal, Owner hula design/build, Offices in Aberdeen/Sioux Falls

Eric C. Dodds (33) Operations Manager (AE2S) Advanced Engineering and Environmental Services, Inc. Fargo, ND/Moorhead, MN

Lance decided to pursue an opportunity to run his own business starting Yanish Custom Exteriors with his partner, Michael Krumwiede. At the start there was one window installer and one siding crew. Now, the business employs one office manager, one sales person, and several installation crews. After becoming a licensed farrier, Lance later went on to receive an associate degree in 2002 from the North Dakota State School of Science’s Construction Management Technology program. He has worked as an installer and as a sales person for siding and window companies.

Tom founded hula design/build in 2008 with an idea that the Upper Plains should create more meaningful architecture. His design experience with various firms and background in construction has created a recipe for thoughtfully designed projects. Hula is engaged in traditional design-bid-build, design-build, general contracting, and developing. Project types include; elementary/post-secondary education, office, hospitality, retail, residential and preservation. Previously he has worked for architectural firms in New York City and Sioux Falls. Among his hobbies, Tom co-hosts a public radio show and is currently building his own office furniture.

Eric handles the operations for both the Fargo office and Moorhead, MN office for AE2S; currently leading a staff of 18 people. He provides project management, facility and master planning, regulatory evaluation, and preliminary design services for water and wastewater systems projects throughout the Midwest. At 30, he became the youngest shareholder at the company. Eric is a registered Professional Engineer in Minnesota, North Dakota, and South Dakota. He has a Bachelor of Science degree in Civil Engineering and a Master of Science degree in Environmental Engineering; both from North Dakota State University.

Jason Schuler (34) Sales Manager Giant Seeds, Wahpeton, ND

Chad Coauette (36) Vice President Customized Training Alexandria Technical College Alexandria, MN

Dusty Johnson (34) Chairman, PUC Commissioner Public Utilities Commission, State of South Dakota,Pierre, SD

Jason, along with his brother, Robert, led the Giant Seeds sales and marketing efforts and increased sales dramatically to require Giant Sunflower Seeds to build a new processing facility that had its grand opening earlier this year. Giant Seeds is the number one sunflower seed in Minnesota, Wisconsin, North Dakota, South Dakota, and Iowa, as well as the official seed of the Minnesota Twins and Colorado Rockies. The seeds are now sold in 32 states and there are more than 100 distributors.

As the Dean of Customized Training, Chad oversees seven Customized Training reps who are charged with providing high quality training and educational services to business and industry. The mission is to provide customer centered, industry driven workforce solutions through dedicated people focused on providing services that exceed customer expectations and provide exceptional value. He is also involved with many community and state organizations. He received a Bachelor of Science degree in Industrial Technology, a Master of Science in Industrial Technology, and a Doctorate of Philosophy; all from the University of North Dakota.

Brian Jennings (39) Executive Vice President American Coalition for Ethanol, Sioux Falls, SD

Marne Neiger (29) Electrical Engineer Bobcat CompanyDoosan Infracore Const. Equip. Gwinner, ND

As the Executive Vice President of for the American Coalition of Ethanol, Brian manages legislative, market development, public relations, and advocacy strategies on behalf of nearly 1,500 ethanol producers, farm and commodity groups, businesses, and individuals that comprise ACE’s grassroots coalition of ethanol supporters. He has played a leading role in U. S. agricultural and energy policy issues for more than 10 years, including service on Capitol Hill as a legislative advisor to U. S. Sen. Tim Johnson and as a lobbyist with the South Dakota Farmers Union. 26

December 2010

In her job as an electrical engineer with Bobcat Company, and for the past four years, Marne has designed electrical systems on the skid steer and compact track loaders. She enjoys working on a new product development program where she can see a program go from initial concept through the development phase and eventually seeing it working for customers on job sites. She received her MBA with a project management specialization from Capella University, an online university based in Minneapolis, MN.

Dusty was elected statewide to the Public Utilities Commission in November 2004. He currently serves as commission’s chairman since 2007. Since joining the commission, Dusty has worked hard to develop renewable energy resources, expand broadband and wireless phone capabilities, keep utility rates low, and protect consumers. He attended both the University of South Dakota and the University of Kansas. Dusty has been a small businessman, worked for the U. S. Department of Agriculture in Washington, D. C., and served as the senior policy advisor in charge of transportation, economic development, and energy issues for Gov. Mike Rounds.

Bradley S. Woerner (37) Director of Agricultural Engineering Eisenbraun & Associates, Inc., Yankton, SD Brad joined the staff of Eisenbraun & Associates as a project manager in 2002. In 2007, he became a Principal in the firm where he now serves as the Director of Agricultural Engineering Services working with farmers, livestock producers, state and local government agencies in air and water quality, environmental permitting and design of livestock production facilities, wastewater facility design and management, grain storage, drying and handling facilities and nutrient management planning. Brad graduated from Iowa State University with a Bachelor of Science degree and a master’s degree in Agricultural Engineering. (continued on page 30)

Prairie Business

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Kathy Dobson (38) Social Services Director Lakewood Health System, Staples, MN

Amanda Bentow (29) Director of Wellness Operations University of North Dakota Wellness Center, Grand Forks, ND

Tanya Vachal (35) Office Manager Job Service North Dakota (Williston Office), Williston, ND

Since joining Lakewood Health System 14 years ago, Kathy has helped grow the social work department from her part-time position to eight full-time social workers that function in care center and senior services, hospital and acute care, outpatient services and infusion therapy, emergency department, clinic services/medical home/palliative care, and home health and hospice. Kathy has a bachelor’s degree in Social Work and is professionally licensed by the Minnesota Board of Social Work. She belongs to the Minnesota Nursing Home Social Worker Association and is a member of a Hospital Social Work group from the central Minnesota region.

Amanda is essentially the “CEO” of the Wellness Center directing a staff of more than 140 full-time and part-time employees including UND students. She has been at the facility since it started in 2006, becoming the Director in March 2009. Amanda continues to grow and develop it into one of the premier university wellness facilities in the state. She is also the President of the Greater Grand Forks Young Professionals organization and was instrumental in developing the organization’s mission, goals, and vision statements, as well as initiating a new workforce initiative working to attract and retain young talent.

After working for several years for the housing authority in Grand Forks, Tanya returned home to Williston to take on the management position at the Job Service Williston Office. She oversees four people in her office and has been instrumental in addressing the workforce needs in the area. Her office handles on average almost 1,200 job openings and has hosted more than 14 individual job fairs in the past year. Tanya is also an active member in the Williston Young Professionals organization.

Derek Walters (34) Communications/Outreach Manager Energy & Environmental Research Center (EERC), Grand Forks, ND As the Communications and Outreach Manager, Derek is responsible for planning, development, and implementation of all external communications and public relations. He also develops marketing plans, organizes press conferences, and oversees the management of the EERC’s public web site and all other online properties. Under his Derek’s direction, EERC has boosted its media coverage by 208 percent in FY 2009 and the EERC was covered in more than 1,700 publications and media outlets in all 50 states and 18 countries. He received his bachelor’s degree in Communications with an emphasis on Broadcast Journalism from the University of North Dakota.

Shane Johnson (34) Vice President-Branch Administrator Bremer Bank, Willmar, MN In 2009, Shane ranked fourth overall for Eastern Region Sales Managers within Bremer Bank. In 2008 and 2009, his retail teams exceeded overall loan production, compared to its plan, and exceeded referrals received from other business lines. He was also a Best of Bremer Sales Winner in 2002. Shane started working for Bremer Bank in 2001 as a personal banker. In 2007, he moved to the Bremer Bank Willmar branch, retaining the management of the Cash Wise location in Willmar, as well as adding the management of the new location. 30

December 2010

Joel Vockrodt (33) President Office Peeps, Watertown, SD In April 2009, Joel and his wife purchased the 51-year-old, family-owned office supplies company. Because he believes that his 30 employees or “peeps” are the heart and soul, brains and brawn, meat and potatoes of the company, he updated the name and look of the brand from Office Systems, Inc. to Office Peeps. The new name and branding incorporate a retro nod to the past while positioning the company for growth on a national level. Joel believes that if employees are honored and empowered, they will provide excellent customer service.

Hugh Weber (33) President/Curator Storyline, Sioux Falls, SD Storyline grew out of earlier companies sounded by Hugh that included Deep Bench, Dude to Dad, and We Discover Stories. He is recognized worldwide for his ability to make social media and innovative marketing strategies. Hugh’s work with the Ford Motor Company named Hugh a “heavy hitter” in the social media space. He attended Swarthmore College where he was a McCabe Scholar and Senior Class President while earning his degree in Political Science. Hugh also has a master’s degree in Political Management from George Mason University.

Abbey Pieper (29) Vice President, Sales Manager Madden’s on Gull Lake, Brainerd, MN Abbey became the sales manager and vice president for Madden’s on Gull Lake in 2007. Her current role at Madden’s is ever changing. She functions as the Director of Sales and Planning, occasionally becoming involved in marketing and also acting as co-vice president of the company. After her graduation from the University of Denver in 2003, Abbey worked for two years in Colorado Springs, CO at the Broadmoor Hotel at the front desk and as a conference concierge. She then transferred to the Hyatt Regency in Chicago where she spent two years as a meeting concierge manager and sales representative.

Mike Jerstad (39) Managing Principal PrairieGold Venture Partners, Sioux Falls, SD As a partner at PrairieGold Venture Partners, Mike oversees all aspects of the firm’s investment activities including sourcing, structuring, negotiating investments, and serving as a board member for portfolio companies. He focuses on life sciences opportunities and represents PrairieGold on the boards of Grand Prairie Foods, Chronix Biomedical, PetMedicus Labs, Orasi Medical, and LineaGen. Mike also served as an attorney at Briggs and Morgan in Minneapolis specializing in business, litigation, employment law, and contracts. He received his Bachelor of Arts degree from Tufts University, his Juris Doctor degree from Georgetown University, and his MBA from the University of Chicago. (continued on page 32)

Prairie Business

(continued from page 30)

Matt Gage (35) Project Manager, Co-Founder, Gage eServices, LLC Sioux Falls, SD

Fred Selensky (38) Controller, National Information Solutions Cooperative (NISC), Mandan, ND

Kelly Hubrig (30) Branch Manager/ Financial Services Investment Officer Bank of the West, Lidgerwood, ND

Matt currently runs the day-to-day operations of the company and acts as Project Manager. Since 2005, Gage eServices has experienced double digit growth each year and now provides hosting and design services along with online marketing strategy for companies of all sizes across the United States. He studied Information Systems at Dakota State University in Madison, SD, and Business Management at South East Technical Institute in Sioux Falls. Matt has served on the Board of Directors for the Sioux Falls Noon Sertoma Club and The Sertoma Butterfly House in Sioux Falls.

Fred has been at NISC since 1995 after receiving his undergraduate degree at the University of Mary; being first assigned to support, train, and install accounting software products at customer offices throughout the United States. He took over as Controller in 2001 becoming responsible for the accounting functions within the organization including financial statement reporting, payroll, accounts receivable, and accounts payable. Fred also manages the budget process for NISC’s $110 million budget. He has grown professionally during his tenure at NISC attaining his master’s degree in Business Administration and becoming a Certified Public Accountant.

Kelly has been a registered representative with the company’s brokerage firm for six years producing more than $100,000 in gross dealer concession in each of the past six years. Only one registered representative has achieved this over the same period. There are more than 125 representatives in the program. In 2008, Kelly took over branch manager responsibilities. He also has qualified for the BancWest Investments Services National Sales Conference in 2005, 2006 and 2009. Kelly has also been awarded Circle of Excellence from Bank of West.

Laura Anderson (26) Director, Convention and Visitors Bureau and United Way, Thief River Falls, MN Laura is in a unique position of leading two organizations. Not only is she the lone person running those organizations, she also works under two separate board of directors. Working for the two also provides Laura an opportunity to give back to the Thief River Falls community. She is also incorporating social marketing into the community’s marketing efforts trying to bring a more contemporary approach to the organization. Laura graduated in 2007 with a Communications major from the University of North Dakota.

Scott Russell (38) Executive Vice President and Chief Strategy Officer Cloverdale Foods Company, Mandan, ND Scott is part of a manufacturer that specializes in producing high quality processed meats that are distributed throughout the Midwest and western United States. Drawing from knowledge earned through a career background in the food industry, he leads several key areas including production and operations. After graduating from Cornell College in Mount Vernon, IA, with an Economics degree, Scott pursued his passion of being in the restaurant business. After returning three years later in the sales department, he was promoted to Director of Sales and Marketing. 32

December 2010

Dustin Floyd (29) President/CEO, TDG Communications, Deadwood, SD TDG Communications is a full-service advertising and public relations firm that provides a niche in social media and online marketing for tourism clients in South Dakota and Illinois. Dustin is a fifth-generation South Dakotan who studied at Oxford University before graduating from Coe College in Cedar Rapids, IA. He started as a copywriter and media relations specialist, became a partner in 2007, and was named President in 2009. Dustin and partner Monte Amende, TDG’s creative director, and the company’s 16-person staff now serve clients in Colorado, Illinois, Florida, Oregon, California, and South Dakota.

Dustin Pratt (24) President, Solid Rock Clothing, Vermillion, SD Dustin is founder and president of Solid Rock Clothing, a start-up company that makes eco-friendly, dry-wicking t-shirts for outdoor enthusiasts. He encourages others in his role as a teaching assistant for entrepreneurship courses at the University of South Dakota as he pursues his MBA. He has received the South Dakota Board of Regents Outstanding Leadership Award, the Governor’s Giant Vision award, earned a Sales and Marketing Executives, Inc. scholarship, and was one of South Dakota’ first Innovation Fellows.

Rebecca Jirava (34) Human Resources Manager, 3M, Aberdeen, SD Rebecca provides human resources leadership for 650 employees at 3M’s manufacturing operation in Aberdeen. She consults with the leadership team to set strategic direction and operating plans, develop and implement employee engagement, hiring, leadership development, training, performance management, organizational effectiveness, and reward strategies. She has a Bachelor of Science degree in Psychology with a minor in Business Administration from North Dakota State University and a Master of Arts in Human Resources and Industrial Relations from the University of Minnesota, Carlson School of Management.

Kayla Shafer (29) Corporate Marketing Coordinator, Kadrmas, Lee & Jackson, Bismarck, ND In five years, Kayla has moved through the company as a Communications Specialist, then transitioning into government affairs, and now assisting in the development of a new division, corporate marketing. In 2010, she worked with clients to secure more than $102 million in economic stimulus funding that will develop infrastructures in rural areas of the Upper Great Plains. After attending Washington State University, Kayla returned to North Dakota and has been actively involved in projects that enhance the quality of life to retain the community’s youth.

Jeff Scheel (35) Vice President/Market Manager Home Federal Bank, Aberdeen, SD

Michael Chambers (36) President/CEO Aldevron, LLC, Fargo, ND

Two years after joining Home Federal Bank in 2003, Jeff was named Vice President/Market Manager. He also earned the distinction of being the Best Overall Performer in his job function and has been nominated for the bank’s Community Service Award. Jeff is a strong advocate for local community outreach and development that includes leadership roles in the Northern State University Foundation Board of Trustees, Bethlehem Lutheran Church, Leadership Aberdeen, Junior Achievement, Hub Area Habitat for Humanity, North Eastern Work and Technical Education Center, Aberdeen Housing Task Force, and Aberdeen Home Builders Association.

Michael is President and CEO of a company that offers products and services to the DNA vaccine and gene therapy community. The company employs 80 people and works with 1,000 research groups around the world including government, academic, and industrial laboratories. The company initially focused on contract manufacturing, products and services related to gene therapy and DNA vaccine technologies. Michael, along with James Ballantyne, founded the company in 1998. He also serves on the board of the North Dakota State University Research Foundation and the NDSU Research and Technology Park.

Jeff Ackerson (39) President/CEO Vinylite Windows, Fergus Falls, MN

Michael Raum (35) Vogel Law Firm, Fargo, ND

As the President and CEO of Vinylite Windows, Jeff is responsible for strategic planning, oversight of sales, marketing, finances, production, human resources, engineering, logistics, and service. Prior to coming to Vinylite Windows in 2007, he spent 12 years at Pella Corporation in a variety of capacities that included engineering and plant management. Jeff has a Bachelor of Science degree in Mechanical Engineering from North Dakota State University and an MBA from Drake University. He is also serving on the Fergus Falls Economic Improvement Commission Board of Directors.

Steve Stickelmyer (32) President/Owner Tel Serv Communications, Aberdeen, SD Steve, who grew up in Eureka, SD and graduated from Eureka High School, started Tel Serv Communications in 2004 with a mission to partner with and revolutionize businesses through the use of innovative technology and to be a think tank for businesses to help them meet their goals and objectives. The company, comprised of 14 employees, specializes in outsourced managed IT service, IP telephone systems, and structure data cabling in the northeast region of South Dakota.

In 2007, Michael returned to North Dakota and joined the Vogel Law Firm. He concentrates his practice on advising businesses, commercial transactions, tax controversy, and commercial litigation. He represents several rural agricultural cooperatives in various industries, as well as several rural utility services. Michael graduated from Concordia College in Moorhead, MN in 1997, and then the University of North Dakota School of Law in 2000. He has also worked for the United States Department of Justice, Tax Division, from 2002-2007 in Washington, D. C.

((('&%*")+"*,#+',!$

Hunter Roberts (31) Energy Policy Director State of South Dakota, Pierre, SD In his role as Energy Policy Director, Hunter serves as a liaison on behalf of the governor and department secretary to energy groups and recommends state actions and policies. Since he started in the department, South Dakota has over $2.5 billion of capital investment in energy projects that have been constructed or are under construction. He is responsible for the South Dakota Ethanol Blender Pump Incentive Grant program. He received his bachelor’s, master’s and Juris Doctor degrees from the University of South Dakota in Vermillion. Prairie Business

COMMUNITY PROFILE - WAHPETON/BRECKENRIDGE

Building TWO communities

By Alan Van Ormer t was almost five years ago that the two chamber groups in Wahpeton, ND, and Breckenridge, MN, combined to jointly market retail programs in the communities along the Red River. “It makes sense to the point that we shop here and live in both communities,” says Jim Oliver, Executive Director of the WahpetonBreckenridge Chamber of Commerce. “We are one community. Both have to have viable and strong businesses.” Breckenridge Mayor Clifford Barth states that it has been good that the two communities are working together. “Cooperation between the two communities has been great,” he says. “It is very important that we both show support for each other.” Wahpeton Mayor Jim Sturdevant adds that it has been a good marriage for both communities. “We both have the same goals to develop our community and make it more attractive for businesses and for citizens to live in and to visit,” he says. Both communities are located along the Red River. Breckenridge has a population of more than 3,500 people, while Wahpeton is more than 8,000 people. Breckenridge is the county seat of Wilkin County in Minnesota and Wahpeton is the county seat of Richland County in North Dakota.

(Minn-Dak Farmers Cooperative. Photo courtesy of Brad Waldera)

The Port Authority also owns commercial rental property, some of which is designated for start up businesses. For example, Rick’s Paint and Body operated for several years from a Breckenridge Port Authority rental and Rick Busko purchased his own building last year. The space that Rick’s Paint and Body was renting is now rented to Dahm & Sons V-Twin Repair. Matz says there have also been several temporary occupants of other space the Breckenridge Port Authority has. “In summary, the start up business has not been fast moving but there has been enough activity to call it successful,” Matz says. Wahpeton recently started a Comprehensive Plan process that will have an updated study in 10 months to help with the community’s vision paying close attention to senior needs, while also planning for amenities that attract young families. Two major projects have helped Wahpeton continue to flourish. One involved JC Penney Company. The City of Wahpeton and Wahpeton Community Development Corporation worked to purchase

DEVELOPING COMMUNITIES While both communities have their own economic development groups, they also collaborate on various projects. The Breckenridge Port Authority was formed in 1985 and works with economic development for the community. One main activity is to acquire land and develop it for residential housing. “The Breckenridge Port Authority has been successful in developing land for housing and continues to look for more opportunities to develop land for residential housing,” says Michael Matz, President of the Breckenridge Port Authority. “Breckenridge continues to have a future in residential development activity. Agriculture supports a significant part of the business activity in Breckenridge.” 34 Month 0000 34

Month 0000 December 2010

Jim Sturdevant, Mayor, Wahpeton

Michael Matz, President, Breckenridge Port Authority

almost half a city block of buildings downtown to retain the store and its employees. In addition, three large industrial buildings along the 210 bypass would be vacated by the end of 2008. The former Imation Corp. Campus had employed up to 400 people when they announced their exit plans. The goal was to recruit three companies to fill the buildings that had at least 150 jobs each. Today, two buildings house ComDel Innovation and 160 employees. Another is being leased to Bobcat Rick Steckler, President, (Doosan) and 80 employees. Wahpeton Development Corporation. Rick Steckler, President, Wahpeton Development Corporation, says the future is looking bright in Wahpeton. “Things are pretty stable here,” he says. “As the economy turns around Wahpeton-Breckenridge will be ahead of the game because of our strong agricultural economy and the fact we did not experience a significant downturn in our local economy.”

DAKOTA AVENUE PROJECT BENEFITS BOTH COMMUNITIES While Breckenridge and Wahpeton each have their own identities, both are working on implementing a joint professional downtown study and a housing study. Another project that has benefited both communities is a $9.9 million

complete refurbishing of Dakota Avenue in Wahpeton almost a mile in length from 12th Street to the Red River. Oliver states that the hope is that this project will help with retail growth and make the downtown strong. “The programs that the city has put in place for storefronts definitely makes people more interested and excited about having space downtown,” he explains. Barth said the project certainly benefits both towns. “Any time you can keep streets in good condition, it definitely is a plus,” he says. “It is going to help business when you have a nice wide street and room to park.” The Dakota Avenue Street construction project had a significant impact on the Wahpeton community, says Dan Reilly, Consultant for the Small Business Development Center.

(Horton Hall. Photo courtesy NDSCS)

(Aquatic Center)

BLUE COLLAR WORKERS

white picket fences. WE L C O M E T O N O RT H D A K O TA’ S M O S T I N D U S T R I A L C I T Y

And we’re proud of it. More than 8,000 residents call Wahpeton home and over 1,000 commute to our small city every day. Our impressive industrial sector supports a variety of professional, educational, medical and retail careers. Wahpeton is a city built by hand and filled with heart.

when you see what we see,

you’ll know why

we live here.

Prairie Business

(Golfing. Photo courtesy of Chris DeVries)

(Youth at a City Council meeting.)

(Autumn on the Red. Photo courtesy of Dr. Duane Strand)

Reilly works with small business development in the Wahpeton area. “There is a concerted effort with the city, county and private businesses to work together to improve the quality of the business structures in town,” Reilly states. “Retail is the engine that drives any small town. You can’t have manufacturing without strong retail. You can’t have strong retail without manufacturing.”

A STRONG MANUFACTURING CORE For many years, Wahpeton had more manufacturing jobs per capita than any other city in North Dakota, but that has declined in the last 10 years. However, manufacturing is still a key component to how Wahpeton functions economically. Manufacturing, as well as higher education and agriculture have the most impact on the community in jobs and careers. That is followed closely by energy and technology. Manufacturing has faced many challenges over the last three years, with the past three years hitting particularly hard in the region. As 2010 nears an end, leaders are seeing some signs that things may be slowly turning in a positive direction. “We’re hopeful as the economy continues to recover we will build on the foundation we have established and set the stage for growth,” says Jim Albrecht, President of ComDel Innovation. The name ComDel Innovation is derived from the first three letters of the words commit and deliver, along with the team’s demonstrated ability to provide innovation for their customers. ComDel Innovation provides new product development and manufacturing services for customers in commercial, medical, and government market segments. The technology foundation available to ComDel Innovation customers includes precision machining, injection molding, metal stamping, assembly operations, and metal finishing services. The offerings associated with these technologies are vertically integrated under one roof providing significant benefits to customers around the world. Three years ago, ComDel Innovation started with 60 employees. Today, that number has grown to 160 workers. Dec. 1 is the three year anniversary of the company. One company, WCCO Belting, the nation’s largest manufacturer of rubber conveyor belting specifically used in agricultural equipment in the world, has seen its best two years in its history. In fact, the company has doubled the size of its workforce. “It is primarily a result of the ag economy being countercyclical to the rest of the economy,” says Thomas D. Shorma, CEO/President of WCCO Belting, Inc. “Typically, when others have been down we have seen the ag economy become stronger. That in combination with new technology in the industry, we have had two very good years.” The manufacturing company has been a steady business influence on the community since 1954. Recently, it was awarded the President’s ‘E’ Award for export growth. The company ships products to 20 companies and generates more than 60 percent of its total revenues from customers located outside of the United States. There are 150 employees in Wahpeton and another 35 located in Texas. 36

December 2010

(Headwaters)

AG ALWAYS AN IMPORTANT PIECE RDO Equipment, the local John Deere dealer, continues to expand its presence in the community. A 25,000 square foot addition is slated to be completed in early 2011 that would allow the company to serve larger equipment efficiently. RDO Equipment is a John Deere ag and retail dealer that services the southern Redwood River Valley. It is one of 54 stores in the United States. Store Manager Joel Kaczynski says that the last expansion was 20 years ago and this last expansion was needed because equipment continues to get larger and the store had outgrown its capacity. The expansion will also allow RDO Equipment to hire up to six more employees. “Agriculture is huge in this community,” Kaczynski explains. “It is the number one economic driver of this community. We are fortunate that what has happened around the country has not impacted us.” In fact, Kaczynski adds that 2010 has been one of the better years for crop production. “The crops have been decent. The markets have been

(continued on page 38)

Research and Development at SEEDS 2000速, Inc. Research and development of sunflower hybrids has been the backbone for the success of SEEDS 2000 and the motivation for leadership in introducing seeds with market leading technology.

Benefits of SEEDS 2000 - Situated in the heart of the sunflower production area of ND, SD, and MN - Develop sunflower varieties that are well adapted to northern production zones - One of the only independent sunflower breeding programs - Dedicated to developing unique sunflower hybrids

Research and Breeding at SEEDS 2000 - Three sunflower breeders - Combined experience of nearly 75 years in the industry - Dr. Gary Fick, one of the founders of SEEDS 2000, specializes in confections and specialty corn - Dr. Pat Duhigg, who has a long history of breeding sunflowers, focused on oilseed hybrids - Dr. Fabio Pedraza-Garcia, expert in marker assisted breeding - Developing new parent material and hybrids for most segments of the sunflower - Ability and desire to develop hybrids for segments considered too small by larger corporate breeding programs

Screening and Technology at SEEDS 2000 - Screen thousands of lines from which to develop hybrids - Have a long-standing collaboration with sunflower processors and researchers - We develop hybrids with traits that are preferred by processors and consumers - Market leading technology in the seed - Introducing several new products to the market in the next few years. - Rapid introduction of new products and technology - Focus on regional agronomics that provides farmers with the knowledge and products for optimum yields

New Products Coming Soon From SEEDS 2000 - Sunflower hybrids with new genes for multiple race resistance for downy mildew resistance - High oil and confectionery products with herbicide tolerant traits - New seed treatment packages for sunflower for expanded disease, insect and stress tolerance - Clearfield Plus速 for confection and oilseed hybrids

SEEDS 2000 P. O. Box 200 115 3rd Street North Breckenridge, MN 56520 www.seeds2000.net

Technology in your seed.

Prairie Business

decent,” he says. “This year has been a more normal fall harvest.”

COLLEGE HAS STRONG WORKING RELATIONSHIP WITH COMMUNITIES The North Dakota State College of Science is one of the educational components that helps the two communities thrive. The two-year college has historically been associated with Wahpeton and Breckenridge since 1903. Now, it offers three components – Career and Technology Education programs, transfer programs, and workforce training across the state of Dr. John Richman, President, North Dakota. North Dakota State College of Science “We really see ourselves as a state (continued from page 36) agency graduating and placing students in the state,” says Dr. John Richman, President of the College. “We are listening to their workforce needs providing customized, short-term training that an employee might have.” More than 2,800 students attend the 125-acre campus with 38 buildings, including a $5.7 million renovation of Horton Hall, which is one of the largest instructional facilities on campus. There are 300 fulltime and 300 part-time employees. One of the largest challenges is with the heavy emphasis in career and technological education, the school requires 8-10 times more resources than the college’s transfer programs. This includes physical space, equipment, the cost of training, and remaining certified. What has helped in all aspects of the college is the strong working relationship with Breckenridge and Wahpeton. “We share resources whenever possible,” Richman explains. “We look for partnerships and collaboration.”

ROSEWOOD ADDITION HELPING WITH HOUSING CHALLENGE

She adds that the communities expect the study to assist in making informed decisions about future housing trends, determining where the housing needs gaps are, and to follow the recommendations and findings where possible and financially feasible. Sturdevant agrees citing two projects that are currently underway. “Two developers have stepped forward to create and expand opportunities for senior housing in Wahpeton,” he says. “There are plans in the works for more units in 2011.” Housing has also been a concern in Breckenridge. Barth is hoping to retain what the community has and at least expand on it. Overall, anytime a large business comes in either Breckenridge or Wahpeton, it helps both communities, Barth states. “We’re twin towns separated by the river,” he says. “We need to work together to keep it strong on both sides of the river.”

ST. FRANCIS COMMITTED TO QUALITY HEALTHCARE Another fixture in the Breckenridge community has been the St. Francis Healthcare Campus, a critical access hospital with a 120 bed skilled care nursing home, 20-unit congregate housing complex and an outreach community clinic in Milnor, ND. St. Francis serves a multi-county area in Minnesota, North Dakota, and South Dakota. In 2005, the facility was relocated to a new 60 acre site on Highway 75 and the 210 Bypass. The hospital system offers Acute Care emergency services, intensive care unit and coronary care, medical support services, surgical services, medical wellness services, diagnostic services, home health, and other patient support services. “Jobs in healthcare provide a significant impact,” states David Nelson, President/CEO of St. Francis, adding that the healthcare facility has partnered with North Dakota State College of Science to create opportunities for individuals to further their healthcare careers. St. Francis also cooperates with local healthcare providers. Over the past few years, five family practice physicians have located to the community joining the medical staff of 20 physicians. Nelson says that recruitment of specialists continues to be included in the strategic planning efforts of the organizations. “Having a strong healthcare presence with services and programs locally allows for business growth and retention of the population base for the community,” Nelson explains. “Without the healthcare available for the industries it is hard to recruit new industries into the community. It is integral part for a community to have healthcare available. Healthcare is a drawing card to the community. With a new hospital, it shows that this community is poised and ready for what lies ahead for the communities in the future.”

It was in 2003 when the Wahpeton Community Development Corporation purchased undeveloped lots in the Rosewood Subdivision. A demand for more spacious lots and low interest rates for mortgages prompted a Phase 1 project to quickly fill. New infrastructure was added for Phase II and then the recession hit causing lot sales to slow down significantly. Between May 2003 and December 2006, 34 lots were sold. There were eight lots sold between August 2006 and December 2009. However, in 2010, activity has started to pick up gaining new jobs with continued expansion of ComDel Innovation and other businesses, as well as the addition of Bobcat. That triggered the need for a Housing Study. The last housing study was a joint effort between the two communities in 1996. The new one was completed in September with both communities participating (Upper level Horton Hall) and once again sharing the cost. “The public is demanding that public officials control what happens by eliminating blight, protecting individual investments, and generating new housing growth to meet economic development needs,” Wahpeton Economic Development Director Jane Priebe states from the study’s Jane Priebe, Director, introduction. Wahpeton Economic Development

(St. Francis Healthcare ICU)

(Carousel. Photo courtesy of Chris DeVries) (Senior Rental Unit)

December 2010

Market forces drive building energy costs down nergy consumption costs for buildings represent a significant line item expense for many companies and organizations. Over the last five years, a combination of market forces have come into play that have given facility owners new tools to drive those costs down. Among those market forces are a greater awareness of sustainable and energy efficient construction, cost reductions for higher performing HVAC materials, energy provider support and government incentives.

AWARENESS OF ENERGY EFFICIENCY The public conversation around green initiatives has reached a level where conserving energy has moved from an afterthought to the front page. Garry Black, an architect with FourFront Design, Inc and the chair of the new South Dakota Chapter of the US Green Building Council, credits the advent of high profile energy efficient buildings, and $4.00 a gallon gas as drivers of raising the public awareness of using more efficient means of heating and cooling commercial buildings. “Five years ago there weren’t that many in the general public that thought much about what could be done in the way of building energy efficiency, but today it is a subject that has become a checklist item for builders and facility managers.”

LEED ARCHITECTURE Leadership in Energy and Efficient Design (LEED) emerged to the forefront of the Dakota’s in 2005 with the construction of new high profile commercial buildings exemplified by Cherapa Place in Sioux Falls and the public attention that these buildings’ sustainable and energy efficient designs earned. Prior to 2005, there were a handful of LEED Accredited Professionals (AP) in the Dakotas who were at the forefront of advocating energy saving and sustainable practices. Today there are more than 150 professionals who have earned LEED AP status. The growing body of LEED professionals generated greater awareness within the construction community spurred industry conferences dedicated to energy efficient and sustainable building design including the Plain Green Conference held in Sioux Falls every spring. That growth has also led to the formation of a new chapter of the US Green Building Council in South Dakota to facilitate education and certification efforts. The momentum of the LEED movement and the number of accredited professionals has moved energy efficiency to a higher level of awareness and importance in new construction and in updating existing buildings. In 2008, the South Dakota Legislature passed Senate Bill 188 which directed that all new construction and major renovations of state40 40 40

Month 0000 0000 Energy Month

owned buildings costing at least $500K or greater than 5,000 square feet to earn LEED Silver, two Green Globes or a comparable standard. To date there are 57 LEED projects underway in South Dakota along with the new LEED Silver Education building on the campus of the University of North Dakota that have moved the sustainable building platform into the mainstream of new construction and existing building renovation.

COST CURVE The cost of heating and cooling equipment and other associated materials that increase energy efficiency have grown less expensive. Compared to five years ago, energy efficient HVAC equipment has grown more efficient and the costs effective. Much of that can be credited to the growing demand for greater energy efficiency. Justin Howe, of Howe Plumbing and Heating, notes that what owners spent five years ago on high efficiency heating and cooling solutions has decreased to the point where inefficient technologies no longer make sense from either an acquisition cost or from an ongoing operational cost. “We’ve seen a dramatic spike in commercial building either upgrading their existing HVAC systems and almost all new construction taking advantage of high efficiency equipment. A big part of that has been that the manufacturers recognize that inefficient models no longer make economic sense and have placed a greater degree of technology and research into higher efficiencies. Seeing this price/performance improvement coupled with the tax incentives available to commercial building owners had a very positive impact on the industry.”

GOVERNMENT INCENTIVES Beginning with the Energy Policy Act of 2005 and the subsequent American Recovery and Reinvestment Act of 2009, tax incentives for energy producers and commercial customers drove dramatic adoption of geothermal, ground source, and other high efficient heating and cooling systems. Tax incentives for advanced lighting systems and building shell enhancements provided many companies new opportunities to lower their operational costs.

ENERGY PROVIDER SUPPORT Energy companies and providers have also stepped up their efforts to help businesses more effectively manage their energy costs. Beyond developing new and renewable energy sources most energy providers have programs in place that give businesses energy saving tools including energy audits, conservation rebates and other services designed to provide better ways to manage their energy costs.

Building A Strong America®

Our North Dakota roots are strong, and their reach is long. MDU Resources Group’s diversified businesses operate across most of the United States, helping build a strong American infrastructure. • We provide natural gas, oil and electricity that power business, industry and our daily lives. • We provide pipes and wires that connect our homes, factories, offices and stores to bring them to life. • We build the transportation network of roads, highways and airports that keeps our economy moving. We are proud to be a Fortune 500 company, and the largest publicly traded business headquartered in the four-state region of North Dakota, South Dakota, Montana and Wyoming.

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Montana-Dakota Utilities Co. • Great Plains Natural Gas Co. • Cascade Natural Gas Corporation • Intermountain Gas Company • WBI Holdings, Inc. • Fidelity Exploration & Production Company • Williston Basin Interstate Pipeline Company • Bitter Creek Pipelines, LLC • Total Corrosion Solutions, Inc. • Knife River Corporation • MDU Construction Services Group, Inc.

Energy

ENERGY

PRAIRIE BUSINESS

ENERGY

PRAIRIE BUSINESS

E-15 approval: A move in the right direction By Loretta Sorenson hile it’s a step in the right direction, ethanol industry experts agree that the Environmental Protection Agency’s recent approval of E-15 for use in 2007 and newer vehicles will not do much to promote use of ethanol as a renewable fuel or stimulate expansion of the ethanol industry. Drivers using 2007 or newer vehicles comprise only about 18 percent of the U.S. vehicle fleet. Ralph Groschen, Senior Marketing Specialist and ethanol expert at the Minnesota Department of Agriculture says the action was pretty frustrating to the ethanol industry. “On one hand it’s a move in the right direction,” Groschen says. “On the other, it seems the EPA is engrossed in minutiae and splitting the market as they have will greatly reduce any benefit of their approval.”

Energy

National Corn Growers Association President and North Dakota corn grower Bart Schott said the current exclusion of 2001-2006 model vehicles for use of E-15 means EPA’s action will have little economic or expansion impact on the ethanol industry and corn market. “The EPA did say testing of 2001 through 2006 model vehicles could be completed as early as December 2010 and those vehicles may be approved for use of E-15 this year,” Schott says. “We’re kind of hanging our hat on that. If those models are approved this year, it means nearly 50 percent of the U.S. vehicle fleet would be in compliance with emissions laws when they use E-15. Without that the approval has a very minimal impact.” On November 9, 2010 the American Petroleum Institute along with a nine-member coalition group announced a challenge to the EPA's E15 decision, seeking to overturn the partial waiver. API’s director of downstream operations, Bob Greco, alleged that the "partial waiver is premature, lacks statutory authority and puts consumers at risk." The coalition, which includes the Grocery Manufacturers Association, National Meat Association, National Chicken Council, National Pork Producers Council, Snack Food Association and American Frozen Food Institute, expressed concerns that E-15 approval will put pressure on the meat and poultry supply, leading to higher food prices. Renewable Fuels Association President Bob Dinneen noted that extensive vehicle testing has demonstrated that E-15 is safe and effective for light-duty vehicles. Schott says the concerns the coalition expressed in its announcement are for the most part unsubstantiated and have been addressed numerous times in the past by those supporting development of ethanol products. "These are all old arguments," Schott says. Even with a broader consumer base, gas station owners may find themselves in a quandary in trying to determine which fuels to offer. North and South Dakota implemented programs subsidizing installation of blender pumps across each state which will make it easier for stations with blender pumps to make E-15 available. National Secretary of Agriculture, Tom Vilsack, also announced in October 2010 that funds for installation of 10,000 more pumps across the country in 2011 were forthcoming. “Stations with blender pumps will find it fairly easy to offer E-15,” Schott says. “It could take as long as a year before it’s more widely available. Some stations may offer it fairly soon if they have the pumps to accommodate it.” Proposed labels for pumps holding E-15 pose another challenge to the ethanol industry and consumers. Groschen says language on the label the EPA has initially designed appears to be misleading. “At a time when gasoline contained lead, a toxic poison, it was appropriate that warning labels on pumps made consumers aware of that,” Groschen says. “The language on the EPA’s

proposed label for E-15 sounds like a consumer warning even though E15 has been tested and approved for 2007 and newer models. The confusion confronting station owners trying to determine which products to offer their customers is another obstacle. I wouldn’t find it feasible to offer fuel that only 18 percent of my customers could utilize.” South Dakota corn farmer, Keith Alverson, who served on his state’s Corn Utilization Council and currently chairs the NCGA Ethanol Committee, says he and other ethanol supporters are concerned consumers may be misled or confused by the current labeling language. “We’re not asking the EPA to promote E-15, just to inform them of the fuel blend they’re choosing,” Alverson says. “With the exclusion of the 2001-2006 models, it may be confusing enough for consumers to determine if they can use the fuel. The label should provide the information they need to make a good choice.” Darrin Ihnen, current chairman of the National Corn Growers Association, says the general public does have broader knowledge of ethanol than they’ve had in the past. However, there’s a need for farmers and ethanol supporters to continue to share their knowledge at every opportunity. “A good place to start is your local coffee shop,” Ihnen says. “Explain the benefits of ethanol to farmers and the nation as a whole. Writing editorials is another effective avenue. State and national corn grower offices have resources to help with that if farmers aren’t comfortable doing it on their own.” Groschen describes some ethanol research discounting its benefits as “sloppy.” “Brazil told car makers that they had 10 years to make vehicles that burned ethanol,” Groschen says. “Their fuel is either E-85 or 20-25 percent ethanol. The same car makers – Ford, Chrysler, Toyota – and the rest are selling cars in Brazil. This is not rocket science. What’s possible in Brazil is possible here. We just don’t have the political will to implement ethanol use here.” Schott notes that a 2009 study demonstrated that putting E-15 on the market will result in creation of 136,000 more U.S. jobs. It will also inject $24.4 billion into the economy that would otherwise have gone to foreign oil interests. “With the current high unemployment situation and economic slowdown, those jobs and the additional money are important,” Schott says. “Every gallon of ethanol we use means less oil we have to import. I’m a strong supporter of renewable fuels. Just going from E-10 to E-15 means billions of gallons less of foreign oil that the U.S. will use.” Schott and his colleagues believe consumers will be looking for E-15 and interested in using the new fuel blend. “I believe North Dakota consumers want to support the ethanol industry,” Schott says. “From my perspective the EPA’s ruling is a positive message for consumers in general. NCGA is willing to do whatever is needed to assist the EPA in completing testing so we can move forward with making E-15 available to consumers. We’re raising more corn on fewer acres every year. We have plenty of corn to meet our commitments. About 40 percent of the corn produced goes to livestock users. About 30 percent is used for ethanol and the balance is exported.” Alverson adds that farmers can help promote E-15 in their own community in a number of ways. “Use E-15,” he says. “Ask your co-ops to put E-15 in their pumps and fuel suppliers bulk fuel mix. Taking an active part in corn organizations and finding a way to make your voice heard will also strengthen the ethanol industry. We all need to continue to work with EPA and other government agencies to keep promoting biofuels and higher blends.” Sorensen is the owner of Prairie Hearth Publishing, LLC. She can be reached at sorensenlms@gmail.com.

Energy

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Demand for energy expected to increase WHERE ARE YOU AT? WHERE DO YOU WANT TO BE?

By David C. Boyd Chair, Minnesota Public Utilities Commission

WHAT ARE THE RESPONSIBILITIES OF THE MINNESOTA PUBLIC UTILITIES COMMISSION? Under Minnesota law, the Minnesota Public Utilities Commission is directed to protect the public interest in the provision of electric, natural gas and telephone services. The Commission’s broad policy objectives are: To assure safe and reliable gas and electric services at reasonable rates; To determine the need for and location of large energy facilities; and To foster effective competition in Minnesota’s telecommunications markets. The Commission’s charge is to regulate the public utilities operating in Minnesota so as to accomplish these policy objectives while balancing the financial and economic requirements of those public utilities with the impact on ratepayers.

WHAT IS THE STATE’S ENERGY PROGRAM AND WHAT ARE YOU HOPING TO ACCOMPLISH? Three years ago, Minnesota enacted major energy policy legislation that establishes the following energy policy goals: The per capita use of fossil fuel as an energy input must be reduced by 15 percent by the year 2015 through increased reliance on energy efficiency and renewable energy alternatives; and 25 percent of the total electricity generated and used in Minnesota must be derived from eligible renewable energy resources by the year 2025.

Energy

Energy Efficiency: In this state’s integrated resource planning Byprocess, Ryan Schuster energy efficiency programs have been viewed and used as “resources” to meet customer demand in much the same manner that power plants represent resources available to the utility. Minnesota’s Next Generation Energy Act of 2007 converted the Conservation Improvement Program (CIP) from a “spending” requirement to a “savings” requirement. The Energy Savings Goal is set at 1.5 percent of gross retail energy sales annually beginning in 2010 and is to be accomplished through conservation programs, rate design, and other methods. The 2007 law also requires the Commission to establish criteria and standards for decoupling, the regulatory tool designed to separate a utility’s revenue from changes in energy sales. The purpose of decoupling is to reduce a utility’s financial disincentive to pursue expanded energy efficiency. The Commission must design the

standards for decoupling programs in such a manner as to mitigate the impact of these required energy savings goals on public utilities “without adversely affecting utility ratepayers.” The Commission has approved a pilot decoupling program for CenterPoint Energy. Renewable Energy: The renewable energy standards, enacted in 2007, increase incrementally during the next 15 years until reaching 25 percent in the year 2025. At this time, all 16 utilities reporting to the Commission regarding their renewable energy portfolios are in compliance with the standards now in effect. The Commission has established a biennial reporting process in order to monitor the activities of the utilities in this regard and to ensure continued compliance with the standards as they increase over time.

WHAT ARE SOME CHALLENGES? HOW HAVE YOU RESPONDED TO EACH OF THESE CHALLENGES? The Commission’s role is multi-faceted. At times, it acts in a quasi-legislative manner

in establishing broad utility industry policies consistent with the policy goals established in law. In other matters, the Commission acts in a quasi-judicial capacity as the regulatory body for the public utilities operating in Minnesota. In this latter role, the Commission makes findings and issues orders relative to companyspecific issues in proceedings before it. As specific projects for renewable energy are brought before the Commission, it must determine if the project is in the public interest If that determination is made, the Commission must also establish the proper location and terms of operation in a permit for the project. The Commission will continue to make these findings and determinations on specific projects in the context of the requirements of the renewable energy standards continuing to increase over the next 15 years.

WHAT DOES THE FUTURE HOLD FOR ENERGY? Despite efforts to achieve energy savings goals, the total demand for energy is expected to increase. The population of the state, the nation, and the world will continue to grow. Providing energy to meet these future demands must occur within the regulatory and policy framework set in place at state and national levels. It is likely that population growth will take place large extent by1 a 11/12/2010 continuing 1210 to 3x5a NDSCS:Layout

concentration of our citizens in large urban/suburban population centers. This concentration of people in ever-larger metropolitan areas, combined with the direction to harvest renewable resources (which are typically in more remote areas), will place additional demands on our transmission systems. As directed by Minnesotaâ&#x20AC;&#x2122;s policy-makers, the Commission must continue to act to ensure that energy is reliable and affordable while achieving the State goals of reducing the use of fossil fuel and increasing the use of renewable resources.

WHAT IMPACT WILL ENERGY HAVE ON BUSINESSES? As with any customer, businesses need reliable energy at reasonable costs. Their energy sources must be reliable so that businesses may operate efficiently and the rates must be as reasonable as possible so that businesses may operate competitively. While balancing the interests of residential customers, the Commission will continue to act to ensure that Minnesota businesses may compete beyond Minnesota. The economy in which businesses operate today does not stop at state, or even national borders, but is global in its expanse. 3:10 PM

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War On Talent By Maxine Herr

Energy

hey’re packing their parkas and counting their cash. But North Dakota’s energy industry workforce is demanding more. As oil production continues to build in North Dakota, so does the need for more workers. But with expansions in the coal and construction industries as well, many employers within the state are tapping into the same skill set, and that is putting applicants in the driver’s seat. “It becomes a bidding war,” said John Funk, Area Manager for Spherion Staffing in Fargo, ND. “Much like jobs in the IT field in the 90s.” Funk says housing shortages and the rapid pace of the oil industry intimidate potential employees in other parts of the country. So applicants expect employers to offer a place to live and a high salary to compensate for the high-risk work. Employers snatching up hotel rooms in blocks and bringing in modular homes for their employees have an edge on industry counterparts. For companies not in a position to offer guaranteed housing, the search for staff can continue indefinitely. Funk recently experienced a tough search for an industrial sales position. “The company had lost their motel space and couldn’t offer a relocation package,” he said. Five months later, Funk finally found someone within the market with a family connection in the district to accept the position. In the heart of western ND oil country, Watford City is a town busting at the seams with an influx of oil workers, but offering very limited housing. In an attempt to secure laborers, businesses are filling wallets. “The salaries have increased and there are signing bonuses,” said Justin Voll, Watford City Economic Development Corporation President. “But if you can have a place for an employee to stay – that’s huge.” A dawn-to-dusk, strenuous work schedule that prevents employees from familiarizing themselves with North Dakota often means many workers are only signing on for a season. Funk is concerned when North Dakota winter rears its ugly head, the workforce shortages will only get worse. “With no housing, it is hard to retain people,” Funk said. “If they don’t have a good experience when they’re here, they will want to leave.” North Dakota Department of Commerce Commissioner Shane Goettle says communities are making great strides to provide housing, and more work will be done. “Housing supply is increasing, both permanent as well as lease units,” he said. He cites the one thousand new units recently built in Williston and numerous crew camps being built to house hundreds of oil workers. Goettle says growing pains are to be expected, but it’s a good problem to have. “I would rather face these challenges than what other states deal with – being hungry for jobs that pay good wages,” he said. But Voll says the battle for an employee base makes it extremely difficult for core businesses such as schools and hospitals to fill entry level positions. “It’s hard finding a spot to live. Rents have been driven up, and it’s very hard to justify the rents they’re getting,” Voll said. Though the inflation in wages may put a strain on employers needing to fill lower-paid positions, Goettle believes the wage pressure will subside as more people move to the area. “We need to be nationally

competitive with wages. Long ago we didn’t want to be a low-wage state. We’re catching up with the rest of the country,” Goettle said. He adds that though wages are rising, so are business revenues, and as a result businesses have to manage their own growth. “That has an impact in the prevailing wage rate,” he said. “With every positive, there’s a flip side,” Voll said. “This throws a monkey wrench into trying to do business, because businesses have to do pre-planning, holding onto an apartment, taking steps to try to secure whatever they can.” While inadequate housing causes some turnover, challenges compound as energy industry employers encounter a large segment of their staff nearing retirement age. “For these industries that were established in the late 70s, a portion of the workforce has been with them for 25 to 30 years and will be experiencing tremendous employee turnover,” Funk said. One of Funk’s clients currently employing 100 people foresees a 65 percent turnover in the next ten years due to retirement. But he notes that it is not just the energy industry that will face a lot of new or replacement employment in upcoming years. He cites a recent statement by Burlington Northern Railroad which expects to add 50 to 90 jobs to replace retiring employees in the next couple of years. Funk believes infrastructure projects and continuing needs for more county and city government will open even more job opportunities, too. “It puts a lot of stress and strain on the labor pool,” Funk said. “We’re spending much more time recruiting.” Goettle says he’s also stepped up recruitment efforts at the state level. Job Service ND’s website is designed to streamline the process for job seekers by pulling employer websites’ information onto the site. The Department of Commerce has a full-time staff person who fields calls from people considering a move from outside the state, and job fairs also help to draw potential employees. “We have a multi-prong strategy to make more laborers available,” Goettle said. Funk says the key is tapping into parts of the country that haven’t been as responsive to date. He says his company doesn’t see as much success recruiting in states east of North Dakota. “Minnesota, Iowa, they have no interest in moving west,” Funk said. In contrast, many employees come from Wyoming and Colorado. “For jobs west of Bismarck and Minot, ten percent of the applicants are from outside the state,” Funk said. He has seen applications come from as far as Arizona and Louisiana. “We are actively searching in surrounding states,” he said. “For new and existing businesses there’s a whole level of competition that they’re preparing for,” Funk said. “It’s a war on talent.” Maxine Herr is a Bismarck, ND-based freelance writer. She can be reached at maxine606@msn.com.

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EERC, Chinese company partnership starts By Sarah McCurdy The Energy & Environmental Research Center (EERC) at the University of North Dakota in Grand Forks, N.D. has worked with companies in all 50 U.S. states, as well as 51 countries. But a recent partnership has many regional and national news outlets buzzing, such as CNBC, and industry trade blogs and publications. Fujian Longking Co., Ltd., a company based in Longyan, Fujian, China, has signed an exclusive license agreement with the EERC Foundation to demonstrate and commercially deploy an EERCdeveloped technology to improve global air quality – a partnership that will help market the technology on the worldwide stage. The EERC Foundation is an independent, nonprofit corporation that invests in the protection of EERC-developed intellectual property. Fuijan Longking is an international company and is listed on the Shanghai stock exchange. The advanced hybrid particulate collector technology focuses on the removal of particulate emissions from the air and is one of the most advanced technologies of its kind in the world, which was invented and developed by a research manager and his team at EERC. The technology allows the removal of fine particles from exhaust gases of coal-fired power plants, incinerators and mineral-processing facilities. It can also be used by the pharmaceutical and chemical industries. It integrates two typical emission control technologies into the same housing: an electrostatic precipitator and a filter bag. The unique synergy between the two creates a compact, durable, costeffective and highly efficient particulate matter collection system. “Longking distributes its projects within China and is currently expanding into overseas markets, working with partners such as the EERC,” said Huang Wei, Director and General Manager of Fujian Longking Co., Ltd. EERC Director Dr. Gerald Groenewold says Fuijan Longking Co. is a great fit for this technology, as it is the largest vendor of environmental technology in China. The Chinese company also has two decades of experience working with American companies, including licensing technology from General Electric. China has a critical need for emissions control and Fuijan Longking Co. has evolved as a leader in providing emission control solutions for coal power plants in China. Policies in China have tightened and updated timelines require that the country clean up the air and the environment. The EERC has the patents for the technology issued for the United States and China. By signing an exclusive contract, Fuijan Longking Co. has the right to utilize those patents exclusively. 48

December 2010

Groenewold says the technology was demonstrated on a smaller scale and then a larger scale, both in South Dakota about eight years ago. When demonstrated, it yielded more than 99 percent removal of particulates from a coal fired power plant. The technology was also deployed at a cement facility in Italy around the same timeframe, which is where the Chinese company first saw the technology working first hand last year. The technology they saw a year ago will be commercially deployed in China and licensed to other parts of the world. “The key is, not only do they need particulate equipment, but the whole aspect of coal is something that will continue to develop,” says Carsten Heide, Associate Director for Intellectual Property Management and Technology Commercialization. “The other exciting aspect is that we are reaching out to China and building relationships, something the North Dakota Department of Commerce has been looking for.” EERC leaders have reached out to the world and are prepared to host people from varying nations at the center’s facility in Grand Forks. “The world knows we’re here, but it’s a big world out there,” Groenewold says. “You really have to have people come here and see our facilities. When they do, it’s an eye opening experience.” The EERC plays a key global role in demonstrating that coal is cleanable. Groenewold says with today’s technology it is possible to design a coal-fired power plant that emits essentially nothing. It is more expensive, but it is possible and Groenewold says investment in this type of technology is good evidence of that. The EERC has a long tradition of research and especially coal research. Groenewold believes this is just the beginning and is excited about the opportunity of more partnerships such as this. There’s also a strong focus at the EERC of inventing things that people need. Development is driven by needs in the private sector and Groenewold says everything the EERC produces is meant to be practical, applied research that leads to deployment. “The world is coming to work with us, it’s a good feeling,” Groenewold says. “Everybody here can go home every night knowing that we did something worth doing.” Groenewold often refers to the EERC as a culture of partnerships and points to this partnership as a great example. McCurdy is a Fargo-based freelance writer. She can be reached at sarah@sarahmccurdy.net.

Biotechnology improves human life By Alan Van Ormer hose who work with biotechnology believe that it can contribute to various industries that improve a human’s life, be it food, fuel, health or environment. The State of South Dakota has biosciences as one of its targeted industries believing that because of the state’s deep roots in agriculture and a strong medicine base, both medical device and biotechnology are a strong fit for the state. The 2010 Initiative was launched as a way for South Dakota to become a leader in research and technology development. Of the top 30 medical device companies in the world, 18 of them are based in the United States. There are more than 75 bioscience and related companies that the Governor’s Office of Economic Development in South Dakota is actively pursuing, according to the GOED’s Quarterly Economic Development Report. Hematech, based in Sioux Falls, SD, is one of those companies that is focusing on research, development, and manufacturing of products to prevent and treat infectious diseases and Biodefense. Hematech’s main focus is biopharmaceutical medicine. Biotechnology has allowed the company to more than double its employee base in a seven-year period from 30 in 2003 to 80 in 2010.

According to the South Dakota Biotech Association, throughout the United States, agriculture biotechnology has generated more than 22,000 jobs and more than $2.4 million in revenues. Liz Larkin, Executive Director, South Dakota Biotech Association, says there are many things happening in the biotechnology field that are occurring under the radar. Many companies were able to showcase new research and new technology taking place at the 5th Annual South Dakota Biotech Association Annual Summit and Annual Meeting in Brookings, SD. “Scientists, management and other business people gather in this South Dakota Bio meeting to share their ideas and new discoveries to further facilitate future collaboration in the region, encouraging new investment from both business community and local and state governments,” explains Dr. Jin-an Jiao, Executive Vice President of Product Development and Manufacturing for Hematech, Inc. The industry continues to expand as states and regions increase competiveness to attract high-wage jobs. The bioscience industry sector includes food and agricultural biosciences, animal and human health, biofuels and biorefining, and industrial biosciences.

At Forum Communications Printing, we partner with you to help you succeed. That’s why we offer so much more than just printing services. Mailing Services range from list acquisition to inkjetting to polybagging. We can assist with market research to make sure you’re hitting the right demographic for your piece. Need to track your results? We can help with that, too. Color Digital Printing allows you the flexibility and creativity you need to stand out. Personalize and customize your mailings so that more people respond to your offers. Be a good steward to the environment. Ask us about our many options to help you make your printed or mailed piece “greener.”

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VIEWPOINT CHUCK CHADWICK

Take care of your customers, or someone else will

DR. MARK LEE

Expanded educational opportunities are needed

uring these uncertain economic times, many businesses are experiencing depressed sales. We are living in the most cluttered marketplace in our history; Customers are gone with a click of a mouse seeking lower prices. According to Frederick Reicheld, “The Loyalty Effect,” businesses lose half their customers in five years. Even though acquiring a new customer cost 5 to 10 times more than retaining one, many companies are fixated on obtaining new customers. In addition, not only new customers are more expensive, the process can be stressful and often times with very disappointing results. Resources are better allocated on improving profitability from existing customers because repeat customers spend on average 67 percent more. Therefore, a five percent increase in retention yields profit increases of 25 to 100 percent. The focus and priority should be on the 20 percent of customers who account for 80 percent of revenues. Of course, there is a need to constantly acquire new customers as marketplace conditions are always in flux. Research reveals that one percent of customers die, three percent move away, five percent follows a recommendation, nine percent find an alternative, and 14 percent are dissatisfied with the product/service. However, a massive 68 percent leave because of indifference. They go to the competitor simply because they do not feel valued. They leave feeling that the business simply didn’t care. Before spending time and money going after new customers, develop strategies to build and nurture existing customer relationships. Treat customers as if they are truly your partners and you truly care about them. Customers either come back for more or they go elsewhere. Take care of your customer, or someone else will.

raditionally, the concept of higher education brings to mind picturesque campuses filled with stately old buildings. Young scholars study in the library and socialize in dormitories or campus hang-outs. In this traditional model of higher education, the individual student selects a degree based on personal interests and goals. The outcome is an educated young graduate who most likely will leave the “college town” and move to another city or state in order to begin their career. As the graduate leaves, they fondly recall their four years of college and a wide variety of experiences. Today, that traditional model of higher education is no longer sufficient on its own. To be competitive in today’s global knowledge economy, we simply have to supplement this most familiar model with expanded opportunities for adults and nontraditional students. Why? Because at a time when our world demands advanced educational credentials more than ever before, the United States (and indeed Sioux Falls) finds itself in an education deficit position. That is not acceptable. At University Center, we have designed our program delivery model and services specifically for the adult and nontraditional student. We must also respond to the needs and demands of the businesses that employ those students. University Center is unique in many ways, but one is quite compelling. University Center was put in Sioux Falls specifically to serve Sioux Falls. An example of service as a response to community demands is the new Masters in Business Administration program offered through Dakota State University. In the DSU MBA, students take the solid core of business courses you would expect to find in any MBA. Then students have the option to customize the final portion of their degree based on their specific interests. So, for example, a student could earn an MBA with an emphasis on Sustainability. At the same time, a business that is seeking to grow its own intellectual capital may encourage its employees to pursue an MBA tailored to a particular career-track within the company. You may be wondering “How do they do that?” The explosion of online graduate certificates from highly reputable universities gives students access to an almost unlimited selection of disciplines. Students will graduate with a DSU MBA, but it can be specific to their interests. In order to meet the human capital needs of the local economy, University Center embraces the challenge to become more entrepreneurial in programming to serve a broader audience. This includes course delivery, student services, innovative programs and strategic alliances with local businesses. These will shape the future of our workforce.

Chuck Chadwick is the Business Liaison for the Greater Moorhead Development Corporation in Moorhead, MN. Chuck can be reached at lets.talkbusiness@yahoo.com.

Dr. Lee is the Executive Dean of the South Dakota Public Universities and Research Center (University Center.) He can be reached at Mark.Lee@SDUniversityCenter.org.

December 2010

Start 2010 tax planning T

he end of the year is drawing near and it is time to start planning for your 2010 taxes. Fiebiger, Swanson, West & Co. has provided Prairie Business magazine with a brief overview of the several tax changes that have taken place over the past year.

THE HEALTHCARE BILL. · Small employers with no more than 25 employees are entitled to up to a 35% credit on the cost of employee health insurance. It has been found to only benefit employers with 10 or less employees who make an average of $25,000 or less per year as there is a tradeoff with other expenses and credits that minimize the benefit for employers not in this range. · Health flex dollars for medications will be limited to prescription medications with few exceptions after 2010. · Penalties for nonqualified distributions from health savings accounts will increase to 20% after December 31, 2010. · Employer health plans that cover the employee’s children are required to cover any employee’s child who is under 27, both for insurance and reimbursements effective in 2010.

THE HIRE ACT. · Employers who hire an employee after February 3, 2010 who has not been employed more than 40 hours in the 60 days prior to hiring are exempt from the FICA matching of 6.2% for wages paid after March 18 through the end of the year. If this employee is still with the company after one year and is still earning at least 80% of 2010 wages, the employer will qualify for a tax credit of up to $1,000 in 2011. The employee must sign an affidavit stating their employment status.

SMALL BUSINESS JOBS ACT. · For 2010 and 2011, small businesses can write off up to $500,000 of qualified capital expenditures in the year made. Certain real property may qualify for this treatment. Also, the limit on the cost of property placed in service was raised to $2,000,000. · 50% first year bonus depreciation was extended for new qualified property placed in service in 2010. · First year depreciation for autos and trucks was increased by $8,000. · Taxpayers may deduct up to $10,000 of business startup expenses for 2010. · Business owners can deduct the cost of health insurance in 2010 for themselves and their family when calculating their self-employment tax. Fiebiger, Swanson, West & Co., PLLP may be reached at 701-280-2100 or by accessing the company web site at www.fsw-co.com.

Businesses giving during the Holiday season I n something that has never been done across the nation, North Dakota and Minnesota state realtor’s group are covering all the kettles in North Dakota and in many communities in Minnesota on Dec. 10 in an effort to help the Salvation Army raise money for the needy. Annette Bauer, Public Relations Director for the Northern Division of Salvation Army that covers North Dakota and Minnesota, says this is an extraordinary occasion. “I have never heard of this anywhere in the nation. This will be ground breaking for the nation.” The Fargo Moorhead Area Association of Realtors® actually stirred other North Dakota realtors to become involved, which then prompted Minnesota to do something to help the Salvation Army throughout the Twin Cities area and outside the two largest Minnesota cities. DeAnne Mason, who handles public relations for the Fargo Moorhead Area Association of Realtors®, says that housing or shelter is a basic need. “We make our living helping others buy and sell homes, so it is only right that we give back to the community,” she says. “We are blessed here in North Dakota to have a stable economy and steady real estate market.” Davenport Evans Hurwitz and Smith, the largest law firm in the region based out of Sioux Falls, SD, provided more than $47,000 in scholarships and sponsorships of arts, education, healthcare, and social

organizations in the Sioux Falls area in 2009. Individual attorneys also contribute to causes on their own. Monte Walz has been a Partner with Davenport Evans Hurwitz and Smith for 23 years and has seen not only an enjoyment in helping a charity, but also a way for lawyers to develop contacts in the business community. All full-time attorneys are United Way ‘Heart Club” members, which involves an $800 plus commitment for each lawyer. In addition, each lawyer in the Firm is actively involved in a charity or community organization. The law firm’s charitable giving program consists of one percent of gross revenue going back to the community, as well as quality of life and being perceived as a driving force for new ideas. The most popular charitable giving is a scholarship program that provides four scholarships at $2,500 a piece and five scholarships at $1,000 a piece. Nine high school students who are going on to South Dakota colleges and universities are receiving the scholarships. Another charitable aspect involves serving at the Banquet. “We get enjoyment out of helping out,” Walz explains. “We get together with other lawyers and staff members to provide service to needy families. This is a bonding experience you never get in the workplace.” Prairie Business

BY THE NUMBERS EMPLOYMENT (NOT SEASONALLY ADJUSTED) UNEMPLOYMENT RATE North Dakota Fargo MSA Bismarck MSA Grand Forks MSA Minot MiSA Dickinson MiSA Williston MiSA Jamestown MiSA Wahpeton MiSA South Dakota Sioux Falls MSA Rapid City MSA Aberdeen MiSA Brookings MiSA Watertown MiSA Spearfish MiSA Mitchell MiSA Pierre MiSA Yankton MiSA Huron MiSA Vermillion MiSA Minnesota Minneapolis-St. Paul MSA Duluth-Superior MSA St. Cloud MSA Rochester MSA Mankato-N. Mankato MSA Brainerd MiSA Fairbault-Northfield MiSA Winona MiSA Fergus Falls MiSA Red Wing MiSA Willmar MiSA Austin MiSA Bemidji MiSA Alexandria MiSA Hutchinson MiSA Owatonna MiSA Albert Lea MiSA Marshall MiSA New Ulm MiSA Worthington MiSA Fairmont MiSA

2010 3.0% 3.3 2.8 3.5 2.6 2.1 1.8 2.8 3.8 4.0 4.1 4.1 3.1 3.4 3.6 3.6 3.4 2.8 4.0 3.2 3.4 6.7 6.7 6.9 6.4 5.4 5.8 8.1 7.2 6.6 6.1 6.5 5.5 5.5 7.7 5.6 8.5 7.2 7.4 5.0 5.5 4.6 6.7

2009 3.5% 3.8 3.0 3.9 3.1 3.0 2.5 3.1 4.5 4.3 4.5 4.3 3.1 3.4 4.9 3.9 4.0 2.7 4.6 3.2 3.8 7.6 7.7 8.2 7.2 6.2 6.6 8.1 8.2 7.8 6.9 7.2 6.1 5.9 7.6 6.0 9.4 8.4 8.1 5.4 6.0 4.8 7.8

EMPLOYMENT 2010 358278 117003 61205 53592 33839 14576 13315 12559 11694 425355 122910 64690 22565 18040 18085 12970 12655 12100 11230 9515 7230 2764553 1738548 137781 101589 101720 54678 43090 31249 25335 27840 23657 22563 19829 19587 19612 17153 18541 14706 13718 14102 11661 10349

2009 352139 115450 60017 52831 32736 14322 13711 11752 11534 426010 122675 64905 22595 18250 18170 12930 12680 12050 11290 9630 7275 2736154 1709455 134502 99603 99098 53549 45495 31100 27211 27894 24028 22379 20164 20248 19980 18305 19407 15429 13977 13930 11215 10429

MSA — Metropolitan Statistical Area MiSA — Micropolitan Statistical Area Sources: U.S. Bureau of Labor Statistics, Minnesota Department of Employment and Economic Development, Job Service North Dakota, South Dakota Department of Labor

NORTH DAKOTA OIL ACTIVITY

August 2010 July 2010 May 2010 March 2010 January 2010

Sweet Crude Price/BBL

Production BBL/month

$69.07 $67.35 $60.10 $71.20 $68.57

10,048,060 9,952,296 9,189,084 8,599,506 7,319,521

Drilling Permits

Producing Wells

Rig Count

138 145 102 120 101

5,115 5,051 4,893 4,736 4,628

140 135 114 102 81

Source: NDIC Dept of Mineral Resources

CANADIAN BORDER CROSSINGS AUTOMOBILES MINNESOTA

Intl. Falls-Rainer Grand Portage Baudette Warroad Roseau

TRUCKS

SEPT 2010

% CHANGE /SEPT2009

SEPT 2010

% CHANGE /SEPT 2009

49892 27349 18992 11913 3986

17.50% 23.74 22.21 13.31 19.16

2051 1566 713 900 236

3.01% 28.15 22.09 - 3.02 19.80

32439 9251 4195 6653 3865 3018

33.86 19.80 - 0.52 23.09 22.39 3.68

16369 6958 1261 2076 1266 424

3.91 14.33 - 14.91 34.98 36.28 - 34.16

NORTH DAKOTA

Pembina Portal Neche Dunseith Walhalla Noonan

Source: US Customs and Border Protection

CANADIAN EXCHANGE RATE 10/26/09

9/27/10

10/26/10

U.S. to Canadian Dollar-

$1.0616 or $0.9420

$1.0263 or $0.9744

$1.0223 or $0.9782

U.S. to Euro

$0.6693 or $1.4941

$0.7421 or $1.3475

$0.7209 or $1.3872

U.S. to Chinese Yuan

$6.8270 or $0.1465

$6.6928 or $0.1494

$6.6643 or $0.1501

$84.167 or $0.0118

$81.264 or $0.0123

U.S. to Japanese Yen U.S. to Mexican Peso

$91.993 or $0.0109 $13.122 or $0.0762

Source: Bank of Canada

December 2010

$12.518 or $0.0799

$12.384 or $0.0875

AIRLINE BOARDINGS SEPT 2010

Minneapolis-St. Paul Fargo Sioux Falls Rapid City Bismarck Duluth Grand Forks Minot

1282878 26716 29697 27977 15049 12861 9468 8402

% CHANGE/SEPT 2009

8.23% - 4.58 19 7 7.92 23.72 29.17 72.17