Armed with a newly released report that says that 265 paper mill employees produce an estimated $207 million of annual economic activity in Koochiching County, local and regional leaders met Monday to develop a strategy to address immediate community needs and to spur economic growth.

The forum was held in response to the May 2 announcement by Boise Inc. that it will terminate 265 jobs at its International Falls paper mill by October.

Organized by an economic response steering committee, made up of International Falls Mayor Bob Anderson, Falls Councilor Pete Kalar, and Koochiching County Commissioners Wade Pavleck and Rob Ecklund, the meeting brought together elected officials, community leaders, and regional and local economic development officials, among others, to share information about the challenges resulting from the anticipated job loss at the local paper mill.

The meeting was led by Anderson and Pavleck and facilitated by Randy Lasky, president of Northspan Group Inc., who told the group that he has been involved in developing strategies for communities, including in 2001 when LTV Steel Mining Company, a producer of taconite pellets, in Hoyt Lakes was closed, eliminated 1,400 jobs, and in 1998 when 120 jobs were terminated at the Blandin Paper Mill in Grand Rapids.

Monday's meeting concluded with a call for volunteers to serve on three developing teams:

  • Worker retention and assistance team - expected to include representatives of area education facilities, unions, and Northeast Minnesota Office of Job Training.
  • Long-term vision and strategy team - expected to include people with an economic development focus that will determine what kind of development the community wants, does not want and realistically fits with the resources available.
  • Immediate business development opportunities and retention team - which will include representatives of private business and industry, the area's chamber of commerce, and the Small Business Development Center, among others.

Contact, by June 14, Anderson, at boba@ci.international-falls.mn.us, or Pavleck, at wade.carol@frontier.com, to indicate interest in serving on one of the committees.

After the committees are developed, other meetings will be planned with a response framework expected to be in place by July 1.

A meeting scheduled with 8th District Congressman Rick Nolan and Minnesota Senate Majority Leader Tom Bakk, scheduled for 9 a.m. Friday in the third floor courtroom at the courthouse, will also bring forward more information about available resources and opportunities.

Impact analysis

John Bennett, Extension educator, with the University of Minnesota's Center for Community Vitality, presented the findings of an economic analysis of the anticipated job loss, estimated at about a 30 percent reduction in positions at the paper mill.

Bennett said a model he used for the analysis shows that the 265 positions that will be terminated produce an estimated $207 million in economic activity annually in the county; those employees are paid an estimated $26.7 million in labor income, or about $97,300 per employee including benefits.

The report says that the loss of the 265 jobs will have significant impacts on Koochiching County, including that 555 jobs in the county in total will be affected by the action. The plant itself will contribute to a total loss of $248 million in sales in the county; labor income will drop by $26.7 million and the lost spending of the wages and other purchases by the plant will decrease total income in the county by an additional $11.5 million, thus the total loss of labor income will be $38.2 million.

The model showed that the loss of paper mill jobs will result in: 27 jobs lost in food service and drinking places; 25 in maintenance and repair construction of nonresidential structures; 21 in commercial logging; 17 in transport by truck; and 15 in wholesale trade.

In addition, the report showed the job loss will result in indirect and induced impacts in the following industries: $3.6 million in lost sales of imputed rental activity for owner-occupied dwellings; $2.9 million in electric power generation and transmission; $2.9 million in transport by rail; $2.3 million in monetary and depository credit banking; $2.3 million in transport by truck.

The report also showed regional impacts of the job loss in the seven northeast Minnesota counties at a loss of $280 million.

Other resources

Heather Rand, regional coordinator of the state rapid response team of the Minnesota Department of Employment and Economic Development, spoke about the immediate needs of displaced workers resulting from the jobs loss, other businesses that will be impacted by the job loss; and a strategic plan for where the next jobs will come from.

She said DEED will assist the community in seeking funds from federal agencies, should it be demonstrated that the job loss resulted from the impact of imports.

She also said that DEED and Department of Natural Resources staff are meeting to discuss advancing green technology in the timber industry, including using chemicals derived from timber that entrepreneurs want to explore.

Anderson noted that the Duluth-based Natural Resources and Rehabilitation Institute is prepared to bring forward information about its timber research.

Carol Stegmeir, career counselor with the Northeast Minnesota Office of Jobs and Training, said displaced workers will be assessed, assigned career counselors and be assisted with developing an employment plan.

She said she's discussed with Boise officials on how to get the displaced workers quickly enrolled in programs.

Pat Henderson, executive director of the Arrowhead Regional Development Commission and Josh Bergstad, ARDC senior planner, spoke about developing a community strategy to qualify for a federal Economic Development Administration grant, which will require a cost-sharing or matching grant.

Henderson said the EDA targets its investments to attract private capital and to create higher-skill, higher-wage jobs. EDA investments are focused on locally-developed, regionally based economic development initiatives that directly contribute to economic growth and that emphasize regional competitiveness, innovation and entrepreneurship.

Later in the meeting, Shawn Mason, Falls economic and community development director, asked whether the EDA grant could be used to make the area foreign trade zone "shovel ready" for development.

"There is an expectation with an EDA grant that it would relatively soon lead to job creation," replied Bergstad.

Falls City Attorney Steve Shermoen asked if a full-time, on-site coordinator should be hired to coordinate the local activities.

Lasky said a local decision on such a position could be considered after committees are developed and it is known whether the community is eligible for an EDA.

Commissioner Rob Ecklund reported that service providers in the community recently discussed the influx of needs that are anticipated with the paper mill job loss during a regular provider meeting.

A joint effort of all the service providers will result in a Community Resource Fair from 3 to 8 p.m. June 25 at Backus Community Center. Providers are now registering to attend the event, which will be free and open to anyone interested in gathering information about finances, housing, public benefits, employment, education, family support and food and nutrition. Representatives from service providers will be there to answer questions.

A video of Monday's meeting will be aired on Channel 7 for MidContinent cable subscribers and online at http://www.kcc-tv.com/

Community meeting

Meanwhile, a meeting held and organized Thursday by area resident Amanda Vogel drew questions and comments from about 50 people who attended. She reported that several local elected officials attended as did many others, including a number of younger area residents.

Vogel said a video of the meeting can be viewed at http://www.ustream.tv/recorded/33553843 and a Facebook page has been developed about the meeting at https://www.facebook.com/groups/buildingborderland/

Vogel told The Journal that people who commented during the meeting stayed positive and forward looking "...using anything identified as a weakness to our community as simply a constructive view of what we all need to take an honest look at, work on, and how we can help move the economy forward from here."

Vogel also said she believes the meeting offered an opportunity for some people to voice their opinions about the community that may not have done so at government organized meetings. "There were still others too afraid to be seen/heard offering their ideas and input to better their community," she noted.

The meeting was intended to encourage people to begin looking at the community's options moving forward.

"My theory is if we try something different, we all start sending an email or two or thinking about our contacts and networks within and outside of our community to contact, that the sum of the efforts would produce something that could not be inhibited by any feared red tape," Vogel wrote in an email to The Journal about the meeting. "We have all these ideas, there are brilliant folks in our community."

"We have to start feeling comfortable taking initiative, speaking up, making things happen without being concerned about this or that person or group if it’s best for the whole greater community to move forward with or without them. I think confidence, empowerment, and action on these and other ideas are energies that can spread throughout the greater community. We are stronger as a whole versus just relying on or expecting a few of our parts to make all the difference."

Area resident Brittany Rognerud shared with The Journal her comments made at the meeting.

"We should not have empty buildings on every block that become unmaintained eye sores," she said. "We should have thriving locally owned, community driven, reliable businesses filled with locals as well as visitors. We need to utilize tourism rather than viewing it as 'terrorism' as many of us have heard before. How can a community thrive when no revenue is being generated? We have to have people to have business and we have to have business to have people. We need to operate as a team rather than a hierarchy. I know that nothing in life is viewed as completely fair, but why can't it be something we strive for? Rather than band-aiding issues or running from them, why not fix them? We have hard working community members, who have every right to stay in this community."

"We already have lost many community members to lack of support and resources made available to us. We can not afford to lose anymore. What can we do to prevent this or change it? I don't have all the answers but I am going to begin with asking the questions."