KEDA Board also hears 2009 audit, plans 2011 budget
“Let’s just get this damn thing cleared,” said Tim “Chopper” McBride, speaking of clearing and grubbing trees in a foreign trade zone.
“For the public interest of the taxpayers and the community, as far as I’m concerned, I’d be perfectly happy for the county to go in there and clear the spot,” McBride told fellow board members of the Koochiching Economic Development Authority Wednesday.
Following a request for proposals, the KEDA Board acted to allow the lowest bidder, Bowman Construction, to do the work at a cost to KEDA of $1,200 per acre on an estimated 20-acre area. The exact areas to be cleared would be directed by KEDA Director Paul Nevanen and Koochiching County Engineer Doug Grindall, who will continue to oversee the project.
Nevanen said that the value of the timber to be cleared was negligible, about $2,000, and recommended that it not be a concern to the KEDA in making the decision.
This is the first step in a site-readiness plan that has been a topic of discussion for several years, but in the spotlight since a private developer, led by Kalan Wagner, proposed in April to rent two FTZ lots and prepare the site for development, including crushing and blasting rock to level the ground.
McBride further requested that the county and city bring back to KEDA recommendations related to blasting and crushing rock. No action was taken related to the Wagner proposal, or suggestions for the county to request proposals to do the work and keep the rock for the government use.
Attorney Steve Shermoen, who recently began working as International Falls city attorney, submitted a letter to the KEDA Board stating that he will no longer be representing the Wagner company due to conflict of interest.
Financial matters
The KEDA Board reviewed its 2009 financial audit with representatives from accounting firm Walker, Giroux and Hahne.
The organization’s total liabilities and cash fund balances was healthy at $392,606, the board was told by the firm. During 2009, the KEDA transferred $69,450 from its cold weather testing fund to its general fund. The KEDA accumulated an additional $13,451 over the year in its cash fund balances.
Several deficiencies in the authority’s accounting practices were mentioned, but linked to a small number of staff members. The audit noted lack of segregation of duties and lack of control over financial reporting process as two deficiencies, but officials noted that this was very common in small organizations such as KEDA.
The audit also recommended writing off a receivable of $4,900 from Ox Brands LLC, which terminated operations in 2008. The company had used the cold weather testing facility.
Board member Wade Pavleck asked where the $42,000 receivable from the theft by Brenda Long was reflected in the audit. Auditors and board members noted that the item was written off for financial recording purposes, but collection of the funds was still possible. Pavleck recommended keeping records of money written off as uncollectible, so that future boards and the public were aware of those totals.
Nevanen complimented KEDA Administrative Assistant Dixie Kalstad for her work with the auditors and for working to implement new procedures related to financial reporting.
The board also made a motion to accept a 2011 budget. The budget was similar to the 2010 budget, including requesting $25,000 each from International Falls and Koochiching County. The organization is also anticipating $90,000 in funding from the Iron Range Resources. The KEDA receives a portion of IRR funds from taconite production each year. That funding was down 55 percent in 2010 due to poor taconite production, but is expected to return to previous years’ totals in 2011.
The KEDA also receives partial funding for the Small Business Development Center, up to $10,000 per year, from the University of Minnesota, Duluth Center for Economic Development. The SBDC counselor position of Jenny Dougherty was changed from part time to full time last year.
The KEDA also agreed to budget to continue to fund the Koochiching Community Development Association for $25,000 in 2011.
Nevanen said that the budget for the cold weather testing facility is based on an annual average of historical usage of the facility. However, the actual revenue and expenses will be dependent on the climate and economy.
