Business leaders express optimism during Fergus Falls economic outlook

The Fergus Falls (Minn.) Economic Improvement Commission hosted an economic outlook session at the Bigwood Events Center in Fergus Falls on Jan. 28 to address opportunities and challenges facing the community in the coming year. Speakers offered their takes on the short-term future of the area’s largest industries and the community as a whole, which, according to nearly every speaker, can expect 2014 to be a year of continued economic recovery and growth.

Jeff Ackerson, president of Vector Windows, said the manufacturing industry is continuing a period of re-strengthening post-recession. Challenges facing manufacturers include uncertainty regarding regulations, changing health care requirements for workers and a lack of available workforce. However, individual companies remain confident in the future of their businesses despite these challenges.

Ackerson noted that regulatory uncertainty is particularly impactful for manufacturers in areas such as Fergus Falls, which are located within close proximity to states that do not have as stringent requirements in certain areas.

Larry Schulz, CEO of Lake Region Healthcare, said his organization will continue to expand in 2014. The organization will soon open a home medical supply store and hopes to begin constructing a new clinic later this year to accommodate its growing number of providers. By 2016, LRHC wants to add at least two additional specialty services as well, in addition to the multiple new specialties that have been added in the past three years. The number of providers at LRHC has grown from 46 to 71 in the past three years and the organization continues to recruit additional providers. He noted that the community had requested more female providers in a past survey and the organization has acted on that request by increasing the number of female providers from just four to 25 within the past four years.

LRHC is an independent organization and is one of just seven indepedent so-called “tweener” hospitals in Minnesota, which means it is not large enough to do complex procedures such as open-heart surgery but it is not small enough to be considered a critical access hospital. Schulz said he is frequently asked if LRHC will join a larger system and assured session attendees that the organization has no interest in joining with another system. He said he feels it is important for LRHC to remain independent to retain local control of operations and to ensure that providers can refer patients to specialists and other providers regardless of their affiliation.

Mark Helland, vice president of customer service at Otter Tail Power Co., said about half of the company’s nearly 800 employees work in Fergus Falls, amounting to an annual payroll of around $31 million. In 2012, the energy provider paid nearly $1.5 million in property taxes in Fergus Falls, making it a major contributor to the city’s economy. That situtation will likely change somewhat within the next decade as federal regulations require that the company’s coal-fired Hoot Lake power plant near Fergus Falls be phased out of commission. Brad Tollerson, director of resource planning and power services, said the company plans to carry out minimal upgrades at the power plant over the next few years and will shut down the facility in 2020. It remains to be determined whether a new facility will be built in the same location or elsewhere in the region. Tollerson noted that the most likely source of fuel for the new plant is natural gas and the Hoot Lake site does not currently have adequate gas supply infrastructure to support a gas-fired facility.

The Hoot Lake plant currently employs 45 people and is responsible for the bulk of property taxes the company pays to Fergus Falls, according to the company representatives. Helland said many of the plant’s employees are nearing retirement age so would likely retire on or before the plant’s closure. Remaining employees would be given opportunities at other locations. Helland further noted that the company is facing a massive turn-over throughout its workforce within the next decade – up to 40 percent of its employees are expected to retire within the next eight years. He said the company will focus on promoting the quality of life in Fergus Falls to attract new employees to the area. “If you don’t think it makes a difference, it really does,” he said.

Nearly every speaker during the morning-long session pointed to workforce shortages and a lack of skilled workers as areas of concern this year and into the future. A representative from Minnesota State Community and Technical College asked each speaker what the college could do to better train workers for each particular industry. Many speakers noted that recent high school graduates lack basic understanding of job responsibilities and several noted that math skills are severaly lacking among recent graduates. Others stressed the need for hands-on experience and suggested collaborative efforts to provide internships or other on-the-job training opportunities for students.