County concerned for shareholders
The state is now asking for its money back after it invested in Red Trail Energy LLC, but Stark County is not quite ready to hand it over.
Bonnie Malo, the director of the North Dakota Chamber of Commerce's division of community services, spoke at Tuesday's county commission meeting asking for the money back. The state has a program which invests in businesses across the state to help them get established. In order to do so, the state uses the cities and counties as conduits to provide this money to the recipient business. As a result, Stark County is the owner of these stocks on behalf of the division of community services, she said.
"Basically what happens, that money comes back to the state, and then it's put back into a revolving loan fund, and it's used for future economic development projects in the state, so we reinvest the money back into the projects in the state," Malo said at the meeting.
But county commissioners opted to delay action, noting community concerns regarding how such a transaction would affect private stockholders in the company.
Malo told the commission that the intention would be to buy the stocks at $1 a share. Gerald Bachmeier, Red Trail's CEO, informed the commission that in the last sale, the shares went for $1.45 apiece. Commissioner Ken Zander said he was concerned that selling the stock below market value would hurt the private shareholders, something commissioner Russ Hoff echoed.
"I just want to make sure we're protecting the interests of other shareholders out there too," Hoff said.
Bachmeier noted that he thought the county's sale of the stocks would help the other investors.
"I can't say what's going to happen eight years from now, but I can tell you today, when you get back to the evaluation of the shares, I think it brings more value to it because you cut their dilution factor on one thing," he said.
Bachmeier also pointed out the impact the company has had on the surrounding area including more than $15 million in capital projects in the county, a payroll of more than $3.2 million and more than a third of their employees living in Stark County.
Bachmeier said, according to his company's records, the county has earned about $75,000 from the dividend payments on these stocks from its role of being an agent. Malo said the money from the stocks would amount to about $1.3 million.
But if the county sold the stocks, it would not retain any assets from that sale. Instead, 86.5 percent of that money would go into the state's revolving loan fund and the remaining 13.5 percent would go to the Roosevelt-Custer Regional Council's loan fund, Malo said.
"When we got into this project, trust me, we knew it was a high risk, so we never thought we would ever get our money back," Malo said. "And now our program right now is in jeopardy of being cut, so we would like that money back, so we can reinvest it in other economic development projects in the state. It is the state division of community services' money, so that's why we would like it back."
Zander asked that the stakeholders in the issue sit down with Stark County State's Attorney Tom Henning and put the request in a legal format for the commission to make a motion on, so all involved have a complete understanding of the situation.
"We have a responsibility to residents to be open and a good manager of the assets," Zander said.
Other commission news
The commission voted unanimously to make the section of road on Highway 10 from the city out toward Southwest Grain a no engine brake zone for truckers after commissioners received complaints from residents in that area about the noise.
When the trucks use their engine brakes, there is a noise as the truck releases compressed air to help it naturally slow down, said commission chairman Jay Elkin. The stretch of road is about 12 to 13 miles and will require about nine new signs.
"It's about the safety of the people, and it's about their concerns," Elkin said. "They live in the rural sector. They moved out there for a lifestyle that hopefully the county can provide them with — a nice, quiet atmosphere."
The county park board awarded the Roughrider Racing Association $10,000 — a grant usually given by the county's fair board — for the two car races during Roughrider Days. The association requested the money to promote the races.
Park Board Chairman Arnie Binek and county road superintendent Al Heiser also voiced their concerns regarding the drainage at the new fairgrounds. Heiser went out with the project's contractor Monday and took a laser level to shoot the area's elevations. He noted that the middle of the arena and ground near the sidewalk needed to be graded and raised to ensure that water did not pool in undesired areas — in the ring and under the grandstands. Heiser said he thinks the problem will only take a couple of days to fix, the company just needs the weather to cooperate so they can work on it.