Pomeroy, business leaders discuss impact of economic stimulus during Grand Forks, ND, visit

Rep. Earl Pomeroy, D-N.D., was in Grand Forks Tuesday to meet with local business leaders and give them a chance to weigh in on how 2009’s tough economy and the federal government’s economic stimulus efforts affected the region.

“There has been a lot going on in Washington,” he said, referring to changing bank regulations, health care reform talks and dealing with the national economy.

Most of those who spoke affirmed Grand Forks has bucked the worst parts of the recession, but it was clear the economy is still a big factor in local business.

STIMULUS IMPACT

City Council Vice President Eliot Glassheim said Grand Forks received about $5.5 million in stimulus funding, which helped the city catch up on $3 million of infrastructure, purchase four buses and retrofit a few buildings that will save on energy costs.

Still, he didn’t know if the money really helped in job creation. “Stimulus money is not permanent, so we’re not hiring too many people,” he said, adding two police officers were hired with some federal money.

Steve Burian, CEO of Advanced Engineering and Environmental Services, said the federal stimulus bills have been important because contractors and consultants would be “hungry” if it hadn’t gone through.

It’s helped his company, which has several jobs lined up for the year. Burian was hopeful the government would look into more infrastructure components in its next jobs bill, and said much of his work is stemming from aging water infrastructure that needs to be replaced.

Jim Richtsmeier, senior vice president of the East Grand Forks-based Ideal Aerosmith, said the national economic problems have enabled healthy companies like his to expand. “We’ve been able to bring in additional engineers from other parts of the country,” he said.

The company is moving its headquarters to Grand Forks and physically expanding, he said.

LM Glasfiber was looking at a tough year ahead in December 2008, plant manager Bill Burga said. “We were all fastening our seatbelts,” he said.

But the plant set “all the records” in 2009, including a production record, and he said this year won’t be any less. Burga said the Grand Forks plant now accounts for 20 percent of the company’s total revenue.

The city needs a bigger complex because the blade size has increased, but he said convincing the company of the need for local expansion won’t be possible until all existing buildings are full.

CONCERNS

Mike St. Onge, Grand Forks market president for Alerus Financial, said the banking industry has been helped by a 2009 law that extended the $250,000 Federal Deposit Insurance Corporation limit to the end of 2013, causing a “good run of money into banks.”

That also creates problems, he said, as customers become cautious about spending and keep planned projects on hold. “How do we get those dollars out?” he asked.

John Snustad, regional president of U.S. Bank, said 2009 was “a terrible year” for banking stress, which scared customers away from spending and loans. “Consumer confidence really pours to us from the national news media,” he said.

Federal regulators have been targeting national chains more than local banks, he said, which has put more pressure on U.S. Bank. Snustad said he expects 2010 to be a better year with more local expansion.

Local economist Ralph Kingsbury said he wondered how the nation could have been in such a serious economic situation “that in 18 months time, we’ve come out of it.” He said it took nearly a decade to rebound from the Great Depression, which was also helped by World War II buildup.

“I just hope we really are there congressman,” he told Pomeroy. “I think we’ve got some work ahead of us.”

David Flynn, UND assistant professor of economics, said his forecasts are “somewhat negative” for the state’s unemployment rate, which could rise to 4 or 5 percent. Still, that’s “far better” than the national average, he said.

As the recession set in, many engineers, research and development specialists and managers were laid off because the production staff was already at “bare bones” in 2009, he said. “I’m not hearing that happening here, and that’s a good thing for North Dakota.”

But Flynn he said Pomeroy represents “one of the biggest risks” to forecasts because lawmakers can implement new policies and rules that change the situation.

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