JSDC delays job count for companies

With the recession pinching area manufacturing sales, the Jamestown/Stutsman Development Corp. Board voted at its meeting Monday to delay job counts until June 30 and support companies such as Precision Results struggling to continue despite sluggish sales.

JSDC CEO Connie Ova said businesses in the area are “being forced to downsize just to keep the doors open.” Precision Results, for example, has dropped from 27 to 11 employees. The metal fabrication company’s president, Kent Paulson, said sales last year were about 47 percent less than the previous year. He added that the company’s losing less in sales this year, but “we’re paying more for materials.”

“Things look better next year,” he said. “Our sales are estimated to double next year. It’s just tough right now.”

The JSDC Board voted to guarantee a Small Business Administration loan made through Bank Forward for Precision Results. Paulson is applying for the $40,000 loan to pay the company’s bills.

“I have payables I have to cover,” Paulson said.

The approved SBA loan is $35,000, so in reality, board President Jim Boyd said, the JSDC is only being asked to guarantee $5,000. Personal guarantees from co-owners Mark Robins and Paulson have also been secured.

“The bank is not willing to take the risk,” Boyd said. “There’s no outlay of cash for us. Essentially, we’re co-signing the note.”

The JSDC holds $75,000 in preferred stock in the 13-year-old company, Ova said. That arrangement was set up years earlier in the company’s operations. She said the JSDC no longer takes a stock option.

Asked when he thought he’d be able to rehire employees, Paulson said he didn’t know. To get through the economic downturn with fewer employees to do the work, he said, the company needed to increase efficiency. It bought software to monitor production to do so and it worked.

“We went from 80 percent to 100 percent in efficiency in four weeks,” he said.

Most JSDC funding to area companies includes a “claw back,” or requirement, about the number of jobs created. Ova said after discussing the situation with companies here, some will not be able to meet their required job numbers. She said she met with the Bank of North Dakota regarding this. Those officials said they will be allowing an additional six months for North Dakota companies to try to build their numbers back up.

“It’s a six-month delay and it could go a year,” Boyd said. “It’s not a good situation. We need to recognize the fact that they’re (local companies) in trouble and help by standing by them.”

“The Bank of North Dakota doesn’t take action like this lightly,” said Ken Schulz, a City Council and JSDC Board member.

JSDC Board member Alex Schweitzer added that in six months, “we’ll have a better idea of what’s happening with this economy.”

As the meeting came to a close, JSDC Board member Dick Geigle said it was time for the mayor to designate someone else on the City Council to serve on the JSDC Board. Mayor Clarice Liechty is a member of the board and was at the meeting Monday.

Geigle called the mayor an “obstructionist on the radio” regarding the JSDC. He said she was hitting the JSDC with broadsides at every opportunity and “harassing the JSDC staff.”

His motion for her to designate someone else to take her place on the board died for lack of a second. Geigle said after the meeting that he’s just begun efforts to remove her. He said he will be asking the JSDC Board “for a bylaws change” to prevent any mayor antagonistic to the JSDC from sitting on the board. He wants the City Council to be able to choose a member for the position, rather than the mayor.

In a telephone call later, Liechty said “he’s free to do and say what he wants as a member of the board. I wouldn’t want to take that freedom away from anyone.”

In other business, the JSDC Board:

* elected Joan Morris to finish the year left of Van Halfacre’s term. Morris is the outgoing chair of the Jamestown Area Chamber of Commerce Board, which concludes her term on the JSDC Board.

* approved $9,600 in funding for two part-time interns.

Sun reporter Toni Pirkl can be reached at (701) 952-8453 or by e-mail at tonip@jamestownsun.com