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U.S. Senator counts jobs--not ballots--in Perham

United States Sen. Norm Coleman talks to a group in Perham during a Dec. 4 tour of the Barrel O' Fun production plant.1 / 3
Wayne Caughey, left foreground, explains production to U.S. Sen. Norm Coleman, center, as Coleman's entourage and an area group are led on a tour of the Barrel O' Fun plant.2 / 3
Barrel O' Fun's Mike Holper explains part of the operation at the Barrel O' Fun plant as Coleman listens.3 / 3

In St. Paul, they were counting Norm Coleman and Al Franken election ballots.

In Perham, U.S. Sen. Norm Coleman was counting jobs, square feet and dollars--in one of the state's relatively few economic bright spots of the past 12 months.

"We live in challenging economic times...the toughest I've seen in 32 years of public service," said Coleman, who Dec. 4 toured the Barrel O' Fun production plant--which has expanded significantly over the past two years. Coleman applauded the cooperative spirit of the Perham area, which has experienced growth despite the poor economy.

From 2006 to 2008, KLN's operations combined increased from 669 employees to 810.

"But we're seeing challenges all around us...and you're sure to see them here, too," said Coleman cautiously.

Credit is tight, because of the banking crisis. In the auto business, for example, Coleman said car dealers in the past were able to qualify three out of four car buyers. Now, it is averaging one of four, he added.

The credit crunch has had an impact on Barrel O' Fun as well, including its sister KLN Enterprises companies Tuffy's Pet Foods and Kenny's Candies.

"Our access to capital is much more stringent," said Wayne Caughey, chief finance officer for KLN, who outlined the past and present history of the company for the group. "The requirements are stricter--we have to cross all the t's and dot the i's."

"I hope the federal government doesn't over regulate the banks," said State House Rep. Dean Simpson, especially with regard to affordable housing. Tight mortgage policy will "continue to slow the market down," said Simpson.

The virtual tie vote between Sen. Coleman and challenger Al Franken, which is now in the recount process, was the source of a few wisecracks during the tour. About 25 Perham area business owners and managers, economic development officials and city council members joined the tour.

"Fortunately for us, people are still eating snack foods, and they're still feeding their dogs," said Caughey. He noted that Tuffy's is producing 86,000 tons of pet food annually--30 percent of which is exported.

Chief operating officer Mike Holper said it is also fortunate that the KLN companies expanded in a strategic fashion, because it has placed the firms in better position to serve a broader market. A Barrel O' Fun plant is being constructed now in Phoenix, Arizona, for example, which will better serve the west coast market.

Expansions in Perham have been made possible, in part, by the Detroit Lakes-based Midwest Minnesota Community Development Corporation, which has secured and administered loans and grants for recent expansions. In total, the corporation has administered nearly $300 million in loans and grants for economic development in the state.

"New Market Tax Credits," is a federal program, administered by the Treasury Department, which KLN has benefited from. The program targets tax credits to companies, based on job creation and economic development criteria.

"I'm strongly in favor of the tax credit program, and the reason is the impact it has had on rural communities," said Coleman. "It provides opportunities to grow jobs here."

KLN expansions have included:

---50,000 square foot addition in 2007, along with 61 new jobs at Barrel O' Fun

---Another 50,000 sqaure feet in warehouse space in 2008

---Total payroll at Barrel O' Fun was $7.5 million in 199l, today it is $21.5 million

---Combining all KLN operations, there is a total payroll of $33 million

---Over the past five years, there has been a total of $57 million invested in expansions at the KLN facilities, which include Kenny's and Tuffy's.


KLN-Barrel O' Fun: Millions in tax collections

These are approximate numbers, based on conservative estimates presented during Norm Coleman's visit to the Barrel O' Fun plant Dec. 4.

KLN's corporate income taxes: $11 million

Property taxes generated at KLN: $1 million

Income taxes from KLN payroll: $16 million

Social Security revenue from payroll: $6 million