[Music] Lakeland Currents, your public affairs program for north central Minnesota.

Closed captioning is made possible by Bemidji Regional Airport , serving the region with daily flights to Minneapolis-St Paul International Airport.

More information available at bemidjiairport.org Hello again everybody, I'm Ray Gildow, co-host of Lakeland Currents.

I have with me today an Executive Director of the Region Five Development Commission, Cheryal Hills and Cheryal has been in this job for a while now it's been a long time since you've been on our program and I know lots of things have happened since then and we're just getting through the election recently we're all wondering how that's going to affect us and we're not going to know for a while.

Yeah.

So welcome aboard, it's good to have you back.

I'm so thrilled to be here, I miss seeing you.

So it's great to be back with.

And I know you were in Norway for a while and have you been there before?

No no we went.

Would you go back again?

Absolutely love that country, it was phenomenal, it was beautiful, it taught me a lot about, we did a lot of research around renewable energy and transportation systems and agriculture, it was fascinating.

So we got lots of new ideas.

Are they way ahead of us?

In some areas and then not in some areas.

We're really great and Minnesota's so fortunate and blessed to have such great leadership at the state level that we literally have some really good programs and some offerings that they don't and so yeah.

So for viewers who might not know what Region Five is just could you just give us a little snapshot of what it is that you do and where you're located?

Yeah cuz we are a bit of a unicorn we're told a lot.

We are a unit of government, Ray, in state statute and so like counties and cities and townships and school districts, we're a unit of government.

We're charged with serving Crow Wing, Cass, Morrison, Todd, Wadena, so five counties here in central Minnesota and through that statute we have a levy that comes to us, but it's about $300,000 of my $10 million budget so it's not a lot but still really we are intentional about being fiduciary responsible with taxpayer dollars and so that's some of our dollars that come in.

We're led by 22 mostly elected officials and some special interest groups and so a county commissioner from each of those five counties and a city council person, usually a mayor, and township officers, supervisors, and then we have Camp Ripley, Leech Lake Band of Ojibwe, Soil and Water, an emerging leader that's usually from the college and higher education.

So lots of elected and appointed folks who come and serve as my 22 bosses and our 22 bosses, 22 to 25, and it's great.

We have a portfolio of work we like to say that we address regional critical issues, right.

So Ray if you went to our website you'd probably go wow this is an organization that might be in search of its mission, they look a little bit maybe a little bipolar like they're not we do a lot of different stuff right and that's because the issues change.

When you're in a recession you do different work, when you're having addressing climate issues or you're trying to address social cohesion or whatever it is the region says is important, that's what we're charged with trying to find the resources and staff to address those issues.

So yeah you asked a very good question what do you all do?

We have a couple buckets I like to say that we focus in.

We've done transportation for over 30 years with MNDoT and staffing a group of county engineers and other experts in the space of transportation, trails, rail, air, right and, the Federal Highway Bill that's passed at the federal level money comes down to the states and then those dollars go to regions and we staff that committee that kind of decides where the money is going to go based upon what the counties want to do and so that's our transportation work.

We've been doing that for many, many years.

We started the last couple of years, four years working in a space of transit and really trying to figure out rural transit very, very hard, particularly if you're not trying to lean on taxpayers to subsidize transit, but we have a lot of mobility issues of people who just can't get to their doctors or to work right and so we're working with the amazing transit providers of the region to try to beef that up maybe do some more volunteer driver programs.

We have some good groups in the region, Faith and Action, others that do really good stuff and so we've been doing that work for about four years and a staff person leads that and so that's kind of fun.

We do typical stuff like economic development organizations even the ones here in Crow Wing County and other counties usually have loan pools, revolving loan funds, they do business loans right to businesses that need it, work with banks, share some of the risk.

The bank puts in a little and we, you know, these loans put in these pools put in a little.

We have seven lending programs in our economic development side the second bucket, more probably than any other economic development district in the state and I should have mentioned to you, Ray, we have there are nine like type organizations of us in rural and the Met Council kind of serves a similar role in the seven county metro area and so we are we're children of the Economic Development Administration, a federal agency the United States Department of Commerce, and so we get funds from them to do some economic development as well.

And in that space, when I talked about the lending, the business loans, we also do well water loans and if you needed a septic system you could come get a loan from us for the septic system because that's you know you can't have economic prosperity without environmental stewardship I like to say and so taking care of our water is really, really important and air, and of course our soils.

But the work that we do around lending is to make sure that businesses can get quality water and that we are doing our part to kind of make sure that they can help it out.

You have a staff, you said around 10-11 people, and you're housed where?

We have our main office is in Staples, in the center geographic center of our region, has been for 50 years.

Region Five is 50 years old now.

We're going on 51 and then we have a satellite office in Baxter for staff so they don't have to put as many miles on and drive to Staples every day because majority of our staff do work in the Brainerd/Baxter area.

And where do you connect with the tribal folks?

Lots of projects, lots and lots of projects.

Obviously Leech Lake Band of Ojibwe which covers five counties but Cass County primarily in our region, and the Mille Lacs Band is a little sliver but we really work more with Leech Lake.

And we've done several projects, it took a while for us to earn trust justifiably to be able to work with them in a way that is respectful and honors culture and as an organization we had some work to do to get there and we did that work and then they are so amazing, they're so wonderful to work with and so we've been able to do and the school district up there they have great leadership with their superintendent and so we were able to do some grants, write some grants fiscally administer some grants that help them with their goals of what they want to achieve and do.

A lot of it is around similar goals that we share at Region Five which is, again, yes economic prosperity so that people can, you know, buy their groceries etc, but also environmental stewardship to do some climate work which could be EV charging stations or improvements to buildings or, you know, renewable energy or a whole lots of variety of things.

But, yeah, so the lending piece we do loans for businesses and people.

And then we have this other last bucket, Ray, that we call Community Development, which kind of gets a whole bunch of stuff tossed into it.

So that's where we do our local foods work with Sprout and other partners that we've had for many, many years.

We have the only bricks and mortar food hub in rural Minnesota left in which is Sprout and we've done local foods work for since.

Where is that located?

Little Falls.

Little Falls.

And yeah they've done some amazing work for veterans and food insecure individuals and bridging cultural difference by teaching people about different culinary arts, etc, so they've done some amazing work I'm really proud of.

Work with the colleges a lot and all the food co-ops and pantries, etc, so they've done some really great work.

I'm amazed at all the things you're doing it's overwhelming to listen to you can you go to a website and see all of this laid out?

Yep and then we have a couple of spin-off websites of course because if you're really interested in transportation it starts to get kind of messy if it's all on one site, so we have a transportation website.

We have one for our loans, another one, but if you Google Region Five Development Commission you'll see all the the websites available to go to that kind of link to our stuff but yeah.

The community development stuff has grown a lot since the Biden Administration did the IIJA and IRA which are acronyms for acts that put money into lots of programs at the federal level and we've tapped into a lot of those programs, more than most and it's because we had support from philanthropy like big foundations McKnight, Cargill, some of the other really big ones, Energy Foundation, great folks that said when I went to them you know saying hey I want to make sure our region is served and we get some of these funds and they, Minnesota Department of Commerce, amazing MPCA they've all kicked in dollars to help us build capacity so that these 10-11 staff are experts at what they do and they will go after the funds and sometimes the funds just pass through us and go straight to a city or a county or a nonprofit.

Sometimes we fiscally administer it and deliver the projects because our partners don't have that capacity so we kind of act as our partners need us to, which means you better be pretty nimble and you better be very resourceful and you need to have a little bit of really solid authentic relationships and those happen by listening, I mean really listening.

You said you've been in this job 18 years, it doesn't seem like it's been that long, and you said there's nine other commissions basically, do you cross strategic planning with all of those or are you pretty separate?

Yeah I mean they do for instance the Headwaters has got a housing development arm.

The Northwest part of our state has a really robust wonderful aging arm of their organization.

So down in the South they've got some really good renewable energy, there's a 17 county consortium that does energy and so we cross by subject matter where we need to.

We were instrumental at Region Five in helping all of the regional development commissions receive dollars to do energy work and climate work.

I have a contract with all of the economic development districts in the state to write grants for farmers to help them get access to dollars to do projects that they want to do.

So we have some relationships we meet and talk.

I haven't been to those meetings for about a year but they, our staff, my team, the wonderful team that are at Region Five meet with their like type colleagues at the regional development commissions on a quarterly basis as well so we're sharing ideas, we're sharing resources, we're sharing grant applications, we're sharing.

How much of your staff time is just developed to research?

Very much?

You know I think we have we've also worked with the University of Minnesota who did a great project for us in the last 12 months where they created a database of where all of the access to where grants are and I've for many many years because I don't watch football I used to sit on Sundays and review what was available from federal agencies and so we kind of know.

How exciting.

Yeah, right, and then I got a life and I stopped doing that on the weekends and we have partners that have created these great resources for us to go to them.

They even created a resource that helps us get the data cuz when you write a grant you better have some data, right, that talks about where are the distressed communities, how do you know you need this, you know, how many green, what is the formula that's going to show how many greenhouse gas emissions you're going to save as a result of doing something with a farmer or a school district whatever.

So we have great, great partners that have developed resources for us to be able to expeditiously get into these grants cuz federal agencies sometimes will give us four weeks.

Well you better know what the project is going to be, who all the partners are and you better have that data pretty quickly.

That's pretty short.

To write it and then you have to write, you have to be proficient in writing, theories of change and logic models and staffing plans and budgets and then you got to get resourceful on the budget because a lot of these folks cannot afford a match when the government says you need to put some skin in the game.

Well where do they think that's coming from, taxpayers that are already sometimes overburdened.

And you said you do a number of high risk loans but your payback has been really good.

Wonderful.

We have a 0.5% default rate for those in lending.

That's pretty low.

They understand it's pretty low and that's historical over the entire tenure of our portfolio of lending so the reason for that is because we can do things sometimes, sometimes not always, the finance institutions can't do.

If you came to me and said I need a loan but Cheryal my money really comes in the summer months cuz I'm in a tourism industry, well ,we would modify your loans so that you're only paying, you know, the principal for those six months versus interest and give you a break and so that or you just pay the interest or whatever.

We work with our borrowers to make sure that it works for their business model versus having them try to figure it out or do, you know, bridge loans to get them through.

It just gets really complex and it's hard enough to start business and if we're giving money we ought not make it more difficult on them.

I've been following with great interest the projected growth in Region Five, specifically a couple of the counties are expected to grow more than others, and how it's affecting housing and also transportation, what's your view on the housing situation in Region Five?

I know you've had some great speakers that have talked about housing on Lakeland Currents, I think our role has been really to help groups look at development opportunities and then connect them primarily with the amazing network of housing partners.

There's, you know, Central Minnesota Housing Partnership, Greater Minnesota Housing Fund, there's the Minnesota Housing Finance Agency and there's a lot of really great housing folks.

All of our local housing redevelopment authorities, right, they're experts and so when we know of a real high need, like there was one in Hackensack and there's been some in Cass Lake that we facilitate and convene and bring those folks together but once they come together these are highlevel professionals, they take the project and kind of roll.

Our job is to just kind of make sure connection and then, you know, we like to go out after funds that you can't usually get through housing pools.

I like to tell folks cool costs, right, you want to do something cool well that costs and so we try to go out after the funds to do things like maybe a housing development wants to do, start a recycling or a composting, or they want solar or they want, right, a community garden, all those cool things cost and so we are the partner that will come in and help try to find the money for the cool stuff.

What's your perspective of the energy future in Region Five?

I think we've had great partners that have, pioneers really in this space that have taught me a lot, still learning, but you know the fuel poverty or the individuals who are already low income and trying to maintain with the increased amounts of the cost of energy whether it's electricity or natural gas or whatever, right, that's where we've really tried to come in and say we really need to focus intentionally on those people that are carrying the burden and are crumbling under that burden of energy costs and helping them stabilize that so at least they can budget, and likewise for school districts and others so, you know, there's a lot of conversations about electric vehicles and there's a whole lot of folks out there will tell you that's just a bunch of bunk and we shouldn't be doing them and blah, blah, blah, right, like they don't run in cold weather and you can only go short distances and it's hard to get them charged, there's a lot of barriers.

So our job is to figure out well, how do we reduce some of those barriers, what can we do, go get funds to do more EV charging stations.

Electric vehicle.

Yes.

Can we help transit providers shift there, you know, and upgrade their fleet.

Yes.

Those are some of the things that we try to do.

But I think we will, as technology advances, and as AI and other technology kind of starts to show up more in our daily lives I think more and more homes and vehicles and buildings will become much, much more energy efficient.

I think I'm not a, I don't have an opinion about the drill baby drill and whether we should be touching our environmental assets to create sustainable energy sources.

I'm lucky and fortunate that I don't have to have an opinion in that space.

But to tell you the truth there it makes some sense on some levels to start looking at our assets and what we have in order to again stabilize those costs and not be dependent upon foreign resources to.

We are actually drilling more than we ever have before so that's an interesting thing.

Solar and wind get a lot of attention and for people who can afford it, not everybody can afford to do that, do you think it's this is kind of off the question I gues,s but do you think it's more practical to tie into the REA's and their movements towards solar than it is to go to the individual level?

And the reason I asked that is because when people individually go to something they get a discount but it's all the other people in the lines paying for it.

This is true.

I think there is a case to be made for both approaches.

I love what our utility companies are doing and they're really being robust about, you know, the goals the state of Minnesota has set and, you know, there's more work to be done but they've been really great about doing solar farms and or we don't have real good wind capacity somebody could argue that that's an expert in that space and the technology is getting better and better in wind but thus far we haven't done as much wind as we have solar, geothermal, hydro, in some cases methane.

I think there isn't a one- size that fits all.

I think you there, you know, until the grids are upgraded, which needs to happen and they're working very hard at doing some grid resilience work and a lot of money flowing through to be able to do that.

Minnesota Rural Electric Association has been doing some wonderful work to help our utility companies improve grid infrastructure, I think that has to happen at that macro level but the micro level is starting to get people to understand energy and how they can be more, well the overused words of resilience and sustainable in their own homes is I think it's a yes and I don't think it's an either or, I don't think either approach, macro or micro, approaches to doing sustainable and utilizing renewable energies is a, that's my opinion that I think we can do both.

You know I think those that want to do it in their homes and if there are rebates and it's affordable and the payback makes sense I mean even if you're rich and you have money and you have means and it doesn't mean that's the best use right of and those folks, those homeowners are smart enough to know that, so I think yeah I think there is a yes and.

That's the approach we take and if your question was where are we going in the future with it, I think you're going to see a lot more I think, as the grid gets upgraded, you're going to see a lot more, a lot more solar systems and solar farms showing up and particularly if they're co-ops, co-operative structures where farmers or land owners go together to create solar farms and when that energy flows back to either those households and if there isn't a way for us to flow that benefit back to very low income that helps our economy overall because now we're doing less subsidies through like our Lutheran Social Services and other fuel assistance programs.

I have some friends that just drove up from Phoenix and the frustrating thing from their perspective, they had an electric car, not many places to plug them in and where they could plug them in they didn't work, yeah, and that's a theme I've heard often.

Yeah so that's part of the challenge of getting this stuff up.

Huge challenge.

We didn't play a whole lot in the EV charging stations, we did two on a solar schools project that we did through Xcel Energy and partners on the east coast and REAL, Rural Renewable Energy Alliance at the time.

We did two EV charging stations, now we're doing two more and it looks like we'll be probably funding and going out getting funding and I think the misconception for Region Five Development Commission is everyone thinks we have money.

We're not a foundation, we don't have grants to give out, we have to go get the money after a need has been identified that our bosses say really does meet our mission, you know, so we go out and find those dollars but we're seeking some additional funds to help partners that want to, like Brainerd Public Utilities or others that want to do EV charging stations.

We've been keeping our eyes out for those kinds of funds and we'll go after them when our partners say.

How about the highway situation, do you think we're in pretty good shape in Region Five for the growth that's projected?

I mean we work a lot with MnDOT and I love our county engineers and I think they're brilliant folks and they work really hard to keep that system, you know, usable for what we need.

There isn't any of us who don't think sometimes that whatever happens is like four years behind and sometimes by the time it's finished with construction it's eight years behind what we actually needed for the entire portfolio.

But I think I am so impressed with the approach that District 3 MnDOT, District 3 takes to keep our infrastructure and our road systems and the counties.

Is that Region Five?

Yeah District 3 runs a portion of Region Five.

Wadena County has some of District 2, so you know the state agencies separate us up as a state differently than we're separated, but I think they do a very, very great job.

I think MnDOT does a good job at reporting on the highway systems and the secondary roadway systems.

I think they, I just can't say enough about our county engineers that have an incredible amount of experience and they, like us, have to cobble together funds to make these projects happen and the region itself, Ray, works hard on an equitable distribution, it's not a requirement to MnDOT, so I'll say that out loud, but they think about hey, let's make sure the small counties that sometimes struggle to get a match for a project are also in this mix of distribution of funds in a way that creates those connections within the region because commerce doesn't stop at the end of Crow Wing County or the end of Cass County, right, I mean so they're going through to other states and parts of the nation so I think we have to be thoughtful about a regional system and not necessarily that's where regionalism works.

We are out of time if you can believe it or not.

How do people get in touch with you if they're interested in working with you?

Go to the website and we have lots of information, podcasts, all kinds of information about what we do, our marketing department's robust.

So go there, pick a name, call and we'll hook you up with the right team member and partners so.

And I want to thank you for this time.

Thank you for coming on board, it's amazing what you're doing, it's overwhelming what you're doing.

I know.

So it's great to have you on board.

Well thank you.

Thank you.

You've been watching Lakeland Currents.

I'm Ray Gildow, so long until next time.