The Salina Journal from Salina, Kansas on April 22, 2001 · Page 31
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The Salina Journal from Salina, Kansas · Page 31

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Salina, Kansas
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Sunday, April 22, 2001
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Page 31
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THE SALINA JOURNAL MONEY SUNDAY, APRIL 22, 2001 E3 Partners / Network assists farmers FROM PAGE El At 59, Levon Nelson is a fifth-generation farmer who works the same fields his Norwegian ancestors homesteaded in 1872; he has been at it since he was a 7-year-old driving his grandpa's tractor. About a decade ago, Nelson was working as a financial consultant when some farmers facing foreclosure turned to him for help. With three decades of banking and farming under his belt, he was a natural. Nelson began talking up their troubles over coffee and Danish pastry at a Wednesday prayer breakfast with nine men at a Lutheran church basement in the town of Mayville. Nelson helped one farmer reduce his debts, but he needed $75,000 for planting — and no bank would go near someone who still owed nearly $1 million. Nelson approached the farmer's lender Their talks turned into a delicate minuet. No, no, no, the lender said. Yes, yes, yes. Nelson replied. They were getting nowhere. "Then I said, 'Will a million dollars in net worth be enough?' " Nelson recalls. Two days later, five men from Mayville marched into the bank office. "We said, 'We're here to cosign the $75,000 loan,' " Nelson says. "All he could do was swallow and give us the papers." Partners is born And so they began. In 1995, they incorporated. Partners in Progress has built a network of people to provide a quick fix of $10,000 to $15,000 to help struggling farmers. The group — which includes farmers, a pastor, an auctioneer and a retired insurance agent — also recruits people to cosign loans and mortgages and buy farmers' land and lease it back for a modest sum. So far. Partners has lent $3 million to nearly 75 farmers in North Dakota and Minnesota. It also has counseled about 200 more there as well as farmers in Montana, South Dakota and Wisconsin. Every loan has been repaid, except one for $5,000 to a farmer who died of cancer ' Loans have ranged from $900 to $486,000. Most are short- term, unsecured and interest- free. And there's no red tape: These deals are sealed with a piece of paper — a photocopy of the check that includes a handwritten pledge to repay. This is farm aid with a handshake. "It's all based on a person's honor," says Theresia Gillie, a Minnesota farmer whose family received a $10,000 loan. "It's the way business should be done," Nelson declares. But most business isn't con- . ducted this way Just ask those on the receiving end. "I was shocked," Gillie says. "When you're hitting a brick wall year after year, and then Arnie Woodbury, shown last month on his farm in Wyndmere, N.D., is president of Partners in Progress. Photos by The Associated Press Lynn Cavett and her son Tim spread hay for caives iast month on their farm in Enderlin, N.D. Partners in Progress, a program designed to help local farmers in financial difficulty, raised $168,000 to save the Cavetts from foreclosure. Levon comes in and says, 'I can get you $10,000'... You kind of wonder: Is it REAL? It is." Make no mistake. Nelson isn't tossing dollars from a passing tractor. He gets acquainted with farmers and their finances. He compiles lists: everything they own, everything they owe. He asks how they got into the mess. He suggests how they can get out. "There are some who see the light and choose to quit," he says. "We never tell them to quit. But we never tell them to keep on." i Rescue plans put into action Nelson develops four or five rescue plans. They might involve selling land or changing crops. About 10 percent of the farmers have rejected the advice — and received no money More than 90 percent of those helped have made it. And Nelson loves to recall deals that clicked. There was the businessman who agreed to make a $486,000 loan, asked the farmer's name, then moaned, "Oh, noooo, he sued me." Nelson got the two together. The loan was made. And they shook hands. A deeply devout man. Nelson credits divine help for so many complex financial deals falling in place at the last minute. Sometimes it's not money that's needed. Nelson talked one farmer out of suicide, rushing to his house 90 minutes away, calling every half hour, first telling him to go outside and count his cattle, then go back and count his machinery "I knew he took pride in what he did," he says. "It was the best way I could think of getting him to put his gun away" Though few farmers get that desperate, Nelson says most have seen hard times, and the seeds of empathy often blossom into generosity Nelson has made 19 loans in recent years, totaling about $100,000. "I don't ask anybody to put in one dollar unless I'm willing to do it myself," he says. Enoch Thorsgard is willing, too. Still spry at age 84 and dapper in a maroon Western shirt with faux pearl snaps and bolo tie, Thorsgard knows the value of a well-timed loan. In 1940, a lender ponied up $30 so he could buy a marriagej license and, he says with a twinkle in his eye, a $5 ring. For decades, he says, farming was so profitable, "1 thought any dumbbell who can't make a living — let him starve to death!" Then came the farm crisis of the 1980s. The successful cattle farmer and Dale Carnegie disciple (he gives $1,000 to each grandchild who reads the Carnegie book "How to Win • Friends and Influence Peoplej) was losing $1,000 a day "The Lord has a way of teaching us a lesson," he says. "When I was hurting, I realized the problems that people get." Answering the call He has answered Nelson's call for cash about a dozen times, usually in the $5,000$20,000 range. "After he tells me the story, I always realize it's legitimate, and 1 trust him," Thorsgard says. "It's hard for me to say no." He helped Arnie Woodbury, a North Dakota farmer who had sold him a bull 20 years earlier. Woodbury had expanded his cattle business at the wrong time and the ruddy-faced farmer, once worth a $1 million, was broke. "It would have been easier if I just got a job and quit," he says, eyeing his grazing herd on a chilly day "But I wasn't going to give up everything 1 had worked for 30 years." Family members bought part of his land, and Thors­ gard signed a $100,000 mortgage for the rest. Woodbury makes monthly payments — and hasn't missed one. Woodbury is now president of Partners and crossed the bridge from borrower to lender ion a small scale). While strangers often write the checks. Nelson also encourages farmers to seek out friends and neighbors. When Ken Hove, a Minnesota farmer, needed $40,000 fast. Nelson studied his assets, then his debts. He stopped at $2,600 he owed a hardware store owner. "What kind of fella is he?" Nelson asked. "Top-notch," Hove replied. A friend, too. "Go apk him for $10,000," Nelson urged. "Geez, I OWE the guy money," Hove protested. "I can't ask him for money" Nelson persisted, and Hove relented. He took the merchant to dinner And he asked. "How much do you need, and when do you need it?" the man replied. Hove got $10,000. "I don't know how in the world I did that," he says, amazed at his own courage. It rarely is that easy Nelson appeals to seed dealers and grain elevator owners for a little patience and a lot of flexibility "You know the old saying that money talks? Well, when you don't have any, you do a lot of talking," he says with a deep laugh. Bankers help, too But no one, he adds, wants to be the bad guy, and bankers are willing to cooperate and realize some money is better than nothing. Mike Bannach, a banker at the Bremer Bank, which handles the group's accounts, credits Nelson's common sense, business savvy and preparation for Partners' success. "By the time they come into the door," he says, "they've gone through everything with a fine-tooth comb." Private money accounts for about 90 percent of Partners' loans. Grants and a foundation loan have provided the rest, and Bremer Bank recently gave the group $200,000 in low- interest loans. Bannach says despite the group's track record, farming is so unpredictable, sooner or later, there likely will be losses. Nelson doesn't worry "You end up going with a hunch and a gut feeling," he says. "There are no regrets. If it doesn't work out, we know we did our best." Merger / Goal is to 'stabilize rates' FROM PAGE E1 "No one will lose their job," Jackson said, adding the majority are linemen who will continue to maintain and construct electric lines in their areas. "We will be retraining a few (employees) for other responsibilities." The consolidated entity would keep all 24 board members — nine from NCK, eight from Jewell-Mitchell and seven from Smoky Hill — working toward a 10-member board in four years. Because board members are encouraged and paid expenses to attend seminars, Jackson said a reduced board size also would represent an expected savings. But he said there are no promises rates will be reduced. However, there could be some rate reduction, said Stephen Parr, chief executive officer of the Topeka-based Kansas Electric Power Corporation, owned by 21 electric cooperatives in the eastern two-thirds of Kansas. KEPCo owns 6 percent of the Wolf Creek nuclear power plant near Burlington in Cof' fey County "The three are relatively • small cooperatives. To some de; gree, there's a feeling that if • you're bigger, you can be more efficient," he said. "There may be some economies of combining from a power supply standpoint as well. "There may be an opportunity to buy power cheaper, but unt^il we can look at the system together, there's no way to know." Keeping rates competitive Jackson said the three cooperatives are not selling consolidation on a promise of lower rates. "Our goal is to stabilize rates," he said, "keeping them competitive in the future." If Hooley Alcorn were a member of the Jewell-Mitchell cooperative, he said, he would vote for the change. Alcorn worked for 40 years for the company before he retired in 1987 as the line superintendent. It's a matter of survival in an area with a declining population. Jewell County lost 10.8 percent of its population between 1990 and 2000. "It's more people getting together to share services. I think it's the way to go," said Alcorn, a Jewell County commissioner. "I don't think they're going to save a lot of money, but I think they're going to offer a lot better services." All three cooperatives pay approximately 4.7 cents a kilowatt hour for electricity Jewell-Mitchell charges its retail customers 9.5 cents a kwh; Smoky Hill, 10 cents a kwh and NCK, 10.5 cents a kwh. A 100-watt bulb will burn one kilowatt hour in 10 hours of use. Jackson said the plan is for rates not to change initially, but all customers will eventually pay the same rate. Each co-op is planning informational gatherings for customers in addition to their annual meetings. "We think leaving rates the way they are is a fair approach," he said. "It may take several years to get them blended to where we have one rate." Each customer — member- owner — will maintain the same equity regardless of the vote result, Jackson said. If it passes, he said, the consolidation would be completed by the end of this year, pending approval from the Rural Utilities Service and the National Rural Utilities Cooperative Fi- All the BANK ^ou'll ever need. Deb Muller Assistant Vice President Consumer Lending Quite simply, Security. Security Savings Bank 517 s. Santa Fe 1830 S. Ohio, Salina 785-825-8241 Equal Hjjuiing Undtr. MEMBER FDIC. New faith in mankind Spring has come to the Cavett farm. Ten calves have been born, the clay soil is thawing, and mother and son — the only ones remaining on the land — are up before dawn. For 24-year-old Tim, who has endured nearly two-dozen operations for a nearly fatal stomach problem, the loan was a tremendous relief The night after they received it, he says, "it was the first time I was able to sleep in three years." The Cavetts have sold some land but have 800 acres to raise cattle and pigs. They know more financial pressures are ahead. "Just getting out of bed in the morning, I know I owe so many dollars," Lynn Cavett says. "But I feel comfortable." This summer, she hopes to have a picnic to express her gratitude to those who bailed her out. "I want to say thank you, thank you," she says. "But it doesn't seem like it's enough. It's just two words. "I told Levon, I have to re^ think my attitude. I never questioned God, ever. But I had a lot of doubts about mankind. I can tell you, I don't have that anymore." Daniel R. Saulnier, CFP Senior Financial Advisor • Personal Financial Planning • Tax Planning Strategies • Mutual Funds • Investment Certificates > IRAs/Keoghs American Express Financial Advisors, Inc. Member NASD 1015 Elmhmst Blvd. • Salina, KS 67401 785-827-8766 nance Corp. Jackson said both groups have "supported and encouraged" the consolidation effort. All three cooperative members must favor the merger separately by the two-thirds requirement, said Jewell- Mitchell's Frieling. "If one doesn't vote to pass, it's done," he said. "You'd basically have to start over" • Reporter Tim Unruh can be reached at 823-6464. Ext. 137. or by e-mail at sjtunruh@salJour nal.com EMPLOYEE BENEEITS •Health -Life •Disabmty •401K •Cafeteria •Retirement GAIL THE EKPERTS IN EMPLOYEE BENEIITS Ynu Have CHOICES In Health, Life B Disability insurance JOHN WOOD & ASSOC. Of pec (785) 827-9099 Fax (78.5) 827-0215 1-800-921-0085 2075 S. Ohio Salina, Kansas 67402-3408 O re-B-C? Y&?UP) MIK)C7 ArNJt? 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