UNIVERSITY OF BOULDER LEEDS SCHOOL OF BUSINESS IN THIS ISSUE PAGE 1 The Economy of Eastern Colorado PAGE 3 Foreign-Trade Zones in Eastern Colorado PAGE 4 Lincoln County—In the Crosshairs of Transportation and Energy Expansion PAGE 7 Economic Impact of Prison Closing in Burlington PAGE 8 Northeastern Colorado Agriculture— More than Cows and Corn A publication of the Business Research Division PAGE 11 Morgan County—Investing in Volume 82, Number 4, 2016 Infrastructure The Economy of Eastern Colorado John Griswold The northeastern and eastern regions (1.7%). The counties that grew, Elbert, wage growth. Per capita personal of Colorado comprise 10 counties that Kit Carson, Sedgwick, and Morgan, income in the region averaged $42,361. are home to 2.1% of the total Colorado accounted for nearly 90% of growth. The industry composition in Eastern population. The counties included The three counties with the lowest Colorado is dominated by agriculture, in this region are , Elbert, population growth rates were Yuma which accounted for 17.7% of total Kit Carson, Lincoln, Logan, Morgan, (-1.2%), Phillips (-1.1%), and Cheyenne employment and provided 26.3% of Phillips, Sedgwick, Washington, and (-0.7%). Together, these counties the region’s total output in 2015. The Yuma; they make up the Department contributed to a loss of 180 residents government is the second-largest of Local Affairs’ (DOLA) regions 1 and in 2015, a 1.1% decrease in the total employer in the region; however, the 5. The 2015 population growth rate of population of the three counties. industry is responsible for only 4.4% 0.8% in Eastern Colorado is relatively According to the Colorado Department of total output. Retail trade is the flat compared to the annual statewide of Labor and Employment, covered third-largest employer, at 8.9% of growth rate of 1.9%. With 112,386 wages and jobs in Eastern Colorado employment, but contributes only 3.1% residents, the region’s population is at its totaled 37,287 and accounted for 1.5% of total output. Manufacturing is typically highest level since 1990. According to of total Colorado employment in 2015. a high output per employee industry; this State Demography Office data, the three Eastern Colorado workers earn 1% notion reigns true in the region as 7% fastest-growing counties in 2015 in the of total Colorado wages, and average of manufacturing workers account for Eastern Colorado region were Kit Carson annual pay increased by 2.8% in 2015, 23.5% of the region’s economic output. (2.4%), Elbert (2.3%), and Sedgwick on par with statewide average annual Together, these four industries accounted for 48.6% of total employment and 57.2% of total output in 2015. Although the agricultural industry is experiencing significant consolidation, it remains the largest employer in Eastern Colorado. The manufacturing and mining industries show future growth potential as workers leave the agricultural space and seek jobs elsewhere. Elbert County, in particular, has contributed significantly to the region’s continued on page 2 population growth in recent years as it Morgan County, Fort Morgan is the county’s has sustained a compound annual growth largest municipality and is home to 40% rate (CAGR) of 3.6%, effectively adding of the county’s total population. Industrial an average of 598 new residents per year livestock is one of the largest industries in since 1990. Growth in the county is double the municipality as Cargill Meat Solutions the population growth rate of Colorado and employs 2,100 of the county’s 14,808 nearly four times that of the United States. workers. Logan and Morgan counties are Much of this growth can be attributed to located directly in the center of the Elbert’s increasing role as a feeder county to Julesburg (DJ) Basin and have remarkable Denver as the city’s footprint expands and potential for economic growth when the citizens move east. Elbert County’s growing price of petroleum increases. FROM THE popularity as a “bedroom community” for Oil and gas production in the Eastern Denver helps explain the 11.5% increase in Colorado region has been impacted EDITOR services-providing employment compared to significantly by the drop in petroleum a 1.4% decrease in goods-producing jobs. prices as many exploration and production Job growth in 2015 was 4.6% while the companies can no longer achieve This issue of the CBR highlights other nine counties in this region recorded breakeven production prices. According the economy of Northeastern a combined decline of 0.3%. Wages in the to the Colorado Oil and Gas Conservation Colorado, which comprises 10 county grew 8.1%, and average wages Commission, annual petroleum production in counties—Cheyenne, Elbert, Kit in the state increased by 6% in the same the region has declined 14.4% from 2014 to Carson, Lincoln, Logan, Morgan, time period. Favorable economic activity, 2015. The slowdown in drilling has affected Phillips, Sedgwick, Washington, affordable housing options, and Elbert’s Cheyenne and Lincoln counties the most and Yuma. With 112,861 proximity to Denver have contributed as they contribute 76.7% of the region’s residents, the region’s population significantly to the county’s growth, and overall production; however, these counties this is expected to continue as Denver’s are relatively small producers in comparison is at its highest level since population increases. to neighboring Weld County. Although 1990. Agriculture, government, Among the decreasing counties, much production is down, declining petroleum retail trade, and manufacturing of the decrease in Eastern Colorado’s production is not a region-specific issue. accounted for 48.6% of total population (65%) is from Yuma County. The The total Colorado rig count is down 63.8% employment and 57.2% of total county accounts for 10.6% of the region’s in the same time period. Eastern Colorado is output in the region in 2015. employment and wages. Yuma experienced not the largest petroleum-producing region 1.9% growth in wages in 2015; however, in the state, but the region’s proximity to The articles in this issue, primarily employment decreased 1.1%. Negative Weld County has introduced oil and gas written by industry and community employment growth has led residents to accessory jobs, including transportation leaders, provide insight into seek employment elsewhere, which explains and disposal. As the price of oil increases the region’s economy, focusing declines in both services-providing and to breakeven levels in the DJ Basin, Eastern on key industries and unique goods-producing industries. Consolidation Colorado should experience an uptick in innovations and challenges in the agricultural industry, coupled with employment and population as exploration facing Northeastern Colorado increases in productivity and the size of and production firms ramp up production. farms in Eastern Colorado, has contributed In 2015, taxable sales in Eastern Colorado communities. greatly to the decrease in employment in totaled $1.2 billion, a 1% increase from 2014. Please contact me at recent years. Morgan, Logan, and Elbert counties account 303-492-1147 with comments Although Logan and Morgan counties for 67.8% of total taxable sales, which is not or questions. make up only 21% of the region in area, they surprising as they have the highest number of are responsible for 57% of earnings and residents and employees. A 12-month rolling —Richard Wobbekind 45% of the total residents. These adjacent sum analysis illustrates that taxable sales counties are located along Interstate 76 and began to decline in November 2015. The are quickly becoming the energy hub of the December 2015 rolling sum analysis shows Eastern Plains. Easy interstate access and that taxable sales were down 1.9% from the transportation networks, in combination peak in October 2015. with access to bountiful natural resources, are attracting new mining and oil and gas John Griswold is a student research production. Logan County currently has assistant at the Business Research Division. 527 wind turbines under construction or He may be contacted at John.Griswold@ planned, which has contributed to the colorado.edu. county’s job and wage growth. Located in 2 COLORADO BUSINESS REVIEW Foreign-Trade Zones: Attracting Investment in Primary Jobs to Eastern Colorado Joe Kiely

The Town of Limon has one of the best final product enters the U.S. market. If to a rural area? For Limon, one of the retail economies in the state. Retail sales the imported component is combined answers was to have access to tools to in the town averaged about $85,800 with domestic components into a final encourage those primary industries to per capita in 2015 compared to Denver, product, the duty paid is the lesser of locate in the community. One tool was at $41,300. Limon’s position in the the individual components or the final a FTZ designation. Limon and Lincoln transportation system, where five major assembled component. If the final County, with the Town of Limon as highways intersect, including I-70 and the product is exported and never enters the Grantee, received a Grant of Authority for growing Ports-to-Plains freight corridor, U.S. market, no duty is paid to the United FTZ No. 293 on June 11, 2015. is why it is called “Hub City.” However, States. So while local communities The Limon FTZ was granted authority the Limon Board of Trustees recognized benefit and Colorado primary employees for up to 2,000 acres. The service area that the retail service industry, while good are used in processes, the company has was limited by regulation and application for local government revenue, was not a clear savings in customs duty. to 60 miles or 90 minutes from the Port nearly as positive to the town’s citizens Studying the global supply chain of Denver. The Limon FTZ Service Area and local economy as primary industries, for distribution, manufacturing, and includes all of the counties of Adams including distribution, manufacturing, assembly led to an understanding that and Arapahoe and major portions the and assembly, could be. Therefore, in a global economy, many distribution, counties of Elbert, Lincoln, and Morgan. the trustees decided to pursue the manufacturing, and assembly processes Any site, allowed by local land use establishment of a Foreign-Trade Zone. include one or more foreign components. regulation, is eligible within the service A Foreign-Trade Zone (FTZ) is The question becomes, how do we area. The Grant of Authority allows an authority, granted through the attract those primary industries, especially continued on page 4 Foreign Trade Zone Board in the U.S. Department of Commerce, designed to encourage U.S. job activity by allowing delayed or reduced duty payments on foreign components while using the U.S. labor force for production and distribution. From a local viewpoint, a FTZ is a tool that encourages the growth of primary jobs in the United States that could be offshored and creates tax revenues for counties, municipalities, school districts, and special districts. Duty payments on most imported components or products are due as soon as the component enters the United States. Those same components or products can be imported into a FTZ site, and the duty is deferred until the Photo provided by Joe Kiely

COLORADO BUSINESS REVIEW 3 designation of subzones outside the international business interests would Initiatives. The state’s rural communities service area when operations cannot be critical to encouraging investors to and regions were invited to apply for feasibly be moved to, or accommodated consider Limon and Lincoln County. specialized resources to help make their in, the service area. Rural Colorado must demonstrate its economies more robust. Developers of The Limon FTZ is organized under the ability to meet global business needs so the program are planning to establish alternative site framework (ASF). The the service area also includes large areas a set of best practices and a strategy ASF, instead of predetermining sites at of other rural counties. for marketing a primarily rural area to specific locations in the service area, As far as successes, Limon is early international business markets. provides the flexibility for a business in the development of the FTZ, but The Limon FTZ will work with to locate in the best location for their already, the Limon FTZ has opened businesses, local governments, and supply chain needs. A usage-driven dialogues with businesses that would economic development organizations to site may consist of a warehouse, a have never reached out to Limon prior identify and process potential users. More portion of warehouse, or multiple closely to the establishment of the FTZ. As complete information on FTZ No. 293, located warehouses. most people understand, economic including a guidebook, is available online Limon is often asked why it applied for development is a long-term effort, and at www.townoflimon.com/index.php/ a large service area, including an urban this effort is still in its infant stages in economic-development/foreign-trade- area and a large rural area outside of its terms of marketing and outreach. zone-no-293/limon-ftz-guidebook. local area. Why not limit the service area Recently, the Limon FTZ was selected to local communities? Having the FTZ by the Colorado Office of Economic Joe Kiely is Director of the Limon authority guarantees nothing. Limon and Development and International Trade for FTZ. He may be contacted at jkiely@ its partners in Lincoln County understood a Competitive Advantage Program under townoflimon.com or at 719-775-2346. that developing relationships with the Colorado Blueprint 2.0 – Blueprint

Lincoln County, Colorado – A Rural County in the Crosshairs of Transportation and Energy Expansion Troy McCue

Across the United States, a total of hour’s drive east of the and in Lincoln County directly involved in 23 counties have the name of our 16th crisscrossed by major U.S. highways production agriculture in 1950 was president, Abraham Lincoln. Lincoln and two railroads, the county looks 2,042, amounting to nearly 40% of County, Colorado, was founded in 1889 forward to industry expansion related to the county’s population. Today, due and interestingly forms a backward “L” energy, transportation, and affordable largely to a changing national shift and on the Eastern Plains of the state. Had warehousing and manufacturing. technological advancement in agriculture, the original founders instead formed Lincoln County has been home the U.S. Census reports that as of 2012, the county to display a forward “L,” to a thriving agricultural industry for 749 people, or 13% of the population the marketing possibilities would be generations. Namely, dryland wheat is employed in the agricultural and endless. Lincoln County is home to and hay production, as well as cow- agribusiness sectors. In the 21st century, just over 5,500 residents, but covers calf and beef yearling productions, Lincoln County has seen enormous a total of 2,586 square miles of land have been the mainstays for the rural investment in the wind and oil industry, mass, ranking eighth largest of 64 economy. According to the U.S. Census forever changing the landscape of the counties in the state. At exactly an of Agriculture, the number of people Eastern Plains.

4 COLORADO BUSINESS REVIEW extensive geographic research across the Niobrara formation of the that lies under Lincoln County. At some point in the future, once crude oil prices return to moderately higher values, or when drilling production technology lowers the development costs further, Lincoln County could be the likely beneficiary of greater oil and gas development and production. Growth in highway traffic counts— seen every year across the state’s Eastern Plains—is especially felt in Lincoln County. The daily counts at the busy service exits in Limon are routinely totaling in excess of 7,600, and the commercial corridor of Highway 40/287 that connects Limon and the county seat of Hugo has daily counts of more than 4,500. These counts are projected to continue to grow by another 13% by 2020, according to Colorado Department of Transportation (2014). Lincoln County’s participation in the transportation corridor association of the Ports-to-Plains Alliance and the Heartland Expressway shows the area’s commitment to playing an increasing role in the future development of the multi- directional freight transportation system. “As the Ports-to-Plains Corridor continues to develop as an alternative to congested Interstate 25 in Colorado and Interstate 35 in Texas, Oklahoma and , Lincoln County’s location at

Photo courtesy of Troy McCue the intersection of an interstate and the Ports-to-Plains Corridor and its proximity to the Front Range economy means Beginning with the Cedar Point which promises another 80 turbines for that Limon is also well positioned for Wind Energy Project in 2011, and the east-central part of the county, to be interstate and international commerce,” followed in quick succession by Limon completed in 2017. said Joe Kiely, vice president of I, II, and III wind projects by Nextera Wind energy in recent years has been operations of the Ports-to-Plains Alliance. (company of Florida Power & Light), accompanied by development in the “Lincoln County is already reaping the the county presently is home to just oil and gas sector. Prior to the decline benefits of a strong retail sector driven under 500 wind turbines. Supplying the of crude oil prices in 2015, Lincoln by growing traffic counts and is looking Front Range with green power in the County had over 120 active permits for beyond to use this transportation system state’s mandate for renewable energy, oil development and saw production to bring primary jobs including small Lincoln County’s northern horizons are of nearly 1.4 million barrels per year, manufacturers, assembly and distribution populated with the energy-harvesting according to the Colorado Oil and Gas facilities into Hub City.” Additionally, turbines. The trend and expansion in the Inspection Service. Although present Class I rail giant Union Pacific and short wind energy sector continues with Xcel production of crude oil and natural gas is line Kyle Railroad (subsidiary of Genesee Energy’s planned Rush Creek II Project, roughly 50% of its peak, there has been continued on page 6

COLORADO BUSINESS REVIEW 5 & Wyoming Railroads) continue to round Community Hospital and Care Center. atmosphere, all point to greater growth out the multimodal perspective of Lincoln The hospital, located in the county seat in coming years. One new feature is the County’s transportation future. of Hugo, is spreading its set of services recent approval of a Foreign Trade Zone When looking at all the aspects for across the county, touching neighboring status. Offering deferred duty benefits Lincoln County’s future, one message Kit Carson County with a clinic in Flagler, to those companies importing goods, is clear: Lincoln County will grow. The a family practice center in Limon, and a the zone promises to attract further economic development efforts are newly acquired assisted living center, also foreign investment in the region. There focusing on two items countywide: in Hugo. A late, very dynamic addition are a handful of small manufacturers in workforce development and the building to the host of health services is AIRLIFE the region, such as Doric Vaults, a burial vault producer, in Limon, and this sector is set to grow. Photo courtesy of Troy McCue The rural folks out on the windy plains in the left-facing “L” county, Lincoln County, look forward to a promising economic future. The steady replacement of the agricultural employment sector with jobs in sectors ranging from transportation to energy, and from health services to manufacturing is leading to a more diverse economy and population. The important thing to remember is that Lincoln County is ready for growth, and extends an invitation to all who may like of available housing. Very typical of services, based in Denver. The service to invest there. rural Colorado, housing shortfalls are in Hugo now houses a full-time medical the leading challenge for keeping and helicopter and crew for rural emergency Troy McCue is the Executive Director employing an adequate local workforce. response and transport services to the of the Lincoln County Economic Additional items to support the workforce greater Colorado hospital network. Development Corporation. He may be include adequate childcare and access Lincoln County’s proximity to the Front contacted at 719-775-9070, or to affordable healthcare. The good news Range, with open and congestion-free [email protected]. is that Lincoln County is home to a highways and railways, coupled with leading health care organization, Lincoln affordable land and a friendly business

6 COLORADO BUSINESS REVIEW Photo courtesy of Joyce Lightle, The Burlington Record

The Economic Impact of Prison Closing in Burlington Rol Hudler

Burlington, located in Kit Carson County, came back and informed the state of The assessed valuation of Kit Carson is a community of 4,254 people along I-70 Colorado it would need an increase of $6 County is $154,589,494. CCA’s prison in on Colorado’s Eastern Plains. Aside from million to keep the doors open. Burlington had an assessed valuation of the impact of the Great Recession, the The state could not justify the figures $15,175,233. CCA has been responsible city has recorded consistent employment desired by CCA and the decision was for 9.8% of the assessed valuation in Kit and population growth over the past two made by CCA to close its Burlington Carson County. decades. Part of this growth has been facility. This past year, taxes collected in Kit attributable to a major local employer—the The closure is a huge hit to the Carson County were $12,200,655. Of Kit Carson Correctional Center. economy of Burlington as well as several that amount, CCA paid $1,217,998, Corrections Corporation of America nearby communities. which represents 10.1% of total tax (CCA), headquartered in Nashville, At the time of the closing, the prison revenue collected. announced in June it would be closing the had 142 employees and 402 inmates. The city’s largest hit from the closure Kit Carson Correctional Center by the end Of the 142 employees, 64 were of the prison will be in utilities. Burlington of July. correctional officers. CCA offered some owns the electrical system and provides The private prison population in positions in other facilities it owns to water and sewer service to the facility. Burlington has been declining over Burlington employees, and the Colorado The total utility bill from the prison in the past several years as it has been Department of Corrections also hired 2015 was $619,367. CCA represented throughout the state of Colorado. At the personnel from the Burlington prison. by far the largest utility customer in the time of the announcement, the Kit Carson Of the 142 employees, 70 resided city’s system. Correctional Center had only 402 inmates. in Burlington; 44 in Goodland, Kansas CCA also paid the city 25 cents per The facility could house approximately (which is 30 miles east of Burlington); inmate per day. This figure totals close to 1,450. approximately 15 in Stratton; and the $65,000, which is calculated based on In an attempt to keep the facility remainder in the surrounding area. the past inmate population. It would have open in Burlington, the state legislature The loss of workers in the community been considerably higher had the inmate had approved an increase in operating is the largest concern. It is estimated the population not declined during the past expense of $3 million for the Kit Carson loss of employee wages could exceed four years. Correctional Center. Officials from CCA $2.4 million to the City of Burlington. continued on page 8

COLORADO BUSINESS REVIEW 7 Obviously, these losses represent a CCA, along with Kit Carson County severe hit to the Burlington economy. and the City of Burlington, are working Despite the closure, the Burlington together to get the facility reopened as economy and community have exhibited soon as possible. This is a huge task as resiliency. It has had substantial business inmate population throughout most of growth over the past year. Several of the United States has been declining. these firms are large, which will help The Kit Carson Correctional Center is lessen the blow of the prison closing. Tax one of CCA’s newest facilities, and it is rolls will benefit from them next year. located on I-70. These are plus factors An interesting side note to the prison as the company aggressively markets the closing is school enrollment. A total prison to other states. of 53 students were enrolled in the school district whose parents worked Rol Hudler is with the City of Burlington for CCA. Because of this, officials were However, the first day of school, the and may be contacted at rol.hudler@ anticipating a large drop in students. district had an increase of 15 students. burlingtoncolo.com.

Northeast Colorado Agriculture – It Means Much More than Corn and Cows Trae Miller Northeastern Colorado is the One thing the Northeast region has partners with area cattle feeders to turn agricultural capital of Colorado. With the done well is vertical integration in the ag the manure waste into high-powered four top ag-producing counties in the sector. Not only does it have cow-calf organic fertilizer. The product is bagged state located in this region, that point is operators that raise calves, but it also for sale in retail outlets and is available by hard to argue. It is something the region has feed yards that take the calves and the truckload for area farmers to spread is also very proud of; however, it is equally feeds them with local crops. The beef on their fields. The fertilizer helps farmers important to highlight the diversity of the plant in Fort Morgan then commercially to grow more crops to be fed to more type of ag production the region has, processes the animals and the beef cattle, which then creates more Humalfa as well as the other industries that are ultimately ends up on the plates of fertilizer. We truly have the complete cycle. thriving in the area. consumers around the state. Similarly, There are other ag products integrated Ag in Northeast Colorado is not Sterling Ethanol uses locally grown grain in the same but less involved way. just corn, wheat, and cattle. The area to process into ethanol, generating Trinidad Benham is an ag processing historically pioneered ag diversification feed by-products that are then fed in company located in Logan County. It in the form of sugar beets and beet the feed yards around the region. Other processes specialty crops, such as processing; dairy, beef, and commercial elements of the beef supply chain include specific bean varieties, that are grown bison processing; and the development innovative businesses like Performance in the Northeastern area and around of grains and field crops for human Plus, which formulates proprietary liquid the country. Those crops are cleaned, consumption. Alternative crops like feed supplements to increase production processed, and packaged in Sterling. soybeans, canola, and most recently, while lowering input costs of animal Ultimately, those packages are sold to industrial hemp are also being developed, feeding operations. Logan County even consumers through retail outlets such as and Sterling is home to the state’s first capitalizes on the “back-end” of animal Walmart and food service companies that ethanol plant, Sterling Ethanol. production. Humalfa is a company that supply restaurants.

8 COLORADO BUSINESS REVIEW Millet is another niche product that is new solutions to production challenges. agricultural roots, pun intended, the being produced in Logan County. The When most people think of agriculture Northeast and Logan County is home facility not only processes locally grown and Northeast Colorado they picture to successful innovation. Farmers have millet, but brings in product from other some cows, maybe some corn and adapted to be very resourceful and states, too. Clean Dirt Farms, west of wheat, but rarely do they realize the innovative when it comes to solving Sterling, processes the grain by cleaning scope of what agriculture in Northeast problems and challenges within their and dehulling it to make it ready for Colorado means. Yes, it is the main operations. That mentality has come human consumption. As a gluten-free lifeblood in many cases, but it is also all down through the generations to product, it has become popular and can of yours! As you have your barbecue create a region of problem solvers be purchased in stores like Whole Foods next summer, meat-filled football parties, and entrepreneurs, which has helped and Sprouts along the Front Range. or simply buy groceries, remember the develop a strong manufacturing sector. The same integrated supply chain impact Northeast Colorado has on your Examples of these businesses in Logan model happens with many different opportunity to eat those foods, and County include ag-related companies crops and facilities across Northeast likewise, remember the effect you have such as Nichols Tillage Tools and Graham Colorado. The Leprino Foods’ cheese- on rural Northeast Colorado economies Electric Planter; multiple specialized and dairy-processing facility in Fort when you buy those foods. fabricators, such as Industrial Welding; Morgan processes local milk from dairies Although agriculture is what built the Rylind Manufacturing; and Frontier across the northeast region, from Yuma Northeast communities and continues Fabricating. In addition, a strong sector to the Front Range. There is bison to sustain them, the region has much of machinists and shops supports the processing in Brush, which has opened more to offer. Specialized manufacturing oil and gas industries, including general new opportunities for local cattle feeders and fabrication businesses are thriving to diversify by feeding bison that are sent in the region. Due to the area’s deep continued on page 10 to that facility. Oregon Trail Jerky, located in Wiggins, Colorado, turns regionally VERTICALLY INTEGRATED AGRICULTURAL raised and processed beef into a finished SECTOR IN NORTHEASTERN COLORADO product that is sold to consumers across the country. Similar to what has been done with these agriculture-driven products, Northeast Colorado is now eyeing industrial hemp as the next opportunity for a vertically integrated production system. The region obviously has the ag production capability, the land, the necessary water, the expertise, and innovative mentality. The next step is to start identifying a commercial and viable market with a formal outlet for the crop and set up processing to create the necessary opportunities. New challenges accompany this opportunity due to legal issues and the nature of the plant. Those barriers are coming down so there is hope we can have the same success with hemp as the region has had with so many other ag products. The potential of this new cash crop is also driving innovation. Equipment, growing, and harvesting techniques have had to be developed and adapted to fit the unique properties of the plant. This forces the farm One example of the vertical integration existing in the agricultural sector of Northeast community to be innovative with finding Colorado centers around corn production. This is only one small piece of the big picture.

COLORADO BUSINESS REVIEW 9 machining companies Luft Machine, adjust their planters as they move to Other unique businesses include Skylyne Machine, and Farley Machine an accuracy level within an inch. This Rylind Manufacturing located in Atwood. Works. Also, Wisdom Rides is an technology also allows them to run the Rylind bought an existing shop in example of a unique niche manufacturer system with devices they are already 2008 and added the location to its in the region. familiar with, either in cab monitors or portfolio of other assets. The company Ag-related manufacturing is yet another in a simple touch screen tablet. One of manufactures specialized heavy aspect of the thoroughly integrated the key features of Graham equipment equipment attachments, such as loader agricultural sector of the region. is the ability to control each row of the buckets, road grader blades, and plows Companies like Nichols Tillage Tools field individually. By interfacing their for snow removal. Though the local shop and Graham Electric Planter help keep software with agronomist data records is focused on snow removal attachments, area producers on the cutting edge of a customized prescription that can it regularly helps area farmers with various technology and ensure that equipment be tailored to individual soil types and projects as they come up. avoids costly down time. Nichols Tillage moisture to increase the efficiency of ag Probably the most unique of all Tools relocated the family business to producers. Graham systems help farmers manufacturing or fabricating businesses Sterling over 30 years ago. The company reduce costs, increase yields, and save in Logan County is Wisdom Rides of manufactures various replacement time. This type of technology will ensure Merino. Wisdom began its core business components for farm implements that the American farmer is able to feed the of trailer mounted carnival rides in 1969. are typically used to cut through the soil world well into the future. The family-owned business began with and therefore wear out quickly. Using Logan County is fortunate to boast an innovative idea from Jerry Wisdom— proprietary hard surfacing processes some other very unique manufacturing mounting a Ferris wheel on a tank hauler Nichols produces high-quality shields businesses and fabricators that serve trailer for their traveling carnival in 1957. and blades that are shipped around other industries. One of these is That project kicked off the concept of the country and the world. In a recent focused on the oil and gas industry, creating portable carnival rides that were expansion, Nichols constructed a new but like many others, regularly works easier and faster to assemble for traveling state-of-the-art laser cutting facility to with businesses outside that sector. shows. Today, the business is operated enhance the flexibility of its operation. Frontier Fabricating produces oil and by the next generation of the Wisdom According to owner Rob Nichols, this gas storage tanks in Sterling. Frontier family, continuing the work of creating allows them to quickly adapt to different is a start-to-finish shop that works new attractions and serving the global product orders and produce shorter with major oil exploration and drilling entertainment world. A recent factory runs of material than having to change companies across the multistate region. tour revealed the construction of a small out their forge dies. With more 100 The shop is unique in its ability to work roller coaster for children in Saudi Arabia. employees, Nichols is a major player in with very large tanks, first building them Wisdom’s has also recently completed the Logan County economy. on their sides then standing upright to projects for Santiago, Chile, and two rides Another unique ag-related manufacturer finish. Frontier uses robotic welders for Da Nang, Vietnam. The company is Graham Electric Planter. Graham is a for part of the process to ensure a employs 35 people and has been a staple family-owned company founded in 2008 high-quality, leak-proof product. The in Logan County and the small town of to solve problems the family was facing in company also has the ability to produce Merino for decades. its own farming operation. The founder of airtight tanks such as those used by It is clear to see that agriculture is a the company began work on its current septic tank pumping companies. A big part of Northeastern Colorado, and technology after adapting data collection specialized focus, with the ability to be that means so much more than planting systems that he had developed for the flexible with the jobs they take, ensures seeds and harvesting grain. The sector drag racing industry. In 2011, Graham Frontier is successful while heavily tied is a spider web of industry, production, sold its first commercial units. Sadly, in to such a cyclical industry. processing, and even manufacturing 2015 the young founder, Toby Graham, Industrial Welding & Supply Company, that supports the region. Agriculture has passed away from an unexpected brain in Sterling, is another specialized bred an innovative and entrepreneurial aneurism; however, with the help of his manufacturer that focuses largely on way of thinking and doing business brother Marty and Marty and Toby’s building Colt truck dump beds and that resonates across all sectors of parents, the company has continued trailers. This past summer it celebrated 50 manufacturing, fabrication, and industry to thrive and is entering global markets. years of business in Sterling. Like many in Northeast Colorado. Their products are electric drive motors of the shops in the area, the company that interface with other technologies to has learned to be flexible and adapt to Trae Miller is the Executive Director of the provide precision to ag producers while demand. Industrial Welding & Supply has Logan County Economic Development planting their crops. The new versions built custom trailers for frac heaters and Corporation. He may be contacted at of Graham equipment allow farmers to hot oil tanks, for example. 970-520-1283 or [email protected].

10 COLORADO BUSINESS REVIEW Morgan County: Investing in Infrastructure for the Future Josh Miller and Chelsea Gondeck

In Colorado, water is more precious system of reservoirs, pipelines (including than gold, and energy production the 13.1-mile Alva B. Adams Tunnel), and supplies a wide variety of jobs. As pump plants to deliver snowmelt to the a major industrial, agricultural, and Eastern Plains. manufacturing hub of the northeast Increasing demand has limited the region, Morgan County and its 28,254 availability of additional C-BT water, residents share a similar perspective with so the City of Fort Morgan wanted to the state. find another source of drinking water In the 1990s, Morgan County saw to supply the city into the future. That rapid natural population growth and net supply needed to be of similar quality migration. In the early 2000s, the county to C-BT and, in order to be most cost Photo courtesy of Josh Miller experienced slower growth with slight effective, deliverable through the current declines during the Great Recession. C-BT infrastructure. In 2002, the City Energy Production Since that time, growth has continued of Fort Morgan joined with 14 other With Colorado’s Renewable Energy at a much slower pace. However, participants, including Morgan County Standard requiring 30% of electricity to Morgan County is projected to reach Quality Water, to pursue the Northern be produced from renewable sources nearly 40,000 in population in the next Integrated Supply Project (NISP), a water by 2020 (including 3% from distributed 15 years. With increased population storage project that, through the work generation), the energy sector in comes an increased demand on of Northern Water, met these criteria. Colorado will only continue to grow. As resources. Anyone involved in water and NISP will consist of two reservoirs (Glade the most populous municipality and the energy infrastructure knows that these and Galeton), pumping plants, and county seat, the City of Fort Morgan resources require years of planning and pipelines that will provide reliable water has been historically active in pursuing preparation. Morgan County has been supplies from the to a diverse portfolio of energy sources. extremely progressive in securing the 15 water partners. The city owns and operates five utilities, appropriate resources for the expected With a storage capacity of 170,000 one of which is the Light & Power growth and expansion. With leadership acre-feet, Glade Reservoir will be larger Department that derives approximately from several entities, the county has than the widely known Horsetooth a third of its supply from renewable secured resources for decades to come. Reservoir. While the construction of sources. This capacity is provided by the reservoir will require several miles two Western Area Power Administration Water Resources of U.S. Highway 287 to be relocated, it (WAPA) hydroelectric projects: the Since the early 2000s the City of Fort will provide a recreational amenity to the Colorado River Storage Project (CRSP) Morgan has been a recipient of water state as well as 40,000 acre-feet of fresh and Loveland Area Projects (LAP). supply from the Colorado-Big Thompson mountain water to each partner. NISP CRSP and LAP produce hydroelectricity (C-BT) Project. The project, which began will also store the abundance of water throughout the Colorado and Missouri construction in the late 1930s, provides over and above the legal requirements river basins, and Fort Morgan has water to a multitude of municipal, of interstate river compacts that has been receiving electricity from these rural-domestic, and industrial entities in been exiting the state to neighboring WAPA projects since the early 1950s. northern Colorado and has served as Nebraska; more than three million acre- Especially interesting is the cost Fort Morgan’s single municipal provider feet of water has been allowed to flow effectiveness of such hydroelectricity. since 2000. The project collects water out of Colorado unnecessarily since WAPA electricity can cost as much as from the Colorado River Basin on the 2009 alone, simply because there was 50% to 70% less than electricity from Western Slope and uses a complex nowhere to store it. the city’s other sources.

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COLORADO BUSINESS REVIEW 11 Federal Communications Commission’s to proactively address the growing challenge to overcome the digital infrastructure requirements as the divide created by older networks, the county’s population continues to diversify state’s Department of Local Affairs and expand. As the Capital of the Plains, established a broadband program Fort Morgan’s mission states the desire to enhance planning efforts. Taking to be “the city of choice for ourselves advantage of this opportunity, Morgan, and future generations—beautiful, clean, Washington, Weld, Phillips, Sedgwick, and safe.” Yuma, and Logan counties, through the Northeastern Colorado Association of Josh Miller is the Director of Community Local Governments, hired a consultant to Services and Economic Development for develop a strategic plan for implementing the City of Fort Morgan. In conjunction a regional broadband system. with Chelsea Gondeck, the Economic For several years prior to the regional Development Specialist, the department system planning, the City of Fort Morgan is responsible for enhancing the vibrant Photo courtesy of Josh Miller had been operating and maintaining its business environment through attraction, own fiber backbone to all of the city’s retention, and expansion of private sector anchor institutions, as well as the county development. Josh and Chelsea are The city has also been exploring and the local school district. This was available at Josh.Miller@cityoffortmorgan. other renewable sources to meet the possible due to the city leading the first com and Chelsea.Gondeck@ demand of both population growth and successful ballot initiative in 2009 to opt cityoffortmorgan.com, respectively. regulatory mandates. Several years ago out of SB-152, allowing the organization Fort Morgan staff began discussions to pursue this vital asset. However, with a private developer, Creative Energy as demand for broadband Internet Systems (CES), on the potential of a grew, city staff began researching what waste-to-energy facility. Essentially, other communities had been doing— the 15-megawatt plant would produce specifically, the energy by converting municipal solid Council of Governments’ project and waste from several counties through Longmont’s gigabit network. With a proprietary pyrolysis process. The increased urgency from the city council pyrolysis process would condense the to provide citizens and local businesses waste into pellets that would be heated with a necessary service, in 2015 Fort in an oxygen-deprived chamber, creating Morgan’s utilities director, in coordination a gas byproduct that is converted to with the newly established Economic electricity. While the project has been Development and Marketing Department, under review for a number of years released a request for proposals for the by collaborating agencies, the city is design and engineering of a citywide optimistic that the proposed facility will fiber-to-the-premise network. With begin construction in the next 12 to 18 approximately 5,400 utility customers, months. The project would also provide the city intends to reach every the region with a new primary employer, serviceable address with gigabit service further diversifying the local economy, The CBR is a quarterly publication of the Business ­ in the next several years. The design Research Division at CU Boulder. Opinions and ­conclusions and contribute to the city’s desire for and engineering are scheduled to be expressed in the CBR are those of the authors and are local control through the establishment of completed shortly, but the city must still not endorsed by the BRD, the Leeds School of Business a distributed-generation facility. decide how the system will operate. Fort faculty, or the officials of CU. Morgan could be the owner, operator, View our website: www.colorado.edu/business/brd Broadband and service provider, or simply own the Richard L. Wobbekind, editor; Cindy DiPersio, Perhaps one of the most exciting infrastructure and partner with a private assistant editor; Brian Lewandowski, technical advisor; Kristin Weber, design. investments the county is pursuing internet service provider for customer is broadband. In 2005, the Colorado service. Regardless, the city intends to This report is not produced at taxpayer expense. The University of Colorado Boulder is an equal State Senate produced controversial have shovels in the ground by early 2017 opportunity/nondiscrimination institution. legislation (Senate Bill 152) on to have the first phase of construction For information/address change: restricting a municipality’s ability to complete by 2018. provide high-speed bandwidth data Business Research Division As it has historically illustrated, 420 UCB, University of Colorado Boulder transmission. However, with the the City of Fort Morgan will continue Boulder, CO 80309-0420 • 303-492-8227