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Published September 11, 2009, 12:00 AM

North Dakota State Mill loses $9.7M; manager gets 4% raise

BISMARCK – The directors of North Dakota’s state-owned flour mill gave its general manager a 4 percent raise after the mill reported a $9.7 million annual loss, marking the second straight year its ledgers were stained with red ink.

By: Dale Wetzel, Associated Press Writer, Associated Press

BISMARCK – The directors of North Dakota’s state-owned flour mill gave its general manager a 4 percent raise after the mill reported a $9.7 million annual loss, marking the second straight year its ledgers were stained with red ink.

North Dakota’s Industrial Commission, which oversees the Grand Forks mill and the Bank of North Dakota in Bismarck, blamed volatile grain prices for the loss. Manager Vance Taylor is turning the mill’s finances around, with help from a North Dakota State University consultant who has helped overhaul its strategy for hedging against swings in wheat prices, said Gov. John Hoeven, who is chairman of the commission.

“At this point, (Taylor) has the mill profitable again,” Hoeven said.

“He’s worked very hard to accomplish that, and we’ll continue to evaluate his performance.”

The mill buys most of its wheat from North Dakota farmers and produces flour for baked goods and pasta, most of which is sold in bulk to food makers.

The mill also markets packaged bread and all-purpose flour and bread machine mixes in grocery stores.

The mill’s budget year runs from July 1 to June 30. During April, May and June, the flour mill turned a $3.4 million profit.

The 4 percent raise increased Taylor’s annual pay to $181,505. It is the same percentage pay increase given to mill workers, Hoeven said. It is retroactive to July 1.

Taylor also is eligible for a bonus of up to 30 percent of his salary if the flour mill meets established profit targets. He has received no bonus for the past two years, said Karlene Fine, the commission’s director. The mill lost $821,607 during its 2008 budget year, the first since 1994 that it didn’t make money.

The Industrial Commission reviewed the mill’s financials late Thursday at a meeting in Grand Forks. Taylor did not respond to requests for comment.

Hoeven, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring make up the Industrial Commission. They said fluctuations in wheat prices caused losses at flour mills nationwide last year.

“Now, we’ve seen this situation turn around, and I think (Taylor) is entitled to be compensated at a reasonable rate, the same rate that other employees at the mill are getting,” Stenehjem said. “It wasn’t a personal failing on anybody’s part at the mill, but there were problems there last year that just were the same kind of things that were seen at similar operations all across the country.”

Aside from the mill and the Bank of North Dakota, the Industrial Commission oversees agencies that regulate oil and gas production, provide housing aid, and lend money to local governments for water and sewer improvements, schools, industrial development and other public works.

Separately, the commission voted to grant 5 percent raises to Fine; Eric Hardmeyer, president of the Bank of North Dakota; Lynn Helms, director of the Department of Mineral Resources; and Tim Porter, director of the state Public Finance Authority.

Hardmeyer’s salary will increase to $193,251. Helms’ raise puts his compensation at $136,027. Porter’s salary will rise to $89,175, and Fine’s salary is increasing to $78,586.

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