Grand Rapids City Council Examines Unemployment Rate. What’s Obviously Missing from this Report?

This article ran in the Grand Rapids Herald a nearly 4 years ago.   Has anything improved since this article was published in the paper?     – GRV-


By Lisa Rosemore Herald-Review Nov 1, 2013

So why is the unemployment rate in Grand Rapids so high compared to the rest of Itasca County?

Grand Rapids city councilors wanted to know if there was an answer to this question, so during a council work session in June, they asked Councilor Ed Zabinski and City Administrator Tom Pagel to research the issue further and report back to the council at a later date.

That later date came at Monday’s city council work session.
He, along with Pagel, interviewed people from various organizations to see if they could find any answers to the unemployment puzzle.

The Grand Rapids Area Chamber of Commerce, along with KOOTASCA, had concerns about funding, especially the inconsistency of funding, for job programs, Zabinski told the council Monday afternoon.

Another thing they found during their research was many area jobs go unfulfilled because the unemployed don’t have the skills to perform those jobs, he said.

One interesting thing they learned through the Chamber was a worker in Minnesota needs to earn wages of $14.11 per hour match what a person earns on welfare, he said.  The Chamber also said the next five to seven years, there will be approximately 50,000 area jobs to be filled as Baby Boomers start to retire.

According to figures from the Minnesota Department of Employment and Economic Development (DEED), the unemployment rate in Grand Rapids was 8.7 percent in July and 8.5 percent in August, the most recent data available. In comparison, Duluth was at 5.9 percent (July) and 5.5 percent (August); Itasca County was at 7.2 percent (July) and 6.7 percent (August); Koochiching County was at 7.6 percent (July) and 7.2 percent (August); Aitkin County was 6.6 percent (July) and 5.9 percent (August); Virginia was at 7.7 percent (July) and 7.5 percent (August); and Hibbing was at 8.9 percent (July) and 7.9 percent (August).

According to the memo provided to the city council:

• Both KOOTASCA and the Chamber explained they have “proven, successful programs to help transition unemployed people to jobs,” but the issue is inadequate and inconsistent funding. KOOTASCA provided information that a family of four needs to have an annual income of $52,416 to meet basic needs.

• According to DEED, there were 5,206 job vacancies in Northeast Minnesota. “Of those vacancies, the wages of only 163 fell below the welfare equivalent wage of $14.11 per house.

• Blandin Foundation executives said that resolving an issue like high unemployment requires a commitment of resources, time and talent.

“The consensus was that the community needs some entity or person to champion the issue of unemployment,” the memo said. “We believe that there are several groups in the community who may be potentially able to fill that role.”

• The City of Grand Rapids is not in the business of job training and education; and it does not provide a social net for those in need. Most people interviewed believed the city’s most appropriate role “is cultivating and maintaining an environment supportive of business growth and job creation.”

• Officials from the Grand Rapids Area Foundation said “they are setting strategic goals and have concluded that Itasca County’s poverty levels are an overriding concern for the area.” Several conclusions were reached during discussions with the foundation, some of which include: No one organization is leading a community effort to deal with the area’s high unemployment; there seems to be a “heightened sense of entitlement” in the area; there is little or no demographical data on unemployed people in Grand Rapids or Itasca County; and “we don’t need another report that sits on a shelf.”

Conflicts of Interest

At the last GRV meeting the topic of Local Government Conflict of Interest was brought up.  It appears that a few Public officials in the City Government may have conflicts of interest, which may be either intentional or unintentional.   To avoid embarrassment or accusation of impropriety they should abstain from voting or decline to participate in discussion.


 The State of Minnesota Office or Revisor of Statutes website ( contains the official State Statutes, Definitions, and Rules pertaining to conflicts of interest for all public officials

Per Minnesota Statutes, County Board members are required to file the Statement of Economic Interest while City government is not.  Why the one and not the other?

Although such disclosures may not be required by statute for our city public officials, it is thought that in order to avoid the appearance of a conflict it would be good public policy for our public officials to provide a “Statement of Economic Interest” , similar to the requirements in Minnesota Statutes Chapter 10A CAMPAIGN FINANCE AND PUBLIC DISCLOSURE, paragraph 10A.09, Subd.5  (     

§ Subd. 5.Form.

(a) A statement of economic interest required by this section must be on a form prescribed by the board. The individual filing must provide the following information:

(1) name, address, occupation, and principal place of business;

(2) the name of each associated business and the nature of that association;

(3) a listing of all real property within the state, excluding homestead property, in which the individual holds: (i) a fee simple interest, a mortgage, a contract for deed as buyer or seller, or an option to buy, whether direct or indirect, if the interest is valued in excess of $2,500; or (ii) an option to buy, if the property has a fair market value of more than $50,000;

(4) a listing of all real property within the state in which a partnership of which the individual is a member holds: (i) a fee simple interest, a mortgage, a contract for deed as buyer or seller, or an option to buy, whether direct or indirect, if the individual’s share of the partnership interest is valued in excess of $2,500; or (ii) an option to buy, if the property has a fair market value of more than $50,000. A listing under this clause or clause (3) must indicate the street address and the municipality or the section, township, range and approximate acreage, whichever applies, and the county in which the property is located;

(5) a listing of any investments, ownership, or interests in property connected with pari-mutuel horse racing in the United States and Canada, including a racehorse, in which the individual directly or indirectly holds a partial or full interest or an immediate family member holds a partial or full interest;

(6) a listing of the principal business or professional activity category of each business from which the individual receives more than $50 in any month as an employee, if the individual has an ownership interest of 25 percent or more in the business; and

(7) a listing of each principal business or professional activity category from which the individual received compensation of more than $2,500 in the past 12 months as an independent contractor.

(b) The business or professional categories for purposes of paragraph (a), clauses (6) and (7), must be the general topic headings used by the federal Internal Revenue Service for purposes of reporting self-employment income on Schedule C. This paragraph does not require an individual to report any specific code number from that schedule. Any additional principal business or professional activity category may only be adopted if the category is enacted by law.

Our purpose is not to encumber our city officials with needless paperwork but to rather to shed light on activity and policies that can lead to erosion of the public trust and to help ensure that the decisions of our public officials remain clear of undue and corrupting influences.



Question of the Week: Why does poverty seem to be the area’s growth industry?

broke monopoly manAre we importing poverty for the industries that benefit from it?

Why does it appear we are developing more and more social programs? Are the social service agencies driving their own growth? There is no doubt these agencies and nonprofits contain some of the highest compensated jobs in the area. Are we in danger of these groups driving their own growth for monetary reasons?  These are the questions that give rise to the real question:  “Is poverty the area’s new growth industry?”

The public is invited to comment.


This letter arrived from a concerned county citizen.  Please Read:


Update:  The author of the following letter asked to make a correction.  The County Board intends to vote on this on Tuesday, June 14th not the 15th.  The cost to the taxpayers of Itasca County for the interim County Administrator will be $135,000 plus benefits. 


Itasca County Logo


In 2011 the Itasca County Board of Commissioners, upon the recommendation of the County Coordinator opted to change the form of county leadership (governance model) to that of County Administrator.

Prior to this and for 30-35 years Itasca County functioned with the assistance of a County Coordinator.  Minnesota Statute 375A.01-375A.13 requiring counties to adopt one of the various forms of statutory county government.

The statutory forms of county government are:  Elected County Executive; County Manager; Chair of the County Board elected at large by voters; County Administrator; and County Auditor/County Administrator.   Minnesota statute 375.48 also allows for the appointment of a county coordinator.

Each option has pros and cons, differing restrictions and rules. Some options require elections, court appointed citizen committees to study and make recommendation and may only be changed after a county-wide referendum is placed on the ballot and is passed.

However, what has changed is that our State Legislators prior to and in 2015-2016, at the urging of County Boards, County Administrators and the Minnesota Association of Counties took away the citizen rights to choose and gave absolute authority to County Boards to make the decisions.

One example of key language change was the addition of, “Notwithstanding other provisions of law to the contrary,”. In other words, all other existing law is erased allowing the county board to make their own decision without citizen participation.


What changed?

Under the past 30-35 years of Coordinator leadership, where elected county board members were acting in both an administrative and legislative capacity the county was able to build a reserve of $22-$23 million dollars, while budgeting and taking care of county business. The building of reserves continued even while under Governor Plenty’s levy limits and budget cuts. The county board was directly responsible for setting the budget and managing departments with department heads reporting directly to them. County Commissioners had a direct line of supervision over the appointed department heads allowing them to keep track of what was occurring in those departments.

When an Administrator is appointed, the Administrator assumes general supervision over all county institutions and agencies; prepares and submits the proposed budget, hires and fires and assumes other responsibilities formally that of the elected county commissioners. Itasca County hired its first Administrator in June of 2011.


How well did that work for us?

The County Board received a self granted pay increase for doing ½ the job reducing their workload significantly.

One of the early actions taken by the Administrator was to fire our Assessor who had a long Career doing assessments. Cost? The Administrator then hired the same Assessor back as consultant at an expense of $80,000.00 plus until someone new could be trained in and qualified.

The Assessor as a consultant was no longer required to manage department or report for work every day and was able to come and go as desired.

The Auditor/Treasurer voluntarily stepped in to assist management of the department on a short-term basis, without additional pay, or it would have cost taxpayers a lot more.

The County Administrator, self-determined that the Administrator position is subject to salaried employee protections under the Fair Labor Standard Act for purpose of overtime. —- Wrong!  Consequence? Nothing of significance! Rather was given the benefit of flex time and a pay increase by current county commissioners. In actuality the Administrator received about 8% per year pay increases from 2012-2016, placing the annual salary at around $139,000.00 plus a lucrative benefit package.

The Administrator sought to make the elected Auditor/Treasurer job an appointed position. The elected Auditor/Treasurer reports regularly to the Board on the financial status of the county including reductions in the county reserves.  The Auditor/Treasurer’s office acts as a check and balance to Board spending. Oh yes, our current county board lobbied for and obtained legislation making possible their exclusive appointment of Auditor/Treasurer. This new legislation also includes an option for appointment of the Sheriff and a Civil Processor.

Employees were deemed to have such low morale under the leadership of the Administrator that the county board hired private consultants to hold “Employee Feel Good meetings.” The first hired was a friend of the Administrator, the third hired is an Aunt to one of the sitting county Commissioners. The cost to taxpayers is about $300,000.00 to date.

The Administrator convinced the Board to undertake an employee salary study under the guise of needing to be in compliance with “Pay Equity.” Guess what, the county has always been in compliance with Pay Equity since its legislated start in 1984. The county uses the same process as the state of Minnesota and many other counties for rating jobs, the “Hay system “. What the Administrator promoted is called the “Decision Band method”.

One might ask why you would promote something like this when the county is already in compliance. It might have something to do with the fact that the Administrator job would have been at the top of that scale based upon the number and importance of Administrator decisions, making it appear another salary increase for that position is justified.

Most of the positions rated as needing upward adjustment under this method are those already at the top of the scale and freezes those at the bottom. It cost around $60,000.00 for the study with additional payments required each time adjustments are made.

The cost of implementation is estimated at between $2.9 million to $5 million dollars. The State Department of Employee Relations (DOER), as required by law, presented a 2016 Report to the State legislature.  The report says that the State of Minnesota is currently at 99% compliance and that DOER is opposed to the plan changes recommended by Decision Band Method.   The 2016 DOER Report also states it is not acceptable to accomplish “Pay Equity” by freezing salaries or laying off male employees. The male line is considered to be the proper trend line as it is considered non-discriminatory historically. Female dominated jobs are expected to be made comparable based upon factors used to rate and value them. This was long ago accomplished in Itasca County using the “Hay System.”


Then there was the recent voluntary resignation of the Veterans Officer because of management conflicts and disagreement regarding what was in the best interest of the Veterans. The Administrator managed to turn this into a wrongful termination within an hour or two of the meeting, at which the Veterans Officer resignation was accepted, to be effective June 1st. In this case, the Veterans and the community turned out in strong support of the VO, in keeping this department as an exception to report directly to the county board and separate from the Social Service Agency. The outcome was appropriate and shows the public can be effective when collective action is taken.

Cost to county taxpayers for termination of Administrator in accordance with the Administrator contract was around $70,000.00.

However, the questions are:

  • Why is there an exception for only Veterans Service Officer’s department?
  • If it is best that the Veteran’s Service Officer be under the direct authority of the Board and reports directly to the Board, then why is it better to have a County Administrator over every other county department head?

Employees are included, as they are no longer allowed to bring concerns directly to County commissioners, but are required to go through the Administrator first. This has a chilling effect on potential “Whistle Blowers.”

  • What are we protecting by not allowing taxpaying public employees direct access to their county commissioners?
  • What is it that the Administrator does not want the County Board to know?
  • What is it that the County Board does not want the public to know?



A County Coordinator was previously employed at less than an Administrator demands and while not a perfect solution, none are, this worked well for 30-50 years. Only took 6 years to destroy all that was reserved over those years and put us into the red ink.

The issues listed are only the “Tip of the Old Ice Berg”.  It is just a matter of time before the taxpayers of this county must pay for the existing Board member decisions in Spades. It is going to mean significant increases in your property taxes. It is going to mean a reduction in services and employee layoffs.

It is common knowledge that Itasca County has a “Good ‘Ole Boy” power click problem. It is a lot easier for those currently controlling agenda and outcomes to go to one County Administrator than to convince a majority of five (5) county commissioners that something is a good idea. It is even harder to convince the voters that it is, thus the incentive for taking away voter rights to elective process and referendum action.

As of the Work Session on June 7th Tuesday, it seems the majority of the County Board members are in favor of continuing the failed Administrator model.  This issue will be discussed and voted on at the regular Board meeting on Tuesday, June 15th <correction 14th>.  If you care, you have a short window of opportunity to make your voice heard. Whether or not the Board members listen is yet to be determined.

Perhaps they feel safe now that filings for office are closed. Maybe they forget that write in candidates are an option as are recall elections.