Case Study: Kiwash Electric Cooperative

Source: NRECA Power of Partnering Guidebook

An Amazing Makeover for Southwest Oklahoma

There once was an area with:

• A steady decline of its core industries: petroleum, ranching and farming;
• A 20-year loss of population and jobs; and,
• An increase in poverty conditions as business and young people left the area.
• Then a cooperative went to work and:
• A silkscreen company quadrupled its staff and increased production ten-fold;
• A town of 2,900 built a community swimming pool that attracts over 100
• children a day and draws families from the region to Main Street stores;
• A family-operated crop duster business moved to a new facility and developed an international clientele; and
• A corral manufacturer relocated, bringing in 65 jobs.
• Another critical step: Kiwash Electric Cooperative hired a manager, Dennis Krueger, who had economic development training and who understood how to get things done, why to form partnerships and how to access financing—three critical keys to local growth.

Located in Cordell, Okla., Kiwash Electric serves approximately 5,800 members, deriving 40 percent of revenues from 18 large commercial customers. With the economy in the cooperative's six-county service dependent upon declining industry, the co-op was determined to grow businesses to replace the declining livestock, gas and petroleum reserves, winter wheat and cotton markets.

Kiwash Electric led the "charge to change" by using the USDA's REDL&G program twice ($250,000 each time) to initiate a revolving loan fund. Beginning with a $208,000 USDA grant and $42,000 in cooperative matching funds in 1995 and again in 1998, Kiwash has made a number of loans to area businesses and local governments through either a zero-interest REDL&G loan or via a Kiwash Revolving Loan as the REDL&G loan is repaid. The projects are as follows.

Price Printing - Cordell, Okla.
"Kiwash stepped forward and helped us in a time when there weren't a lot of people that were willing to help us," said Jim Price, owner.

Project
Even though Price Printing is not on the cooperative's power lines, Kiwash Electric recognized that in helping the business, the co-op could help all of its co-op members.

Price Printing silkscreens and embroiders shirts, hats, jackets and other apparel. Owner Jim Price started his business in the 1990s, returning after college to work and raise a family in his hometown. Thanks to Kiwash, Price Printing now employs 17 and processes over one million items a year.

First, Kiwash assisted with a Rural Economic Development Loan (REDL) so Price could purchase new silk screen printing equipment. Then, as the company continued to grow, Kiwash provided a second loan for new screen-printing dryer equipment. Price Printing received equipment loans of $81,932 in total through Kiwash's Revolving Loan Fund. The company's big break came right after the Sept. 11th attacks on the World Trade Center. The military approached Price to apply logos to clothing. However, existing equipment prevented Price from delivering on a contract for 500,000 items two days after the U.S. invasion of Afghanistan. In stepped Kiwash to make it happen.

"We would not have been able to produce the quantities that the government required," said Price. "They would have found somebody [else], and we would have been left out and probably would be out of business."

Impact
There are numerous ways to count the impact of Kiwash's support of Price Printing:

• Additional jobs in Cordell and environs;
• Additional taxes for local economy;
• Inspiration to other entrepreneurs who want to start businesses;
• Additional jobs in other lo cations throughout the country because Price only uses T-shirts made in U.S.; and
• Electric load growth that enables the co-op to spread costs of serving all members.

Partners
Kiwash Electric Cooperative
Western Technology Center

• Helped Price Printing deal with the complex paperwork involved with its government printing contracts, which ran more than 90 pages.

W&W Livestock Systems - Thomas, Okla.
"Our relationship with Kiwash has been tremendous!" said Greg Overton, W&W general manager.

Project

W&W Livestock Systems builds animal stalls and corrals for assembly and delivery to a national market. W&W owners contacted Kiwash Manager Dennis Krueger and the Thomas Economic Development Authority about relocating to Oklahoma. W&W, an energy-intensive operation, moved into a new 70,000 sq. ft. facility, with a ventilation system that met EPA standards.

Impact

• W&W Livestock Systems employs 65 local people.
• Co-op has a new customer using more than 790,000 kWh yearly.

Partners
Thomas Economic Development Authority

• Provided critical information about work force, facilities, access to materials, transportation and markets.
• Provided the financing conduit for other public and private building grants and loans for this project.

Kiwash Electric Cooperative 

• Arranged REDL&G loan of $100,000 for W&W toward the 70,000 sq. ft. manufacturing facility and an additional $19,797 for the purchase of ventilation equipment via the Kiwash Revolving Loan Fund.

Community Swimming Pool - Burns Flat, Okla.
Background
Once home to a major Strategic Air Command (SAC) Base, Burns Flat, Okla., suffered in the early 1970s when the Air Force closed down the base. However, the community inherited all the old housing, the government buildings and the fourth longest air runway in the country.

Project

As a first step to revitalizing the town, Burns Flat built a recreation area including a large swimming pool and adjacent playground with assistance from the Kiwash Electric Cooperative and the USDA's REDL&G program. This is a prime example of resource-based community development – using what you have to spark other opportunities.

Impact

• Attracts more than 100 swimmers a day during the summer months
• Provides safe and hospitable place for children
• Draws area families to Burns Flat for shopping, services, and other attractions
• Initiated interest in 13,000 ft. runway, fourth largest in Western hemisphere

- May attract major aerospace or aeronautical manufacturer
- May become the first private space port due to length of runway and safe distance from densely populated areas

Partners

• Kiwash Electric Cooperative with a $250,000 loan from REDL&G revolving loan fund
• Oklahoma Department of Commerce Community Block Development grant
• Oklahoma Department of Tourism grant
• Midwestern Oklahoma Development Authority grant
• The town of Burns Flat (through dedicated city sales tax) repays the Kiwash loan as well as pays the operations and maintains the pool.

J&C Enterprises - Thomas, Okla.
"When we didn't know which step to take, Kiwash was always there to help us." Said Vicky Litsch, Thomas Economic Development Administration (TEDC) coordinator. Harold Gleason, Chair of the TEDA, agreed: "Kiwash has been an example of what rural electric cooperatives can do in cooperation with communities that are interested in and aggressive in determining their own destiny for the future."

Project
Entrepreneur Jerry Buester wanted to return to Oklahoma and work in some aspect of aviation after his stint as an aircraft technician in Vietnam. After much research it turned out that crop duster refurbishing would be a good niche. Jerry and his wife, Cecilia, (the J and C in J&C Aviation Enterprises) started a salvaging and rebuilding business that now ships crop dusters around the world to places such as Brazil and Australia.

With help from the Thomas Economic Development Authority and the Kiwash Electric Cooperative, J&C has grown to 12 employees, with all administrative staff having a college degree or higher. J&C is a prime example of why it pays off for cooperatives to help entrepreneurs with their dreams.

Impact

• J&C Aviation Enterprises has highly skilled and educated employees.
• Local airport has lengthened its runways and installed a beacon light to facilitate the testing of the J&C refurbished crop dusters.
• Airport upgrades provide opportunity for designation as a regional airport.
• Success of J&C Aviation Enterprises has helped spawn other new businesses in Thomas: two construction companies and a computer sales and service store.

Partners

• Kiwash Electric Cooperative provided a $150,000 REDL&G for a building/facility loan.
• Thomas Economic Development Authority arranged for additional financing through USDA, Oklahoma Department of Commerce and local banks.

Lessons Learned

• Partnerships are essential for growth. Partners bring together the planning, financial and institutional resources of the private, public and non-profit sectors.
• Partnerships must have broad support including cooperative staff and board of directors. The Board sought and hired a manager with an economic development background and gave him the go ahead to lead a regional planning initiative.
• Economic and community development partnerships take time and commitment. Unlike business "deals" that can be one-time arrangements, partnerships provide benefits over time because they are built on trust and relationships.
• Plan regionally, not competitively. All six counties in the Kiwash service area face economic challenges. Kiwash Electric and its partners have worked together to capitalize on the unique needs and resources that promote a strong overall economy, avoiding situations that produce winners and losers.
  

Kiwash Electric Cooperative is located at 120 West 1st Street in Cordell, OK 73632. Contact Dennis Krueger at (580) 832-3361 or dkrueger@kiwash.coop.