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Forest City-based Winnebago doubles profits, reports $1.5 billion in revenue

FOREST CITY | Winnebago Industries, Inc. on Thursday reported it has more than doubled its profits this year. 

The Forest City-based leading U.S. recreation vehicle manufacturer, said in a news release its fiscal 2017 revenues were $1.547 billion, up 58.6 percent from $975.2 million the previous year.

The company attributed the profits to the addition of Grand Design and growth in its towable products. Founded in 2012, Middlebury, Indiana-based Grand Design generated $248 million in revenue in 2015-16 before Winnebago purchased it for $500 million in 2016. 

In 2016, Grand Design said it had experienced a compound annual growth rate of more than 80 percent since 2013. 

CHRIS ZOELLER, The Globe Gazette 

Assembly line worker Scott Lieber examines the inner roof of an RV on the assembly line at Winnebago Industries in Forest City in March 2016. 

Winnebago has made “significant progress” in transforming itself into a “larger, more profitable outdoor lifestyle company offering a full line of RVs,” President and CEO Michael Happe said in a statement. 

The company has paid down its debt ahead of schedule, Happe said, with $69 million paid off since the end of the first quarter.

“I want to thank all our Winnebago Industries employees for their hard work over the year and their continued dedication to providing our customers with an extraordinary experience and strengthening our company overall,” Happe said.

CHRIS ZOELLER, The Globe Gazette 

Assembly line workers Jared Maas, right, and Stan Trca work under the chassis of an RV on the Winnebago Industries assembly line in Forest City in March 2016. 

The company’s fourth quarter revenues were $454.9 million, an increase of 72.8 percent compared to $263.3 million the previous year. The quarter ended Aug. 26.

Although revenues for its motorized RVs — $226.2 million — were down 4.4 percent from the previous year, Winnebago reported its revenues from towable RVs more than doubled.

Those revenues were $228.7 million, up $202.1 million over the prior year. Winnebago said that was due to $193.4 in revenue from the Grand Design acquisition and growth in its branded towables, up 33 percent from last year.

Arian Schuessler / ARIAN SCHUESSLER, The Globe Gazette  

Workers walk in a production area of Winnebago Industries in Forest City in this file photo from April 2015.

As a result, Happe said the company’s towable division will receive a $12 million expansion. The division is located in Indiana. 

“We have very strong brands, and our long-term aspiration is to be the undisputed leader in the market,” Happe said. 

CHRIS ZOELLER, The Globe Gazette 

Assembly line workers Jared Maas, right, and Stan Trca work under the chassis of an RV on the Winnebago Industries assembly line in Forest City in March 2016. 

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Trout makes case Friday for Mason City downtown project to IEDA

MASON CITY | Brent Trout's last day on the job as city administrator will be an important one for Mason City.

Trout, who will start as city manager in Topeka, Kansas, on Monday, will travel Friday to Des Moines and present the current development agreement between Gatehouse Capital and the city for a proposed hotel to the Iowa Economic Development Authority.

The IEDA has already granted a preliminary approval for $7.1 million in tax breaks for the project; that figure could reach a total of $10 million.

Mason City is seeking IEDA funds because the proposed hotel sits in its reinvestment district downtown. Kannan Kapelman, a spokeswoman for the IEDA, said the agency's funds is actually state tax that is "reinvested" into the district, in the amount approved by the IEDA.

Alaina Santizo, program manager for the IEDA, said a "commencement date" for funding will be set after the project has been approved by her agency. She added this is tentatively set for late 2019 or early 2020, once the hotel and conference center are scheduled to be completed.

After that, Mason City officials will work with the state's Department of Revenue, and then the city will receive the tax "reinvestments" on a quarterly basis, Santizo added.

Kapelman and Santizo said Friday's meeting is mostly an update for IEDA's board members to ask Trout questions about the new development agreement with Gatehouse.

Trout could not be reached for comment by phone or email Thursday. At Tuesday's city council meeting, he reviewed the new development agreement between the city and Gatehouse to council members.

Multiple members questioned him about specific parts of the agreement and overall proposal. Second Ward Councilman Travis Hickey expressed concerns that no funding from Gatehouse has been secured at this point.

"We would prefer to see things further along," Trout admitted to Hickey and council members. "We were held responsible as to when it came to the state granting us approval, they were wanting us to have financing on the project completed prior to their approval."

A public hearing for the development agreement with Gatehouse is Nov. 21, two weeks after Mason City voters decide on two key ballot items in this fall's general election. At least 60 percent of voters need to vote "yes" to approve a lease agreement with the mall for the proposed downtown multipurpose arena, along with up to $14 million in general obligation urban renewal bonds for the proposed hotel.

At Tuesday's meeting, Mayor Eric Bookmeyer asked Trout if the IEDA's "standard of approval" had changed since the city still doesn't have financing from a developer for the hotel.

Trout responded that the IEDA's board is looking for a development agreement and a favorable vote in the Nov. 7 election. If the city provides that, the project should be granted contingal approval and official approval by the agency's December meeting, he added. 

Santizo told the Globe Gazette on Thursday that she doesn't believe the IEDA's "standard of approval" has changed, adding that delays in the project have been because the agency wanted more details.

"The IEDA board on the second round of this said, 'We need to see more specifics on financing and development agreements," she said.

She added December is a "very reasonable" timeline for final approval, and that board members could reach a ultimate decision as early as November.

At-Large Councilman Paul Adams asked Trout at Tuesday's meeting whether he expects a delay in state funding. Trout said he doesn't, as long as voters approve the two aforementioned ballot items and the city and Gatehouse finalize the development agreement.

CHRIS ZOELLER, The Globe Gazette 

Mason City Southbridge

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Four North Iowa counties take first step to leave mental health region

GARNER | Hancock, Winnebago, Worth and Kossuth counties have decided to explore an option they hope improves mental health and disability services for their residents.

Within the past month, the counties’ board of supervisors have individually — and unanimously — voted to draft and submit a letter to County Social Services, or CSS, stating they intend to withdraw from the 22-county service region because they aren’t satisfied with its delivery in their counties.

But it’s likely the first of many steps the four counties, and others wishing to join them, will have to accomplish before such a feat can be realized.

“If you go about it half-a----, that’s what you’re going to get,” said Roger Tjarks, Kossuth County supervisor. “We’ve had some of that in County Social Services, where we tried to do too many things, and we never set a good foundation. ... It’s been a failure, so if we’re going to do it right, let’s do it right from the beginning.”

Tjarks was one of more than 20 supervisors and staff within the CSS service region who met with Jan Heikes of the Iowa Department of Human Services and area legislators on Wednesday in Garner. The meeting was the second for the group in less than a month.

At the first meeting on Sept. 28, a similar-sized crowd voiced concerns about the region’s staffing, funding and delivery of mental health and disability services to Heikes, Bob Lincoln, the region’s CEO, and area legislators.

The second was scheduled to give counties time to determine whether they wished to withdraw from CSS and Heikes time to receive answers to the supervisors’ questions. She brought those answers to the meeting Wednesday.

CSS is one of 14 regions established in 2014 as part of Iowa’s Mental Health and Disability Redesign to “efficiently and effectively” provide mental health services mandated under state law, according to the region’s joint agreement.

With 22 counties spanning North Iowa, it’s the largest region in the state, but all regions operate differently based on the joint agreements the counties approved during the redesign.

Supervisors in Hancock, Kossuth, Winnebago and Worth counties believe that can be improved if a smaller region is established.

But there isn’t “a clear path” in state law that outlines the process for establishing a new region after the redesign, said Sen. Waylon Brown, R-St. Ansgar.

“I met with Director [Jerry] Foxhoven to see what the appetite of DHS is to allow a piece of legislation, and basically what he told me, with some stipulations, they would be willing to take a look at it,” he said. “With a piece of legislation done right, I believe that a pathway can be made.”

The original Mental Health and Disability Services Redesign Regionalization Workgroup recommended the minimum number of residents a service delivery region should have is between 200,000 and 700,000, according to a progress report issued by the Iowa Department of Human Services in December 2016.

“So the real concern is whether counties with smaller populations and with a smaller financial tax base would be able to provide all the services that are required to form a region,” Heikes said. “That’s really the crux of what needs to be looked at.”

But the final mental health and disability services redesign legislation did not require a minimum number of residents be included in the region, but instead required regions to consist of at least three counties.

Because the population requirement isn’t in state law, Heikes said the question is whether a region smaller than the workgroup’s recommendation can provide all the core services, core-plus services and evidence-based practices a region is required to their residents more effectively and efficiently than one that does.

In 2015, the combined population of Hancock, Winnebago, Worth and Kossuth counties was 44,317, which is about one-tenth of the population of the current 22-county region.

“What we can do is we can work to offer the pathway that you need, but I would strongly encourage you guys ... to make sure at the end of the day, you are providing the services in an efficient manner to the people who need them; because at the end of the day, that’s what this is about,” Brown said. “It’s not about whose money is whose. It’s not about where the service is provided. It’s about are the people getting the services when they need them in a timely manner that they need to have them.

“If you can’t do that, I strongly, strongly suggest you take time and look at how the citizens of the counties that you represent will be impacted.”

According to the CSS region’s joint agreement, a county may not withdraw unless written notice is received by CSS from the county board before Nov. 15 for effective withdrawal by June 30 of the following year.

Ron Sweers, Hancock County supervisor and CSS Board member, said it’d likely be two calendar years before the counties were comfortable creating a new region because of the criteria a region must meet.

“Right now, we have services and things work,” said Sis Greiman, Hancock County supervisor. “I think we really have to define everything before we just all of a sudden decide to jump ship.”

The supervisors agreed to continue the discussion with those interested in starting a new region at the next CSS Board meeting at 10 a.m. Oct. 25 at the Hancock County Extension.

And if the counties ultimately decide not to move forward with the establishment of a new region once proper legislation is in place, Tjarks said the discussions will be a “learning tool” for Lincoln and CSS.