September-October 2014 by Connect Business Magazine

IN THE SPOTLIGHT

The Story of Andy Meyers

Andy Meyers, CEO

Chief Executive Officer Andy Meyers has been with Orthopaedic & Fracture Clinic since 1990. He finished high school in Marion, Iowa, where his dad was as an insurance adjuster and his mother was an accountant, social worker, and graphic artist at various times. Due to his father’s insurance work, the Meyers family often had to relocate, and young Andy would live in Davenport, Wausau, Sioux City, and finally, Marion. With each move came another Boy Scout troop to join, a passion he and his older brothers shared. His father was active in Scouting and was a Scout Master for years. My brothers and I had very good parents. Because of the way we were raised, and our Scouting experience, we were brought up to work hard and help others. As kids, we were responsible for our rooms and making your bed. There was always a chore list to be accomplished. I think my dad stayed up late at night building a list for us to tackle the next day. We learned a lot about being responsible, developed skills for self-reliance, yet we still had a lot of fun. Outside of Scouting, we enjoyed camping, fishing and pinochle as a family. They were great activities for three active boys. I know we ran them ragged until we feel asleep, exhausted from the day’s activities. Back then there wasn’t a lot of organized volunteerism. You just took care of the people in your neighborhood. If we knew of a need close by, we helped out. Dad and us boys would help elderly neighbors by doing their yard work and snow shoveling. Andy Meyers and wife Debbie have three adult children. He started college wanting to teach industrial arts before becoming a deputy sheriff/paramedic for seven years. He eventually became a physician assistant and joined OFC. In 2006, he completed his masters of business administration degree and moved into management. This position allows him to work hard and help others.

Mankato, Faribault, Hutchinson, Northfield and 14 outreach clinics. 16 physicians and 110 employees.

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Contents

THE MAGAZINE FOR GROWING BUSINESSES IN SOUTHERN MINNESOTA

STAFF & CONTRIBUTORS Publisher: Jeffry Irish

COVER STORY

Crystal Clear

Editor: Daniel J. Vance Art Director/Staff Photographer: Kris Kathmann

Advertising Manager: Steve Persons

Contributing Writers: Carlienne Frisch, Michael Tanner, Grace Webb

PROFILES

Production: Becky Wagner

Earth Movers

Wood Stock

Contributing Photographers: Daniel Dinsmore, Art Sidner

Circulation: Becky Wagner Printing: Corporate Graphics, N. Mankato Mailing: Midwest Mailing, Mankato

Cover Photo: Kris Kathmann

CIRCULATION 8,800 for September/October 2014 Published bimonthly

CORRESPONDENCE

Send press releases and other correspondence: c/o Editor, Connect Business Magazine P.O. Box 452, Nicollet, MN 56074

In the 1980s, Richard Berry’s pallet business was a part-time venture out of his garage while he spent his days working at his fulltime job. Now, 25 years later, Berry Pallets has grown large enough to warrant its own assembly building and offices. Berry oversees 36 employees and turns out 8-10,000 pallets a week.

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Locally owned Connect Business Magazine has ‘connected’ southern Minnesota businesses since 1994 through features, interviews, news and advertising.

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You are

Mankato.

We are Mankato’s clinic. You make this region strong. Because you know what matters most— family, friends, community. It’s who you are. And it runs generations deep here. It’s who we are too. We are Mankato’s clinic. Committed to the health of this region. Dedicated to caring for you and your family for generations.

➜ mankatoclinic.com

EDITOR’S LETTER

Labor Day, Every Day Southern Minnesota business leaders laboring in agriculture, construction, and manufacturing highlight this issue. In agriculture, we feature 25-year industry veteran Roger Kienholz, 57-year-old general manager of $375 million Crystal Valley, which serves customers and members in its four business segments of grain, energy, feed, and agronomy. This cooperative has 250 full-time and seasonal employees, and has operations in Lake Crystal, Darfur, LaSalle, Madelia, Nicollet, Vernon Center, Waldorf, Janesville, and Hope (near Owatonna). Over the years on our cover, we have featured the leaders of the two co-ops in our region larger than Crystal Valley, i.e., AMPI (New Ulm) and WFS (Truman). UFC (Lafayette) is right behind Crystal Valley. As for construction, read what has been behind the success of earthwork and construction management giant Mathiowetz Construction (Sleepy Eye), which recently has made Mankato roundabouts and smoothed soil for a new Walmart distribution facility. In manufacturing, we have stacked the success story of savvy pallet manufacturer Berry Pallets (Waseca), which started as a one-man operation slicing firewood for retail sale before evolving into a 36-employee manufacturing facility. Finally, remember to follow instructions on page 8 to nominate a friend or colleague for our annual Business Person of the Year contest. Go there right now. The deadline for an online submission is Friday October 3 at noon. Your colleague can’t win unless nominated. Sursum ad summum,

Daniel J. Vance

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Call for Nominations

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Business Person of the Year Award Nominate a colleague and see them featured on the cover of Connect Business Magazineâ&#x20AC;&#x2122;s January 2015 issue. All nominations are confidential. PREVIOUS WINNERS

2006: Bob Weerts

2007: Roxie Mell-Brandts

2008: Jeff Thom

2009: John Finke

2010: Pamela J. Year

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Nominate at connectbiz.com/bpoy

IT’S EASY TO NOMINATE! Go to connectbiz.com/bpoy and fill out the entry form by noon, October 3. Three important rules: You can’t nominate yourself; the nominated person must work and live in either Blue Earth, Le Sueur, Martin, Brown, Watonwan, Waseca, Faribault, Sibley or Nicollet County; and the nominated person must not have appeared in a major Connect Business Magazine feature from 2012-14.

NOMINATIONS OPEN SEPT 1 through OCT 3 IN ASSOCIATION WITH:

How the winner is chosen: Connect Business Magazine will learn more about the nominees, and forward the information on to our judges, who are Minnesota State University business professors. Each judge will have up to three votes: five points will be awarded for their first choice, three for second, and one for third. The top votegetter will appear on our January 2015 cover, and the two runners-up will appear inside the magazine. Judges will take into consideration the person’s character, leadership abilities, community involvement, and business results. Business persons from any business — large or small, profit or nonprofit, large town or small — are eligible.

NOMINATE A COLLEAGUE TO APPEAR ON THE JANUARY 2015 COVER!

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2014: Mike Pinske

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By Daniel J. Vance

He has been general manager of Crystal Valley more than fourteen years and would not have been if not for persevering through many setbacks and challenges— and skillfully turning those situations into assets. For one, in 16-degree weather while playing for Bird Island High in the Class C state championship game against Battle Lake on November 15, 1974, linebacker Roger Kienholz and his Panther teammates literally gave away the game. Battle Lake converted on seven fourthdown plays to earn a stunning double overtime victory in a game Bird Island should have won. Said 57-year-old Kienholz to Connect Business Magazine from his Lake Crystal office, “When you lose a tough game like that, you’re going to replay every play in your mind and see what you or your teammates could have done differently.” Some men would have been bitter. Roger Kienholz

Photo by Kris Kathmann

became stronger after applying lessons learned in that and other tests, including losing his marine business to fire in 1985 only a month after having a grand opening. Also, he had to overcome the numerous mental and physical tests associated with getting through the elite United States Army Jumpmaster School at Fort Benning, Georgia. Kienholz used these lessons learned to help take the cooperative he manages, Crystal Valley, from $25 million in sales in 2000 to $375 million today—and 1,500 members and 5,000 customers. Crystal Valley operates in nine Minnesota cities: Lake Crystal, Madelia, Vernon Center, Nicollet, Darfur, LaSalle, Janesville, Waldorf, and Hope. In 2013, the cooperative was the third-largest in the Connect Business Magazine reading area, behind New Ulm-based AMPI (cover story, May ’00) and Truman-headquartered WFS (cover story, May ’03). continued >

Lake Crystal-based cooperative has operations in nine cities, $375 million in sales, 250 full-time and seasonal employees, 5,000 customers, and 1,500 members.

SEPTEMBER/OCTOBER 2014

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Crystal Clear

Where did you grow up? I grew up on a farm south of Bird Island, about 80 miles northwest of Lake Crystal, along with my parents, two brothers, and two sisters. It was a typical small family farm of 320 acres in the ‘60s and ‘70s, raising corn, soybeans, alfalfa, sweet corn and peas for Green Giant, oats, wheat, and, until I was 10, sheep. My younger brother still lives on the home farm and rents out the acreage and I was the fourth of five children. I was involved in 4H and softball, with the latter often involving going to a neighbor’s farm, clearing some cow pasture, moving rocks to make bases, and playing. Dad was hardworking and Mom was always on the farm. We had as morally upright of an upbringing as possible in terms of my parents’ example. Dad was very conservative and an astute businessman with a strong work ethic. There was a time in my life when I thought I hadn’t learned anything from him because he didn’t seem to be a very good communicator. But I realize now that I’m older there was no way I could have learned as much as I did except for growing up on the farm and hanging around Dad. He was on the school board, the church board, sang in the church choir, taught Sunday School, and was a 4H leader and gun safety instructor. As for his being on the school board, when I was in grade school, the superintendent would give me a large manila envelope filled with checks to take home for Dad to sign and bring back to school the next day. My dad was the school board treasurer. I don’t think anyone would do this with a 10-year-old kid nowadays, but back then you could even bring your .22 rifle to school for show and tell. We lived within our means. I don’t know if Dad ever borrowed any money except for buying his first quarter of land on a contract and for planting his first crop in the ‘50s. You’re a big man. Were you involved in sports? I played high school basketball and football, and played baseball my junior and senior years when my younger brother was old enough to help my dad with spring work. We had 54 in our graduating class in Bird Island, a town of 1,200. Because of the small school size, I could play sports, and be in band, choir, school plays, musicals, student council, and honor society. We made the state football playoffs my junior and senior years, losing to the eventual state champions (Gaylord) in the quarterfinals my junior year and to Battle Lake in the championship game my senior year, in two overtimes. You were that close to being state champions. What happened? (Laughter) We played Battle Lake in Willmar for the Class C championship on November 15 in 1974 and it was 16 degrees outside. We were ahead 20-6 at halftime. They tied it up in the second half by converting on seven fourth down plays. I played linebacker on defense and tight end on offense. Back then, in overtime, each team took the ball on the 10-yard line and had four downs to score. We scored first and failed the two point conversion. Then they scored and failed to convert. Then they scored and we didn’t, and we lost 34-26. 12

CONNECT Business Magazine

SEPTEMBER/OCTOBER 2014

Roger Kienholz | Crystal Valley

How did that affect you? (Laughter.) We were that close, but I learned more by losing than if we had won. I learned you don’t always get what you want and things don’t always go your way. I learned life isn’t always fair. I learned the importance of maintaining your cool in pressure situations. They ran a fake punt and we panicked instead of keeping our heads on straight. There are a lot of things learned in tough defeats that you don’t learn through easy wins. Mostly, I learned in pressure situations to simplify versus complicate matters, especially if you’re working with a team of 11 guys. We ran a number of series where we converted for first downs but had jumped too soon because of trying to run the snap count on three instead of one. If we had run every play on one in the fourth quarter, we would have been fine. When you lose a tough game like that you’re going to replay every play in your mind and see what you or your teammates could have done differently.

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We discontinued that to focus our attention and resources on what we do best: agronomy, energy, feed, and grain. We simplified. These are the things we do to serve our customer base of farmers and livestock producers. You talked about the importance of simplifying. How have you applied that principle, for instance, to Crystal Valley? With the cooperative, we have stopped doing business in some areas. For example, we have exited the convenience store business, the automobile service and tire business, hardware stores, the selfstorage rental business, dust control for gravel roads and parking lots, seed cleaning—these were things we had been involved in. We discontinued that to focus our attention and resources on what we do best: agronomy, energy, feed, and grain. We simplified. These are the things we do to serve our customer base of farmers and livestock producers. Not that those other things couldn’t serve them, but our primary core business, and why we were founded, was for those areas. We have become better at our four divisions because we have focused on fewer things rather than being highly diversified. Your career path? I went to North Dakota State University and majored in civil engineering because my high school counselor suggested it and said I was good in math and physics. After two and a half years, I realized I didn’t like engineering because I thought it would lead to a desk career. So I switched to agricultural economics. And, I got involved with ROTC. As for football, I was a walk-on in college. As a team, we didn’t have

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Crystal Clear

In the military, besides gaining valuable work experience, I was put in situations in which I was stretched and where I was either going to fail or gain confidence. I gained a tremendous amount of confidence there. Again, if you’re forced to do something, you don’t have the choice to quit, so you have to do it. the best experience my freshman year. The coach and his assistants were let go with two games left my freshman year, so we played those last two games without a coaching staff, only with graduate assistants to lead. The next year, Jim Wacker, who later coached the Minnesota Golden Gophers, became the head coach. In retrospect, it would have been different playing for him. He showed up in December to meet with all the players, but at that time I thought college football wasn’t for me. Before I earned an ROTC scholarship, I had to pay my way through school and so became the football team equipment manager the next season. My friends tried to get me to come out for the team but, in part, I kind of lacked confidence in my abilities. It was a totally different team with Wacker at the helm.

You were in ROTC? An Army ROTC scholarship paid my way through three years of college, which allowed me to graduate from college without any debt. I spent four years on active duty, first at Fort Belvoir, Virginia, in engineer officers basic training, and the remainder of the four years at Fort Bragg in North Carolina in a combat airborne unit. In the Army, I made 55 parachute jumps. The military is where I learned the most about leadership and human nature. I feel like I gained ten years of life experience wrapped up in those four years of active duty. Quitting isn’t an option in the Army. It’s called desertion. You are forced by the nature of the business to work with people you would not necessarily have chosen yourself. They were different than the people I was used to while growing up in rural Minnesota. I served

Roger Kienholz | Crystal Valley

with people from the Bronx, Philadelphia, Alabama, Hawaii, Samoa and the Philippines, and their cultures and backgrounds were not the same as my farm upbringing in Minnesota. When I was younger, I lacked confidence in general. When I was in college and realized I could play football better, I wanted to go back to high school and do it all over again. In the military, besides gaining valuable work experience, I was put in situations in which I was stretched and where I was either going to fail or gain confidence. I gained a tremendous amount of confidence there. Again, if you’re forced to do something, you don’t have the choice to quit, so you have to do it.

Crystal Clear

Student Teaching I’ve heard you homeschool your children. Why? My wife was a public school teacher by training and trade before and after we married. She had an opportunity when we lived in South Dakota to teach in a two-room schoolhouse 55 miles west of Pierre. She had nine students total in kindergarten through fourth grade and lived in an apartment that was part of the school building. The other teacher had fifth through eighth grade. My wife had the experience of teaching multiple grade levels in a single-room setting. She saw the value she could offer as a one-on-one tutor, rather than having to teach up to 30 students. Both my wife’s parents were public school teachers. We came across other families that had chosen to teach their children at home and saw the number of opportunities that open up in terms of customizing a child’s education and being able to give more individual attention. My participation has been as the math, algebra, trigonometry, and calculus corrector/explainer when they run into difficulties. Teaching has been largely my wife’s doing. Our children have known nothing else other than homeschooling. We have graduated three so far, with each going on to college, and have two to go. From our perspective, we have a greater freedom to choose the curriculum and type of training, and have greater control over what to teach at certain ages.

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In the Army, we climbed Mt. Rainier. Not everyone can do that. Not everybody is willing to jump out of an airplane. It’s literally mind over matter. If your mind says you can’t do it, you aren’t going to do it. There were things I normally wouldn’t have tried, but in the military I had the opportunity. What did you learn in the Army in terms of human nature? I learned how people react under all kinds of circumstances, especially under pressure. For example, we would have to get up at midnight to board an airplane at 4 a.m. that would fly us to California, where would jump out of another airplane to build an airstrip. I saw how people reacted. Paratrooper training at Fort Benning had a 40 percent graduation rate. I saw people that lacked the necessary physical or mental capabilities get washed out. At jumpmaster training, we graduated only 27 out of a class of 64. In terms of seeing people and how they react, do you believe you are good today at reading people? I think so, but again, while reading people in peacetime, non-stress situations are one thing, but deadline or pressure situations are another. That’s where a person’s true colors come through. I left active duty as a captain after four years and served six more in the Reserves. Ever thought about going on for 20 or 30 years? As much as I respect the military, a large, governmental, bureaucratic institution was not where I wanted to be during peacetime. I had no intention of making the Army a career. Your career after the Army? I got out in 1984, and went to Pierre, South Dakota. My older brother and I opened a boat dealership on the Missouri River selling boats, motors, and trailers. That doesn’t seem to fit you. There was nothing in your background that had anything to do with marketing or sales. (Laughter.) After getting out of the Army

Roger Kienholz | Crystal Valley

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and having saved some money, I was confident and thought I could do most anything. My brother and I bought a building, remodeled it, and opened April 1, 1985. On May 2, it burned to the ground. A fire had started in an upstairs apartment. We had put a lot of sweat equity into it and had started the season with a bang. We got a call at 4:30 a.m. from the police saying that America Marine was on fire. We watched them hose down the neighboring buildings while ours burned to the ground. You must have been devastated. Not really. It was all stuff. We weren’t crushed. Nothing was destroyed that couldn’t be replaced. No one died. I had a mechanic living in an apartment upstairs and he lost everything he had. He got out with just the clothes he was wearing. It was a definite setback and an expensive tuition paid to learn a business. After the fire, I decided to rebuild and my brother went back working with the State of South Dakota. I spent the next three years on my own in the boat business.

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I would imagine you learned as much from that fire as you did from losing the state championship game. Yes. I learned “things” weren’t all that important. I learned about insurance. We were insured, but the price we paid for the business from the bank and the cost of buying the building was far less than the cost to rebuild. This was the first money I had borrowed in my life. I continued on with much higher operating costs. That was my business education. I sold the business in 1989 just to get out from under the debt load. What did you do then? My wife and I moved to Fargo, where I worked in construction 16 months. In 1990, I came to Lake Crystal as a management apprentice trainee with Land O’ Lakes and Crystal Cooperative, working a year in the different departments, sitting in on every board meeting with the general manager, and attending managementtraining sessions. I learned the ropes of managing a co-op. In 1991, I went to Greenbush, Minnesota,

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near the Canadian border, to manage a co-op for three years, and from 1994-99 managed Ada Co-op Oil Association in the Red River Valley. After Ron Held retired as manager of Crystal Co-op in 1999, I took over on January 1, 2000. Had you been waiting for him to retire that whole time? No. We came here because we had been living in South Dakota, North Dakota and northern Minnesota for years and were six hours from my parents in Bird Island. Earlier that year, my father, at age 82, fell down the basement steps and nearly died. I thought it would be a good thing to move

closer to mom and dad for a few years and have them closer to our children. Also, my dad had been born in Amboy and I had relatives in the area. I had trained in at Crystal Co-op and knew many of the employees and board members. The area was familiar. It was a financially strong coop, so I applied and was hired by the board. How big was it in 2000? About $25 million a year in sales, with locations in Lake Crystal, Vernon Center, and Nicollet. Last year, we did $373 million out of nine locations. Besides organic growth, we have grown by way of two mergers. In 2002, we merged with Southern Valley

We try to do what we do well, and focus on customer service and performance. We have a superb board of directors, the best I’ve had at any time in any place.

Cooperative, and in 2006, with LaSalle Farmers Grain Company. We have 160 fulltime employees and hire about 90 seasonal. We try to do what we do well, and focus on customer service and performance. We have a superb board of directors, the best I’ve had at any time in any place. What makes that so? They are good, sound businessmen running good farming and livestock operations themselves. They realize the co-op is bigger than them. They don’t come in with the idea that this is their personal company. Has that happened to you before? I’ve seen that at other places, where a long-time board member might think he has more of a say than others. I don’t have any dominators or wallflowers on the board. Everyone participates, has a different perspective, and has respect for one another. I want board members to contribute. I like being challenged at board

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Roger Kienholz | Crystal Valley

But the railroads are struggling, and currently can’t meet our needs because of the demands of their having to transport oil and oil products out of North Dakota or Oklahoma. Plus, they had to deal with one of the harshest winters in 30 years. meetings—respectfully, though. (Laughter.) In sports, the better competition you play with, the better you get. Likewise, the better our board is, the better our company will be, the better I will be, and the better our management team will be. Take me through your four business segments and tell me the top issue currently in each. Start with grain. We handle corn and soybeans, almost exclusively. Our biggest issue right now in grain is the performance of the railroads. We have shuttle loaders in Madelia and Hope, Minnesota, both built for the purpose of shipping out 110 car trains. But the

railroads are struggling, and currently can’t meet our needs because of the demands of their having to transport oil and oil products out of North Dakota or Oklahoma. Plus, they had to deal with one of the harshest winters in 30 years. Snow and ice slow down the capacity and movement of the trains. Do you feel if the Keystone Pipeline were constructed it would relieve some of this demand for trains? Absolutely. It would play a part and would be huge. We are transporting so much of this oil with train cars. There is no more efficient means to move oil

or refined fuels than by pipeline. In the eastern part of our trade area, many acres didn’t get planted last year. Ethanol plants and feed mills needed to reach farther for corn in order to supply their needs. There was less grain for us to handle, even over on the western side of our trade area. We are on the UP Railroad, and through it we can reach California, Idaho, the Gulf, and export to Mexico. Does any of your corn go to Poet or Guardian Energy ethanol plants? Not much of our own corn goes to Poet and Guardian because they like to access grain directly from farmers. They will buy

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from us at certain times of the year. We have a better market usually by putting our corn on a train to California, Idaho or other domestic markets. Our soybeans go to crush plants in Mankato or Fairmont.

Jay Weir

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What is the big issue with agronomy? Sustaining trend-line crop yields. We are very focused on precision ag, meaning offering many agronomic options to our farmers, such as soil testing, grid sampling, tissue sampling, plant health research, crop protection (insect, disease, weed pressures), and variable rate fertilizer applications, and see prescriptions. It’s all very capital intensive now for grain and agronomy. For example, a brand new dry fertilizer spreader may cost $450,000. To justify that expense for our members, we have to cover a lot of acres. What about energy? Propane sales are highly variable because it’s all seasonal and weather related. This year, for example, we had a cold, long winter and sold two million gallons of propane more than the year before. We also had a heavy corn-drying season. We can vary up to four million gallons of propane from one year to the next, not because of anything we do, but because of weather and crop moisture.

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Weir working today, to protect your tomorrow. 20

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SEPTEMBER/OCTOBER 2014

Getting to know you:

Roger Kienholz Born: November 13, 1956 Education: Bird Island High School, ‘75. North Dakota State University, B.S., agricultural economics, ‘80. Family: Wife, Kristin; and children Joseph, Adrienne, Andrew, Gretchen, Natalie. Professional Involvement: Minnesota Managers Association (made up of co-op managers; past president and vice president); Pillar Insurance Limited (board chair); Cooperative 401k Plan (fiduciary board member). Personal Involvement: Grace Baptist Church, Mankato.

Roger Kienholz | Crystal Valley

We have to prepare for the worst-case scenario, but if farmers don’t need propane, we can’t force it on them. If you contract at your home for 1,000 gallons with us, and you use only 800, we have to do something with the remaining 200 gallons. So we have to cover ourselves with hedging or other means. Gasoline and diesel isn’t a growing market because as farm equipment gets larger and more efficient, it can cover more acres using less fuel. The number of gallons it takes to farm an acre of ground has been diminishing every year.

True economics and free markets should drive demand rather than government mandates. In my opinion, any artificial government intervention in the market is usually disruptive, not productive. The fourth area, feed? The biggest issue facing livestock producers is the PED virus, which has affected southern Minnesota pork production. It has reduced the hog numbers in our area, which means less feed volume through our mills and it puts a pinch on hog producers. Corn and soybean meal prices have come down considerably the last 12 months, which provides some relief in terms of feed costs to livestock producers. But the five years of corn at $5-7 a bushel and soybeans at $12-17 made it expensive to produce a pound of pork. There are far less hog producers today than when I was young. Back then, just about every farmer had livestock and crops. Hog production has become more consolidated and integrated so there are people raising hogs that don’t grow a bushel of corn. Of course, there are some who grow corn and feed it to their hogs. Some farmers like that diversification.

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Would you personally pay $12k for farmland? (Laughter.) My first answer is no because I don’t have that kind of money, nor would I borrow it. But I’ve seen many people do it. Depending on how much land they already own, perhaps free and clear, they can leverage it to buy more. In terms of the future of farming, we still feed the world. To be part of that, in some way, is exciting for this farm kid from Bird Island. SALES • INVESTMENT • DEVELOPMENT • LEASING

I talked with one farmer who lost 60 acres to the wet spring. Will that affect your business? I don’t know exactly how many acres in our trade area were drowned out and how much production will be lost. It’s probably less than five percent. It won’t dramatically affect our business. Hopefully, the bushels produced on the remaining acreage will make up for the shortfall.

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SEPTEMBER/OCTOBER 2014

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Crystal Clear

What are the factors keeping southern Minnesota from diversifying beyond corn, soybeans, and pork? Economics is all about employing the highest and best use of your resources. That’s what’s driven us to corn, soybeans, and hog production. There are other areas better suited for small grains and other crops. In areas where you have canning factories, you are going to have vegetable crops, such as Sleepy Eye, Blue Earth, and Le Sueur. You have the packing plants in Austin and Worthington. True economics and free markets should drive demand rather than government mandates. In my opinion, any artificial government intervention in the market is usually disruptive, not productive.

We all need to grow, but people often ask, Why? As our customers and farmers get larger, our ability to serve them in the way they need will require us to get larger, in order to offer specialized agronomy services and access markets for their grain. What about merging with a company like WFS? They are nearby, in Truman. The history of your industry has been one of mergers. We have done two mergers since I’ve been here. Other co-ops have merged as well, and I can see that trend continuing. We all need to grow, but people often ask, Why? As our customers and farmers get larger, our ability to serve them in the way they need will require us to get larger, in order to offer specialized agronomy 22

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SEPTEMBER/OCTOBER 2014

Roger Kienholz | Crystal Valley

THE ESSENTIALS

Crystal Valley Address: 721 West Humphrey Lake Crystal, MN 56055 Telephone: 507-726-6455 Web: crystalvalley.coop

services and access markets for their grain. We have been able to do some things without merging, such as building our new shuttle facility in Hope, Minnesota. We looked at different partnership opportunities while researching that project, such as with ADM, Cargill, CHS, Columbia Grain or Bunge, but decided on doing this ourselves. Our board has looked at merger opportunities, but there has to be a mutual consent of purpose. There has to be value for our members. Our past mergers have given us great opportunities to serve customers better, improve facilities, and upgrade equipment necessary going forward. What do you like best about what you do? I like building things and love construction projects. If not a co-op manager, I likely would be a building contractor. Here, I get to help build a business. I like answering to a board of directors and making many of the decisions regarding people, resources, and the organization. I prefer that to being second in command. I like building a business. We’ve had a fair degree of success here, and continue getting good people. I like team sports—I wasn’t in individual sports, I loved football, basketball and baseball—and like being part of a team achieving something. Southern Minnesota has great farmland. We’re fortunate to surround a city like Mankato, too, which helps us attract good people. Some employees want to live in a regional hub or find spousal employment here. It has helped us get and retain some excellent employees. Also, our co-op has been here since 1927. It really had a good base from which to grow. Editor Daniel J. Vance writes from Vernon Center.

Comment on this story at connectbiz.com SEPTEMBER/OCTOBER 2014

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RibFest Success

It was the Mankato Civic Center back in 1998 when the Hickory Street RibFest originated in a gravel parking lot across the street from the venue. There were six ribbers, backline gear included a mixing board, four microphones and two large speakers for the ApplauZe Variety Stage. The BareFoot Winos was the first band to perform at 11:30 a.m., Friday, August 14. Friday and Saturday night headliners on the Pro Radio Stage were City Mouse and Dazy Head Mazy, respectively. Seventeen years later national recording artists the likes of Sawyer Brown, Eddie Money, Big Head Todd & the Monsters and Rick Springfield are headlining in the Vetter Stone Amphitheater at Riverfront Park. Who would have thought? Entertainment has run the gamut from grilled fruit demonstrations, carnival rides, a laser light show, the Monster Putt contest, an appearance by the Budweiser Clydesdales, an elevated, air-conditioned VIP chalet, water wars and a dunk tank. We experimented with a lot of different things but the real foundation of the event is music, ribs and beer; as Steve Conover, VWC operation’s manager, so succinctly put it, “everything else is just window dressing.” Hickory Street RibFest continued for 13 years in the parking lot across the street. In 2003, Mary Brown, hospitality manager, “recruited” Texas Thunder, that has been winning the “People’s Choice” award fairly consistently since. Thursday night was also added to the three-day event and it became “country” night; High Noon was the headliner. By far the biggest change to RibFest was moving it to Riverfront Park in 2010. The move was a bit controversial, two of the ribbers dropped out of the event. The civic center team was unsure the event would survive. Logistically it was a nightmare transporting product and trying to provide refrigeration at the park. But ultimately the move turned out to be the best thing that could

es True Facade Pictur by Photos provided

have happened. There was an unexpected chemistry that is particularly evident Saturday nights; it has become a summer reunion destination and an annual gathering spot for many. After 17 years RibFest is still growing and without a doubt will continue to evolve. Civic center staff are physically and emotionally invested in successfully growing the event. Changes to the parkâ&#x20AC;&#x2122;s infrastructure, such as the new pavilion have made dispensing food and beverages more efficient and profitable. In addition to the staff, there are many organizations, including Tow Distributing, Radio Mankato and Pepsi that have supported the event from the beginning, when we didnâ&#x20AC;&#x2122;t really know what RibFest would become. In 2014 MTU Onsite Energy became our title sponsor. Thank you! And, thank all of you who continue to support RibFest with your attendance. Watch for the next issue of Connect Business Magazine; the civic center will be farther along in the expansion process and provide and update of the progress. Burt Lyman Executive Director

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SEPTEMBER/OCTOBER 2009

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Co-founders of then $560 million TECTA America, brothers Kent and Kim Schwickert, bookended our cover. Their introduction included the following: “For almost three decades, the Mankato dynamic duo of Kent and Kim Schwickert have been a southern Minnesota tag-team, wrestling over decisions and creating synergies that would have astonished their grandfather in 1906, the year the company began. 10 YEARS AGO

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Former Minnesota Governor Tim Pawlenty appeared on our cover on nearly the same day President Bush spoke politics at the humid Mankato gravel pits. We interviewed TimPaw inside the air-conditioned Governor’s Office in the State Capitol. 15 YEARS AGO

SEPTEMBER/OCTOBER 1999 Fairmont Agrapreneur Tom Rosen, president of then $550 million Rosen’s Diversified, made our cover and told the true story of his company’s beefy rise. 20 YEARS AGO

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Back in 1994, “Connect Magazine” didn’t have cover stories, but we did feature Windings (New Ulm) and CADD Specialists (St. Peter). Our coverage area was limited to Mankato/North Mankato, New Ulm, and St. Peter.

Read the entire articles at connectbiz.com

BUSINESS TRENDS

INCOME

The July Fedgazette went deep into the demographics of Minnesota minimum wage employees. The results appear to have been released a day late and dollar short however, given the state legislature’s done-deal passage of a $9.50 minimum wage law phased in over three years. The first phase started August 2014 at $8 an hour and the full $9.50 will be implemented by 2016. Beginning in 2018, also, the State of Minnesota will start adjusting annually its minimum wage based on the inflation rate, with a 2.5 percent cap. Going forward—and we’ll have to see what happens—Minnesota’s small businesses could be at a disadvantage versus industry competitors in neighboring states unless other Upper Midwest states raise their wage rates, too. Right now, Minnesota has a $9.50 minimum wage phased in over three years, versus the current rates in Montana ($7.90),

North Dakota ($7.25), South Dakota ($7.25), and Wisconsin ($7.25). What people often forget is that all under-$9.50 Minnesota workers will get the new higher rate, not just minimum wage employees. In 2013, a Minnesota Department of Employment and Economic Development study found Minnesota had 388,000 jobs in first quarter 2013 paying less than $9.50, accounting for about 15 percent of all jobs, and about 20 percent in southwest Minnesota. In terms of the Fedgazette analysis, one surprise was the fact only 20 percent of Minnesota minimum wage workers lived in households with incomes below the poverty line. Another surprise was that 33 percent of minimum wage workers in Minnesota also received tips and really earned far more than minimum wage. Minnesota is one of only seven states that forbid employers to pay an hourly rate less than minimum wage to tipped employees. For example, wait staff at Minnesota’s best restaurants earning nearly all their income off tips are still classified as minimum wage employees by the State of Minnesota. In reality, many of these employees could be earning more than $35 an hour. Yet they will get a minimum wage increase, too. Other facts: About 80 percent of Minnesota minimum wage earners were single,

65 percent were under 25, and 72 percent worked part-time. More than one-third were teenagers. Reported the Fedgazette, “Much of the debate over minimum wages has focused on whether and to what extent higher minimum wages will affect current workers, their employers, and overall employment. It’s turned into a polemical fight with many employers arguing that a minimum wage increase would cost jobs and others, such as labor groups, countering that it would help create jobs rather than kill them.” The minimum wage first appeared in the U.S. in 1938, which Congress set at 25 cents an hour. Congress has raised the rate 22 times.

BUSINESS TRENDS

TRENDS

In July, Eide Bailly and Gislason & Hunter Law Firm sponsored a Southern Minnesota Business Summit in

which presenters discussed trends in business ownership with representatives from more than 90 region businesses. Long-time Gislason & Hunter Attorney Gary Koch, a member of the firm’s executive committee, said in a Connect Business Magazine telephone interview, “In a macro

sense, business paradigms are changing. There are a number of areas where work needs to be done by businesses in order to keep up with what are some fundamental shifts in how to conduct business and how to do proper planning in the future.” Koch said many business changes were being driven by increased state and federal regulations, the national deficit and the need for governments to generate additional tax revenue, and increased competition in general. As for the latter, he said business margins are small and customers expect to shop hard for value, which creates many challenges for businesses wanting to stay competitive in the marketplace. He said, “As for regulations, on the permitting side, statistically it can be shown that getting authority to build and operate a business today takes longer and involves more agencies. So the planning and preparation function is more complex and more difficult. Understanding those barriers is important. On the enforcement side (of

regulations) no doubt there are increasing levels of enforcements in various areas of state and federal government, such as environmental or OSHA matters. There are also heightened levels of audit scrutiny on the enforcement side in an attempt to recover more by way of fines, for example.”

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TRENDS

The birth of children is important to many businesses and organizations here in southern Minnesota—anyone offering a service or product catering to children, from pediatricians and grocery stores to toy stores, children’s book publishers, daycare centers, elementary schools, food manufacturers, retail malls, event centers, clothing stores, hospitals, and movie theaters. According to the National Center for Health Statistics, the U.S. fertility rate dropped in 2013 to a record low of 63 births for every 1,000 women between the ages of 15-44. The average number of children U.S. women gave birth to also fell to 1.86, the lowest rate since 1986. Demographers consider 2.1 a minimum necessary in order to maintain a stable population. As recently as 2007, the U.S. rate stood at 2.1. To put this into perspective, if the U.S. rate had stayed at 2.1 through 2013, as a nation we would have today about 1.3 million more children in our midst. Some states, such as Maine and West Virginia, lately have been experiencing more deaths than live births. The reason for the slide in the U.S. can be attributed almost completely to the Hispanic-American fertility rate, which fell from 2.7 in 2008 to 2.19 in 2012. As quoted in the Washington Examiner, Sam Sturgeon of Demographic Intelligence said the financial crises of the last six years “has had the most punishing impact on demographic trends of anything since the Great Depression.”

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Owners Brian Mathiowetz, wife Ronda and sister Julie Anderson in the company's â&#x20AC;&#x153;antique equipment museumâ&#x20AC;?.

Brian Mathiowetz is a gambler. Instead of dice, he rolls with the weather. At the time of his Connect Business Magazine interview this summer, Mathiowetz Construction Company was halfway through a three-month contract to build two roundabouts in Mankato, despite excessive rain in June. Every day over schedule would cost the company a $15,000 penalty for each intersection that was being turned into a roundabout. “The weather always delays us, and we plan for it,” Mathiowetz said. “A lot can happen yet this summer, but by the time this is being read, the roundabouts should be open and everyone will be happy.” The 56-year-old Mathiowetz (pronounced Math-o-wetz), who has been company president and CEO since 1999, has beaten the odds in a different game. He’s the third generation to own and manage Mathiowetz Construction. Typically it’s under the third generation’s management a family business begins failing. That’s not the case here. Mathiowetz directs the largest civil construction firm outside the Twin Cities, and is surrounded by family members on the job. (See sidebar “DNA Development.”) “You have some big players up in the metro area,” Mathiowetz said. “But we work mostly in Mankato, Rochester, Cannon Falls, Stillwater, St. Cloud, Brainerd, and the southwest metro area. Minnesota is a great place to have a business, with good, honest people. We’ve had very little problem collecting payment for our work.” Two massive projects in Mankato this last summer were roundabouts near River Hills Mall and site work for the new Walmart distribution center. One might expect a company with sizeable projects, 170 employees, and more than 300 pieces of heavy equipment would have headquarters in Mankato, or perhaps, Rochester. Instead, planning and management of Mathiowetz Construction occurs in a group of buildings in the small community of Leavenworth, a few miles from Sleepy Eye. Mathiowetz said, “We pretty much are Leavenworth. Of the 21 people in town, 10 are family and/or employees. I live walking distance up the road from the office.” continued >

Third-generation earth-moving and construction management company becomes southern Minnesota’s largest. By Carlienne A. Frisch Photo by Kris Kathmann

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Earth Movers

Mathiowetz said, “We pretty much are Leavenworth. Of the 21 people in town, 10 are family and/or employees. I live walking distance up the road from the office.” Mathiowetz grew up in Leavenworth, the oldest of four boys and two girls. The study of math and science came easily for him, including pre-calculus and prephysics classes at Sleepy Eye High School. He believes he lacked the creativity needed for English classes, but said, “I’ve become much better with language use and writing through practice. And I now enjoy learning about history. I’m intrigued with the two World Wars. My bucket list includes a trip to the Normandy Beaches.” Also on the list is an upcoming trip to Budapest, Hungary to visit one of the three international exchange students his family has hosted. Mathiowetz began working in the company

business when he was 13, picking rocks and running blue tops--moving stakes that have a little blue fringe on the top. He described the latter as a tedious, but challenging job, saying, “When you get a road to about the right height, a surveyor comes and levels the dirt, small pile by small pile. The person running blue tops removes and reinserts the marker stick every 100 feet, running ahead of the equipment, sometimes for up to four miles. It has to be done three times for each section of the road, once on each side and once down the middle. “By the time I was in high school, I took on other responsibilities during the summer, mostly setting grade stakes for large earth

movers, so they would know where to place their 40-ton load of dirt. I also helped install culverts large enough to drive a pickup through, replacing bridges. After graduating from the University of Minnesota in 1981, Mathiowetz returned to working in the field, being a go-fer, learning to run every kind of equipment and doing whatever the supervisor needed done. His sons entered company employment the same way. “In those days we used an eye level for measuring,” Mathiowetz said, producing one to see. “Now they are obsolete, and everything is done with GPS and lasers. But

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Mathiowetz Construction Company | Sleepy Eye

I still have an eye level in my truck, just for nostalgia. I haven’t used it for a long time.” An attachment to items related to the business runs in the family. Mathiowetz’s desk is surrounded by a collection of miniature backhoes, dump trucks, scrapers, loaders, graders, a sheepsfoot and a semi truck designed to haul construction equipment, all in their original packaging. More highly prized is the bulldozer carved from wood by a retired employee. Mathiowetz said,

“I’m just starting--you should see my dad’s collection” and led the reporter to several display cases of vintage equipment models his father had amassed. In the 33 years since Mathiowetz became a full-time employee, the number of employees has nearly doubled, as has construction efficiency. “With the 90 employees we had in 1981, today we could do 40 to 60 percent more work because of more efficient equipment

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DNA Development Richard’s and Mary Lou’s sons, Brian, Leon, Glen and Dean, began operating equipment while still in grade school. Their sisters, Sue and Julie, worked summers during college. After Richard’s death, company ownership fell to Brian, his wife, Ronda, and his sister Julie. Glen spun off from the family business to form M.R. Paving, which works cooperatively with Mathiowetz Construction on projects. It’s obvious the construction business is in the family’s DNA, and their educational choices. Brian Mathiowetz graduated with a Bachelor of Science degree in civil engineering from the University of Minnesota Institute of Technology and holds a civil engineering license. (His sister, Julie Anderson, has a mechanical engineering education.) Ronda handles contract management and EEO. Their son Brett, applies his construction management degree to project management and serves on the bidding team. He currently works with the Walmart crew, scheduling and keeping the trucks hauling. His brother Chad, fresh out of college with a business degree, is the GPS surveyor and right hand for the supervisor on the roundabouts. Son-in-law Brent Kuchera applies his business management education to the estimating team. Although his wife Rachel’s business finance expertise occasionally comes into play, she’s biding her time for full employment until their young children are in school. Anderson works with human resources and on marketing special projects. Her husband, Paul, is in charge of equipment management and maintenance, and he supervises purchasing. Their children, Jordan and Tori, work for the company during the summer. And the previous generation still checks in. Mathiowetz said, “My mother, Mary Lou, who was with the company for 55 years and has been my mentor, still has an in-box. She can come in and hold us all accountable.”

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and technology,” he said. The variety of customers also has changed from being predominantly farm related. Clients include municipalities and other public sectors such as MnDOT and private customers such as Walmart, Menards, Lowe’s and Target. Ag-related clients include railroads, co-ops, ethanol plants, Del Monte, sugar beet plants and about 100 farmers each year. Mathiowetz said, “We build sites for grain loading, dairy barns and sheds; we remove trees, and we do terracing, drainage and tiling work for farmers.” The company’s motto, ‘In All we Do, We Build It Right,’ is their only form of advertising. Mathiowetz explained, “Mostly we just support community events in Sleepy Eye and New Ulm. We support after-prom parties for 10 high schools. That’s not going to get us jobs, but word-of-mouth about the quality of our work does.” The small town, family business approach extends to employee relations. Mathiowetz said, “I treat all employees as family and, as the CEO, I attend employees’ family functions--weddings, anniversaries,

Earth Movers

Digging Up The Past Brian Mathiowetz’s grandfather, Martin Mathiowetz, founded Mathiowetz Construction Company in 1924. The first customers were farmers who needed land cleared and graded for driveways and ditches, and snow plowed in the winter. The company neared bankruptcy during the Depression and continued to struggle through the 1940s. The 1950s brought tragedy and new challenges when a fractured neck and back limited Martin’s ability to work. His 17-year-old son, Richard, took on the responsibility, with coaching from his parents. Working with his younger brother, Reinhold, he moved the company into the MnDOT arena in the 1970s. The firm constructed miles of the interstate system, as well as other highways, mostly in Minnesota. Richard Mathiowetz was so highly regarded by members of the state legislature that, upon his death, legislators unanimously voted that the 26-mile section of Minnesota Hwy. 4 between Sleepy Eye and St. James be designated the Richard J. Mathiowetz Memorial Highway.

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Mathiowetz Construction Company | Sleepy Eye

“At what point in the day do we pull 50 people off a project when rain is approaching?” he said. “We might have 20 trucks approaching what could become a mud pit. Constant anticipation planning is required—Plan A, Plan B, Plan C. ” funerals. Our people are good people. They can get a job anywhere. We try to reward them with job satisfaction as well as with good compensation.” Looking back at more than three decades, Mathiowetz said, “You have to feel your way as you go. You have to ask yourself if you want to do this and if you can do this. On October 31, 1999, when our father was taken from us by a heart attack, I had to answer those questions. I don’t know if I had a choice. Some of it’s in the blood.” Today the biggest collective challenge is scheduling, considering the weather and accommodating clients who change things daily. During the summer, Mathiowetz meets with his three project managers at 6 a.m. to discuss the previous day’s challenges and the critical issues that will be handled that day. “At what point in the day do we pull 50 people off a project when rain is approaching?” he said. “We might have 20 trucks approaching what could become a mud pit. Constant anticipation planning is required—Plan A, Plan B, Plan C. ” After checking in at the office, Mathiowetz returns to the field by

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Construction Museum Just down the road from Mathiowetz Construction is what Brian Mathiowetz calls “our antique equipment museum,” a horse pasture in which equipment from the 1930s through 1960s shares the area with a palomino and a pony, both owned and ridden by Mathiowetz’s sister, Julie Anderson. Because the 1970s equipment is still running, it literally has not yet been put out to pasture.

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Paving The Way In addition to his involvement in every company project, Mathiowetz spends a significant part of each week in professional and community volunteer activities. The accomplishment of which he is most proud is the group home he built in Sleepy Eye for his daughter, Stacy, who has developmental challenges. “When Stacy graduated from the Academy for the Blind in Faribault, there were waiting lists for group homes,” Mathiowetz said. “We went to county officials to learn what it takes to build a group home. We stumbled through all of the paperwork and built the group home, which is administered by a private company through Brown County. Stacy and four housemates live there.” Mathiowetz’s professional involvement includes serving on key industry advisory committees that involve topics such as grading, open shop, erosion control, etc. In 2011 he was the Associated General Contractors of Minnesota Skill Responsibility Integrity Award Winner. Mathiowetz’s community involvement includes the Church of the Japanese Martyrs Parish Council, the Teens Encounter Christ National Conference Council and Christ Leadership Team, the Riverbend Together Encounter Christ Council and the Rebuild Resources Leadership Board. He is also heavily involved in the Friends of San Lucas Mission in Guatemala. “I’ve been there eight or nine times,” he said, “planning for things like consistent electricity for the clinic and hospital and overseeing construction of homes, churches, community shelters and stores.” His sister, Julie Anderson, represents the company in the Sleepy Eye and Springfield Chambers of Commerce.

Mathiowetz Construction Company | Sleepy Eye

Meetings sprinkled throughout the week involve educating legislators about industry concerns, industry association tasks and meetings with a customer’s high-level management team to “take care of little things before they become big things.” late morning to check on projects. Meetings sprinkled throughout the week involve educating legislators about industry concerns, industry association tasks and meetings with a customer’s high-level management team to “take care of little things before they become big things.” Supper at home is usually followed by an evening of phone calls. Mathiowetz’s wife, Ronda, describes him as “honest, hard-working and intuitive.” The honesty is evident in what he calls his humility story. “A good number of years ago, I had a box cell phone in my pickup,” he said. “When the phone rang, the horn honked. Working alone on a Saturday, I parked the pickup with the nose over the embankment so I could hear the horn. I was operating an excavator ad, when finished, had to travel the excavator up the very steep embankment backwards, using the backhoe bucket as a lever to push it. Because I couldn’t see where I was going, the equipment track went up on the hood of my pickup and smashed the truck. Totaled it. I had no way to get home and no way to call anyone. That experience taught me to be forgiving of others’ mistakes.” If he could be granted one wish, other than a preference for no winter season, Mathiowetz wants stability in the economy and in funding sources. He regrets that during the recession of 2008-2010, the company laid off 25 percent of its employees. “In this business, everything is variable and uncertain now, when it used to be more reliable,” Mathiowetz said. “Almost all highway funding for a significant project begins with federal money, and then the state adds money, the county adds money, etc. All of the partners must come up with money or it all stops. In mid-July of this year, a temporary fix was discussed to carry over the federal transportation spending bill, which was scheduled to expire in August. And the Highway Trust Fund is bankrupt for the first time since it was formed in the 1950s. After the election in November, the new Congress will have to debate how to do a new six-year highway bill. Without it, funding and new projects will be few and far between.” He said his company often takes on challenges others shy away from, such as the Mankato roundabouts, in which timing was a continuous challenge and also the company’s 15 sub-contractors were affected by rain and schedules on other jobs. It was like orchestrating a symphony, he said.

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Mathiowetz Construction Co. Phone: 507-794-6953 Address: 30676 Cty Rd 24 Sleepy Eye, Minnesota Web: mathiowetz.com

“There have been a lot of 70-hour weeks,” Mathiowetz said, “but now my advisors, including a family business consultant, say I should work 50 to 55 hours a week. We’ve been fortunate to have good advisors for a family business. Most family businesses fail because of bickering amongst the family, people having too many different visions of

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My goal is to be smart enough to transition this company to a fourth generation and have them answer the questions ‘do I want to do this’ and ‘can I do this?’ I’m faith-based, a steward, a caretaker. The company is not mine per se.” the future. I’m moving the company from one generation to another. I must make it all fit together. I gather good people together and point them in the right direction. Some of those people predate me in the company. My goal is to be smart enough to transition this company to a fourth generation and have them answer the questions ‘do I want to do this’ and ‘can I do this?’ I’m faithbased, a steward, a caretaker. The company is not mine per se.” Carlienne A. Frisch writes from Mankato.

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Before you hook or slice into our editorial rough, remember to visit page 8 for instructions on how to nominate a friend or colleague for our annual Business Person of the Year contest. An expert panel of Minnesota State University College of Business professors selects three winners, with the top vote getter appearing on our January 2015 cover. Our contest has become a southern Minnesota business tradition. Mike Pinske of AmeriCare Mobility Van garnered last year’s laurels as Connect Business Magazine 2014 Business Person of the Year. Now to the rough: The editor had an eye-opening moment after reading details on the U.S. Supreme Court’s 5-4 decision allowing family-owned Hobby Lobby, under the Affordable Care Act, to opt

out of having to offer insurance coverage for certain contraceptives the company believes cause abortions. In sum, Hobby Lobby had no problem agreeing to pay for two types of birth control pills, female condoms, cervical caps, cervical shields, diaphragms, vaginal rings, sterilization implants, skin patches, spermicides, sponges, implantable rods, some IUDs, injections, and tubal ligations. What the closely held company vehemently objected to was being required by the federal government to also pay for certain IUDs and morning- and week-after pills, which Hobby Lobby considered abortifacients. After the Supreme Court ruling, Hobby Lobby will continue paying for a wide range of birth control interventions, but its employees—including those in Mankato— will have to pay out of pocket for what Hobby Lobby considers abortifacients. As editor, I’m not taking any stand on this issue. Yet the ruling opened my eyes concerning something else. I heard over the radio at least one person knock the ruling as an example of what has been called by some pundits as a War on Women. After doing my own research into the ruling though, I began seeing contraceptive coverage under the new law from a different light: it’s sexist. It blatantly

discriminates against men. From what I have learned about how the Minnesota version of Obamacare works, women here now have healthcare coverage for a number of contraceptive choices, but not so for men. (Our thanks to Tim Schwartz of Brown & Brown Insurance for helping find this information.) Daniel J. Vance One Minnesota Editor healthcare insurer, for example, covers women ages 12-64 for having an annual contraceptive counseling visit, and covers for diaphragms, contraceptive sponges, cervical caps, spermicides, female condoms, oral contraceptives, skin patches, shots/injections, vaginal rings, implantable devices, permanent birth control, and lastly, five types of emergency contraception, which Hobby Lobby likely would consider abortifacients. Minnesota men ages 12-64 get nothing, nada, zilch. A double standard exists. For the record, the healthcare insurer referenced above makes quite clear the rules: “Male condoms are not eligible for coverage.”

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Now on to other fare. Minnesota Economic Trends (June 2014) reported that manufacturing means more to southwest and southeast Minnesota than it does to any other Minnesota region, accounting for nearly 68,000 jobs in almost 1,300 businesses in the combined regions. Nationally, perhaps as many as 500,000 skilled manufacturing job openings exist. One big reason has been that Baby Boomers are retiring, but other factors have contributed to a skilled manufacturing labor shortage. Perhaps the most striking reason for those half-million openings has been the male age 25-54 labor participation rate— historically the prime pool for these types of jobs. It’s near a record low. Men currently hold 73 percent of all manufacturing jobs, including an even higher percentage in manufacturing production, with women being more concentrated in manufacturing clerical positions. Only 88 percent of American men in the prime 25-54 age bracket now are working or looking, primarily because of a steady rise over the years in the number of men in that group who are incarcerated, disabled or under-educated. In terms of incarceration, male U.S. inmates outnumber female 15 to one and their numbers have hit record highs. Once released, many of these inmates will struggle being hired for skilled manufacturing jobs after having to self-report felonies on job applications. In terms of disability, the U.S. now has nine million disabled workers (and two million others) receiving federal disability payments, double the amount from 1997, when the U.S. had only 4.4 million disabled workers. Of course, the number of disabled workers ages 25-54 has more than doubled, too. As for being under-educated: About 25 percent fewer men than women now graduate every year from a U.S. college, with the number of female graduates being higher since 1985. In 2009, for example, the Census Bureau reported 685,000 men and 916,000 women graduated from college. Many skilled manufacturing jobs require a two-year college degree, and other manufacturing jobs, including those in management, financial or sales, often

SEPTEMBER/OCTOBER 2014

require at least a four-year degree. If U.S. manufacturing must fill these half-million jobs, it would seem politicians or the industry itself either will have to take on the massive task of reducing the causes behind the high number of incarcerated men, tighten up disability eligibility requirements or encourage more men to seek education in skilled trades. The latter seems most likely. Another solution—or part of it—could be for the schools to encourage more women into seeking skilled manufacturing careers, which U.S. Sen. Amy Klobuchar has proposed. Thanks for reading your region’s first and only locally owned business magazine, the only one covering nine southern Minnesota counties since 1994. Be sure to visit page 8 to learn how to nominate a friend or colleague for our Business Person of the Year contest.

LETTER TO THE EDITOR

Well Read Mag. Your Connect Business Magazine I receive gets read and re-read every time I receive it and for that I thank you and your staff for allowing others to see what abilities the people in our area possess. I have been in Gaylord since 1960 and had the pleasure of meeting early in my career Dr. Don Meredith (whose career was highlighted in an OFC July ad) and was impressed with him then. Many others, such as the people at Heintz Toyota (ad in the same July issue), have been accurately portrayed (in your magazine) also. Dr. C.R. Carlson, Gaylord

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Any chamber of commerce, convention and visitors bureau, or economic development organization in our reading area—large or small, from Amboy to Winnebago—can post on our free bulletin board. For details, email editor@connectbiz.com.

Blue Earth Cindy Lyon, Blue Earth Chamber/CVB Falling into a giant season in beautiful Blue Earth: City-wide garage sales will occur on September 19-20. On Wednesday November 12 at 3:00 p.m., we host the Southern Minnesota Tourism Association board, and on November 13 host the SMTA quarterly meeting and family tour. On November 14 is “Holiday Sampler about Town” which kicks off our holiday season. On November 15, Santa Claus comes to town to scarf the Green Giant for winter weather ahead.

Fairmont Bob Wallace, Fairmont Area Chamber After having served 18 years as president of Fairmont Area Chamber of Commerce, I am retiring. It has been a pleasure working with my outstanding staff, local businesses, schools, nonprofits, chamber colleagues, cities, counties, volunteers, and individuals. I also commend Connect Business Magazine Editor Daniel J. Vance and Connect Business Magazine for the professional way the magazine reports on and represents our nine-county region of southern Minnesota. Keep up your excellent work.

Lake Crystal Julie Reed, Lake Crystal Chamber The City of Lake Crystal has been recognized as a Minnesota Green Step City. The award shows community members and other Minnesota cities Lake Crystal is taking great steps in the direction of energy and resource conservation and innovation. Lake Crystal is one of 67 participating cities helping lead the way in sustainability

and helping secure Minnesota’s natural beauty for the future while helping the city thrive economically and socially.

Le Sueur Julie Boyland, Le Sueur Chamber Le Sueur Market Fest is a new event! Come to Market Fest every Thursday from 4:30—7:30 p.m., beginning July 24 through October 2. It’s a free community celebration in downtown Le Sueur on South Main Street. Come check out our vendors, classic cars and motorcycles, entertainment, and weekly activities. Invite your family and neighbors. It’s fun for all ages! Hosted by the businesses of South Main Street. For more information, see MarketFestLS.com.

Mankato Julie Nelson, Small Business Development Center How should you finance your small business? The SBDC can help you identify the appropriate financial resources and navigate the application process. Our team has longstanding relationships with lenders in the region and understands their needs. Lenders know that companies are more likely to succeed if they work with their SBDC to develop realistic financial projections, thorough business plans and adequate controls to measure financial and operational performance. Apply for no-cost SBDC services at myminnesotabusiness.com.

Mankato Kathryn Reeder, Visit Mankato Join five thousand runners on October 18-19 for the fifth annual Mankato Marathon by Mayo Clinic Health System. The Mankato Marathon offers a marathon, half marathon, relay, 10K, 5K, KidsK,

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Sleepy Eye Trista Barka, Sleepy Eye Area Chamber

Sleepy Eye held its 53rd Annual Buttered Corn Days with a weekend of fun and lots of visitors to our great community. The Chamber of Commerce will be hosting the Safety Day Camp on September 17th to educate area 4th graders on various topics of safety. In October, for Minnesota Manufacturing Week the Chamber will recognize an outstanding business that contributes to the Sleepy Eye economy, is committed to making Sleepy Eye a better place to live and work, and has improved or increased technology needs in the workplace.

Faribault County Linsey Warmka, FCDC

Faribault County Development Corporation and the City of Blue Earth are excited announcing a new industrial park project is underway along US 169, which is due, in part, to a federal EDA grant of nearly $1 million. The project includes 60 acres of shovel ready commercial and industrial property. The first tenant on the new property will be Kibble Equipment, which plans to open a 48,000 sq. ft. facility March 2015. Learn more at fcdcorp.net.

toddler trot, and diaper dash. Mankato Marathon was voted “Best Marathon Worth Traveling For in Minnesota” by Trip Advisor. Experience kids activities, speakers, and vendors at the Scheels and Under Armor Sport & Health Expo October 18, followed by the October 19 race. See mankatomarathon.com.

place October 23 Noon-6:00 p.m. It’s free and open to the public. Community members will be able to stop by any participating manufacturer throughout the day to take a tour, and learn about the business and what is manufactured and be introduced to career opportunities. For more, see greatermankato.com/tour-manufacturing.

Mankato Amy Linde, Greater Mankato Growth

Region Nine Nicole Griensewic, Region Nine Dev Commission

Annually, the Economic Growth Collaborative of South Central Minnesota and Greater Mankato Growth present the Tour of Manufacturing during Minnesota Manufacturers Week. The event takes

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Local Chamber & Economic Development News

implemented and will continue in the coming months. Veteran’s Sleepy Eye EDA is continuing to promote its Downtown Sign and Awning, and Capital Improvement Loan Assistance Programs. The Business Retention and Expansion Program has also been implemented and will continue in the coming months. Veteran’s Park has been completed and residents and visitors can enjoy that downtown amenity. Along with the existing businesses, a number of new businesses now open daily on Main Street, including: K&J Antiques, Anytime Fitness, and Kotton Law Firm.

New Ulm Terry Sveine, New Ulm CVB

October 3-4 and 10-11 is New Ulm Oktoberfest! The Holiday Inn hosts music, food, and dancing all four days. Morgan Creek Vineyards has a “Cambria Crush” grape stomp the first Saturday and Schell’s Brewery hosts music, food, and beer the second. The Chamber has music, food, and drink on the street downtown the first weekend. On the second Saturday, “The Taste of New Ulm” features sample “food bites” from downtown restaurants. See newulmoktoberfest.com or newulm.com.

Springfield Marlys Vanderwerf, Springfield Chamber/CVB Will Roiger of F&M Insurance Agency earned the Paul Harris Fellow recognition award from Springfield Rotary for his dedication and commitment. Robert Fink, Springfield public school teacher, was recognized with a WEM Outstanding Education Award. T.J. Brown, agriculture/industrial technology and work-based learning teacher and FFA advisor, completed his term as president of the Minnesota Association of Agricultural Educators. Finally, Beers Family Dentistry purchased the local Mayo Clinic Health System dentistry business, effective July 1.

This free event will be held on Thursday September 25 at 8:30 a.m.–noon at the South Central Service Cooperative in North Mankato. Breakfast will be provided. Registration will be accepted until September 11. Space is limited. Reserve your seat today by contacting Ashley at Ashley@rndc.org. To learn more, visit rndc.org.

Sleepy Eye Kurk Kramer, Sleepy Eye EDA Sleepy Eye EDA is continuing to promote its Downtown Sign and Awning, and Capital Improvement Loan Assistance Programs. The Business Retention and Expansion Program has also been

Waseca Kim Foels, Waseca Area Chamber Farmamerica Fall Fair September 13-14 (peddlers, tractor pulls, draft ponies, antique machinery, food). Farmamerica October 1011/17-18 (haunted corn maze/mill). Marching Classic Celebration September 20 at Noon (100-unit parade). Downtown District Brick and Block Walk, trick or treating October 23 5:00 p.m. Touch of Country Class Boutique September 18-21/25-28 (crafts, antiques, food). Downtown Beer & Brats Night, October 2, 3:30 p.m. until gone. Chamber Business and Industry Luncheon October 16, recognizing 2014-15 Business of the Year. For more, discoverwaseca. com/chamber.

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By Grace Webb

Photo by Kris Kathmann

Waseca pallet manufacturer employs 36 after evolving from a one-man operation.

In the 1980s, Richard Berry’s pallet business was a part-time venture out of his garage while he spent his days working at his full-time job. Now, 25 years later, Berry Pallets has grown large enough to warrant its own assembly building and offices. Berry oversees 36 employees and turns out 8-10,000 pallets a week, offering about 30 types of pallets to clients across the state. Not bad for someone who started a firewood business because he was bored. Berry was born in rural Waseca in 1957, growing up on a farm that raised both cows and hogs. He credits his work ethic to his farm upbringing and the many hours every week he put in milking cows. “When you grow up on a farm, you’ve got a different way of looking at things as far as work instinct,” Berry said. “If you milk cows, you work seven days a week. That’s kind of my instinct: working all the time.” continued > SEPTEMBER/OCTOBER 2014

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“I do everything,” he said. “That way, I can visualize or see how things flow. Your employees may tell you, ‘This [way of doing things] is stupid,’ so I’ll do the same thing they’re doing to see if they’re correct. Is there a better way. Berry said he’d always stack his firewood above the ground, so he started using wooden pallets for the stacks of wood. He said companies were eager to give him the pallets when they were through. “Everybody said, ‘Take them all. We don’t want them,’” he said. “There were so many pallets to be had.” Berry started taking the old pallets and repairing them, selling them back to companies to use. At first, he removed the broken boards by hand—a long process that included drilling holes in the deck boards and using a hammer to pound the nails. As he sold more pallets, he was able to reinvest his profits into buying some

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equipment to make the process easier, including air compressors and power nailing tools. In the next few months, his pallet business had become popular enough that he needed more workspace, so he moved his operations to his parents’ farm. He rented the land and built six buildings on the property, along with purchasing a skid loader and a gooseneck truck. It was around this time he decided to drop the firewood business and focus on his pallets. While he started off just recycling old pallets (which is when workers tear the old pallet apart and use the material to create a new pallet) and repairing used ones, he eventually branched into creating new

SEPTEMBER/OCTOBER 2014

pallets too, once he bought his automated nailers. He orders the wood from sawmills in Canada, Minnesota or Michigan. Berry said recycled and repaired pallets are becoming more popular because they’re cheaper without losing quality (all recycled pallets are built to the same standards as new pallets). In fact, he would almost say recycled pallets are of better quality, because nails hold better in recycled wood, so there’s less likely to be a problem with a nail pulling loose in one of the recycled pallets compared to a pallet made out of new wood. Berry’s business also creates “combo” pallets, which are made from a combination

Berry Pallets | Waseca

of new and recycled components. One reason for this is because it can be difficult to find enough recycled lumber to create a completely recycled pallet. Some customers prefer “combo” pallets because of how strong and durable they are, in addition to being cheaper than a new pallet. However, Berry said the newly built pallets are still the most popular, since some businesses, such as those in the food industry, have stricter requirements regarding what kind of pallets can be used. Even the leftover scraps are put to use, helping to heat the buildings during Minnesota winters. When it comes to recycled pallets, Berry has some competition up in the Twin Cities, but in southern Minnesota, there aren’t many other companies that offer them. He said he has pretty steady customers, including one business in Owatonna that has stuck with him for 23 years. “We try to do a good job,” he said. “If you do a good job and have a good price,

they’re going to stay with you. That’s been my experience.” By 1995, he had such a strong customer base he was able to quit his job at Cargill to put all his energy into the pallet business. “I made this my full time hobby...well, I guess it’s more than a hobby,” he said. Eventually, the business grew so much that Berry decided it was time to move to a new site. He chose to stay in Waseca, buying property at the edge of town and starting construction in 2012. It took about nine months to construct the new buildings, which include an office building, storage area and assembly area, and Berry was able to move his company into the new space last July. “We built this from the ground up,” he said. “We went from my garage to this.” While the location has changed, Berry’s business practices have stayed the time. Even as the company expanded

and brought on more employees, Berry has kept himself involved in pretty much every aspect of the business. He manages the overall state of things but also works on the maintenance and production side to make sure the company is being as efficient as possible. “I do everything,” he said. “That way, I can visualize or see how things flow. Your employees may tell you, ‘This [way of doing things] is stupid,’ so I’ll do the same thing they’re doing to see if they’re correct. Is there a better way to do it? I’ll jump in and run all the stuff just to make sure everything’s working properly.” Berry said the most challenging part of running his own business is working with his employees, since everybody has a different perspective on how to run operations. “Dealing with customers is easy. Running the place is easy. But everybody’s got a different way of thinking,” he said. “Then you’ve got to try to understand their

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Address: 1502 4th Street SW Waseca, Minnesota Phone: 507-835-5056 Web: berrypallets.com

way of thinking and doing things, and you’ve got to try to meld the two together.” On the other hand, the best part of running his pallet business is simply creating the finished product. “What I like is taking a piece of wood and making something out of it,” he said. “That’s neat to me, when you take a 2-by-4 and turn it into a pallet. It still intrigues me.” There are only a few duties Berry doesn’t take on—he uses a temp agency to hire employees, and he also doesn’t deal with the marketing side of things, hiring a salesman instead. The salesman will call area businesses to talk about pallets, but the business doesn’t do much advertising otherwise. He said when he first got going, his business grew through word of mouth, but now it’s more difficult to advertise since there are so many platforms. “Business people would talk and then you’d get a phone call,” he said. “It was easy to sell back then. Today it’s a bit tougher.” Berry said he works from about 7 a.m.6 p.m. during the week but comes in on weekends too. “I come in to relax more or less on the weekend,” he said. “I work, but it’s relaxing for me. People may just sit and put their feet up. That’s not me. I’d rather do something. That’s my way of unwinding.” He isn’t the only one in his family who puts in long hours at the company. Wife Kathy works as an office manager, as does Curtis’ wife, Karissa. “It’s kind of a family business,” Berry said. In addition, both Curtis, 24, and Kyle, 29, have helped with the business, but Kyle left to become a chef. Curtis is a foreman right now and plans to take over when Berry retires. Because of this, Berry has been slowly turning over certain responsibilities to his son. Berry also attends trade shows to learn more about the pallet business and the

Berry Pallets | Waseca

available tools. He confessed the shows are one of the perks of being a business owner, since he enjoys traveling. Every year, he goes to Florida for one show, and every other year he visits Richmond, Virginia. “That’s my vacation,” he said. He also belongs to the National Wooden Pallet Container Association (NWPCA), which hosts conferences that feature tours of pallet plants in different cities. Last year, he visited plants in Chicago, and this year he’s going to Detroit. He said the conferences are important because they give him the opportunity to check out tools before he buys them. He will even visit other companies sometimes to tour their assembly rooms and watch what tools they use. “I use the term, ‘Kick the tires,’ like you’re buying a car,” he said. As for future plans, Berry doesn’t have

everything perfectly mapped out, but he knows one thing: he’s going to stick with pallets from here on out. He doesn’t know if he’s going to expand to more locations, but he said he isn’t crossing off the possibility. “It’s always in the future plans, but right now I’ve got to chew on what I’ve got first,” he said. Another thing he isn’t sure about is when he’s going to retire, but he does know it isn’t going to be any time soon. “One never knows,” he said. “If I’m healthy, I plan on continuing. I’m one that doesn’t like to sit still. I’ve got to have something to do. The family razzes me about it. They say, ‘You’ll never retire.’ Someday, I’ll slow down, but it ain’t in the near future.”

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Pallet Pause Even with all the work, though, Berry still finds time for a few hobbies. He’s part of the Liberty Seated Collector’s Club, a group of coin enthusiasts who collect special “Liberty Seated” coins. These coins were issued from 1836 through 1878 and all feature depictions of Liberty in a sitting position. Berry has found quite a few of these coins and said he enjoys seeing how different each coin looks because of the tarnishing, or “toning” as collectors call it. “With coins, it’s like a piece of art,” he said. “Every coin is different— there’s really not a coin with the same toning. It really makes that coin really beautiful.” Berry also enjoys fishing, though not in Minnesota. He prefers deep-sea fishing off the coast of Florida. Last time he went with a group of friends, they sailed south of Miami to fish for tarpons, bluegreen fish that can grow up to eight feet long and weigh up to 280 pounds. The group was so excited, no one remembered to bring water, food or suntan lotion for the 10-hour trip. Even though Berry never did catch a fish, he said the whole experience was a blast. “I never caught one, but I’m glad I didn’t,” he said. “It’s hard to catch. It’s a very vigorous fish that’s hard to pull up.” But while Berry didn’t catch a fish, he did manage to snag a seven-foot shark later that afternoon. He said he wrestled with it for 20 minutes before it snapped his line and swam free. “That was so fun,” he said. CONNECT Business Magazine

HOT STARTZ!

Very New or Re-formed Businesses or Professionals New To Our Reading Area

Marco’s Pizza Pam Breeden, acting general manager of Marco’s Pizza, grew up in Grand Rapids, Minnesota, where her mother worked in a dental office and her dad drove truck for Coca-Cola. In a telephone interview, 32-year-old Breeden said, “My dad always said if you’re going to do something, then do it right. He would lead by example. I learned from both my parents to always pay attention to detail and take pride in your work.” Breeden learned aspects of her current job while working in high school as a customer service and satisfaction clerk for Kmart before graduating from Grand Rapids High in ’00. After some personal detours, she landed in New Ulm in 2004 as a stay-at home mom studying business management through Rasmussen College online. “Then I did customer service jobs for Northwest Airlines and Nextel, for their websites, but I was at the point in my life where I didn’t want a sit-down desk job,” she said. So she took a job as cook at Ron’s Pine Street Café in Nicollet, then Uncle Albert’s (Eagle Lake) and finally Bonfire (Mankato), where management eventually asked her to prepare and cook pizza. A love was born. After researching “three or four” other job possibilities, she settled on Marco’s Pizza when the location opened in January 2014. She said, “Marco’s Pizza and Family Video are owned by the same company (from Springfield, Illinois). In Mankato, we have

a window between the two stores so people can order their pizza while on the video side. We can also deliver a movie with your pizza.” She continued, “I like everything about this business. I like how every pizza is the perfect pizza. We don’t sacrifice on quality. We make all our dough fresh in-house for the classic crust and we use fresh vegetables.” The business has carryout, delivery, and eat-in, and features cheesy bread, cinnamon squares, toasted subs, salads, and wings. She added, “Tell your readers I have a wonderful fiancée, too.” MARCO’S PIZZA Address: 551 Belle Avenue Telephone: 507-388-8888 Web: marcospizza.com

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MANKATO St. Andrews Drive 507.385.4444 & Madison Ave 507.625.1551 VERNON CENTER 507.549.3679 I AMBOY 507.674.3300

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ART SIDNER

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Comment on Hot Startz at connectbiz.com

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Bradley’s On Warren

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Owner Kathy Depuydt manages Bradley’s on Warren with son, Bradley, opening the bar/restaurant in the former Boomtown location on April 1, 2014. In a Connect Business Magazine telephone interview, Depuydt said, “St. Clair is my hometown. At age 30, I went back to South Central College for a sales and marketing management degree, and to Concordia for a degree in organizational management and communications. Then I worked at the Holiday Inn (Mankato) as director of sales for ten years and doing quotes for conferences. That’s where I learned the food and beverage business.” At Holiday Inn, she was responsible for business accounts, sales, and marketing, and for the “Sunday to Thursday” market. She kept in touch with many Minnesota associations in order to persuade them to choose Mankato. Meanwhile, son Bradley, a Loyola and MSU graduate, eventually worked for a company that had him traveling five days a week, which wore thin. That’s when Kathy and Bradley, who had talked about buying a bar together, had a conversation with family friend Matt Pittlekow, who owned Boomtown. Depuydt purchased the business on April 1, 2014. She said, “We remodeled and knocked out walls, and added seating for 35 in the dart and pool area. We began having trivia every Wednesday night. We are in the process now of gearing

up for many (new) things for the college kids. Thank heavens I have a degree in marketing because I need to market to a whole different crowd to fill those hours and then late in the evening we need to do specials to get the campus kids in.” What excited her in late July and early August was having ESPN report out of her office for a two-week period during Vikings Training Camp. She said, “We’ve ramped up the menu, and have pizza, calzone, wraps, and burgers. I don’t know of any other place in town with calzone.” BRADLEY’S ON WARREN Address: 1600 Warren Street Telephone: 507-388-5005 Web: bradleysonstadium.com

SEPTEMBER/OCTOBER 2014

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Very New or Re-formed Businesses or Professionals New To Our Reading Area

MANKATO

Kato Ballroom Tania Cordes grew up outside Chicago, where her father was a structural engineer and her mother a volunteer on many boards and for charities. In a telephone interview, 45-year-old Cordes said, “My mother has lots of energy and I have some of that from her, for sure.” Her business knowledge developed as an economics major at Colgate University, after which she became a Wall Street analyst and 1995 Harvard MBA graduate. She went on to Bain & Company as a strategy consultant before running the Chicago office of an Internet employee benefits company that eventually went belly up. She said, “I have four kids, and during the next ten years (through 2013), I was on charitable nonprofit boards in Chicago, including for the Lincoln Park Zoo and Chicago Botanic Garden.” While entertaining in-laws over Thanksgiving 2013, she learned Kato Ballroom was for sale. Her in-laws owned it. Her husband had just left his position at a major hedge fund and was starting his own business. They could live anywhere. She purchased the Ballroom on January 1, 2014. “This is something I’ve always wanted to do,” said Cordes. “In my nonprofit work, I organized numerous fundraising events and galas. I have a passion for entertaining, cooking, and making people laugh.”

One early challenge was her having to replace the host of Bandwagon, which Kato Ballroom had hosted for many years. She began hosting the TV show herself this April, including booking all the bands. Show attendance has jumped to more than 300. She said, “Now I’m trying to figure out our niche, and right now we’re a private events business doing weddings, events, lunches, bridal showers, and company cocktail parties. We also do public live entertainment. The big question we have is whether Mankato needs more private event (hosts) or live entertainment?” Kato Ballroom also partners with Mankato Symphony Orchestra to offer a Pops night. She added, “Kato Ballroom is a fabulous place. It’s magical.” KATO BALLROOM Telephone: 507-625-7553 Web: katoballroom.com

To be considered for one of three spots in the November Hot Startz!, email the editor at editor@connectbiz.com. Businesses considered must have started—or changed greatly in form—within one year of our publishing date. Professionals chosen must be new to our reading area.

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Elmore: 507-943-3131 Lewisville: 507-435-2451 Madelia: 507-642-3251 Mankato: 507-345-7069 Mapleton: 507-524-3630 North Mankato: 507-625-3268 St. James: 507-375-3201 Lake Crystal Loan Production Office: 507-726-6475 52

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SEPTEMBER/OCTOBER 2014

ART SIDNER

HOT STARTZ!

PRESS RELEASES

To submit a press release for publication:

Email: editor@connectbiz.com Fax: 507-232-3373

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New Eunoia Family Resource Center providers are Mary Pat Holler, a licensed advanced registered psychiatric nurse practitioner in the telepsychiatry program, Linda Zarrett, a psychiatric clinical nurse specialist, and Becky Mensing, a licensed therapist. KRISMA Counseling new adult rehabilitation mental health services employees are Brian Robinson and Kris Boerner. From the Chamber: new members include Kandy Koncepts, Lynn Rosa, owner, and Fairmont Lakes Foundation; new businesses include Serenade’s by the Lake, Sarah and Nate Brown, owners; Blue Box Bridal relocated to 77 Downtown Plaza; Kayla Rohlk is chiropractic assistant at Burtis Chiropractic Center; Marco was named one of the Top 100 Workplaces in Minnesota for five consecutive years; Courtney Fritz is Fairmont Mayo Clinic Health System’s 2014 health career scholarship recipient; and Sweet Financial Services representatives Bryan Sweet, Ty Totzke, Lynne Burgraff, Oliver Kollofski, and Amber Knips attended the Raymond James Financial Conference for Professional Development in Maryland.

Artist Greg Mueller installed the sculpture “Prairie Cross” in Madelia Community Hospital & Clinic Tranquility Garden, commissioned by Madelia Community Hospital Foundation and financed by Dennis and Lynda Arduser. MacKenzie Bade, LCWM High School, and Taylor Thomas, Madelia High School, are 2014 recipients of Madelia Community Hospital Foundation scholarships. From the Chamber: Dr. Gary Goldberg, Mankato Clinic urology specialist, sees patients at the Madelia Community Hospital and Clinic one Thursday per month; Madelia Municipal Light & Power celebrated 75 years of service in June; and Amy Gillespie’s book Six Years in Mozambique is available at Sweet! Indeed.

Lake Crystal Kari Carrouth is corporate controller for Truck Bodies and Equipment International and its brands, and TBEI and LCWM School District #2071 celebrated five years of collaboration in educating students in the gas metal arc welding technique. Judy Hayes joined MinnStar Bank as chief financial officer. From the Chamber: new members include Kelsey Osborne, LLC and Helleksen Photography.

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Mankato Violinist Emily Saathoff is Mankato Symphony Orchestra concertmaster. The following Blethen, Gage and Krause attorneys were selected for inclusion in Super Lawyers/Rising Stars for 2014: Julia Corbett, Christopher Roe, Benjamin McAninch and Jim Turk; selected as Rising Stars were Beth Serrill and Kevin Velasquez. Capstone principal Robert Coughlan and CEO Tom Ahern received the 2014 Ernst and Young Entrepreneur of the Year Award for the upper Midwest. Primrose Retirement Community celebrated 15 years in business. The CityArt Walk People’s Choice sculpture “Saturday Distractions” was installed June 18 near Mom & Pop’s Ice Cream, on the corner of Riverfront Drive and Rock Street. The City Center Partnership seeks applicants for CityArt on the Go, using city infrastructures as art canvases.

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Jeremy Smuder, Condux Tesmec, is sales and marketing director for North America. CPA Ben Ellingson joined Eide Bailly; new senior associates include Katie Stenzel, David Gullixson and Matt Moline; new managers include Ann Coleman, Brad Thompson, Tonya Rule and Linda Lovich; and the firm will award $60,000 to 12 non-profits in four states for outstanding revenue generation. The board of directors of Enventis Corporation and Consolidated Communications Holdings, Mattoon, Ill., have approved a definitive agreement for a merger of the two companies; Enventis reported a total revenue of $49.7 million for the quarter ending June 30; the board of directors voted to declare a quarterly dividend of 15 cents per share of common stock, payable in the third quarter on Sept. 5 to shareholders of record on Aug. 15; and Enventis expanded its business cloud services to include cloud compute, data protection and cloud wifi and Enventis SingleLink. Feeding Our Communities Partners received a $55,822 grant from Otto Bremer Foundation. Dan Benrud joined First National Bank Minnesota as vice president and commercial lender. Habitat for Humanity of South Central Minnesota received a check from Union Pacific Foundation for expansion of the ReStore. Amy Porter, Hillcrest Health Care Center administrator, received the American College of Health Care administrators Facility Leadership Award, and Hillcrest was awarded five stars by the federal agency

that operates the Medicare program. Brent Krohn and Brian Welch, I&S Group, are licensed professional engineers, Jim Osborne is a licensed land surveyor, Cody Meyer is a Level 2 Certified Survey Technician, and Dallas Willman is a professional interior designer. Tom Pethke is Jordan Sands director of operations and Brett Skilbred is director of resource development and a member of the Silica Sand Rulemaking Advisor Panel of the Environmental Quality Board. Scott Nelsen is a commercial lender at MinnStar Bank. Judy Ringler Mountain, New York Life, is a 2014 member of the Million Dollar Round Table and joined other insurance professionals in meetings with members of Congress to discuss financial issues. Southern Minnesota Initiative Foundation, in partnership with Capstone BookStart, awarded 10,000 books, valued at $171,040, to southern Minnesota children; SMIF, in partnership with IBM, awarded 20 Young Explorer Computer Learning Centers, a $52,000 value, to teachers and child care providers; SMIF received a $100,000 Blue Cross and Blue Shield of Minnesota Foundation grant to help southern Minnesota children prepare for kindergarten; and SMIF received funding to continue hosting AmeriCorps positions. Family Video opened at 551 Belle Avenue. Region Nine Development Commission received a 2014 Innovation Award from the National Association of Development Organizations Research Fund for the Highway 169 Reconstruction and Flood Mitigation Project. Steve Bach is senior vice president and

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business development officer at United Prairie Bank. Mike Gustafson is MSU interim vice president of the Division of Strategic Business, Education and Regional Partnerships. From Greater Mankato Growth: New members include Kato Public Charter School, The True Team (Re/Max Dynamic), Profile by Sandford, Committee Against Domestic Abuse, and Baxter’s Hair Shop; Forbes ranked the Mankato-North Mankato Statistical Area the third best small city in the nation; MnDOT launched a “Get Connected” website to show links between transportation, the economy and Minnesota quality of life; the elder care facility Water’s Edge had a grand opening June 26; and GMG is seeking participants for its Oct. 23 Tour of Manufacturing.

New Ulm Gislason & Hunter attorneys named to the Super Lawyers list are Dustan Cross, Michael Dove, and Dan Gislason, all of New Ulm; named rising stars are Matthew Berger, New Ulm, and Cory Genelin and Andrew Tatge, both of Mankato. New Ulm Community Market & Co-op board of directors is raising $25,000 to launch the business. Oktoberfest is October 3-4 and Oct. 10-11. From the Chamber: M.R. Paving celebrated 20 years in business and moved to 2020 North Spring Street; Sisters Bridal & Tux celebrated its 10th anniversary; and Kemske celebrated 100 years in business.

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North Mankato The City of North Mankato joined the Regional Economic Development Alliance in July. From Computer Technology Solutions: the company achieved the top sales partner for Watchguard Firewalls in the Upper Midwest for six quarters in a row and is a Hewlett Packard NetworkOne PSG Gold Partner; Steve Nixt, Tim Ray, and Todd Tanhoff earned Citrix Certified Sales Professional designation; Ray and Tanhoff earned HP ExpertOne Network Sales Certification; Tanhoff earned VEEAM Sales Professional certification; Jim Patchin earned VMware Technical Sales Professional certification; Randy Reimers earned VEEAM Technical Sales Professional and Backup & Replication Specialist certifications; David Norris is VolP telephony expert; Jeremy Marquardt earned HP Flex Networks Fundamentals Certification; and Jaron Roberts is an Apple Certified MAC Technician.

Owatonna Jerry Kopel is president of Profinium Owatonna office.

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8 remodeled the lobby, meeting room and breakfast area; Los Potras opened an outdoor dining patio; physicians Joe Hamm, Lindy Eatwell, Hesed Mugaisi and Jennifer Langbehn, Mayo Clinic Health System, finished in the top 10 percent nationally in patient satisfaction for effective communication in 2013; Century 21 new office is at 116 Armstrong Blvd, Sherri Bicknase, agent; and Stray Cat Coffee House is serving Mayo Clinic Health System.

St. Peter River’s Edge Hospital & Clinic offers a hospitalist program with specialty-trained internal medicine physicians. Thrivent Financial consultant Brian Jones earned the Retirement Income Certified Professional designation, and Thrivent Financial donated $1,000 plus $664 collected July 4 to the food shelf.

From the Chamber: Sheila Michels, Hometown Travel, was chosen by Travel Weekly to attend the Global Travel Marketplace in Florida in July.

Sleepy Eye Kurk and Janet Kramer opened K&J Antiques. From the Chamber: new members include Trinity Lutheran Church, Kotten Law Firm, Glen Kotten, and Krenz Real Estate & Auctioneering, Larry Krenz.

Springfield From the Chamber: Will Roiger, F&M Insurance Agency, earned the Paul Harris Fellow recognition award for commitment to the Springfield Rotary Club and community.

Waseca From the Chamber: new members include Streamline Communications, City Directory, and Van’s Machine Service, Elysian; Ted Johnson is NAPA Auto & Truck Parts manager; Kevin Sandborg is ProBuild assistant general manager; Dr. Bob Jeske joined Mayo Clinic Health System; Karl Pagel is HyVee wine and spirits manager; Joshua Archer is business development manager at Express Employment Professionals, Owatonna; Megan Lynch, First National Bank, graduated from American Bank’s Association School of Bank Marketing; Waseca County News and Patton Hoversten & Berg, PA received the Roots award for more than 30 years in business; Quad/Graphics and Ultra Beach Contempo Day Spa received Progress awards; and new businesses include American Taphouse and Grille, Dollar Tree and Thrivent Financial.

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NATIONAL OPINION

Although it was expected to top $17.6 trillion by August 1, the national debt has dropped out of the headlines recently. Out of sight may indeed mean out of mind, especially in Washington, but that hardly means the problem has gone away—as a new report from the Congressional Budget Office makes clear. Let’s start with the good news. The annual budget deficit continues to decline. This year’s deficit is expected to be just $492 billion. Of course “just” is a relative term—

CONNECT Business Magazine

a $492 billion deficit still means that we are borrowing 14 cents out of every dollar we spend. Even so, this represents a marked improvement from the $1.4 trillion deficit that we ran as recently as 2009. And, next year’s deficit is projected to be even lower, possibly as low as $469 billion. Unfortunately, this respite is expected to be very short-lived. As soon as 2016, the deficit will begin growing again. By 2023, it is likely to once again top $1 trillion. These ongoing deficits mean our national debt is only going to get bigger too. The CBO report reminds us the debt has been growing by leaps and bounds recently, doubling over the last six years. Today, every taxpayer owes $151,000 as his or her share of this debt. To this ocean of red ink, the CBO estimates we will add an additional $9.4 trillion over the next ten years. And that’s the good news: after 2024, things really get bad. The CBO estimates debt held by the public, the portion of our national

SEPTEMBER/OCTOBER 2014

d e bt e c on om i s t s consider most worrisome, will hold steady as a percent of the economy for the next few years, falling slightly from 74 percent of GDP, Michael D. Tanner then rising slightly to 7 7 p e rc e nt of GDP by 2023. But by 2039, it will rise to 106 percent of GDP. Remember too, this represents only part of our national debt. If one includes intragovernmental debt (debt owed to government trust funds such as Social Security and Medicare), our national debt today is more than 103 percent of GDP, and will reach roughly 118 percent of GDP by 2025. The future unfunded liabilities of Social Security and Medicare, beyond what is owed to the various trust funds, add another $66 trillion to that (in discounted present-value terms), bringing our real

indebtedness to over 480 percent of GDP. The CBO report also points out interest on the debt is becoming an ever larger portion of federal spending. This year, the federal government will pay $221 billion in interest charges. By 2024, that will rise to more than $876 billion. Not long afterward, we will be paying a trillion dollars every year just for interest on the debt. By 2035, in fact, interest on the debt will be tied with Medicare as the second largest line item in the federal budget, trailing only Social Security. And this assumes interest rates won’t rise back to their historical norms (though the CBO assumes they do rise some). Bad as this news is, all of these estimates are likely far too optimistic. The CBO also provides an alternative fiscal scenario, based on much more realistic assumptions about future spending. Under this baseline, for example, the CBO assumes the spending limits under the sequester are breached again, as they were under the December 2013 bipartisan budget deal, the Medicare

“doc fix” is not paid for, and discretionary federal spending is not further reduced as a share of GDP. Under this scenario, debt held by the public alone would reach an astounding 205 percent of GDP by 2045. Shortly after that, the CBO says it is unable to make further projections because no one might be willing to buy U.S. government debt. These are not just abstract numbers. The CBO report makes it clear there is a very real cost to continued government profligacy. Under the baseline CBO projections, real GNP per capita will be 4 percent lower by 2039 than it would be if we followed more prudent fiscal policies. That means our children will be roughly $2,000 poorer per capita. Under the more realistic alternative scenario, real GNP per capita will be as much as 7 percent lower. Yet as we approach the 2014 mid-term elections, politicians are spending far more time discussing who should pay for what kinds of birth control than they are the

specter of national bankruptcy. And, when Congress has taken action this year, from the farm bill to the VA fix, it has almost always meant more spending. We can’t say we haven’t been warned. Michael Tanner is with Cato Institute. This article first appeared on National Review (online) on July 23, 2014.

Gislason & Hunter llp Congratulates our Attorneys named to the MN Super Lawyers and Rising Star List www.gislason.com

RISING STARS 2014

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SEPTEMBER/OCTOBER 2014

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