There is a clear sense of anxiety and frustration among even those who understand how medical insurance works and how the new federal health care law is theoretically designed to change the system.

Broader implementation of the federal health care law approved in 2009 – commonly referred to as Obamacare – will begin in October when states must provide a “marketplace” for consumers to shop for health insurance plans within Arkansas’ Health Insurance Marketplace (HIM). Enrollment in the HIM begins Oct. 1, and ends March 31, 2014.

An estimated 500,000 Arkansans are expected to gain health care insurance through Obamacare and Arkansas’ “private option” plan approved during the recent Legislative Session. The insurance plans range from plans on the books now to taxpayer-subsidized insurance.

‘UNCERTAINTY’ AND FRUSTRATION
Dennis Jumper, owner of Conway-based Arkansas Training Solutions and a lead healthcare-implementation trainer for the state of Arkansas, said “everybody is pulling their hair out” trying to get consistent information on new rules and regulations.

Cal Kellogg, an executive vice president for Arkansas Blue Cross Blue Shield, said, “The issue for us is all the uncertainty it creates.”

With less than 30 days before insurance carriers have to submit qualifying plans for Arkansas’ HIM, Arkansas QualChoice President & CEO Mike Stock said the company is “continuing to assess and implement operational changes needed to meet demands of new law.”

Jennifer Parks, who represents HealthPointe Insurance Services and has clients in the Northwest Arkansas and Fort Smith areas, said frustration is building among agents and business owners who can’t get pricing plans and policy guidelines for 2014.

“People are terrified because they don’t know what is going to happen,” Parks said.

TO PAY OR NOT TO PAY
Parks said in the past few months she has signed up three groups of more than 50 employees who did not have health insurance. One of the businesses has operated for about 15 years.

“The reason they did it, the reason these groups signed up, is because they knew they were going to have to do it eventually,” Parks said.

She was quick to add that the three groups are an exception. More business owners are mulling their options, with one of those options paying a penalty for not offering a health insurance plan.

The law requires a company employing 50 or more full-time equivalent employees (FTE) to offer insurance. In the first year, the penalty for an employer is $2,000 per employee, with the penalty exempted for the first 30 employees. If a company has 51 employees and decides to not offer insurance, the penalty the first year is $42,000 ($2,000 x 21 employees).

Depending on the situation, Parks said the penalty could be less than what the employer would pay to provide insurance to all employees. Kellogg, with Arkansas Blue Cross Blue Shield, said the per employee penalty could rise to $3,000 if an employee is contributing more than 9.5% of their W2 wage to pay the premium on an insurance plan offered by the employer.

“It can get complicated fast,” Kellogg said.

Kellogg said the initial thinking was that many employers would simply “walk away” from providing insurance, which would send their employees to the Arkansas HIM to obtain coverage. But there are more factors than just the cost. Kellogg said paying for employee insurance is tax deductible, but the penalties are not. Also, employees can contribute to premiums with pre-tax income, but the pre-tax option is not available for the employee who buys insurance through an exchange.

“When we take employers through that process ... what they find is that it ends up being a better deal for the employer and most of their employees if they continue to offer the coverage,” Kellogg said, adding that an employer also has to factor in the cost of keeping good employees happy.

HIGHER COSTS LIKELY
Parks agreed that employers want to do the right thing, but employers also have to live within a budget. The potential for higher insurance premiums is another big unknown.

Insurance companies aren’t providing guidance on premium costs in 2014 because of several factors that create uncertainty for the actuaries who determine such rates, Parks said. She said one factor is that there will be many more “lives” covered by insurance, and many of those new lives are those who previously couldn’t afford or couldn’t get insurance.

“The insurance companies know that many of them (newly insured) are the ones who will utilize a lot of services,” Parks said. “We all know that will drive up the costs.”

Kellogg agreed.

“Early on, we expect a lot of usage of the insurance,” he said.

And while there will be pressure on the medical and insurance system in the short term, Kellogg said in the long term “maybe this will cause us to focus on the real issues of cost and quality and how medical care is delivered.”

The goal, of course, is to reduce the number of Arkansans without health insurance.

Stock, with QualChoice, provided info from a March 2013 report published by the Society of Actuaries that estimated the change in insured after three years of exchanges. The estimate was that the percentage uninsured nationally will decrease from 16.6% to between 6.8% and 6.6%. In Arkansas, the number of uninsured in three years will fall from 18.1% to between 10% and 4.9%.

‘MASS EXODUS’
But for Parks and her clients, getting through the short term is trying – especially when insurance carriers are not yet willing to provide 2014 rates for some plans.

“They won’t even give you a ballpark figure because they are saying the numbers are so high that they are hoping they are wrong,” Parks explained.

Parks said she is aware of a company with 600 employees where the decision makers have “run the actuarial tables” and believe the penalty may be the best financial option for the company. Officials with the self-insured company are waiting for more clarity on the rules, regulations, policies and prices. If the rules are too onerous and the premiums are too high, Parks predicted a “mass exodus” of small employers who will drop group plans and choose to take the penalty.

“We are holding our breath basically, until January 1st. If on January 1st, if the rates go up for my employers, they’ll drop their plans because many of them are already at the high end of their budget. They all want to do the right thing for their employees, but if it goes up sky high, they will not have any choice. It will be either close the doors ... or drop the plan,” Parks said.

‘MORE QUESTIONS THAN ANSWERS’
As Kellogg noted, educating people about the process helps ease the uncertainty, but according to Jumper, there remain many blank pages in the rule book.

“I have more questions than answers. The real world will not know (the key rules and regs) and will probably not have things really firm until late August,” Jumper said. “With that (uncertainty) you have business owners that can’t make informed decisions. ... And who knows at this point what those (2014) rates will look like.”

For Jumper to be uncertain highlights the extent of how little is known just a few months before exchanges in all 50 states are supposed to be up and operating.

Working for the Arkansas government through the network of Arkansas’ community colleges, Jumper is training the people who will train “in-person assisters” (IPA).  The assisters will travel the state explaining the rules and regulations to insurance agents, human resources workers and other people involved in the health care insurance process.

“They (IPA) will be the folks that the state will be equipping and then you have a second group of people who are called ‘navigators’ and they will be federally funded folks ... who will also be doing a lot of what the IPAs are doing,” Jumper said.

He estimated as many as 560 state-funded assisters will be used.

SHORT TESTING TIME
Not only is there uncertainty about what is mandated through the new rules, but Jumper said the expedited time in which insurance carriers must develop new plans has added to the tension. He said the normal cycle for an insurance company to roll out a new product is 18-24 months.

“What we’re looking at here is doing the same thing, but doing it in less than a six-month time frame,” Jumper explained.

Kellogg said the schedule is tough. The insurance carriers have to submit their plans (pricing, policies, etc.) to state officials by June 30. The state has 30 days to review and must have recommended policies to the U.S. Department of Human Services by July 31. The federal HHS is expected to issue its decisions by Sept. 4, Kellogg said.

The expedited time frame has also crunched the testing of computer systems needed to connect the insurance carriers, state officials and federal officials. With “several hundred thousand people” expected to enter the exchanges in just a few months, Kellogg said government officials “are only going to give us about three weeks to interact with their system.”

‘NOBODY HAS THE ANSWERS’
There are rumors that full implementation of the federal health care law approved in 2009 could be delayed to provide more time for all parties to adjust to new policies, prices and other factors.

Jumper doubts a delay will happen, but would not rule it out.

“My official position is that I tell everyone, ‘It’s coming. Be ready to go.’ But it would not surprise me one bit that in the first part of July or in August that a big decision is made to push this off for another year,” Jumper said.

He also suggested the members of Congress who supported the law may want to delay full implementation “because they probably don’t want this to blow up in their face during that election year in 2014.”

The one thing of which Jumper is certain is that each day delivers either more clarity, or a change to the previous clarity.

“Every day is a new day. Nobody has the answers. If anyone thinks they do, they’re a fool.”

Arkansas’ economy grew an estimated 1.3% in 2012, with growth in manufacturing, utilities and trade responsible for most of the increase. The increase is better than the 0.7% gross domestic product (GDP) increase in 2011, but below the 2.6% gain in 2010.

The U.S. Bureau of Economic Analysis reported Thursday (June 6) that real GDP was up in 49 states and the District of Columbia during 2012. Nationwide, durable–goods manufacturing, finance and insurance, and wholesale trade were the leading contributors to economic growth. U.S. real GDP by state grew 2.5 % in 2012 after a 1.6% increase in 2011.

Connecticut ranked last in terms of GDP improvement between 2011 and 2012 (down 0.1%). North Dakota was first in terms of GDP improvement with a 13.4% increase. Texas was second with a 4.8% increase.

ARKANSAS DATA
GDP in Arkansas during 2012 is estimated at $93.892 billion, ahead of the $92.684 billion in 2011. Arkansas’ year-over-year gain ranked 38th among the 50 states.

Arkansas’ per capita GDP in 2012 was $31,837, up slightly from the $31,547, but still below the pre-recession per capita GDP of $32,054 in 2007. Per capita real GDP ranged from a high of $61,183 in Delaware to a low of $28,944 in Mississippi. Per capita real GDP for the U.S. was $42,784.

The mining sector in Arkansas during 2012 saw a 0.19% dip in activity. While the BEA report does not provide details on what causes ups and downs in specific sectors, it is possible the mining sector decline is connected to reduced activity in Arkansas’ Fayetteville Shale Play. There are about 15 rigs in the Fayetteville Play – located in north and central Arkansas – compared to more than 55 rigs about five years ago, and down from 22 a year ago. The monthly average for natural gas rigs in Arkansas during 2010 was 39.

Arkansas’ information sector was down 0.03% in 2012, health care services fell by 0.04% and the “professional, scientific and technical services” fell by 0.25%.

The state’s manufacturing sector saw a 0.37% gain during 2012. The utilities sector was up 0.26%, wholesale trade was up 0.32% and retail trade was up 0.28% during 2012. The state’s agriculture, forestry, fishing, and hunting sector was up 0.15%, and far better than the 0.4% decline seen nationwide in the sector.

NATIONAL SECTOR DATA
• Durable–goods manufacturing was the largest contributor to U.S. real GDP by state growth in 2012. This industry increased 9.1% in 2012, after increasing 6.8% in 2011.

• Finance and insurance was also a leading contributor to U.S. real GDP by state growth. Finance and insurance increased 3.6% in 2012, rebounding from a 0.6% decline in 2011.

• Wholesale trade contributed to real GDP growth in 48 states and the District of Columbia. Wholesale trade increased 4.8% in 2012, after increasing 3% in 2011.

• Although mining was not a major contributor to real GDP growth for the nation, it was a large contributor in North Dakota, West Virginia, and Texas. In North Dakota, the fastest growing state in 2012, mining contributed 3.26 percentage points to real GDP growth of 13.4%.

• Construction turned up in 2012, after eight consecutive years of contraction; increasing by 3.2% nationally. This industry contributed to real GDP growth in 43 states and the District of Columbia.

• In contrast, agriculture, forestry, fishing, and hunting subtracted from real GDP growth in 2012. This industry subtracted from real GDP growth in six of eight BEA regions and in 35 states.

ARKANSAS, OKLAHOMA, MISSOURI GDP
• Arkansas
2012: $93.892 billion
2011: $92.684 billion
2010: $92.075 billion
2009: $89.776 billion

• Missouri
2012: $221.702 billion
2011: $217.401 billion
2010: $216.681 billion
2009: $212.591 billion

• Oklahoma
2012: $138.296 billion
2011: $135.454 billion
2010: $132.917 billion
2009: $132.059 billion

How do you take one of the top government websites in the nation and make it even better? Optimize the site for mobile devices, according to Phil Billingsley, general manager of the Information Network of Arkansas.

Billingsley said Arkansas.gov, which has been the go-to online portal for everything relating to Arkansas government since 1998, won the Best of the Web Award (state portal category) at the 2011 Web and Digital Government Achievement Awards.

"It's actually been two years since an update," he said. "We normally do an update every year, but after winning the award, we waited a year. So we did this update in May 2013."

The push for a going mobile was driven by loads of data available to the web managers, such as Claire Bailey, the state's chief technology officer.

"Arkansas has some of the highest rates of mobile usage in the country, so it was critical for us to ensure that the state portal provides the best information regardless of what device the citizen is using,"she said in a press release.

Billingsley elaborated, telling The City Wire that the number of visits to Arkansas.gov from mobile devices had "actually doubled in the last year." He said the push for mobile also came about due to a CDC study that ranked Arkansas as being the state with the highest number of wireless-only households.

"With the explosion of smart phones and tablet devices, the number of people coming in on a traditional desktop or laptop is going down. All the stats we see is proving that out."

The newly-designed site, which rolled out to the public on May 1, was built to be a "responsive design."

"It's technology that recognizes the device and renders the screen formatted best for that device, whether a smart phone, tablet or desktop," Billingsley said. "Some of the mobile sites you go to, you lose the content, but that's not the way with ours. No content is lost.”

An example he cited included a user scrolling down the page and seeing a map showing state services available in different areas. While the map would be "clickable" using a desktop or laptop computer, it would respond to a mobile device with a slight change.

"If you try to scroll down on a tablet function ... we designed a function to tap it to use it and then tap it again to continue scrolling (down the page). It was designed for a tablet or a smart phone, so that function is not needed on a desktop."

Another section of the website to see improvements is the search function.

According to the press release announcing the re-designed site, Billingsley said "nearly 70% of visitors to Arkansas.gov use the search feature first." Because of that, the team working on the re-design spent a lot of time working on algorithms to customize the search function for Arkansas residents, versus using a standard search function powered by other search engines, such as Google or Bing.

"The portal's enhanced Smart Search connects to several databases simultaneously, and a unique scoring system summarizes the results on a single page," the press release said. "The search also ranks some results higher based on the user's geographical location."

The newest, and perhaps most intriguing function, goes back to Arkansas' ranking as the state with the most wireless-only households.

And while it is geared to mobile web users, the feature itself does not even require users to log on to Arkansas.gov. Instead anyone looking for information can send a text to 501-246-8783 and get a response.

"For example, if you were looking for who the attorney general of Arkansas is, you could text that and it would give you the information and the contact information," Billingsley said.

The service, which he said is still being tweaked, will continue to be monitored to ensure the best results are made available to users of the service.

Intended to be simple and easy, Billingsley said he hopes it can provide a valuable service to Arkansas citizens, including letting know about state holidays, elections, polling places and how and where to conduct state business.

"It's a lot that you need and it's easy. You don't have to open a browser, you just text your question and we do our best to reply based on some algorithms build around that service. As far as we know, we are the only state that gives some sort of text response back to our citizens."

The site re-design, valued at more than $180,000, was completed at no cost to taxpayers utilizing a self-funded model with Arkansas' eGovernment partner, the Information Network of Arkansas, according to the press release.

Wal-Mart executives are taking the retailer’s “store of the community” seriously these days across Arkansas, Oklahoma and Missouri.

Products like Norman Lures of Greenwood, Mainstay Candles made in Fayetteville, Cavender’s Greek Seasoning of Harrison are among some of the 1,700 products displayed in Northwest Arkansas Walmart stores under the banner “Arkansas’ Own."

A similar program is also under way in Oklahoma and Missouri, according to Glenda Fleming-Willis, an operations manager at Wal-Mart. She said products go through a rigorous check to ensure they are made in-state.

Carol Johnston, senior vice president of store development, said there are 47 suppliers and 79 brands flagged as “Arkansas’ Own” providing items that are made or processed in the Natural State. Johnston said it’s a sense of pride and part of the global retailer’s efforts to focus on the local communities they serve and help sustain jobs across the state.

The “Arkansas’ Own” flagged displays went up Memorial Day weekend in a few stores across Northwest Arkansas and the placement will continue to expand in the coming weeks.

Jack Sinclair, executive vice president of Wal-Mart’s grocery division, said sourcing fresh and locally is essential in food.

“A hammer is a hammer, but food preference is a very local thing. By using big data and other analytics we are getting from Nielsen and others is helping to assess what brands local communities want,” Sinclair said during a media tour of Walmart Store No. 5260 in Rogers on Thursday (June 6).

He said ice cream was an item where grocery has focused to broaden assortments with local and regional brands throughout the country.

“We have added 1,100 sku's (items) of ice cream alone this year and will be doing the same thing with cheese. meats and other products in the future,” Sinclair said.

Wal-Mart made big headlines when it announced it would source an additional $50 billion of products made in the U.S. over the next five years. This is in addition to the fact that two-thirds of the items in Walmart stores are today are made in America.

“Arkansas’ Own” is one-closer step to localization and while the retailer did not commit to a timeline or the scale of the state initiative across the country, it is well under way in the local three-state area. Other products tagged as “Arkansas’ Own” include: Mainstays Mops, Great Value Chips, Riceland Rice, Forrester Chicken, Alliance Rubber bands, Fisher Honey, Dewafflebakkers Pankakes, Biffs Coffee, Westrock Coffee, Medlaion Chips, Yarnell’s Ice Cream, Stopby’s Cheese Dip and Petit Jean Meats.

While the buyers have the final say which products get on Wal-Mart shelves, Michelle Gloeckler, senior vice president of Walmart home, said media attention to the “source local campaign” has caused some suppliers to reach out to Wal-Mart about their products.

“Many times suppliers don’t realize that they don’t have to furnish product to all the stores and we are finding more small companies are calling us since we have launched this program,” Gloeckler said.

From e-Commerce confidence to small business challenges, top executives with Wal-Mart Stores Inc. promoted an expectation for growth at the world’s larger retailer this coming year.

Wal-Mart is unfazed by Amazon’s plans to expand into the grocery business, and while it did not comment specifically about its competition the message was clear to the several dozen reporters at Thursday’s media session in Rogers ahead of Friday’s annual shareholder meeting.

Neil Ashe, CEO of Walmart Global eCommerce, said Wal-Mart knows what it takes to make grocery delivery feasible. He said market demand, population density and ability to deliver products efficiently are the three dynamics needed.

Wal-Mart has tested home delivery in San Jose and San Francisco markets for several months and says there is not enough consumer demand to warrant expanding that program to other large urban areas. He said if someone else wants to test and develop that market density, Wal-Mart is ready roll out its own program on a grander scale.

Wal-Mart has some 4,000 stores across the nation that can serve as distribution nodes to facilitate the process of filling orders locally. It has also opened e-commerce only fulfillment centers in addition to having dedicated areas within the retailers 130 distributions centers across the country that focus on item shipping, not pallet delivery.

Ashe said this gives Wal-Mart an advantage over other competitors. He said transportation is the biggest challenge to delivery for any retailer and Wal-Mart has one of the world’s most efficient systems on its side. He said the company has also learned lessons from ASDA, its grocery business in the United Kingdom, which has already achieved a successful model for home delivery.

Ashe said Wal-Mart is reaching customers through e-Commerce in Antarctica and Easter Island, the first retailer to do so. He told the group the first order to Antarctica was filled last summer and it was an ice cream maker.

Gibu Thomas, senior vice president of mobile and digital at Walmart e-Commerce, said 50% of the transactions that start online, are finished in-store.

The pay-with-cash option for online shoppers represents between 3% and 5% of the $9 billion in annual sales last year.

INTERNATIONAL GROWTH
Doug McMillon, CEO of Walmart International, said the international market is very diverse in terms of store banners, but the growth opportunities that come with low prices  are universal.

He said the company is working to perfect its low-cost price strategy in all of the markets it serves. China, he said, is planning to begin the conversion over this next year  and Brazil is already in the process of implementing the “Everyday Low Price” cost model.

McMillon said he is pleased with how Wal-Mart Canada is faring against heightened competition in that market, especially since 40% of the stores are still the older discount store format.

“We are seeing growth in grocery marketshare in Canada,” McMillon said.

He also expects that to continue as these older formats are expanded to include more food.

The Massmart banner in South Africa is doing well, despite some softness in that economy.

He said the company’s international procurement and logistics business is helping to cut costs in supply chain as they work directly with farmers to get the product to the store.

India is another bright spot for opportunity, according to Ann Bordelon, chief financial officer for the international division.

“The cash and carry format is great for India as we can be the supplier for thousands of mom and pop vendors there,” Bordelon said.

SMALL BUSINESS COLOR
Sam’s Club relies heavily on its small business members to drive continued sales growth year over year. And while Sam’s reported a strong 2013 with $56.4 billion in revenue last year, comparable sales grew just 0.2% in the recent quarter.

Sam’s Club CEO Rosalind Brewer said times are tougher for mom and pop restaurant operators and convenience store customers, which make up a large percentage of Sam’s Club sales. She said just as some consumers live paycheck to paycheck, some small businesses are operating meal to meal.

A recent visit with a longtime club member in Texas City, Texas, just outside of Houston, revealed that times had gotten so tough that restaurant owners were using lunch proceeds to go to Sam’s to buy product need for that night’s business.

“I think times are tougher now for some of our club members than they were in 2008. As we see consolidation in the convenience store sectors many of the small mom and pop operators are being squeezed,” Brewer said.

She said more small businesses were using Sam’s as their inventory keepers, buying only what they need for a very short period of time. It’s a trend she has seen continue in recent months.

Brewer expects to grow Sam’s revenue to $100 billion in the next few years, despite the challenges some members are facing today. She sees these as opportunities to build loyalty. The club is also expanding rapidly with 15 to 20 new clubs coming online this year. This is on the heels of nine new locations last year, following several years with just two or three additions.

McMillon said Sam’s is also a growth opportunity internationally and plans to add more clubs in the next few years on a global scale.

Broadway and action movie star Hugh Jackman emceed a Wal-Mart shareholders meeting in which a party atmosphere highlighting the company’s financial successes and its employee contributions also included a few party crashers calling for more transparency on the board and in international dealings.

Rob Walton, chairman of the Wal-Mart Board of Directors and son of Wal-Mart Stores Inc. co-founders Helen and Sam Walton, welcomed the estimated 14,000 in attendance by saying the 2013 meeting was the first meeting for the company’s second 50 years.

As usual, Wal-Mart gathered an impressive list of celebrities to entertain the crowd. In addition to Jackman, the stage saw Kelly Clarkson, Tom Cruise, Jennifer Hudson, John Legend, Prince Royce and Jahmene Douglas. Douglas is an ASDA Wal-Mart employee who was a finalist on the X-Factor reality show in the United Kingdom.

Before turning the show over to Jackman, Walton said the Wal-Mart culture is father created is “strong and moving forward.” He also told the crowd to not be surprised “if protestors try to disrupt” the event.

Later in the meeting, Walton said the company “continues to investigate” the allegations of bribery and potential violations of the Foreign Corrupt Practices Act. The investigations are ongoing in Mexico, China, Brazil and India. In the first quarter earnings report, the company said it has spent $157 million on matters related to the investigation.

Jackman brought levity to the proceedings by commenting about the 7 a.m. start to the meeting.

“I have never been up this early” in my life, Jackman joked.

Later in the meeting, Wal-Mart officers discussed the company’s business performance among the various sectors. Charles Holley, Walmart executive vice president and chief financial officer, said that at the 2012 shareholders meeting the share price (NYSE: WMT) was around $64. On June 6, the share price closed at $75.63, or more than $30 billion in added value to shareholders since June 2012.

‘HALF A TRILLION’
Holley also noted that total revenue in the most recent fiscal year was $466 billion, and he is confident it will go higher.

“We’re closing in on half a trillion dollars,” Holley said.

Holley also said Wal-Mart is the only company in the Dow 30 to post gains in revenue, income and earnings per share for five consecutive years. In the past five years the company also has returned $62 billion to shareholders.

Holley also announced that the Wal-Mart board had approved another $15 billion share repurchase plan.

12 BILLION TRANSACTIONS
Doug McMillon, president and CEO of Wal-Mart International, said the company had 12 billion transactions with customers in 2012. McMillon said the transactions gives employees 12 billion opportunities to create a good impression with customers.

As did Walton, McMillon also said the company is working to strengthen global compliance measures.

“It’s not what we say, it’s what we do that really matters,” McMillon said.

Rosalind Brewer, president and CEO of Sam’s Club, announced that the club is rolling out an entrepreneur support program in 25 markets. The program is designed to help struggling small business owners in areas such as inventory control and marketing.

Brewer also said Sam’s Club plans to open 15-20 new locations in the next 12 months, and will roll out a “scan and go” mobile application in June in limited markets.

VISION AND VALUES
Wal-Mart Stores Inc. President and CEO Mike Duke talked about the company’s values and vision. He told several stories of how Wal-Mart employees went above and beyond in the jobs, including an assistant store manager who helped a family by finding a way to get a tire replaced at 3 a.m.

In a document prepared prior to the shareholders meeting, Duke outlined the following “strategic focus areas” for the company.
• Making sure the company has the best retail talent at every level of the organization by recruiting, developing and retaining the best associates;

• Delivering on the productivity loop that enables Walmart to operate for less so the company can drive prices even lower for its customers;

• Being even more disciplined about operating expenses and capital spending;

• Investing to serve more customers globally and accelerating the vision of anytime, anywhere access by bringing together best-in-class online, mobile and social capabilities and our more than 10,700 stores; and,

• Benefiting our communities and having a world class compliance organization.

SHAREHOLDER PROPOSALS
During the meeting, there were four shareholder proposals mentioned that are not supported by the company. The non-company proposals provide unions, advocacy groups, pension funds and other organizations a soapbox during the shareholders meeting.

The first proposal was presented by Kalpona Akter, a former garment worker from Bangladesh who is now seeking to improve working conditions in garment factories in the country. Akter’s proposal seeks special shareholder meetings to be allowed, with the focus to be on problems like fires at Bangladeshi garment operations that have killed several hundred workers.

Wal-Mart said it will not sign an accord with European retailers over factory safety in Bangladesh, but has opted to conduct its own inspections at 100% of the factories in that country where goods for the retail giant are made.

Akter alleged that Wal-Mart’s “supply chain is out of control” because company officials were not immediately sure if the garment workers who died made clothes for Wal-Mart stores.

Janet Sparks, a Wal-Mart employee from Louisiana, spoke on behalf of the International Brotherhood of Teamsters for a plan to require Wal-Mart execs to retain a majority of their shares until they retire. She also complained about Wal-Mart CEO Duke receiving a $20 million salary and bonus package in 2012 when bonuses were cut in many stores.

“With all due respect, I have to say, I don’t think that’s right,” Sparks said.

Tim Goodman, a representative from United Kingdom-based Hermes Fund Managers, asked shareholders to approve a plan requiring the Wal-Mart Board Chairman to be independent. He said Hermes is a “critical friend” to Wal-Mart, but that Hermes officials believe the bribery allegations and problems in Bangladesh represent “failures in the culture and the oversight.”

Cambria Allen, representing the United Auto Workers and several pension funds, asked shareholders to approve a plan that would fully disclose what Wal-Mart does to “claw back” pay from executives who violate company policies. She said the transparency would create “concrete consequences for misconduct.”

The four proposals were rejected by shareholders.

Two new polls show widespread state opposition to immigration reform, including a measure being considered at the federal level.

A poll released Friday (June 7) by the Federation for American Immigration Reform (FAIR) showed that Arkansans are opposed to a Gang of Eight federal immigration bill by a 60-30% margin.

According to the poll of 500 likely Arkansas voters conducted by Pulse Opinion Research, 60% of Arkansans oppose S.744, a bipartisan immigration reform bill that will soon be considered by the U.S. Senate.

Approximately 30% said they supported the bill and 10% were not sure. More than one-third of those surveyed (35%) were not familiar with the legislation, which does offer a potential path for citizenship to some illegal immigrants.

U.S. Sen. Mark Pryor, D-Ark., who is standing for re-election in 2014, is expected to be a pivotal vote on the issue. He said in a recent interview that he supports immigration reform, but is studying the current Gang of Eight measure.

“I want to look at everything they’ve done – it came out of the committee with a hundred amendments on it, so we’re trying to sort that out right now to get the right bill so we understand what’s there – but the truth is, I would like to support immigration reform. We should have done this ten years ago,” he said.

When asked if he supported a path to citizenship for illegal aliens, Pryor said he sees a possible path.

“I think what we would do there is if it’s like they had it structured before – in the draft bill – I think I can support that,” Pryor said.

The FAIR poll also found:
• 67% oppose granting legal status to illegal aliens before a border security plan is fully implemented, and 29% of voters oppose granting amnesty under any circumstance;

• 64% oppose provisions in the bill that would significantly increase overall immigration to the U.S., including 53% who are “strongly opposed.”; and,

• 70% oppose the increases in guest workers authorized under the bill, including 47% who said the increases are “much too high.”

The FAIR group’s poll, which you can access here, was conducted on June 3 and has a margin of error of +/-4.5 percent.

Its results mirror findings from a recent survey conducted by Diamond State Consulting on behalf of the Arkansas Trial Lawyers Association (ATLA).
The ATLA poll, conducted on May 30, 2013, found:
• 68% of Arkansans think illegal immigrants hurt the economy;
• 20% think illegal immigrants help the economy;
• 59% think businesses hiring illegal immigrants should be punished; and,
• 28% think businesses hiring illegal immigrants should not be punished.

In a wide-ranging speech to the Fort Smith Regional Chamber of Commerce's First Friday Breakfast today (June 7), U.S. Sen. Mark Pryor, D-Ark., spoke about the housing market, the overall economic climate and dredging the Arkansas River channel as a way to increase exports from the state of Arkansas.

Pryor started the speech acknowledging the difficult economy experienced across the nation, saying the rebound, while not perfect, is starting to take place, especially in the housing market.

"For housing, which is one of the reasons we went into the tank in the first place, the housing market is recovering, there is no doubt about it. You can look at all the different kind of criteria that you look at on housing, whether that's home sales, prices, new home starts, etcetera - all of those are in positive territory."

According to Pryor, the industry has improved so drastically, it is showing its best numbers since 1993.

"It's getting as strong as it was before the recession, not that there's going to be another bubble, but it's getting traction, it's back on its feet, it's solid again, that's good."

Pryor said another sign of the improving economy was the rise in consumer confidence.

"I don't know if you saw this, but last month consumer confidence increased to 76.2% and man, it was down way, way low. I'm not sure how low it got, but it was like in the 20s or something," he said.

With the consumer confidence index rising, Pryor said spending, hiring and other trends should continue to trend up.

His speech took place at the same time that the U.S. Department of Labor released May employment numbers, showing the unemployment rate increasing to 7.6% nationwide, an increase of 0.1% from April.

Pryor said while he could see improvements in the economy, nationally and at home in Arkansas, it was not the end of the road. He said there was still a lot of work to do.

"So we see these very positive signs around the nation, and we need to remember that we can always have progress, we can always do better, we can always work harder and get more, but still things are moving in the right direction."

He said as the economy continues to improve, he would like to see continued growth in the Fort Smith area. The area, Pryor said, was healthy and growing and had a lot to offer the business community, including a "trained workforce" and strong local leadership within both government and the private sector.

Among the many recent accomplishments to Fort Smith's credit, he cited the announcement of hundreds of jobs coming to Fort Smith through HMA, the parent company of Sparks Regional Medical Center, along with 90 jobs expected to be created at Gerber Products and the continued progress taking place on the planned-U.S. Marshal's Museum along the banks of the Arkansas River near downtown.

Pryor said his goal as a Senator is not just to cast votes to help the citizens of his home state, but to be an active participant in bringing jobs and economic growth to the area.

"Just tell me what I need to do and I'll do it," he said. "Let me just say this - a lot of times, people think of their senator and all they do is vote, and that is an important part of what I do. … but there's more to this job than just voting."

A project Pryor said he is focusing a lot of his energy on is getting the U.S. Army Corps of Engineers to dredge the Arkansas River channel to a 12-foot depth in order to bring in more barge traffic along the river. He said by having the deeper river, trade could increase not only along the Arkansas portion of the river, but also up into Oklahoma.

The only problem? Money.

In an era marked by decreasing spending and eliminating earmarks, or pork, finding the estimated $188 million to complete the project has become a tedious process, Pryor admitted. But the project will move forward, he said, even if it doesn't happen by 2015, the date President Barack Obama had designated as the date he would have liked to have seen American exports double in volume.

Following the speech, Pryor took answers from the public and the press.

Asked about a television commercial that attacks his vote against mandatory background checks for all gun purchases, Pryor said nothing in the Manchin-Toomey Bill would have stopped an event like the Sandy Hook School Shooting and he did not think an attack ad by a Democrat (former Democratic Party of Arkansas Chief Financial Officer Angela Bradford-Barnes) showed a rift within his own party.

"I think on that bill that they're talking about, the context of that ad is (former Democratic Party of Arkansas Chairman) Bill Gwatney's (shooting) death, and that was a sad day - I was actually in the hospital room when he died. It was a sad day, sad day for Arkansas,” Pryor said. “But that bill, the Manchin-Toomey Bill, would have done nothing to prevent it, what happened to Bill Gwatney. Just nothing. There's nothing in there. It's almost insulting to me. It is insulting to me that they would choose his death to make a political issue out of it on an issue where they have no solution at all.”

Special interest groups were also discussed after the speech, with Pryor conceding defeat in the area of spending against such groups.

"You're going to have all of these third party out-of-state groups, most of them you have no idea where their money's coming from or who's really behind them, you're going to have all of these groups say all these things about me. We'll run ads and we'll do our best to challenge that. There's no way that I can compete with them on the money. They're going to have so much money,” Pryor said.

Pryor also expressed shock that he is already running campaign ads a year and a half before the election, at a time when he does not even have a Republican opponent, though speculation has placed U.S. Rep. Tom Cotton, R-Dardanelle, as a potential candidate in next year's election, though he would not acknowledge Cotton by name.

"No, I never thought that would happen, but I never thought they were going to spend a million dollars against me and here we are 17 months (out) and I don't have an opponent. …whoever's going to run, they're going to be well-qualified, well-financed campaign. I can almost guarantee you that whoever runs on the Republican side will have as much or more (money) than I will. It's just the reality of it. It's just the way things work now. I wish we could fix the money in campaigns. I really wish that when I run for re-election, it could be kind of a one-on-one campaign, all Arkansas money, all Arkansas issues, and just go after it because I feel like that's really the way the system was designed."

Rule No. 6 of legendary retailer Sam Walton was “celebrate your successes." But more than half of Walton’s list of “10 rules for building a business” dealt with engaging and appreciating “associates” or company employees, according to his son Rob Walton.

“Dad knew that building a business was about building up the people,” said Rob Walton, chairman of Wal-Mart Stores Inc., as he addressed more than 14,000 at the retailer’s annual meeting in Fayetteville on Friday (June 7).

The Wal-Mart “associate," was the key focus of the entire week leading up to Friday’s meeting which showcased some of the retailer’s brightest stars including Jahmene Douglas, with ASDA until recently. ASDA is the retailer’s grocery business in the United Kingdom. Michael Lundberg, a high school senior who works in a Texas Sam’s Club, was also called into spotlight.

Douglas, the X-Factor runner-up, wowed the crowd with his riveting vocal performances and he gave ASDA the credit for giving him the confidence to enter the competition.

Lundberg was tagged a “hero” by CEO Mike Duke, for continued volunteer efforts to help his fellow residents in West, Texas. On April 17, Lundberg was eating dinner at home when a fertilizer plant exploded and leveled the surrounding area. He immediately jumped in his truck and headed to the scene, Duke said.

At a nursing home next to the plant, he helped triage the injured and then went inside to pull people from the rubble. Once first responders arrived, he went to a nearby apartment building and evacuated another injured man to safety. Duke said he is still volunteering in that community and he graduates from high school tonight before he joins the Marines later next month.

“Michael when you get back from serving our country, I’ve got a job waiting for you,” Duke said.

Tributes like that were played all week and the retailer recently launched a media campaign with a similar message of opportunities and possibilities within the massive corporate giant’s family. With some 2.2 million employees around the globe, Wal-Mart is also the world’s largest private employer.

While Wal-Mart claims every shareholder week in the past has been about celebrating its employees, it is clear the retailer went to great lengths this year as Simon granted two promotions onstage during Friday’s shareholder meeting. Simon called Mary Lou Singleton from Pleasanton, Calif., and Kari Grissom from Cave Creek, Ariz., to the stage.

“She (Singleton) is very dedicated to her customers, and her manager has called her ‘the backbone’ of her store.  Kari Grissam is very positive and supportive of her team. And her market manager says she has the best in-stock in her market,” Simon on told the crowd.

“They've both recently applied for assistant manager positions, but they didn’t know if they’d gotten them until right now. Congratulations, you're both being promoted,” he said.

He gave them their new management badges and told them these jobs come with a raise. Then he simply asked, "Who’s next?”

“More so this year than any other, we are focused on our people, Duke told analysts in their Friday afternoon meeting. “Our people make the difference and I continue to be amazed at who we are recruiting, we have the best merchant talent we have ever had, the best anywhere in the world,” he said.

More than 5,000 store workers, hourly and management, made their way to Bentonville for this year’s meetings and dozens of them were proudly displayed for the media at multiple events ahead of Friday’s meeting.

Wal-Mart’s top management team sat down with analysts following Friday’s (June 7) shareholder meeting to discuss operating challenges and growth potential for the retail giant this coming year.

Chief Financial Officer Charles Holley said the company would not provide new earnings guidance for its second quarter of fiscal 2014, which ends July 31.

Last month during Wal-Mart’s first quarter earnings call the company gave a second quarter guidance between $1.22 and $1.27 per share. This compared to $1.18 earned in the prior year period.

Walmart U.S. and Sam's Club, excluding fuel, expect same-store sales for the 13-week second quarter period to between flat and 2% and 1%-3 %, respectively.

Holley said the company would remain focused on its three-prong strategy of growth, leverage, and return.

FAMILY FOCUSED
Leon Nicholas, senior analyst with Kantar Retail, said every presentation Wal-Mart executives make revolves around this triple-focus strategy of growing sales while also leveraging all assets in order to drive better shareholder returns.

“When you look at who Wal-Mart’s biggest shareholders are – the Walton family – it’s pretty safe to assume this strategy is going to stick for quite sometime,” Nicholas said during a recent Kantar conference in Rogers.

On Friday, analysts asked management if they had to make a choice between the three goals, which could be sacrificed. The short answer given by the executive team was none.

Doug McMillon, CEO of Walmart International, did discuss how the diverse global business unit has thought through its investment strategy for future growth. He said Canada has some of the highest store returns in the world.

Last year Wal-Mart spent $750 million in Canada with 73 new projects adding 4.6 million square feet of retail space. At the time the retailer said it held the No. 2 spot in a highly competitive Canadian market. McMillon said evaluating growth opportunity for near maximum return on the capital invested is how the retailer approaches future capital expenditures.

He reiterated that the decision to scale back expansions in China and Brazil were necessary to ensure better returns on capital investments.

“In China ... we were too accommodating in store layout, as you know some of the supercenters were in malls and we really needed them on one floor with customer parking. When we gave on too many of our principles we found our performance was not as strong,” McMillon said.

In Brazil, he said they had the wrong format with Maxxi Atacado because it failed to meet expectations. Maxxi is a cash and carry operation that sells goods from a wholesale warehouse similar to Sam’s Club or Costco. The average store size is 65,000 square feet.

He said the two markets held the global division returns back a bit, but at the same time the company made price investments in the mature Japanese market in hopes of improving growth there.

“We took a shorter margin in Japan and worked at raising customer loyalties there. We didn’t raise margins in other markets because of that. Each one of these markets has to grow share over time and deliver return over time. If we make too many trade-off decisions we could harm our investment in a market,” McMillon said.

CEO Mike Duke reminded analysts that Wal-Mart has provided a high level of consistency over time because it is a portfolio of businesses. The retailer operates in mature and developing countries located in varying geographies which are managed for the long-term. But Duke said the portfolio also allows the company to provide annual consistency for its shareholders.

U.S. COMPETITION
With fierce competition for consumer dollars Wal-Mart executives were asked how they plan to produce a positive and sustained customer traffic trend in the U.S. business.

Bill Simon, CEO of Walmart U.S., said until the last quarter the company had produced six quarters of positive comp traffic. And he considered the most recent quarter a bit of an anomaly. Same store sales fell 1.4% for the quarter ended April 27.

In their May 16 earnings report, Wal-Mart execs said softer consumer sales hindered by higher taxes and larger winter heating bills this winter resulted in earnings that missed analysts’ expectations. However, the company pocketed $3.78 billion in its fiscal first quarter ending April 27, and operating income in the Walmart U.S. division was up 5.9%.

Simon said the productivity loop is the answer as the company continues to offer low prices on fresh food and other consumables which are traffic drivers to the store. Once in the store, Simon said they will continue to coax shoppers across the aisle into general merchandise.

“We continue to work on this, and don’t expect another quarter like the first quarter,” he said.

Analysts asked management to explain any external factors that are hindering gains in marketshare or improving overall comp traffic and sales. Simon said there are changes in the retail landscape as the number of stores are growing faster than the rate of shopping trips per consumer.

“It’s challenging but I think you will see the strong get stronger and weak get weaker. I put us in the strong category,” Simon said.

CONSUMABLE-CENTRIC, MARKETSHARE
As other retailers have expanded heavily into consumables and grocery, analysts wanted to know if Wal-Mart management might consider focusing less on consumables and differentiating more into other product categories. They cited the fact that Costco has used that strategy and had not suffered lower traffic or sales comps.

Simon responded, “Please don’t misinterpret our focus on consumables, as a lack of focus on everything else, because the velocity of a pillow is once a year or two where bananas and milk are a weekly or twice-weekly purchase.”

The consumables drive the “velocity” (numbers) for store traffic, he added.

Analysts asked Simon how he can grow marketshare when so many retailers are doing the same thing, focusing on fresh food and consumables.

“You have to do it better, the supply chain has to get it there faster and efficiently so you can offer the low price,” Simon explained.

He said the company is leveraging all of its assets, including recent investments in the e-Commerce division to ensure they win on low price and gain customers through the omni channel options – aka, various ways to shop with Wal-Mart – and more delivery choices.

Holley said the company will continue to invest in its e-Commerce business which will offset about nine cents per share in earnings this year, and two cents in the current quarter.

On the international stage, McMillon said, the company is taking marketshare, even though it did not produce first quarter results as strong as he had hoped. McMillon doesn’t expect a robust back half of this year economically, but his team is focused on growing marketshare in the short-term in each of the countries and banners in which it conducts business.

GLOBAL COMPLIANCE
Analysts asked for an update on the company’s expenditures toward the ongoing independent investigations into alleged violations of the Foreign Corrupt Trade Practices  Act (FCPA). The allegations involve potential criminal activities in Brazil, China, India and Mexico.

Wal-Mart spent roughly $73 million on FCPA matters in the recent quarter and $157 million in fiscal 2013, according to the company’s annual report with Securities and Exchange Commission.

Jeff Gearheart, the executive officer overseeing global compliance for Wal-Mart Stores Inc., told the analysts Friday that roughly 41% of that total was spent on the company’s internal compliance activities and majority on the investigations which are underway in the four countries.

“Those investigations will go on as long as necessary and go where the facts lead us. The people up here (Wal-Mart’s executive team) don’t really have any control over that. ... It is independent,” Gearheart said.

He also said the retailer is using a “meaningful number of outside experts” related to FCPA. To date, he said 300 legal and accounting professionals have logged more than 100,000 hours toward FCPA issues.

Gearheart said the company expects the costs will remain elevated through the year as it continues to ramp up its own compliance infrastructure. Wal-Mart has added several global compliance officers in each of its international markets. The retailer has invested in systems that will unify the company’s processes relating to permits and other phases of store operations throughout the world.

McMillion said the company has broadened its own compliance efforts to also include issues like food safety and fire prevention. In total, he said there are 14 different dimensions Wal-Mart is targeting in its own compliance activities.

When asked about the expected duration of the ongoing FCPA investigation, Gearheart said, “It’s hard to know ... we have no control over that. We will fully cooperate with the government and it will take as long as it will take.”

No immediate change in work schedule, pay and benefits is expected for the more than 230 who work at Exide Technologies in Fort Smith as a result of the company filing for Chapter 11 bankruptcy reorganization.

In the documents filed over the weekend and announced early Monday (June 10), officials with the battery-making company blamed the financial bind on Wal-Mart Stores Inc., the continued economic woes in the European market and the high price of lead.

The company has 13 manufacturing operations in the U.S., including the Fort Smith plant located at the corner of Zero Street and Old Greenwood Road, and 74 branch operations which sell and distribute products. Exide has 3,600 U.S. employees, with 1,100 salaried and 2,500 hourly, including 540 union workers.

Susan Jaramillo, a communications consultant with Exide, said the Fort Smith plant employs 231 – 193 hourly and 38 salaried.

Exide’s industrial batteries are used in the material handling industry for electric fork-lift trucks as well as in other machinery, including floor cleaning machinery, powered wheelchairs, railroad locomotives, mining equipment, and electric road vehicles. Also, the company’s “network” power batteries provide energy storage for systems that require uninterrupted power supply and are used to power telecommunications systems, computer installations and data centers, hospitals, air traffic control systems, security systems, electric utilities, railways, and various military applications.

Only the company’s U.S. operations, including the GNB Industrial Division, are part of the filing. The international operations are excluded from the filing, and Exide plans to continue to operate globally without interruption during the reorganization. The company is using GCG as administrative agent between the company and the Court through the bankruptcy proceedings. The company said it has more than 20,000 creditors.

In the bankruptcy documents, Exide said higher production costs, “intense” competition, ongoing struggles in the European market and increased difficulty in obtaining affordable credit resulted in the decision to reorganize.

Exide officials said in the documents that competition has “intensified” with large retailers able to “use their buying power to negotiate lower prices and longer payment terms,” or to simply cut off the supplier.

“In this regard, one of Exide’s then major customers, Wal-Mart Stores Inc., designated Johnson Controls — Exide’s principal competitor — its sole-source supplier of transportation batteries and stopped carrying Exide’s transportation products. This switch resulted in Exide’s loss of approximately $160 million in annual revenue. More significantly, in addition to the revenue lost from Wal-Mart sales, Exide also lost an important and reliable source of battery cores under a captive-core arrangement with Wal-Mart,” noted an Exide bankruptcy document.

Following the loss of the Wal-Mart business, Exide moved to reduce expenses by closing its Frisco, Texas, plant and idling its Reading, Penn., smelting operation.

Exide was also hit with higher costs when operations at its Vernon, Calif., lead recycling plant were suspended by the federal Environmental Protection Agency. On April 24, 2013, the EPA suspended the operations, saying the plant’s storm-water system was not in compliance with state requirements. The shutdown forced Exide to use third-party lead recyclers which is expected to reduce the company’s bottom line by $24 million in the six-month period following the shutdown.

The cost of lead is also a problem.

“Suppliers of raw materials have subjected Exide to pricing premiums, and Exide has been unable to pass along higher production costs to customers,” according to the filing.

The company said Monday the reorganization should not change business operations or employee pay.

“Operations both in the U.S. and in the rest of the world will continue to serve customers in a timely manner with the same quality products, and outstanding customer care as they did before the filing” James Bolch, Exide president and CEO, said in a statement. “All post-filing obligations to U.S. suppliers will be paid on time and within terms. We intend to pay U.S. employees as usual and do not expect any material changes to their benefits. Outside of the U.S., obligations to employees and suppliers will not be impacted by the filing.”

However, it’s possible that not all operations, products and services will survive the reorganization.

Bolch said in the statement that the restructuring “will allow us to strengthen our balance sheet and complete the operational changes that build upon the strategies that we have been pursuing. Over and above these efforts, we intend to become even more aggressive in reducing costs, taking actions with respect to underperforming business segments and to focus on the most attractive areas for future growth.”

Exide secured $500 million debtor-in-possession (DIP) financing through a group of financial institutions and investors in connection with the filing.

Exide noted in its statement: “Once approved by the Court, this financing will enhance the Company’s global liquidity position with approximately $300 million in new capital, in order to allow it to pursue its restructuring goals. The proceeds of the DIP financing together with cash generated from daily operations and cash on hand will be used to fund post-petition operating expenses. Exide’s global management team will continue to manage both the U.S. and global businesses.”

Link here for the bankruptcy filing, and link here for the "first day" filing document that provides more details on the reasons for the action.

Five months into the year, electronic games of skill (EGS) wagers at Oaklawn and Southland neared the $1.5 billion mark as both tracks saw smaller percentage increases in casino-style gambling.

According to the Arkansas Racing Commission, EGS wagers topped $1.384 billion year-to-date. Southland EGS wagers have totaled $908.25 million, while Oaklawn’s cleared $476.27 million in the first five months of 2013.

EGS wagers include gambling spent on video blackjack, poker, slot machines and other casino-style games.

At Southland’s racetrack in West Memphis in May, EGS wagers cooled off their recent torrid double-digit pace. The track posted EGS wagers of $177.14 million during the month, only an 8% increase from one year ago.

At Hot Springs-based Oaklawn in May, EGS wagers topped $96.04 million, a 25% increase from last May.

The jump in EGS wagers has certainly contributed to state tax revenues. With one month to go in the state’s fiscal year, tax revenue from EGS wagers is up 32% accounting for $32.6 million in collections for the state of Arkansas.

Arkansas Insurance Commissioner Jay Bradford is satisfied that five companies have submitted letters of intent to do business in the state’s forthcoming health insurance exchange, but more may be on the way.

Blue Cross Blue Shield of Arkansas, Celtic/Novasys, QualChoice of Arkansas, and national Blue Cross Blue Shield met a Monday, June 3 deadline to announce their plans to bid for the state’s insurance exchange, known as the Health Insurance Marketplace (HIM). United Security Life and Health Insurance Co. submitted a letter of intent after the deadline, but insurance officials said they would extend the period to later in the month allowing United to qualify.

Broader implementation of the federal health care law approved in 2009 – commonly referred to as Obamacare – will begin in October when states must provide a “marketplace” for consumers to shop for health insurance plans within Arkansas’ Health Insurance Marketplace (HIM). Enrollment in the HIM begins Oct. 1, and ends March 31, 2014.

An estimated 500,000 Arkansans are expected to gain health care insurance through Obamacare and Arkansas’ “private option” plan approved during the recent Legislative Session. The insurance plans range from plans on the books now to taxpayer-subsidized insurance.

The five insurance companies are vying for as many as 500,000 new insurance customers in Arkansas. Bradford said more carriers may be allowed to participate despite a recent deadline that passed for prospects.

“There’s the possibility that we may have a couple of others,” Bradford said. “We may have two more. ... We’re certainly welcoming them in.”

Bradford said one contributor to adding more insurance companies in the state’s exchange may come from a long-running federal employees health insurance exchange.

“There’s another system that’s in play with the Affordable Care Act. That’s the federal Office of Personnel. Federal employees have always had a menu of companies that they can choose, multiple companies that they can choose for their insurance. They’ve had an exchange for years and years and years,” he said.

Bradford said he is willing to allow those companies, and others, to join the Arkansas exchange.

“[Late entries] support the system. Consumers would benefit from that,” said Bradford. “I have some discretion in those areas. When it’s in the best interest of the consumers, I use that discretion.”

He said the next two to three weeks will be critical in the success of the HIM. His agency will be negotiating with the insurance companies submitting letters of intent.

Every county must have at least two firms vying for business, but more than two firms could be competing in the different regions of the HIM.

Link here for the video interview with Bradford.

Wal-Mart’s distribution centers are efficient, well-oiled operations serving the world’s largest retailer 24 hours a day. But these massive hubs also could hold the key toward improved sales growth for Wal-Mart Stores Inc., according to Bill Simon, CEO of Walmart U.S.

Jabo Floyd, the general manager of DC (distribution center) No. 6094 in Bentonville, said “there are no cash registers in a distribution center,” so the only way they can contribute to Wal-Mart’s bottomline growth is through efficiency. Efficiencies within Wal-Mart’s distribution centers saved the company $15 million in 2012, the company said.

“If you have ever seen our distribution centers and how neat, how orderly and well-organized they are … then project yourself to the backroom of a supercenter, where there is more merchandise ... you would see less organization, less efficiency,” Simon told a group of reporters last week in Rogers.

He said if Wal-Mart could have the same inventory management discipline in the backroom of its stores as seen in the distribution centers there would be “an incredible amount value to unlock.' Simon also said the supercenters have more inventory and warehouse square footage than any of the retailer's distribution centers.

He said unlocking this value is No. 1 or No. 2 on the list to do for Chris Sultemeier, senior vice president of transportation for Wal-Mart.

TIME IS MONEY
Floyd said products flow through the distribution center taking about 25 minutes to make their way from the warehouse floor into the truck once an order is created. As Wal-Mart works to keep stocked inventories lower, the ability to move product the day it is received into the warehouse from the supplier is crucial.

Floyd said products being unloaded on one end of the building can make their way through the warehouse and be reloaded in a truck for store delivery in less than 45 minutes. Orders are received from stores each night and are based on sales from that day. Those nightly orders are filled by the DC the following day and delivered based upon a customized schedule.

Products make their way into the Bentonville warehouse through 264 dock doors. The boxes then take a ride a state-of-the-art conveyer system that reads the label and sorts the product out to the warehouse floor or to the appropriate dock door for reloading. Each dock door is dedicated to one particular store. (There are 12 miles of conveyers that run across the average regional distribution center.)

FULLER TRUCKS
Floyd said large volume stores receive daily deliveries and smaller stores may get product delivered three times a week. From the Bentonville DC alone, trucks travel 1.8 million miles a month to reach the 130 stores it services.

Given that transportation is a huge expense for Wal-Mart Stores Inc. the company has continued to focus on improved efficiencies in its truck fleet.

Sultemeier said last year Wal-Mart reduced the “empty miles” driven and found other efficiencies that allowed the company to deliver 297 million more cases while driving 11 million fewer miles. One of the efficiencies was as simple as providing a step stool to the dock loaders, according to Floyd.

He said products are stacked tightly in a brick style inside the 53’ foot trailers and the shrink wrapped for more stability and shift resistance. Floyd said for years the trailers were often not stacked to the top, as most of the loaders were not tall enough to reach those heights. A two-step stool now sits outside each dock door and loaders are expected to stack floor to ceiling of each trailer.

He something as simple as this has made a huge difference in overall load efficiency.

Floyd said in a typical day warehouse workers will unload 150 to 175 trailers and load and dispatch another 100 to 150 trailers. A typical load consists of 2,000 cases and the Bentonville DC receives and ships nearly 550,000 cases each day.

GREEN GAINS
Sustainability initiatives have been big within Wal-Mart’s distribution center network and contributed millions to the bottomline since 2005. The DC network is in the midst conversion to LED lighting which is expected to be completed by 2016 with a cost savings of $11 million.

The retail distributor is also using hydrogen fuel cells to power a fleet of 255 forklifts used in the Bentonville warehouse and in one more DC in Ohio.

Solid waste recycling of plastic and cardboard within Wal-Mart’s distribution network contributed income of $18 million during 2012.

LOGISTICS NUMBERS
The distribution center in Bentonville was the No 1 DC for the company last year and employs more than 1,000 workers in conjunction with the local transportation office. Floyd said nearly 600 of those employees have logged 10 years with the company and there is very little turnover among these logistics jobs.

Wal-Mart Careers said the average wage for its full-time logistics jobs average $19 per hour and DC managers can earn more than $150,000 annually.

Wal-Mart’s Logistics division employs 78,000, which includes 7,200 drivers in the retailer’s private fleet.

Wal-Mart drivers hauled more than 4.5 million loans of merchandise last year and prides itself on having one of the best safety records in the industry. Some 66 drivers for Wal-Mart have logged than 3 million consecutive accident-free miles. Phillip Null, who met with reporters last week achieved that accomplishment in 20 years.

Floyd said it would take the average consumer 200 years to reach that milestone, driving at an average rate of 15,000 miles annually.

Members of the Arkansas Tech University community gathered Thursday (June 6) to honor Dr. Jo Alice Blondin’s impact during her tenure as chancellor of Arkansas Tech University-Ozark Campus.

To commemorate the work of Dr. Blondin, who has served as chancellor since 2006 (serving previously as chief academic officer and chief student officer), a reception was held in the Student Service Conference Center. Along with Arkansas Tech administrators, board members, faculty and staff, guests included elected officials, community leaders, family and friends.

Blondin is moving to Springfield, Ohio, to serve as president of Clark State Community College.

Speakers included President Dr. Robert Charles Brown, Board of Trustees Chair Leigh Burns Whiteside, Chief Academic Officer Bruce Sikes, Chief Student Officer Richard Harris and Chief Fiscal Officer Sandy Cheffer.

Brown spoke of the campus’ growth – both in student population and program offerings – at the helm of Dr. Blondin, as well as her spearheading the campus’ initiation of a strategic planning process and first capital campaign.
 
Since Blondin joined the Arkansas Tech family, ATU-Ozark enrollment has increased 562% – the fall 2012 semester saw an enrollment of more than 2,000 for the first time ever – and 16 new academic and technical programs have been added.
 
“This is only scratching the surface,” Brown said, smiling. “But beyond all that, Jo Blondin has been our colleague – she’s been our friend.”

He added, “Jo, please know that you go with all our good wishes, and we wish you nothing but the best.”

Whiteside, who has served on the Board of Trustees since 2008, spoke of Blondin’s mission-driven philosophy, commitment to business and community outreach and dedication to creating a first-class learning environment that yields “competent, smart men and women ready to meet the challenges facing them upon graduation.”

“Arkansas Tech strives for excellence in education; Jo is committed to this principle,” she said. “She is going to be missed, but a plan for moving forward has been established that will carry on because of all the outstanding people who work as hard and are as committed to this campus, to its students and to the region as she has been. Her legacy is, and will be, the foundation for the future of Arkansas Tech.”
 
During the event, Blondin was presented a citation from the Arkansas General Assembly from Rep. Bill Gossage, R-Ozark, as well as a commemorative plaque from the ATU-Ozark faculty and staff for her “leadership, vision and resolute dedication to the success of the Ozark Campus,” Sheffer said. Also, Brown presented her with an Arkansas Tech 100th anniversary commemorative plate.

Blondin thanked Brown for instilling in her a “mission-driven attitude,” Whiteside for being “such a champion of this campus” and the Arkansas Tech Executive Council for their “collegiality.”
 
“I learned more from those individuals than I can possibly know,” she said.

Fighting tears, Blondin alluded to a conversation between she and the chief officers – Sikes, Harris, Sheffer and Chief Business and Community Outreach Officer Dr. Ken Warden – in which she told them, “You will look back on this time ... and you will realize that you never worked with such loyal and committed people. You will always look back and say, ‘That was the best group of people I ever worked with’ – and it’s true.”

She said, “When people credit the accomplishments of this campus, they should really credit Executive Council, the chief officers, Leigh Whiteside and the Board of Trustees, Dr. Brown and our staff and faculty. ... While I look forward to the new opportunity I have, please know that any success I might have in Springfield, Ohio, or Ohio in general, is because of the work we did on this campus.”

The U.S. Senate on Monday approved a five-year farm bill by a 66-27 vote, with U.S. Sens. Mark Pryor, D-Ark., and John Boozman, R-Ark., voting for the legislation that would cut $4 billion over 10 years from the food stamp program.

Boozman was one of 15 Republicans to join with Democrats in voting for the legislation.

The Agriculture Reform, Food and Jobs Act of 2013 (S 954) is the Senate’s idea for what should replace the existing farm bill set to expire Sept. 30. The U.S. House version seeks cuts of almost $40 billion, with $20.5 billion coming out of the food stamp program. The Senate bill reduces spending by more than $23 billion. The Senate version projects about $955 billion in spending over 10 years, and the House version projects about $940 billion over the period.

“The Agriculture Reform, Food and Jobs Act reforms, eliminates and streamlines numerous programs, saving taxpayers $23 billion. It does this while strengthening the tools available to producers to help manage risks and conserve natural resources,” noted a statement from U.S. Sen. Debbie Stabenow, D-Mich., and chairwoman of the Senate Agriculture Committee.

Pryor said the “fair and equitable” bill includes provisions to help Arkansas agriculture interests.

“My bio-preferred provision within the bill ensures that timber farmers have a greater advantage in today’s global marketplace. We’ve also inserted strong market protections for southern farmers, and kept the catfish inspection program intact so our food’s safe and healthy. All in all, this is a win for Arkansas,” Pryor said in a statement.

Boozman, a member of the Senate Agriculture Committee, said the bill is “a great example of Democrats and Republicans working together.”
 
“Considering that agriculture is Arkansas’s top industry, passage of a farm bill is vital to our state’s economic recovery. Like any other business, Arkansas’s agricultural producers need certainty to be able to make important planting, purchasing and hiring decisions,” Boozman said in his statement. “A five-year farm bill will give our family farmers and ranchers the confidence to move forward with those decisions, and in turn, create jobs and opportunities in our communities.”

Although the Senate and House bills are far apart on deficit reduction plans, food stamp support and other major components, Boozman said he is “optimistic” that a compromise bill will be drafted and approved by both chambers.

Large items in the Senate farm bill include almost $761 billion for 10 years of food stamps and nutrition programs, about $90 billion for crop insurance over 10 years, more than $58 billion for conservation programs and more than $41 billion in commodity protections. One of the commodity protection programs seeks to reduce the negative impact on farmers from price fluctuations – primarily price shifts among row crop goods.

Following are other provisions of the Senate-approved bill. (Info from a summary provided by Stabenow’s office.)
• Direct Payments, Counter-Cyclical Payments (CCPs), the Average Crop Revenue Election (ACRE) Program, and the Supplemental Revenue Assistance Payments (SURE) Program are repealed at the end of the 2012 crop year, creating $16 billion in savings for deficit reduction.

• Any person or entity with an adjusted gross income (AGI) of more than $750,000 will be ineligible for payments from Title I Farm Bill programs, which are now capped at $50,000 per entity. This bill also ensures that payments go to those farmers with an active stake in the farming operation.

• The Department of Agriculture will receive additional funds to prevent trafficking of food assistance benefits and to strengthen retailer program integrity.

• Requires participating retailers to stock more staple foods like fruits and vegetables and gives USDA the ability to exclude stores like liquor stores that do not fulfill the mission of the program, while preserving food access for participants.

• Local food banks are struggling to provide enough food to needy families in their area. The Emergency Food Assistance Program (TEFAP) helps supplement the diets of low-income individuals by providing emergency food and nutrition assistance, largely through food banks.

• The bill continues the Beginning Farmer program, which develops and offers education, training, outreach and mentoring programs to ensure the success of the next generation of farmers. The bill expands eligibility to include military veterans who wish to begin a career in agriculture. The bill provides $85 million in mandatory funding for this program.

Link here for Stabenow’s PDF summary of the legislation approved by the Senate.

Also, link here for C-Span video of Monday’s Senate vote.

Fort Smith households began receiving in July a 7.7% reduction in their trash collection costs, a decrease estimated to save all households roughly $460,000 on an annualized basis.

On Thursday, July 11, 2013, the first set of utility bills reflecting the reduction in sanitation rates were mailed to residential customers, according to a statement from the city.
 
Bill Hon, utility billing business manager, said the bills are generated and mailed five times per month. The first batch was processed July 10.

Fort Smith Department of Sanitation (DOS) Director Baridi Nkokheli has said the fee reduction passed by May 7 by the Fort Smith Board of Directors would amount to an average total bill reduction of about $1.10 per month for the city's 35,000 residential trash customers. At that rate, savings of about $38,500 across all residential customers will be realized, or more than $460,000 a year.

The rate reduction is a result of efficiencies from an automated trash collection system that began in 2006, according to the city.

However, automation of all city households received opposition.

The trash issue was a contentious during 2012, with votes to fully automate the system followed by reversals by the Board of Directors. In November, 79.6% of Fort Smith voters agreed to completely automate the city’s trash collection system. Out of 25,791 votes cast, only 5,261 were in opposition.

Nkokheli said in the statement issued Friday (July 12) that the reduced rate should be around for more than a year.

“Barring a drastic increase in fuel prices or other variable cost line items in the daily operation of the landfill and our collection services, we anticipate this rate will hold for a few years. We can be fairly confident in that prediction because we’re in the process of automating the collection of recyclables, further reducing our cost of doing business and increasing efficiencies and convenience to our customers,” Nkokheli said.

On April 29, 2013, the DOS implemented automated collection of residential recyclables with  plans of automating the collection of yard waste in an effort to “buffer the increasing future operational costs inherent to solid waste management,” noted the city statement.

The DOS has also paid of bonds associated with landfill expansion. The about $1 million in annual bond payments will be used to support future construction and maintenance to modernize the landfill and DOS operations.

The landfill, the largest in Arkansas, has 1,012 acres, with 555 of those permitted for landfill use. The 555 acres will be enough to provide landfill space to 2075, and if the remainder is permitted, the landfill could be used to 2150 – although changes in recycling technologies, consumer packaging and fuel sources could change the volume of items placed in landfills.

AccuWeather.com reports beginning later this weekend and continuing into next week, there is the potential for heavy, gusty thunderstorms hitting portions of Texas, the southern Plains and the Southwest.

While it will be hot, most of Arkansas will avoid severe weather.

While the monsoon continues to evolve over the Southwest, a disturbance is forecast to roll westward over the Central states this weekend. If it continues on into the southern High Plains, Rockies and Great Basin, some very wild weather is possible in parts of the West.

The system is likely to bring not only some extra thunderstorms but also very drenching and severe storms to some communities.

The pattern has the potential to bring drought-busting rain in some cases. On the other hand, so much rain could fall so fast that tremendous flash flooding occurs.

Similar setups like this in the past, with and without tropical systems, have produced several inches of rain on a daily basis.

In very localized areas, some of the storms can also bring a significant amount of hail, damaging wind gusts and localized dust storms.

Most of Arkansas is categorized as being “abnormally dry,” but not in a drought condition. (See map below.)

Any thunderstorm could produce frequent lightning strikes which could ignite new wildfires.

Use extreme caution when traveling along arroyos in this weather pattern. A distant thunderstorm can bring a rush of water downstream hours later with little notice.

Avoid hiking on the ridges from the midday to the afternoon hours, when most thunderstorms rapidly develop, to avoid being struck by lightning.

Arkansas’ Medicaid program saw a marked slowdown in spending growth compared to the previous year, and state officials said the most recently concluded fiscal year produced the lowest annual growth rate in more than three decades.

Medicaid’s preliminary actual expenditures for FY 2013 totaled $4.684 billion in federal and state funds compared to $4.615 billion in FY 2012. Medicaid hasn’t seen total program growth of less than $100 million in 14 years.

The Medicaid Trust Fund ended the fiscal year with an estimated $62 million on hand.  Previous projections suggested the fund was running at a deficit. Last November, Arkansas Department of Human Services officials warned that significant budget cuts to the Medicaid program were needed.

The roughly $68-$69 million in growth was largely attributed to costs associated with an increase in average enrollment, state officials said. They also indicated investments Medicaid made in a payment reform initiative launched last July also slowed the cost curve for the low-income health care program.

“This is wonderful news. We began the year talking about a huge shortfall that would force us to cut vital services for the elderly and reduce provider rates, neither of which we wanted to do,” said John Selig, director of the Department of Human Services, which oversees the state Medicaid program. “This gives us some breathing room as we continue to transform the health care system in Arkansas.”

Andy Allison, Arkansas Medicaid Director, said that growth slowed in most areas across the program and actually declined in some key areas, such as prescription drugs, nursing facilities and dental care. He also said reductions in spending “are historically rare and especially noteworthy given that enrollment increased,” he said.

For the better part of this calendar year, DHS officials have noted the slowing cost increases in Medicaid, but have not been able to identify with certainty the reasons for the slowdown.

“We’re cautiously optimistic about the numbers we’re seeing. They show that providers are aware of the program changes and are beginning to transform their practices,” Allison said. “It’s now critical that we continue our progress so that we can sustain the momentum.”

DHS is hopeful that as more aspects of the payment reform initiative kick in, the cost curve on existing programs may bend further.

PRIVATE OPTION FACTOR
Within the next year, aspects of the Affordable Care Act and a state “private option” health insurance program will launch in Arkansas qualifying as many as 250,000 Medicaid-eligible citizens for subsidized health insurance through a forthcoming marketplace exchange.

In late March, DHS released actuarial figures that show the private option would save an estimated $30.7 million in FY 2014, $151.3 million in FY 2015, and $176.4 million in FY 2016.

Those three years account for the federal government’s 100% commitment to fund Medicaid expansion, which Arkansas lawmakers have received permission to shift into subsidies on the exchange, which is expected to launch on Oct. 1, 2013.

After year three, the state of Arkansas must gradually pick up the tab for a portion of the Medicaid expansion dollars, eventually a 10% cost-share by FY 2023.

Still according to DHS calculations, the state would save more than $341 million during the next four years following FY 2016 as federal money would outweigh state costs. By FY 2021, the trend would reverse as the state would be on the hook for $8.8 million, according to the actuarial analysis, followed by $9.9 million in FY 2022 and $10.8 million in FY 2023.

A Freedom of Information Act request filed with Secretary of State Mark Martin's office on June 2 has partially been fulfilled, but not before a lawsuit was filed to compel Martin's office to turn over the documents in electronic format.

The suit, filed on July 1 by attorney and liberal blogger Matt Campbell of the Blue Hog Report, sought a court order to force Martin's office to turn over documents related to another lawsuit by two former State Capitol police officers, who claim to have been wrongfully terminated from their positions. The former officers have also made claims of racial discrimination in the suits against Martin's office.

The documents were requested in electronic format, though Martin's press secretary, Alex Reed, has attempted to provide some of the documents in physical form.

Campbell said when he filed the suit that there was "no provision of the AFOIA that allows a custodian of records to require a citizen to accept public records in a medium of the custodian's choosing."

In an e-mail to The City Wire, Campbell said he received some of the documents he requested on July 8.

"Last Monday, I received a letter for his (Martin's) newly hired attorneys that included a flash drive that had 5 of the requested Word docs. Unredacted."

The issue of redaction was a contentious issue in Campbell's lawsuit against Martin, as Reed had told Campbell that he would be happy to "print them (the requested documents) and redact them," according to the lawsuit.

"Basically, they turned over things that they'd sworn up and down for weeks had either been deleted or had to be redacted and printed," Campbell said by e-mail. "They lied/stalled until I finally sued, then they were all, 'Oh, here you go!'"

While Martin's attorneys – Quattlebaum, Grooms, Tull & Burrow – have turned over five Word documents in electronic format, there are still .PDF files that have yet to be turned over.

In the letter attached to the flash drive containing the Word documents, attorney Chad Pekron told Campbell that the remaining files would not be available in electronic format.

"With respect to the remaining issues in your lawsuit, the records …attached to the electronic mail message from Ms. Hoggard to Mr. Hedden dated October 28, 2012, contain personnel information that is not subject to FOIA and/or that the Secretary of State concludes would constitute clear unwarranted invasions of personal privacy if disclosed," he said. "Despite this, the Secretary of State offered to provide redacted records to you, pursuant to Arkansas Code Annotated § 25-19-105(f), in hard copy form. I understand that you rejected this offer and demanded the records be provided to you in its native form. The Secretary of State, however, cannot redact the exempt information electronically from the existing records without creating new records to do not exist currently. As you know, a custodian of records is not under an obligation to create new records in response to FOIA."

Campbell disputed Pekron's claim, saying, "They are standing by this absurd argument that redacting a PDF and saving it in electronic form is somehow 'creating a new record,' which they aren't required to do."

In addition to the five Word documents that have been turned over, Campbell is still seeking three PDF documents and one Word document, though he said he would be willing to drop the lawsuit should Martin agree to certain terms.

"I responded to their letter with an offer to settle the whole thing in exchange for about $191 (filing fees plus postage that I've spent), plus a signed letter from Mark Martin admitting that the Word docs were subject to disclosure from the outset and that his office had no substantial justification for not providing them.

"Not surprisingly, I haven't heard anything from them on that offer."

Reed said by e-mail that he had not yet heard about Campbell's settlement offer.

"The settlements are up to the lawyers.  I do not know anything about it. You must have a good source."

An amended lawsuit seeking the additional four documents has been filed in Pulaski County Circuit Court.