J. Thomas May came to Pine Bluff-based Simmons First National Corp. more than 25 years ago when the bank enterprise was a $500 million operation. $4.5 billion in assets and a quarter century later, May is set to pass the torch to the next generation.



On Tuesday (Dec. 10), Simmons First held a community celebration for May and invited the region to present well wishes to the retiring CEO who will be succeeded by CEO-elect George Makris.

“I’m awfully lucky to be able to work with him for one year under this transition period. A lot of people have to come in and immediately step in and make decisions. I sort of had an easy ride there for about six months. Then, he really put me to work,” Makris tells Talk Business.

Makris and the rest of Simmons First leadership have been hard at work with the $53.6 million acquisition of Little Rock-based Metropolitan National Bank. Makris said that many details of the bank merger will be forthcoming by Dec. 31 and by the end of the first quarter 2014.

May – who has been battling amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s Disease – greeted guests for nearly two hours at the Pine Bluff Convention Center. He said he was excited for the new leadership changes coming to the bank and he was looking forward to his new endeavor: a charitable foundation.

May will be the first chairman of the Simmons First Foundation, a charitable giving extension of the bank. Makris said that a lot of the bank’s donations will move through the foundation, which will be seeded on Jan. 1, 2014 with a million dollars. Eventually, it will be a multi-million dollar organization once several current investments mature and become available.

Distributions from the foundation will come in the form of “Tommy May Make A Difference” grants, said Makris.

“We’ll go into communities we serve, find worthwhile organizations that have a specific project, and we will help fund that project. We’ll have our bankers across the state looking in their communities for those unique opportunities,” he added.

May has a storied history of community service during his bank tenure.

He has served on the University of Arkansas Foundation Board of Directors, the Dean’s Executive Advisory Board in the Sam M. Walton College of Business, the University of Arkansas Board of Advisors, the Steering Committee for the Campaign for the Twenty-First Century, and the Board of Trustees for the University of Arkansas System from 1993 to 2003.

May has also dedicated his time to organizations such as the Boys Club of America, Habitat for Humanity, United Way of Jefferson County and Southeast Arkansas, and the Pine Bluff Downtown Development. He also has served on the board of directors for Arkansas Blue Cross Blue Shield, Baptist Health and the Federal Reserve Bank of St. Louis.

He will have an office on the Simmons First campus in Pine Bluff. Makris said he’s looking forward to the proximity.

“I told him to expect the carpet to be worn out between my office and his because it will be,” he said.

While many Arkansans have come to know Greg Henderson’s work through his satirical news website Rock City Times, his next venture will be anything but a joke.

Henderson is set to launch Manufacturing Times, an online business-to-business publication, in early 2014, tapping into a vast network of contacts from his time in the manufacturing industry. He will use many of those contacts as contributors for the web venture, using his manufacturing and web savvy to launch the site and eventually branch out to provide training and consulting to manufacturers from across Arkansas.

“It’s sort of a two-part thing,” Henderson said. “On one hand, what we’re going to do is be almost like a Forbes of manufacturing. (We’ll) offer advice, offer stories that impact manufacturers, do some profiles of manufacturers who are doing things well.”

The other end of the trade publication will involve training of not only high-level executives, but also the men and women on the manufacturing floor.

“I’m going to start off making it online and then do a few local training sessions around the state, as well. So that’s going to be your basic manufacturing training, quality control, environmental training. So sort of the back end, on the floor-type of manufacturing training all the way up to (management consulting),” Henderson said. “I’m going to bring my marketing knowledge to it for marketing of floor manufacturers and do some of that higher-level CEO training, succession management, stuff like that.”

Having a background in manufacturing marketing, Henderson is hoping his experience taps into an industry that is seen by many as on the decline.

Consultant Allen Engstrom is chief executive officer of CFO Network. Engstrom said he is looking forward to taking his experience and partnering with Henderson as a contributor to Manufacturing Times.

“It’s easy to do, first of all. We’re very involved with manufacturing issues and we see a lot of things people are doing great and a lot of problems people are having and we try to leverage the things people are doing well and highlight areas needed for improvement and put them in one place,” he said. “For myself, if it means putting in some efforts to help somebody and also benefitting my business, then it’s a win-win for everybody involved.”

Henderson said the benefit many manufacturing consultants are likely to receive from contributing to his new site would be a high level of exposure to an industry in need of their services.

“A lot of these consultants, a lot of them are going to write for this very reason – they’re out there consulting in the field two or three days a week, at least. But what they don’t have time to do and what they don’t have expertise to do is market themselves. So outside of their own contacts, they really have a hard time getting their name out there. That’s just not their specialty. So in exchange for writing, what I want them to do is build some thought leadership for these people, get their name out there pretty regularly and help them market their services, as well,” he said.

Engstrom said he is looking forward to the high number of contacts he could reach through his contributions.

“It will introduce us to a new group of companies that we haven’t seen before,” he said. “There’s a lot of businesses there that we haven’t been in touch with.”

While manufacturing consultants will be contributing two or three stories per month, they will also lead training seminars both in person and online. Engstrom, whose business helps small to mid-sized businesses with accounting, said it is the specialized expertise that he and other consultants will bring to Manufacturing Times and its training sessions that will help the company carve out a niche in the increasingly competitive online media market.

“I think there’s a lot of opportunities there, things we learned along the way that would be easy to convert into a training course,” he said, again adding that contributing and providing training will help an industry that has shed almost 38% of its workforce since February 1995.

But as with any business, Henderson is aware that he will have to find multiple revenue streams to take his idea from a dream to a profitable business. He said there are plans for at least two other ways to monetize the site besides conducting training sessions.

“Yeah, of course there will be the training. And there’s probably some level of advertising. And I’ve had people say if we do webinars, they’d actually buy up some of those leads from the webinars. You know, buying a list of people who’ve attended a webinar if they agree to have their name given out. That’s a possible revenue stream.”

As with any new business, Henderson said the key to success would be remaining flexible.

“I’m really just going to go with this and see what happens. Luckily, this is not the first website I’ve set up, so I can keep money as lean and as tight as possible and do most of this on my own. If money opens up, then certainly I’ll expand things. But if it stays lean, then I’ll probably keep (the operation small),” he said.

First Data Corporation, a large electronic payments processing company, reports softer spending patterns among consumers so far this holiday season. The report released Wednesday (Dec. 11) found overall retail spending in November rose 1.3% from a year ago, but slid backwards from the 5.6% spending uptick in October.

November dollar volume growth of 4.4% marked a downtick from October’s growth of 6.8%. Although the cold and dry weather at the end of the month offered perfect holiday shopping climate, several portions of the country earlier in the month dealt with blasts of snow hindering shopper foot traffic. Transaction growth slipped in November to 4.8% compared to last month’s growth of 6.2%.

Retailers have pulled out all the stops to get consumers into their stores and sweetened the enticements to spur online shopping as well, offering free home delivery and Sunday delivery in some areas. First Data notes that spending growth was strong at 9% on Thanksgiving Thursday and Black Friday. Given there are fewer shopping days this year between Thanksgiving and Christmas, retailers took no chances and began offering deals early.

However, First Data found that retail spending growth cooled in November in spite of strong Black Friday turnout. Average ticket growth was down 0.3% in the month as retailers offered price discounts and gasoline price deflation took those receipts lower. One area that reported robust growth last month was travel and hotel merchants who cited 9% and 6.4% respective increases in receipts thanks to more consumers traveling for Thanksgiving.

“Although spending growth increased on a year-over-year basis, the growth slowed on a sequential basis as consumers were more modest in their purchases throughout the month as they prepared for the holiday shopping season,” said Krish Mantripragada, senior vice president for Information and Analytics Solutions at First Data. “We definitely see that consumers are more confident and have enjoyed stronger income growth in 2013 compared to 2012. This should encourage shoppers to open up their wallets as the holiday season progresses.”

Economists believe consumers are willing to hold out for the absolute best deals, which is why retailers like Wal-Mart and Best Buy have guaranteed shoppers the lowest price and will refund the difference in a gift card if the item can be bought cheaper in the next couple of weeks ahead of Christmas.

First Data reports that shoppers pulled back on retail spending for most of the month in anticipation of holiday deals at the end of November and they may continue to hold out for what they perceive as rock-bottom pricing.

Another report by IBIS World, a marketing research firm, expects consumer spending will end up 3.4% ahead of the 2012 holiday totals to a projected $68.9 billion. The report notes the government shutdown, sluggish income growth and sustained unemployment as the main threats to retailers reaching their sales goals this year. At the same time lower gasoline prices are helping to put a little more money in some pockets and a pullback in SNAP benefits is also being felt among lower income families.

IBIS World research expects gift expenses to generate $53.5 billion in sales, up 3.1% from a year ago, but note that fewer people will benefit. 
The trend this year is to shrink the circle as consumers pare down their list to a smaller group of friends and family, the firm predicts.


Two of the biggest gift giving categories are expected to be electronics (6.6% growth), driven by releases of new games and gadgets and jewelry expected to rise 7% from a year ago.
 Clothing and other apparel spending is expected to decline year-over-year, according to the report.


"Many consumers are opting for gatherings with close family and friends, particularly over food and drinks, instead of exchanging gifts with an extensive network," noted the company in a report.

About 111.7 million U.S. households will celebrate the holiday season this December, spending 3.9% more on average for a celebratory dinner than they did in 2012, IBIS World predicts. The firm also expects the holiday decoration segment to under perform the average holiday spending, growing only 2.9% from 2012 to less than $6 billion.

"Tight budgets and weak economic confidence are encouraging consumers to reuse decorations from previous years or make some themselves instead of buying new decorations," the report notes.

Even though uncertainty remains regarding the future of the Ben Geren Aquatics Center, the city of Fort Smith took another step forward Wednesday (Dec. 11) in order to provide additional funding for the project.

In a vote of 5-1, the Fort Smith Parks and Recreation Commission voted to recommend a change to the Parks and Recreation Department's Five Year Capital Improvement Program.

Included in 2014's Capital Improvement Plan, which is funded by an eighth-cent sales tax approved by voters last year, is $457,000 in funding for the Ben Geren Aquatics Center. That figure is the city's portion of the additional $800,000 outlined in an amended interlocal agreement to be voted on by the Board of Directors Tuesday night (Dec. 17).

The Sebastian County Quorum Court approved the measure Monday (Dec. 9) in a vote of 7-6, short of a supermajority required for the county to approve the amendment to the agreement. The Court will have to vote in favor of the amendment two more times in order to pass its measure.

The money was requested after estimates from the project's construction manager, Flintco, placed the project's design concepts at $11 million. Flintco, in coordination with designer Larkin Aquatics, has taken some amenities out of the water park's design in order to reduce cost estimate to $8.8 million, above the $8 million total the city of Fort Smith and Sebastian County had projected.

During the meeting today, Parks Director Mike Alsup said the previous estimates were based on outdated figures, which is why the amended interlocal agreement would need to be passed, using money from the Capital Improvement Program.

Parks and Recreation Commission Chair Lorie Robertson questioned whether the amended interlocal agreement would actually be the end of the requests for more money for the park.

"Is it a pretty fair assessment that this is not going to be $8 million? That we're going to be asked for (not just) the $450,000, but probably more and asking us to take it out of our money? We're looking at these estimates right now and we will be asked to carve out that additional funding."

Parks Commissioner Bryan Merry was the lone no-vote on the commission, saying that he did not want to make any recommendation to the Board of Directors until he saw for sure that the county would pass its portion of the additional funding and further stating that the city should not pony up any additional funding should the Board ultimately vote to approve the amended interlocal agreement, which itself is still in question. Merry is the son of Fort Smith City Director Philip Merry Jr.

"We should not give them any more than the $457,000," he said. "We have enough things that we can move forward in our plan rather than giving another (large sum of money)."

Asked by Robertson how confident the city was in the figures, he showed confidence in the figure presented to the public on Monday.

"We're confident of the $8.8 million. The construction manager has looked over that plan. The plan that we currently have can be built with the $8.8 million."

Merry made a motion to approve the amended Five Year Capital Improvement Plan without the additional funding for the Ben Geren Aquatic Center, though his motion failed.

Deputy City Administrator Jeff Dingman made clear to Merry that whether he liked it or not, the $8.8 million project would move forward should the Board approve the amended interlocal agreement.

"The Board of Directors will consider the amendment. The city (will be) committed to the $457,000, regardless of where it comes from."

The foreclosure pace across Arkansas remains mixed as 2013 winds to a close. There were 469 foreclosure filings across the Natural State in November, down 5.25% from the year-ago period, according to Irvine, Calif.-based RealtyTrac.

The number of foreclosure filings nationwide totaled 113,454, down 37% from November 2012.
 
“While some of the decrease in November can be attributed to seasonality, the depth and breadth of the decrease provides strong evidence that we are entering the ninth inning of this foreclosure crisis with the outcome all but guaranteed,” said Daren Blomquist, vice president at RealtyTrac. “While foreclosures will likely continue to stage a weak rally in certain markets next year as the last of the distress left over from the Great Recession is dealt with, it is highly unlikely that there will be a foreclosure comeback that poses any major threat to the solid housing recovery that has now taken hold."

Northwest Arkansas areas differed in their reporting last month with 66 new foreclosure filings in Benton County, up 11% from a year ago. In neighboring Washington County there were 26 new filings, a 53% decline from November 2013.

The Fort Smith metro area was also a mixed bag with 17 new foreclosure listings in November, up 13% from a year ago for Sebastian County. Crawford County reported 11 new foreclosure filings, down from 13 filings a year ago.

Local real estate agents report the number of new foreclosed properties coming back into the markets of Northwest Arkansas and the Fort Smith metro area have been fairly stable at 360 listings as of Wednesday (Dec. 11). Crye-Leike agent Jim Long said the new HUD listings are few and far between with a smattering of properties from Fannie Mae and Freddie Mac in the mix.

“We see a fairly large number of bank-owned properties on the market at this time. The listings range from $12,900 for one acre and an uninhabitable home, all the way up to two homes in Fayetteville listed at  $1.4 million,” Long said.

Last month Long reported there were 368 foreclosed homes listed for sale in the four counties included in this report. That number totaled 354 in September, down from 373 in August.

Foreclosure listings peaked at 393 in July, rising from 222 in March of this year. The listings have slowed a bit, according to Long, who said the clean, well-kept properties are still selling fast, as investors and cash buyers are back in the market.

RISING REDEFAULTS
Roughly 967,000 distressed homeowners took advantage of federal programs to obtain mortgage loan modifications intended to stem foreclosures since 2009. But the most recent report from the Inspector General indicates that nearly half of those mortgages modified in the Home Affordable Modification Program (HAMP) are back in default.

The HAMP initiative has helped about 888,394 homeowners avoid foreclosure through permanent modifications since it began, but 337,854 had redefaulted by the end of September, according to the most recent government report. The Obama Administration has made multiple attempts to fix the program, including expanding the requirements for participation, paying investors more for principal reductions, and extending deadlines.

When it was first initiated, officials estimated that it would reach as many as 4 million homeowners, but closer to just 900,000 have been helped. And more than 1 million borrowers have been bounced out of the program either thanks to redefaulting after failing to make the first three payments during the trial process, failing to qualify, or for failing to finish a three-month trial.

In Northwest Arkansas the report indicated there had been 1,035 permanent modifications, with a redefault rate of 29%. The Fort Smith metro area reported 175 permanent modifications with a redefault rate of 23%. Nationwide the redefault rate has been 27%.

The Treasury reports homeowners with redefaulted loans serviced by the 8 largest mortgage companies have had mixed results since falling out of HAMP. As of Sept. 1, about one-third of borrowers were able to secure an alternative modification, usually a private sector modification. About 22% of the redefaulted loans have moved into foreclosure and 13% lost their homes through deed-in-lieu of foreclosure proceedings or short sales.

Arvest Bank has commissioned a large-scale consumer sentiment survey to measure and report the economic expectations and outlook of consumers in Arkansas, Missouri and Oklahoma. 

The survey will measure respondents’ opinions on their state’s economy for a comparison to the national Surveys of Consumers conducted by the University of Michigan for Thomson/Reuters. Conducted twice a year, the Arvest Consumer Sentiment Survey results will be shared with local media outlets and Arvest business customers.

The bank has commissioned four universities — the University of Arkansas, Missouri State University, the University of Oklahoma and Oklahoma City University — for the survey. 

The Arvest Bank Consumer Sentiment Survey, which measures the level of optimism on the state of the economy reflected by consumers’ activities of saving and spending, will be designed for direct comparison with the Thomson/Reuters Michigan survey.

The nationally representative Thomson/Reuters Michigan survey is reported on a monthly basis and is based on telephone interviews of households. It is included by the United States Department of Commerce’s Bureau of Economic Analysis as a factor in determining the Composite Index of Leading Indicators, a tool used by many economists to judge what is going to happen in the near future. Manufacturers, retailers, banks and the government monitor changes in consumer sentiment to factor the data in their decision-making processes.

The Center for Business and Economic Research (CBER) at the University of Arkansas is leading the research team and the University of Oklahoma’s Public Opinion Learning Laboratory (POLL) will conduct the telephone surveys. CBER, Missouri State University and Oklahoma City University will analyze state level data and provide local analysis of the findings. 

CBER director Kathy Deck will be the lead researcher for the project and will provide evaluation and guidance for results within Arkansas. David Mitchell, director of the Bureau of Economic Research at Missouri State University, and Russell Evans, director of the Steven C. Agee Economic Research & Policy Institute at Oklahoma City University, will evaluate results for their respective states.

The first Arvest Bank Consumer Sentiment Survey data should be ready for public release in Spring 2014 after the survey is conducted in February. The next survey results will be released at the end of the third quarter.

The survey is designed to measure three primary indices mirroring the national consumer sentiment survey. Those indices are: Index of Consumer Sentiment; Index of Consumer Expectations; and Current Conditions Index.

“Arvest Bank has always been attuned to our customers and the markets we serve,” said Jason Kincy, marketing director for Arvest Bank. “To be consumer- and community-focused, we need to know our customers’ views on the economic climate as it applies to Arkansas, Missouri and Oklahoma. This type of survey has long been needed on the state level and will help us better understand the economic mood of our friends and neighbors while providing factual guidance for our small business customers as to the economic mood in their markets.”

The survey will have sample size of 1,200 with 400 respondents from each state and margin or error of 4.2% at the state level.

“The University of Arkansas is pleased to work with Arvest in this endeavor that we feel will provide an incredibly valuable tool for consumers, businesses and policymakers within each of the three states to be surveyed,” Deck said.

The data is meant to provide a snapshot of consumer sentiment which is used by businesses to better understand their customer base. Economists like Deck, use the data to project outcomes in their economic forecast models.

Progress is being made on projects funded by a collection of sales taxes approved by Van Buren voters last year, though not all the progress can be seen by the naked eye.

According to Mayor Bob Freeman, the projects funded by the 1 cent sales tax are moving forward, with some projects expecting completion dates as soon as next year.

FIRE DEPARTMENT
The city's fourth fire station is under construction right now along Northridge Drive East, Freeman said, with an estimated completion date of May 2014.

The station, which cost $2.2 million to build, will house six firefighters and firefighting apparatus already purchased by the city, including a new pumper truck, he said. In addition to the six firefighters and pumper truck, Freeman said more staff and equipment is likely to arrive.

"The minimum is three (firefighters) per shift. We had hired six. That gives us our minimum. We want to hire three more in case someone's sick or whatever it may be. But right now we have our minimum staffing in place," he said, adding that the city had also submitted a grant application on Sept. 3 to the Assistance to Firefighters Assistance Program for a new ladder truck.

"The cost of the apparatus is $895,000. We are asking for the federal share of basically $650,000,” he explained.

Even though there is no word on when the grant could be approved, Freeman said the station will be ready to go with the city's current set of tools and equipment.

POLICE DEPARTMENT
Progress on the city's new police department has not been visible other than a sign in front of the empty lot where the new building will stand, identifying it as a project funded by the 2012 sales tax election. But that does not mean work has not been taking place on the sorely needed facility, which is budgeted to cost $3.3 million.

According to Freeman, there have been changes to the design of the department to allow room for growth in future years, something the city has not been able to do with its existing police department. The changes include utilizing space at the back of the lot previously occupied by a mower shop for an evidence room instead of housing it in the main structure of the police department.

"The primary reason for (housing it) there and not incorporating it into the main building is once built, we have to live with it for a major period of time without doing any construction. You're stuck with what you have. By putting it out in the other location, which is concrete reinforced, gives us capability now to have this new police station for the next 20 to 30 years as its built and the ability to expand it. Those costs will start to come in and I believe once they do, we'll be able to manage it."

With initial design work completed on the new facility, Freeman expects bids from subcontractors on the project to come in by January with a possible groundbreaking by February 2014.

SENIOR CENTER
The Senior Citizens Center, which was billed as the only project to be LEED-certified, is over its $2.8 million budget, with Freeman looking for ways to reduce the overage by $300,000 to $400,000.

"We got initial projections of cost on it," he said. "It was somewhat higher than we originally expected it to be. We are doing value engineering on it (in places) where we can make changes, not compromising size or quality."

As for where those funds will come from, the mayor said it would likely come from reserve funds the city had not spent from the current year's budget.

"We could take it out of the general fund because we are showing a surplus. We can take it out from this year, maybe next year and capital improvement funds," he said. "Once we get numbers in and get the city council approves it, we can break ground real soon."

PARKS AND RECREATION
The biggest unknown with the sales tax projects at this point is what will happen with the parks and recreation funding.

Already, projects at the tennis courts have been completed which added new lighting, landscaping and other amenities. The city has also completed new softball fields and added new restrooms and concessions at the Field of Dreams facility on the west side of town.

But other projects are still to be determined, such as what the city will do with land acquired for a new citizens park or land donated for a wilderness park in far northwest Van Buren. For that, the city is hiring an expert to help with the planning.

"After the first of the year, we'll advertise for help from a consultant to help us work on a parks master plan and that will, I envision look at parks throughout the city – parks in place and other pieces of property. What are the other places to need to fall into place? Not just in one year, but five years, 10 years, or 20 years? Here's what we want to do and now let's look at specifics."

Freeman said the process will "start looking at the big picture and zoom into smaller pictures."

Even though a master plan is still far off, the city is working to add to its park infrastructure after signing a lease with the U.S. Army Corps of Engineers for Lee Creek Park, which the city has partnered with Jobs Corps for cleanup and installation of picnic tables and possibly other amenities such as grills and fishing areas.

The mayor says while it may seem like the projects are taking a long time to get off the ground, he is a firm believer in making sure all projects are planned out and completed correctly instead of just jumping into projects without proper planning.

"I wish things would work faster and there wouldn't ever be a hiccup, but that's not how life is," he said. "I think planning and getting the right plan together is critical. Yeah, would I like to see the police station under construction now? Sure. But you have to put time into planning to make sure it's the right thing instead of just jumping at it and later saying I wish we would have done this."

With more than 35 years of medical practice to his credit, Dr. Jerry Jones at Arkansas Children’s Hospital has seen things. As one of less than 20 physicians in the country board certified in Child Maltreatment, most of what he’s seen are cases no one ever wants to see.

“Child abuse cannot hide under the covers,” said Jones. “It’s not just a social problem or a medical problem or a public health problem. It’s a community problem and a legal problem and a business problem. No one group has a lock on this issue.”

The numbers around abuse in Arkansas are enough to turn anyone’s stomach. Roughly 11,000 cases of abuse were reported in Arkansas in 2011, the most recent year statistics are available. Experts estimate for every case that is reported, there are two unreported cases. According to the National Child Protection Training Center, abuse will cost the state of Arkansas $362 million over the lifetime of the children whose cases of abuse were confirmed in 2011. The cost would be higher, but children who are abused typically die 10-20 years sooner than counterparts who were not abused.

The $362 million represents:
• $25.29 million for acute medical treatment
• 29.97 million for mental health treatment
• $219.36 million for the child welfare system
• $272,416 for law enforcement costs
• $1.22 million for special education
• $4.20 million for early intervention programs
• $6.25 million for emergency/transitional housing
• $3.15 million for mental health and health care
• $25.16 million for juvenile delinquency
• $47.19 million for lost worker productivity

“Because of the cyclical nature of abuse, it’s not just one family that ends up disorganized, but many families are disorganized,” Jones explained. “But the thing is, we know how to break the cycle.”

However, knowing what to do and being able to fund it are two different things. That’s where the Quinn family and Heartland Bank entered the picture. Together, they will donate $1 million over the next five years to build a new Children’s House on the campus of Arkansas Children’s Hospital. The facility, when complete, will house physicians, counselors, trained interviewers, crisis interventionists, law enforcement officials and child advocates. The center will also serve as a training facility for child abuse professionals across the state.

“Over the past few years, we’ve been getting requests to support any number of causes,” said Walter Quinn, Partner and CEO of Rock Financial Partners, the holding company for Heartland Bank. “We didn’t want to give $100 here and there. We wanted to give a substantial gift to something that would make a difference in our community. This was it.”

Terry Quinn has been part of the ACH Auxiliary for many years. She’s seen first hand how the hospital is run and what a difference it makes in the lives of families across the state.

“It’s past time for people to stop saying, ‘Oh those poor abused children,’ and moving on. We need to do something about it. Getting the business community involved in this allows companies to recognize that they have people on the payroll who are hurting and need help, so we’re going to provide it,” she said.

The $6 million plan for Children’s House will move all of the services currently available for abuse recovery under one roof. Currently, if a child presents in a clinic or the emergency room or is reported through the child abuse hotline, the medical and mental health services they need are in three different buildings scattered around the ACH campus. Many people don’t complete recovery services, in part, because the process becomes too arduous to handle.

“Right now, it’s hard to coordinate treatment because all the different departments because they’re predominantly working in silos that don’t integrate well,” explained Jones. “We’ve got to change the mindset to change the outcomes.”

When the Heartland Bank and Quinn family gift was announced, Walter Quinn said an employee who was visibly emotional told him that she had experienced abuse in her family as a child. She plans to volunteer at Children’s House once it’s built.

This is an example of what the Quinns call the “power of philanthropy.” When other companies and business owners heard about their gift, they began to make pledges too.

Rebecca Rice and Associates recently pledged $1.1 million for the project and the Children’s Hospital Auxiliary pledged $1.5 million. The Quinns believe people in the state trust the vetting process they use for foundation gifts and want to “be a part of something good.”

“You can call it social issue, but that’s not all it is,” said Richard O’Brien, president and CEO of Heartland Bank. “It’s people who come to work every day, but they can’t do their jobs effectively because they’re worrying about their child or their sister or any number of situations. It needs to be acknowledged, and business needs to get behind a solution. Otherwise it’s a recipe for disaster.”

Dr. Jones warns that short-term success may not look like it strictly by the numbers.
As more families get help and education, more families will start to report behavior they may not have previously understood to be abuse, such as hitting or slapping a child.

Mothers with PTSD from an abusive situation will learn they don’t have to live with that anymore and seek help. The fear of upsetting extending family members by reporting abuse will ease enough to allow for follow-up counseling for children after their physical wounds have healed.

“Ultimately, our goal remains what it has always been,” said Jones, “for every family to leave here better than they arrived.”

Third-quarter 2013 banking and other economic data released Thursday (Dec. 12) by the Federal Deposit Insurance Corp. (FDIC) show improvements in the state’s banking sector and continued signs of muted economic growth.

The quarterly FDIC state profile shows total nonfarm employment up 1%, an improvement over a 0.1% gain for the same period in 2012. For all of 2012, non-farm employment was up just 0.6% compared to 2011, and 2011 non-farm employment was up just 0.6% compared to 2010.

The average jobless rate in Arkansas during the quarter was 7.4%. Arkansas’ jobless rate in October was 7.5%, below the national rate of 7.3% in October. Arkansas' unemployment rate was lower than the national average for five years, with the trend reversing in 2013.

In other indicators, the number of single-family home permits issued statewide during the third quarter were up 5.8% and apartment and duplex permits were down 72.8%. Permits were up 35.7% and multi-family permits were up 137.5% in the third quarter of 2012.

The home price index was 1.4% in the third quarter, compared to a 0.9% increase in the third quarter of 2012 and a 0.7% increase during all of 2012.

The number of banking institutions in Arkansas in the third quarter was 126, unchanged from the third quarter of 2012 and unchanged from all of 2012. Total assets of the 126 banks grew to $62.298 billion in the third quarter from $60.505 billion in the third quarter of 2012 and from $61.289 billion for all of 2012.

Loan quality, which has been a persistent problem for many Arkansas banks, has improved in recent years. The ratio of past due and non-accrual loans to total loans was 2.4 in the third quarter of 2013, down from 2.97 in the third quarter of 2012. In all of 2012, the ratio was 2.93, down from the 3.17 in 2011.

Arkansas banks also are performing better well on the key metric of return on assets. The ROA average all 126 banks during the quarter was 1.01, just off the 1.05 during the third quarter of 2012, but better than the 0.98 in all of 2012.

Arkansas bank execs have approved more loan activity in recent years. The net loan to assets ratio was 59.92 in the quarter, higher than the 59.71 in the 2012 quarter. For all of 2012, the ratio was 57.03.

Arkansas’ top five largest deposit markets by metro area, based on June 2013 summary of deposits are:
• Memphis Tenn.-Miss.-Ark.: $23.519 billion, 60 banks in the market
• Little Rock-North Little Rock-Conway: $14.238 billion, 37 banks in the market
• Fayetteville-Springdale-Rogers: $8.277 billion, 38 banks in the market
• Fort Smith: $4.058 billion, 22 banks in the market
• Jonesboro: $2.791 billion, 19 banks in the market

Sales of homes in the Fort Smith region showed mixed results in November, with Crawford County beating November 2012's figures by 76.46% while Sebastian County's home sales figures dropped 25.98% for the same period.

In Crawford County, 50 homes were sold last month, showing a sales volume of $5.74 million, an increase from the same month last year when only 31 homes were sold for a sales volume of $3.253 million.

Sebastian County posted the sale of 72 homes valuing $9.546 million, down considerably from last year's 105 homes sold for a collective $12.896 million.

According to Betty Lyles, managing broker at Chuck Fawcett Realty's Van Buren office, Crawford County's drastic increase in home sales could be tied to Van Buren's upcoming loss of rural development loans, which allow some buyers to purchase homes with no money down and low closing costs.

"That's probably got a lot to do with it – trying to get in at the tail end of (the rural development loan). If you're not already in the pipeline, you won't get in."

The loans, Lyles said, will no longer be available to first-time buyers in the Van Buren market due to the city's estimated population now standing at more than 25,000. Should the Farm Bill be renewed, Van Buren would be among the cities to continue eligibility through the year 2020 based on population estimates. The bill would also raise the population limit defining a rural community to 35,000.

Besides rural development loans, Lyles said other drivers in the sales boom in Crawford County last month have been an influx of residents making a living in the medical field and buyers looking to get low interest rates before they go higher.

"The 3.5% (interest rates) are gone and I think it has scared people," she said. "But rates are still good. 4.5% is a good rate, but the 3.5% is probably going to be gone for good now."

But even with the surge in sales last month, Crawford County is still showing a decline in home sales for 2013 of 5.13%, while Sebastian County is showing an increase of 9.4% in year-to-date sales figures over 2012.

A contributing factor in Crawford County's decline, according to Lyles, is the number of higher-priced homes that aren't moving.

"You get up into the $300,000 range and it's really hard (to sell), unless someone specifically has the money to do it. It's just hard to move homes in that price range."

Average sale prices for 2013 reflect Lyle's claim, with Crawford County's average sale price at $111,816, a decrease from 2012's figure of $119,127, while Sebastian County's average sale price was $137,532 compared to $137,716 for the same month last year.

Overall, she said 2014 could be a good year for the housing market if other external factors work in the region's favor.

"If the overall economy straightens out a bit, I think that will help us," Lyles said. "But our area ... Arkansas has always been at the tail end of everything. And we've also had a lot of foreclosures and short sales, which has affected the market. But as those start going away, I think the market will start getting better."

Home Sales Data (January-November)
• Crawford County
Unit Sales
2013: 471
2012: 466

Total Sales Volume
2013: $52.665 million
2012: $55.513 million

Median Sales Price
2013: $106,250
2012: $112,000

• Sebastian County
Unit Sales
2013: 1,125
2012: 1,027

Total Sales Volume
2013: $154.724 million
2012: $141.434 million

Median Sales Price
2013: $115,000
2012: $118,000

An audit of the office of Lt. Gov. Mark Darr (R) found that the state’s highest ranking Republican apparently misspent more than $12,000 in office funds for personal or undocumented expenses.

The Legislative Audit Committee conducted its annual audit of the office and found a number of questionable expenses, some of which had already been addressed by Darr.

The report noted:
• The Lieutenant Governor charged $2,339 on a state credit card for personal expenses. Of this amount, the Lieutenant Governor has reimbursed $1,202 to the State. Although the Lieutenant Governor submitted a copy of a check dated July 1, 2012, for $1,137 to reimburse the State, a credit for this amount could not be located on the credit card statements. Personal expenses of $1,137 have not been reimbursed as of the date of this report.

• Based on a review of travel expenses from January 2011 through September 2013, [the following] transactions totaling $9,836 appear to violate state travel regulations. Of this amount, $9,298 was not reported as income on the Lieutenant Governor’s IRS Form W-2.

• Unallowed uses of state funds – $205 for lodging within the official station. According to credit card receipts, the Lieutenant Governor paid for lodging in Little Rock with state funds on two occasions, although regulations do not allow for payment of lodging expense within the official station.

• Supporting documentation for expenditures of $2,755 was not maintained, based on review of travel reimbursement forms and state travel card statements.

The report concluded that Darr should pay nearly $10,000 back to the office.

“The Lieutenant Governor should reimburse the State $9,836 for excess travel reimbursements and expenses. In addition, the Lieutenant Governor should comply with, and obtain staff training in, all applicable state laws and regulations and follow IRS regulations for reporting taxable fringe benefits,” the report stated.

Darr provided a written response to the audit report, claiming that he had not been cited for errors previously and he seemed to blame the office of State Auditor Charlie Daniels for not stopping errors from occurring.

“[H]aving served in office for almost three years with no findings related to travel reimbursement, we had no reason to believe we were not doing things properly,” Darr said. “The Arkansas State Auditor’s Office is in charge of reviewing and paying all travel reimbursement requests and office expenses. If at any time the Auditor’s Office had a question in regards to a travel reimbursement form, or any other office expense, we promptly provided the necessary documentation. I acknowledge the errors I have committed, and I am endeavoring to make full restitution.”

The report was forwarded to Pulaski County Prosecuting Attorney Larry Jegley for review of possible criminal violations.

Earlier this year, Darr had announced for the Fourth Congressional District race.  He withdrew after reports of misspending of office funds and campaign funds were reported by the Blue Hog Report blog.

An ethics investigation of Darr’s campaign finances is still underway.

Beautifying a major Fort Smith interchange, a big money push for the U.S. Marshals Museum and the hiccups of life are part of the Dec. 13 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• Big gap to close
Those old enough to remember the Smokey and the Bandit movies probably remember the movie’s title soundtrack lyric, “We’ve got a long way to go, and a short time to get there ...”

The same could be said of the effort by U.S. Marshals Museum employees to secure $25 million in donations prior to a planned September 2014 groundbreaking for the museum to be located in downtown Fort Smith along the Arkansas River.

Museum President and CEO Jim Dunn said in mid-August that the museum effort needs between $10 million and $15 million more to reach the “threshold” of between $30 million and $35 million needed to break ground and begin construction.

• Finally!
A group in Fort Smith is finally working to beautify and maintain the Interstate 540-Rogers Avenue interchange in Fort Smith – possibly one of the highest profile crossroads in the city.

According to Nancy Smreker, president of Beautify Fort Smith, the group has raised about $90,000 in funding to transform the interchange into an area landscaped with more than 4,000 shrubs and more than 100 trees. There are numerous great volunteers and companies stepping up to help, and they are all to be saluted for the effort – which will include other locations. The City Wire will stay tuned to this promising effort.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• Fort Smith area jobless rate ticks higher in October
Small year-over-year gains in the Fort Smith metro workforce and the number of employed saw the October metro jobless rate fall to 7.3% compared to 7.5% in October 2012. However, the October rate increased from 7.2% in September.

• Economic optimism, regulatory concerns
Most of the Fort Smith and Northwest Arkansas business leaders who responded to an informal survey from The City Wire are optimistic about overall economic conditions in 2014, but worry that federal regulations and changes in healthcare will curtail the potential for growth.

• The museum push
Jim Dunn said the U.S. Marshals Museum leadership and staff have a lot to do in the next few months as they work to meet a Sept. 24 groundbreaking. The focus of that work will be on securing more than $25 million in donations for a museum expected to cost more than $50 million.

NUMBERS ON THE WIRE
$800,000: The amount of money the Sebastian County Quorum Court and the Fort Smith Board of Directors could jointly pour into the Ben Geren Aquatics Center above the already-committed $8 million should both approve an amended interlocal agreement for the project.

20,000: The number of Arkansas Valley Electric customers who lost power at the height of the Dec. 5 and Dec. 6 ice storm that blanketed the much of the Fort Smith region with more than a half-inch of ice.

18.2%: Estimated percentage of Arkansas high school students who smoke.

3.4%: Estimate by IBIS World of how much holiday sales will increase over 2012 levels.

OUTSIDE THE WIRE
• Obama’s Orwellian Image Control
The White House-based press corps was prohibited from photographing Mr. Obama on his first day at work in January 2009. Instead, a set of carefully vetted images was released. Since then the press has been allowed to photograph him alone in the Oval Office only twice: in 2009 and in 2010, both times when he was speaking on the phone. Pictures of him at work with his staff in the Oval Office — activities to which previous administrations routinely granted access — have never been allowed.

• The first female CEO in the U.S. auto industry
On the brink of failure in late 2008, the U.S. auto industry begged Washington for help. Five years later the industry has been rebuilt and has named it’s first female CEO Mary Barra at General Motors, a second generation autoworker to rise from the factory floor to the executive suite.

• Ivy League Walmart?
Wal-Mart Stores, which operates 11,098 locations around the world, has opened three locations on college campuses since 2011, according to company spokesperson Deisha Barnett. Ivy League students interviewed for this story overwhelmingly opposed the idea of a Walmart opening up at their schools.

WORD ON THE WIRE
“We have seen a number of positives occur recently which bodes well for the coming year. Company expansions along with new companies moving to the (Fort Smith) area provide a ray of hope, especially when coupled with the efforts of the state in incentivizing economic development throughout Arkansas.”
– Mike Callan, president of Fort Smith-based Arkansas Oklahoma Gas Corp., and chairman of the Arkansas State Chamber of Commerce Board of Directors, on his thoughts about economic conditions in 2014

"I wish things would work faster and there wouldn't ever be a hiccup, but that's not how life is. I think planning and getting the right plan together is critical. Yeah, would I like to see the police station under construction now? Sure. But you have to put time into planning to make sure it's the right thing instead of just jumping at it and later saying I wish we would have done this.”
– Van Buren Mayor Bob Freeman, explaining why more progress has not been made on projects to be built using funds from a 1% sales tax passed by voters in late 2012.

“It’s easy to do, first of all. We’re very involved with manufacturing issues and we see a lot of things people are doing great and a lot of problems people are having and we try to leverage the things people are doing well and highlight areas needed for improvement and put them in one place. For myself, if it means putting in some efforts to help somebody and also benefitting my business, then it’s a win-win for everybody involved.”
– Allen Engstrom, chief executive officer of CFO Network, explaining why he is partnering with web satirist Greg Henderson as a contributor to his new and completely serious web venture Manufacturing Times

Consumers who find the number of credit cards in their wallet stacking up over time are not alone, according to a new survey by CardRatings.com.

The survey found that Americans can be easily tempted into buying a new card with great rewards perks or a celebrity endorsement, but they’re even more likely to still be hanging on to their old credit card despite the new card in their wallet. More than two-thirds of the respondents have held one of their current credit cards for five years or more and 37.5% have had a card for at least 10 years.

Among the 50-to-64-year-olds age group – the oldest in the survey 76.5% held cards for five years or more, while 61% had the cards in excess of 10 years. Just because these cards are still in wallets, does not mean they are still getting used, as roughly half of the survey respondents said that they no longer use their oldest credit card.

Consumers said they are more apt to use the newer card. About 35% added a new card in the past year and more than half of consumers added a new card in the past two years.

While consumer confidence has been wobbly this year, credit markets have been a little more lax in hopes of wooing those with high credit scores. CardRatings.com found that consumers have a hard time turning down cash-back reward offers and low introductory interest rates that often accompany new cards. Roughly 28% said this was why they signed up.

When it comes to the incentive, women are more likely to be drawn to cards with non-financial benefits such as concierge services, while men tend to go for the cards with sign up bonuses, according to the survey.

Credit cards stack up over time in consumer wallets. About 9% of millennials have four or more credit cards in their wallet. That number rose to 21% by age 39. The survey found one-third of baby boomers are carrying four or more credit cards at any given time.

The Fort Chaffee Redevelopment Authority voted Monday (Dec. 16) to award its executive director with a $25,000 bonus he requested during an executive session used to evaluate his performance during the last year.

FCRA Executive Director Ivy Owen, who earns an annual salary of $136,500, said the request was a result of a successful year for the redevelopment authority, tasked with redeveloping land that was once a part of the Fort Chaffee U.S. Army installation.

"My performance is based on actual accomplishments," he said. "We have a strategic plan with specific objectives that we are judged by, particularly me. So at the end of the year, if we met those, then I request a bonus based on meeting those objectives."

Owen said it was an "understanding" he and the FCRA Board of Directors had when he was hired nearly six years ago. The purpose, he said, was to push him to perform at his best while on the job because "I want to be judged on performance. And if I'm worth that, they give it to me. If not, they don't."

The bonus is the same amount Owen received in December 2012, and an increase of $5,000 from his $20,000 bonus for 2011.

During the same closed door executive session, Owen requested a 5% annual increase in his salary. The salary increase would total $6,825 annually, bringing Owen's salary to $143,325 per year.

"I had a raise in 2008, I think it was, and hadn't had one since. I'm requesting a 5% raise today in my salary," he said.

Owen is the highest paid individual at the FCRA, also known as Chaffee Crossing. The second highest salaries are given to Director of Finance Janet Menshek and Director of Operations Larry Evans, who both earn $78,758 annually. The lowest salary at the FCRA is an executive assistance salary listed at $32,156 annually. A golf course owned by the FCRA has annual salaries that range from $18,316 to $42,000.

No action was taken on Owen's request for a pay increase, with FCRA Board Chairman Dean Gibson explaining that the board would like to review the authority's budget for the next fiscal year before committing to any sort of salary increase for Owen.

Owen did say that he was not the only staff member awarded bonuses and pay raises. The budget for FY2013 itself includes a line item allocating $36,000 in salary incentives in addition to the $865,000 allocated for regular salaries for the year, of which Owen's current salary equals 15.78% of the authority's salary expenditures. As for what each individual's pay raise or bonus was, Owen said it was not a set amount.

"Each person's was different. It wasn't the same. Bonuses are different based on performance," he said.

Monday also saw the release of the FCRA's annual report, which detailed 2013 operating revenues of $6.138 million against expenditures of $5.168 million. The result was net income of $970,000 for the authority.

"Projected revenue is 37% higher than the previous year, primarily due to increased land sales," the report read. "Overall expenses increased including capital expenditures. Capital improvements represented 84% of the total capital expenditures. Excess revenue was reinvested in the property for demolition, water and sewer line replacements, street construction, site preparation, building improvements, vehicles and various property maintenance projects."

In all, the FCRA posted assets totaling $21.588 million, while liabilities totaled $194,000.

"Year-end total assets will be approximately $212,000 less than prior year," the report read. "This can be attributed to land sales. The Fort Chaffee Redevelopment Authority does not operate for profit. The $970,000 net income projected for 2013 will ultimately be reinvested in future marketing and development of the property."

In other business, the FCRA board:
• Re-appointed Trustees Drew Williams and Janie Glover to five-year terms on the Board;
• Re-authorized a contract with Beall Barclay & Company for 2014 accounting services;
• Re-authorized a contract with Jones, Jackson & Moll for 2014 legal services; and
• Approved a request to amend the site that was set aside for the construction of a new high school in the Fort Smith Public School district.

Employees and elected officials in the city of Van Buren will take home a larger pay check next year after the Van Buren City Council formally approved the city's fiscal year 2014 budget and a separate ordinance dealing with elected officials' salaries.

The budget resolution passed unanimously and sets the city's expenditures at $12.078 million for the year. Included in the budget is a 1.5% cost of living pay increase for all city employees.

The separate ordinance, which also passed the Council unanimously, would raise the salaries of three elected officials – the mayor, the city clerk-treasurer and the city attorney. The mayor and clerk-treasurer's salaries were raised by 1.5%, while the city attorney's annual salary was raised by $500, or 4.17%.

According to the ordinance, the salaries for each position are set as follows:
• Mayor - $63,489.71 annually;
• City Clerk-Treasurer - $46,971.68 annually;
• City Attorney - $12,500 annually; and
• District Court Judge - $27,551.90 annually (the city's pays a portion of the judge's total salary).

Van Buren Mayor Bob Freeman said the ordinance was similar to other years, giving city officials the same pay raises on a percentage basis that city employees receive.

"Whatever the cost of living raise was last year, we did the same thing," he said. "If there's no cost of living raise (for city employees), there's no cost of living raise for elected officials."

Not reflected in the salary figures for Freeman and City Clerk-Treasurer Barbie Curtis are vehicle allowances. The city provides Freeman with a $10,000 annual car allowance, while Curtis is provided a $3,000 annual car allowance. Both are also provided with a city-paid cell phone and are offered the city's health insurance, though Freeman declines the city's health insurance plan and instead is covered under a policy from Tricare for military retirees and their dependents.

"I pay my own premiums with my military (insurance). …I could take the city's health insurance as a supplement if I wanted it, but I just don't think it's the right thing for the taxpayers. So I pay my $150 out of pocket for my Tricare and use Tricare."

As for why the pay was adjusted at a different rate for the city attorney, Freeman said the position had not received a pay raise since it was restructured from a full-time position to a part-time position three years ago.

When the position was listed as full-time, Freeman recalled the salary being in the neighborhood of $55,000 annually. And even though the position is now listed as part-time, City Attorney Candice Settle-Beshears provides many services to the city, such as writing ordinances, providing legal counsel to the city and its staff, in addition to representing the city in the event of a lawsuit.

Settle-Beshears said she did not request the raise, but instead it was requested by Freeman during the course of budget discussions with the Council.

"He did say last month that mine had not been raised these last couple of years, so he made that proposal based upon that," she said. "I just appreciate the Council approving (the raise)."

Freeman was quick to point out that even though the city is doing well financially and was able to award pay raises this year, it does not mean the city is cruising on easy street.

"We're still going to manage those resources to the best of our abilities. We'll keep moving forward."

The salary changes for city staff and elected officials take effect Jan. 1, 2014.

In other business, the Council:
• Approved a resolution to authorize the mayor to enter into a joint contract with the Van Buren Chamber of Commerce and provide financial assistance for a community economic assessment; and
• Approved an ordinance that would prevent many commercial vehicles, including any with three or more axles or weighing in excess of 16,000 pounds, from parking on residential streets and properties.

Siloam Springs-based Allens Foods could soon be gobbled up by Seneca Foods Corporation as the New York-based fruit and vegetable manufacturer entered into an asset purchase agreement for $148 million on Tuesday (Dec. 17).

The deal would give Seneca essentially all of the operating assets of Allens Foods, subject to a working capital adjustment, plus the assumption of certain liabilities, according to the release. The transaction would take place through a court-supervised process under Section 363 of the U.S. Bankruptcy Code and is subject to an auction and bankruptcy court approval.

On Oct. 28, Allens filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of Arkansas. The purchase agreement will serve as the "stalking-horse bid" in the auction process.

Allens will seek bankruptcy court approval of Seneca's asset purchase agreement as the stalking horse bid and certain bid procedures at a hearing in the near future. The preliminary hearing for the bankruptcy scheduled for Dec. 16 was postponed until Jan. 17.

If Seneca is successful in its acquisition of these assets, they will fit with its long-term growth objective to expand the line of canned vegetable offerings to include sweet potatoes, southern vegetables, and broaden its offerings of dry beans and spinach.

Miller Buckfire & Co., LLC, a Stifel Company, is serving as the Seneca’s investment banker. Jaeckle Fleischmann & Mugel, LLP and Wright, Lindsey & Jennings LLP are serving as legal advisors.

SECOND TIME
This is not the first time these two food processors have tried to join hands. In July 2011 Seneca and Allens signed a memorandum of understanding in hopes of a merger of the two companies in an all stock transaction.

But after several months of due diligence by both parties the deal was terminated in September 2011. Seneca said it had hoped at that time that Allens would become a subsidiary of Seneca Foods, but no terms were ever disclosed.

Seneca Foods is the nation's largest processor of canned fruits and vegetables. The company reported weaker net earnings for the fiscal six months ended Sept. 28 of $8 million, this compared to $22.7 million for the same period in the prior year. However, net sales increased $20.1 million, or 3.7% to $568.8 million in the first six months of fiscal 2013.


SPINNING DOWN

In March 2012, Allens sold off four of its six frozen vegetable operations to the French company, Bonduelle Group.

Both companies called the deal a “win-win,” but no terms were released.

Then CEO Rick Allen, said at the time the move was consistent with a renewed focus on Allens core business. He expected then to expand in the areas it was most passionate about, canned Southern style vegetables.

Allens entered the frozen vegetable segment by acquiring the Birds Eye brand products in 2006.

The nominees for the 2014 Henry Awards have been announced, with several cities and groups from the Fort Smith and Northwest Arkansas areas making the list.

The celebration, which honors individuals who have made significant contributions to the tourism industry in Arkansas, will take place at the Governor’s Banquet on Tuesday, March 11, 2014. The award ceremony will mark the conclusion of the 40th Annual Arkansas Governor’s Conference on Tourism, being held at the John Q. Hammonds Convention Center in Rogers.

The Henry Awards honor Henri de Tonti, the 17th century explorer considered one of the first “Arkansas Travelers.” The Arkansas Department of Parks and Tourism recognizes outstanding efforts in eight categories each year.

The nominees:
The Media Support Award, presented to a distinguished individual or organization for extraordinary attention to and/or support of Arkansas’s tourism industry through the use of media:
• KY3 TV, Springfield, Mo.
• Paula Morell, North Little Rock
• Southwest Times Record, Fort Smith

The Bootstrap Award, presented to an individual, organization, or community that has achieved significant success “on a shoestring,” having limited means to work with, either in resources or finances.
• Altus Veterans Memorial
• Eureka Springs Historical Museum
• Miller’s Mud Mill, Dumas

The Arkansas Heritage Award, presented to an individual, organization, or community that has made a significant contribution toward the preservation of some aspect of Arkansas’s natural, cultural, or aesthetic legacy.
• Arkansas Historic Preservation Program, Little Rock
• Arkansas Inland Maritime Museum, North Little Rock
• Hot Springs Historic Baseball Trail

The Grand Old Classic Special Event Award, presented to a festival, fair, or other special celebration which has “stood the test of time” and become an established example to follow.
• Enchanted Land of Lights and Legends, Pine Bluff
• Frisco Festival, Rogers
• Old Fashioned Square Gathering, Ozark

The Outstanding Volunteer Service Award, presented to a community, individual, or organization that, through outstanding volunteer spirit, has made a substantial contribution to Arkansas’s tourism industry.
• Central Arkansas Master Naturalists, Little Rock
• Garland County Historical Society, Hot Springs
• Twyla Gill Wright, Batesville

The Community Tourism Development Award, presented to an individual or organization which has achieved substantial success in the enhancement of its local resources through imaginative and innovative development efforts.
• Eureka Springs Arts Council
• Fort Smith Convention and Visitors Bureau
• SoMa District, Little Rock

The Natural State Award, presented to a community, organization, special event, or attraction which “stands out in the crowd” because of its unique appeal, media coverage, creative approach, and/or enhancement of community pride, thus benefiting the state’s quality of life.
• Grant County Museum, Sheridan
• Terra Studios, Fayetteville
• Wakarusa Music Festival, Ozark

The Tourism Special Achievement Award, presented to an individual or organization that has contributed to the tourism industry through leadership “above and beyond” the normal requirements of their jobs.
• Andy Thomas, Russellville
• Joe Harper, Heber Springs
• The Johnny Cash Music Festival, Jonesboro

During the ceremony, the Tourism Person of the Year will be announced, along with inductees into the Arkansas Tourism Hall of Fame. Selected by former honorees, the Tourism Person of the Year award is presented annually to an individual who has been actively involved in tourism and who has made a substantial contribution, within the past year, to the industry as a whole. Individuals who have been actively involved in tourism for many years and who have made sizeable contributions to the betterment of the industry are considered for induction into the Arkansas Tourism Hall of Fame.

In an age of computerized inventories and modern technology that are a part of nearly all businesses, one Fort Smith hardware store is bucking the trend with a pencil and some paper.

Walrod's Hardware, located at the intersection of Midland Boulevard and Division, has been a staple of the community since 1987, when owner Jerry Walrod set up shop at the store's original location at Fresno and Jenny Lind.

The original Walrod's Hardware stood at that intersection from Oct. 1, 1987, until Sept. 13, 1992, when Walrod said the building owner wanted to tear the building down and allow a grocery store to be built at the back of the property, meaning he had to move and move quick.

"I had 15 adult volunteers, I had three kids, two ladies that worked for me part-time and a blind man and I told him he couldn't drive the truck. I told him I already had a truck driver," he said with a grin.

The merchandise was all moved in one day, establishing Walrod's as the north side's neighborhood hardware store for the last 21 years.

EXPERIENCE BENEFIT
And in those more than two decades, Walrod has established his store as not only the go-to place for anything a customer may want or need, but he has also established his store as the place to go when a customer is seeking knowledge and experience. Walrod said it is not a slight to his competitors, but instead points to his knowledge versus that of possibly younger and more inexperienced staffers at other hardware stores.

"Customers should be assured of finding some quality merchandise and definitely some help that they can utilize," he said. "A lot of the stores that they go to today – a lot of them are younger folks. They just don't have the experience yet and you end up being discouraged because you can't get any real help."

Walrod said customers have come to respect not only the level of knowledge he brings to the store, but also that of his one full-time employee, C.J. Blair.

"CJ's been with me 17 years and I mean, I'm not afraid to leave him here by himself and do frequently."

Blair, who came to work for Walrod during his senior year of high school, explained that it's not only knowledge that customers seek from him and Walrod, but also follow-through.

"When we start with a customer, we stay with them. We get them what they want. We get them in and get them out, you know?"

Walrod and Blair know where every hammer, wrench and screw are located in their store by heart and keep the store's books by hand, itself an impressive feat.

"We pretty well know when we've got to have something," Walrod said. "When I forget something, he (Blair) remembers. If he forgets, I remember. It just seems like we play off of each other all the time. No, it's not a computerized system. …I had a computerized system when I first started and it seemed that with the amount of customers I had at the time, I was wasting a lot of time and paperwork."

SYSTEM CHANGES
And while Walrod's system may have simplified the inventory and accounting for the store, it has become more and more of a challenge when he attempts to place orders with his various suppliers, the largest of which is True Value.

"What I'm having trouble with now is my suppliers are high tech. I'm low tech. And my suppliers are saying the computers are telling them no, we don't need to stock this item any more because it's not selling well, it's not making us money. So it is making it more difficult for me to obtain merchandise."

But it is becoming increasingly harder for small mom and pop outfits like Walrod's to keep up in the digital age and the age of big retail.

A September 2013 report from IBISWorld says the U.S. hardware market is a $22 billion  industry, with an estimated 16,386 businesses and more than 140,000 employees.

And while IBIS says the recovering national housing market will boost business for hardware stores, consumers are turning more toward the big-box outlets.

“The industry will continue to face challenges, despite an improving economy. Competition from big-box home improvement stores will threaten operators, with consumers choosing to make purchases from stores that offer a large variety of products and convenience,” noted the IBIS report.

The report also notes that no single company has more than 5% of the U.S. marketshare.

‘AIN’T NO MUSEUM’
For the uninitiated, Walrod's may look like a store with a lot of merchandise and even more memorabilia, stacked in every nook and cranny imaginable. But Walrod himself pointed to a sign in his store that reads "This ain't no museum. Everything's for sale."

And everything means everything.

"And I have in fact had to sell a few things because I've got that sign up there that I had really intended to keep. But it's been good and people enjoy it."

With so much merchandise placed in every free spot in the store, it can be a challenge to navigate the narrow aisles. But Walrod said there is no safety problem, having passed fire inspection each year, though he admits the fire department will just let the store burn should it catch fire.

"I try to follow the rules. You've got to have your fire extinguishers where they will work. I have been told by the fire department, though, that if this place ever catches on fire, they're just going to shoot water at it. They're not coming in because it is so tight. If something catches on fire, it can fall and hurt them. But we've not had any accidents like that at all. We've not had any accidents. I know it's packed up in here high, but we try to make it as secure as possible."

NO PLANS TO RETIRE
As for how much longer Walrod, who did not disclose his age, would keep chugging along at his little hardware store on the north side of town, he hopes to work until he meets his maker, though he admits his work pace has slowed since having a heart attack just a few years ago.

"Well, I've told customers this for years. I think it's been written before, too. I hope to live to be 102 and fall dead waiting on my next customer. But now I have this defibrillator, and it won't happen because momentarily I'll be gone, and a minute later this thing is going to hit me real hard and I'll be back to say, 'Have a good day.'"

Whenever he does go, it is anyone's guess as to what will happen to the hardware store. Walrod said he is open to possibly selling it to one of his grandkids if they're interested. Granddaughter Ella has taken an interest in the store and has helped her grandpa ring sales on Saturday mornings. But there's one other person who may be interested in the store, as well.

"One of these days I might even own the store," Blair said.

A dispute over payment for land that erupted at a Dec. 3 Board of Directors meeting brought to light a continuing nuisance for the city of Fort Smith and according to one city official, it does not look like that nuisance will be going away anytime soon.

At issue Dec. 3 was an attempt by the city's utility department to acquire land through eminent domain in order to move forward with construction of the Mill Creek Pump Station project. The land owner, Steve Beam, said the $86,000 price offered by the city was too low given the fact that a bank had financed the land for $200,000. Beam eventually received a payment of more than $146,000 for the property.

At the time, Director of Utilities Steve Parke said it was vital for the Board of Directors to approve the project since the city would be meeting with the United States Department of Justice (DOJ) the following week regarding a consent agreement associated with wastewater runoff problems that date back to the 1970s.

The city is prohibited by the Department of Justice from discussing any of the specifics of the meeting, but Deputy City Administrator Jeff Dingman reiterated that the problem was longstanding and would not quickly be resolved.

"The city has not been under a consent decree from the (Environmental Protection Agency) though the DOJ. I think it's been since (1989)," he said, adding that the city is under an administrative order, which he labeled "a preamble to a consent decree."

He said the reason the EPA and the DOJ involved themselves in the city's sewer system is due to a violation of the Clean Water Act.

"In the past, there have been areas of town where untreated water has gone into the streams and the river in violation of the clean water act. That's the whole deal. We've (had) untreated water going to streams and rivers in violation and we have to prevent those."

The overflows of untreated water have been corrected, according to Dingman, though he said the projects continue in an effort to satisfy DOJ requirements and to replace pipe he said it nearing a century in age.

"Now all of the overflows have been corrected, but we have a lot of areas in the pipe that we need to identify in order to secure our system."

Projects such as the Mill Creek Pump Station and the new tanks being installed at the intersection of Jenny Lind and Zero Street are intended to relieve stress on the system that includes miles of outdated infrastructure.

"They're intended to serve as collection basins and then slowly release water into the sewer system, get treated and then recycled, so to speak."

And while the city has made great strides from no wastewater treatment during the 1960s to a system that is constantly being updated today, Dingman said it will still take many years for the city to come out from under any sort of DOJ orders, including an expected consent decree to be put in place by the D)J.

"They've been working on the consent decree for four or five years to get it finalized," he said, adding that the city would comply with the contents of the agreement once it is issued. "We will comply with them. That's the deal. When we get a consent decree negotiated, it will be one we can comply with."

Even though some cities have had their utility and sewer departments taken over by the EPA, Dingman said Fort Smith residents should not expect that even though Parke told the Board that the city has been under some sort of order since the 1970s.

"Those things are for cities who refuse to do what they're supposed to do. We're not refusing. We're doing a lot of work knowing that it's coming. A lot of the work during the last 10 or 15 years is because we know we've got problems and we're correcting them."

And while the collection of utility projects to bring the city into compliance will be well over $100 million when all is said and done, Dingman said the city is not focused on the price tag.

"Once we get everything done, it's going to be a lot. And the other thing that's part of this is not only…of course the main focus is correcting the problems we've got, but there's also a concentrated effort in having a more aggressive cleaning and maintenance program going forward."

As for when the DOJ may release details of the consent decree it has been negotiating with the city, Dingman said it would likely be in the first quarter of 2014 "before we hear something back from them."

"I know it's been at least five years (that the city and the DoJ have been in negotiations), but it's not a particularly fast process."

Consumers may not be freely spending money on non-tangibles, but 2013 marked a turnaround year for investments in the old homestead, with an uptick in renovations that some economists say has been precipitated by the rise in U.S. home prices.

The tell-tale signs of consumer spending in the home renovation projects can be seen in the do-it-yourself big box retail sector with Home Depot. Fitch Ratings recently issued a note on Home Depot and the home renovation sector indicating a projected 5% growth in home improvement activity that has already taken place this year. Fitch expects home improvement spending will increase another 6% in 2014.

“The continued improvement in the housing market, as well as strong home price appreciation seen so far this year, are likely to drive higher spending on home renovation projects in 2014,” Fitch noted.

Steve Abshier, president of Abshier Construction in Rogers, said the back half of 2013 has been busy and he continues to get calls nearly every day for room additions as well as kitchen and bath upgrades.

“Most of my clients want to add square footage. I had a call today from a lady who is retiring and wants to add 600 square feet to her home. Right now I am finishing up another master bedroom suite addition,” Abshier said.

He said the jobs range from the low six-figures down to $400 and there is really no common patterns about what people are wanting. But the majority of his customers have paid in cash, with just one or two this year using home equity lines of credit.

Economists note that near 0% interest rates and record high stock valuations have consumers sitting on mounds of cash which they have steadily been pumping back into their homes nearly all year long. Fitch said retailers like Home Depot have benefited from that cash spend posting strong comparable sales growth since the spring, up 10.7% in the second quarter and 7.4% higher in the third quarter. Meanwhile Fitch expects comp sales to grow in the low mid-single digits over the next two years.

FINANCE OPTION
As real estate values continue to rise, homeowners will have more opportunity to secure home equity lines of credit. Median home sale prices across Northwest Arkansas have risen 24% in the past two years, according to MountData.com.

“We’ve begun to see demand grow at a modest but increasing rate for home equity lines of credit over the last year," said Thomas Hay, loan product manager at BOK Financial, parent company of the Bank of Arkansas.

He said approximately half of the demand for equity products is related to home improvement.

“Often, our clients use their home equity lines of credit for multiple improvement projects over the course of time. Common projects are the build out of a swimming pool, refinish an attic space, or upgrades to kitchens or master baths,” he added.

A large survey of homeowners done earlier this year by Houzz.com found that the average bathroom remodels cost $10,442, while kitchen makeovers tallied $28,030.

Hay said as home equity rises, the amount which can borrowed also improves. Most home equity lines of credit are based on 80% loan-to-value ratio. For example, a consumer who owns a home valued $200,000 and owes $100,000 would have a 50% loan-to-value ratio. Under a contract with a maximum loan-to-value of 80%, this particular client would be eligible to borrow up to $60,000 to improve their home.

HOMEOWNER MOTIVATION 
Abshier said most of the customers he has completed projects for in the past year where planning to stay put.

“They needed more space or wanted updates for their own comfort level,” he said.

The Houzz.com survey indicated the motivation behind renovation and redecorating projects is still about improving the look, feel, flow or layout of the home. However, more people said this year they were also investing to increase the home’s value versus last year.

Roughly 40% of 100,000 homeowners surveyed said they plan to remodel or add an addition in the next two years, and 84% said they planned to redecorate by 2015. The survey found that 53% thought the time was right for starting a home renovation.

POTENTIAL HEADWINDS
Fitch notes several challenges that could still derail the sustained rebound in home remodel spending in 2014.
• Lingering high unemployment

• Tighter consumer credit standards
, and
• Rising interest rates


Spending for big-ticket remodeling projects will continue to lag the overall growth in the home improvement sector somewhat, as credit availability remains relatively constrained and homeowners remain cautious in their spending, according to Fitch. However, there are signs that homeowners are somewhat more willing to undertake larger discretionary projects and purchases.