No longer are the Fort Smith Board of Directors and the Sebastian County Quorum Court wrangling over whether or not to add an additional $800,000 to the $8 million budget for the Ben Geren Aquatics Center.

Instead, both bodies approved an amended interlocal agreement in separate meetings Tuesday (Dec. 17), setting the project budget at $10.9 million, which would allow the project to include many of the amenities Fort Smith voters thought they would see in a project when they voted to approve a sales tax to fund the city's half of the construction in May 2012.

But spending the additional funds did not come without a fight at the city Board meeting, which took place an hour prior to the meeting of the Quorum Court.

BALLFIELDDELAY
In order to pay for the city's additional $1.5 million now obligated to the budget, the money will be taken from the Parks and Recreation Department's Five Year Capital Improvement Plan. But in order to take from CIP, projects originally slated for funding during fiscal years 2014 and 2015 have been shuffled around, including the River Valley Sports Complex, a project spearheaded by Election Commission Chairman Lee Webb and State Sen. Jake Files, R-Fort Smith.

An ordinance passed by the Board on June 5, 2012, requires that money be set aside for the project from the sales tax in different amounts at different times. From June 2013 to December 2013, the ordinance spells out $750,000 in funding that would have been set aside for the project, money that City Administrator Ray Gosack said would now be used for the aquatics center instead.

"It would be used for the aquatics center and then we would have to get re-appropriated for the ball field project later on," he said, adding that the Board would have to amend the ordinance at a later date in order for the funding to officially be taken away. "It would have to come separately (from the vote tonight)."

Webb addressed the Board, asking that it look at other ways to draw funding from the CIP in order to build the aquatics center without having to take from funds already obligated to the sports complex, to be built at Chaffee Crossing.

"I know the position you're put in. I've been there myself. I hope there's a way to figure out (how) to get around this,” Webb said in addressing the Board.

Even though the sports complex, which is proposed to now not be built until 2018, is being sidelined for the time being, Gosack said a previous agreement with the U.S. Army National Guard would still move forward. The Army, through a grant, would clear the land for the ballfields at Chaffee Crossing in Aug. 2014. After their work is complete, Gosack said the city would still spend about $350,000 already set aside for the project to "stabilize" the site and carve out drainage, preparing the site to sit for years until funding comes available to construct the ball fields.

WAVE POOL ADDITION
Even though the sports complex was an issue raised by Webb, the Board looked at other factors in their decision to approve the additional funding.

Director Mike Lorenz presented the Board with polling done by his daughters, who attend Northside High School and Trinity Junior High, which showed water slides and a wave pool as an interest among more than 600 students he said were polled at both schools.

He said it was clear to him that in order to draw patrons to the facility, it would need to be built closer to the concept presented to the Board in March of this year, including a longer lazy river, slides and other amenities, adding that "we need to build something we can be proud of."

Director Keith Lau echoed those sentiments, adding that the city needed to "be the best or go home."

Parks and Recreation Director Mike Alsup said building the larger facility and possibly including a wave pool would be the primary driver of customer traffic, which would lead to a lower chance of both the city and county having to subsidize the facility's costs each year. He came to the conclusion after speaking to individuals at municipal water parks across the region.

"The likelihood to break even is greater with a wave pool being part of the project," he said, adding that the "wave pool is the draw."

He also said he had spoken with the project designers and had been assured that the wave pool could replace the diving well and still have the entire aquatics center project come in under the new $10.9 million budget.

‘PROMISES OF FUTURE NUMBERS’
The final vote for the $10.9 funding concept passed the Board on a 4-3 vote, with Directors Pam Weber, Philip Merry and George Catsavis voting against the project.

Both Merry and Weber expressed concern that not enough was known about the costs of the project, with the $10.9 million figure having just been made public on Friday (Dec. 13).

"We've seen so many numbers and we've relied on so many for numbers, but we still don't know if $10.9 million would cover the original plan or cover a wave pool. We don't know that," Merry said.

Weber went so far as to suggest the possibility of going back to the voters and asking for an extension of the current bonds in order to not sacrifice funding for the sports complex or any other facility. It was an idea that gained no traction.

"I want to remind all of you when we do this vote - we relied on numbers that did not come to fruition," she said. "And our Board is not in the business of micromanaging. But I wish this was one time I had stepped forward and micromanaged. Because going from $8.8 million to $11 million on the same plan has not left me with a good taste in my mouth or left me feeling comfortable with promises of future numbers."

QUORUM COURT ACTION
Following the action of the Board, the Quorum Court approved the additional funding of their portion of the project, with Judge David Hudson explaining that short-term loans could be issued against future sales tax revenues the county will collect that is dedicated to parks capital improvements.

When asked by Justice of the Peace Linda Murry what the cost of such short-term financing would be, he suggested using a local financial institution to structure the loans with interest rates he did not expect being above 2%.

Justice of the Peace John Spradlin spoke out against the additional funding, explaining that designer Larkin Aquatics had already been off in their estimates by 24.6% from the original concept to the most recent cost estimate.

"We don't have a firm number. This is really scary and with revenues down…with revenues down and we can't get a firm number out of these guys. ... This is very dangerous here and I think if we're not careful…we're already stretched and revenues are down. The projections don't look good. We can't get a firm number. We're flying blind and now we're going to say, 'OK. Let's do this.'"

Not having the votes to defeat the cost increase, the amendment moved forward, with Justice of the Peace Danny Aldridge, a proponent of the aquatic center, declaring Tuesday as a great day for Fort Smith and Sebastian County.

"You've got governments working together to get the citizens what they want. We're serving them and using their tax dollars the best way we can. I think it will be great for everybody. I think it will be a boom for the economy."

And even though the city spent nearly 30 minutes discussing a possible wave pool, with Alsup declaring he was assured by the project designer that it could come in under budget, Hudson said he was unaware that estimates related to a wave pool were included in the project to replace the dive well.

"I don't know anything about that, so I can't comment on that. I know that Mike Alsup has talked to some other water park operators and that their recommendation to them is you're better served participant-wise, and connected to that cash flow-wise, with a wave pool than you would be with a dive well."

Following the meeting, Spradlin said he feared the increased funding and the county's plan to eventually take out loans at a later time against future sales tax revenues would put the county in a financial bind, resulting in tax increases to make up the deficits. And he placed the blame squarely on Aldridge's desire to see a larger park built.

"It's a sad day for taxpayers. And I blame Danny Aldridge."

Hudson and Gosack have said a joint meeting of both the city and county legislative bodies will be held in coming weeks to finalize the design of the project, though a firm date has not yet been set.

The Arkansas Ethics Commission released a staff report on Wednesday (Dec. 18) alleging that Lt. Gov. Mark Darr, R-Ark., misspent more than $44,000 in both campaign and public funds.

The issue of spending by Darr was first brought to light by attorney and liberal blogger Matt Campbell, who reported inaccuracies in Darr's campaign finance reports tied to his run for lieutenant governor and filed an ethics complaints against Darr. The disclosure came to light shortly after Darr's declared candidacy for the 4th District Congressional seat. Darr dropped out of the race 17 days after announcing.

After announcing his withdrawal from the race, the lieutenant governor told Talk Business in an interview that he had in fact made errors in his campaign finance reporting.

“No one wants to make a mistake in filling out reports obviously, I’m not throwing other people under the bus. I signed the reports, so it’s my campaign, my responsibility. But there were some errors on there,” he admitted.

Darr also said he expects he may owe his campaign money as he took more than the debt he was owed.

“I think I will. It’s not a whole lot of money but it’s still an error in calculation and reporting,” Darr said. He was not ready to disclose the total repayment as he wanted Dumas to review his amended reports, but he said the amount was “not exorbitant.”

An annual legislative audit found that the problems were not confined simply to the campaign, but included information alleging that Darr had misspent nearly $10,000 in state funds on items including lodging, commuting expenses and other personal expenses.

According to Campbell, who was in the hearing Wednesday, the violations alleged against Darr included:
• $3,577.76 in improper travel reimbursements;
• $3,532.60 in personal expenses on a state credit card;
• $31,572.74 of campaign funds used for personal expenses; and
• $6,000 in campaign contributions in excess of campaign contributions.

Campbell said the Ethics Commission noted Darr's cooperation with the investigation, adding that Darr's defense was that "he just didn't know what he could and couldn't do (with campaign and state funds)."

Darr could face maximum fines of $2,000 for each of the 12 violations he is alleged to have committed, though Campbell doubts he'd actually be asked to pay the full $24,000 maximum fine.

"They won't hit him with the full $24,000 fine because they noted that he was forthcoming with information when the investigation started."

Darr did not make a statement following the hearing, though when asked by a reporter if he would resign his post as lieutenant governor, he replied, "No."

Campbell, who has built a reputation as a thorn in the side of Republican officeholders, said the findings released today shows that the law works.

"This is proof that the system works when people are willing to actually put in the effort and file the complaint," he said. "There's a lot of allegations of people doing X or Y, but nobody takes the next step and files a complaint. The ethics commission did a great job on the investigation. The accounting was thorough."

There has been no word on if the findings of the Ethics Commission report would be forwarded to a special prosecutor. The Legislative Audit report was forwarded to Pulaski County Prosecuting Attorney Larry Jegley for review of possible criminal violations.

Some of the revenue from the 2009 purchase of Fort Smith-based Sparks Health System could be used to help build and operate a medical school in Fort Smith and generate an up to $100 million a year economic impact.

When Naples, Fla.-based Health Management Associates (HMA) acquired Sparks in a deal valued at $138 million, part of the money was used to create the Fort Smith Regional Healthcare Foundation. Foundation initiatives include supporting scholarships for individuals seeking advanced medical training, the Community Dental Clinic in Fort Smith, health education programs in area schools, and other medical training options.

According to Foundation Chairman Kyle Parker, the foundation now has around $50 million and the board is investigating the feasibility of an osteopathic medical school that would, once fully operational, serve 600 students. Osteopathic medicine, according to the American Osteopathic Association, the practice is “a complete system of medical care with a philosophy that combines the needs of the patient with the current practice of medicine, surgery and obstetrics; that emphasizes the interrelationship between structure and function; and that has an appreciation of the body's ability to heal itself.”

Not all of the $50 million would be available for the school, but enough of it to make the concept worth pursuing, Parker said.  The Commission on Osteopathic College Accreditation (COCA) has been contacted by the foundation, which is the first step in the process. COCA requires several steps to happen before any mention that such a school will open. To announce a certain plan prior to a COCA review is considered “recruitment of students” and is verboten in the industry.

The foundation has hired two consultants who will be in Fort Smith in early January to begin work on a feasibility study. Parker said the study should be complete no later than April. If the foundation board moves forward with the plan, they then seek approval to gain accreditation with COCA and they hire a chief academic officer/dean. Within six months of hiring the dean, the foundation could technically break ground on the school.

Parker would not say where the school may be built, but did acknowledge that the school could open by the fall of 2015 barring any surprises in the feasibility study and based upon COCA approval. Parker acknowledged two false starts with other groups on a school plan, but is confident this latest effort has legs.

“We’ve talked to some medical schools ... and we’re not closing any doors from that standpoint. But with each of our visits, we have become more and more confident about our abilities, if it’s feasible, and I have to stress that we’re merely working to see if it’s feasible at this point ... but we are confident that if it is (feasible) then we have the people or know where to get the people to make this a success,” Parker said.

The osteopathy school plan has some early supporters. The Community Health Centers of Arkansas, which provides medical care in Arkansas’ rural areas, supports the idea, according to Tom Webb, executive director of the foundation. The foundation press release issued Wednesday (Dec. 18) included this statement from the CHCA Board of Directors: “CHCA supports the development and implementation of the osteopathic school and residency program which will help build the pipeline of osteopathic physicians' availability for rural and underserved communities.”

The osteopathy notification sent to COCO includes endorsements from the Arkansas Osteopathic Medical Association (AOMA), the Arkansas Society of the American College of Osteopathic Family Physicians (ACOFP), and the Arkansas Osteopathic Foundation (AOF).

“FSRHF’s effort to establish an osteopathic medical school parallels our vision for improving health care in the state. The strong need in the area combined with community support contributed to sweeping osteopathic association support,” Frazier Edwards, executive director of the AOMA, said in the foundation statement.

Following are other notes in the foundation statement.
• There are 30 colleges of osteopathic medicine (COMs), offering instruction at 40 locations in 28 states. There is not an osteopathy school in Arkansas.

• Twenty-four of the COMs are private; six are public. Should the development of an osteopathic school in Fort Smith happen, it would be a private, non-profit institution and not dependent on continuous public funds from the state.

• Approximately 60% of practicing osteopathic physicians (DO) practice in the primary care specialties of family medicine, general internal medicine, pediatrics, and obstetrics and gynecology.

• Osteopathic physicians (DOs) could help fill a critical need by practicing in rural and other medically underserved communities.

• Arkansas is ranked 48th among states in physicians per capita based on the 2010 Healthy Workforce in Arkansas Study by the University of Arkansas for Medical Sciences (UAMS) Center for Rural Health.

• The latest data from Arkansas Department of Health’s Behavioral Risk Factor Surveillance System indicates the greatest percentage of adults 18 and older with no personal doctor reside on the entire western side of the state.

“If this happens, if we’re able to meet that feasibility line, I’m telling you that this will move the needle in the Fort Smith area” in terms of healthcare, Parker said.

He added that the school could eventually be a feeder school for hospitals and clinics in Northwest Arkansas and other adjacent metro areas.

Parker said the foundation is working with the Fort Smith Regional Chamber of Commerce, the city of Fort Smith and other groups on the medical school concept.

A little more than a month after the Arkansas Department of Environmental Quality presented its plan to address contamination caused by Whirlpool's admitted leak of trichloroethylene (TCE) into groundwater in the 1980s, action is being taken at the contamination site.

According to ADEQ Public Outreach and Assistance Division Chief Katherine Benenati, crews from ENVIRON will be in the area this week.

"Whirlpool’s consultants are in the field doing pre-design testing of the soils in preparation for implementing the RADD after the first of the year," she said in an e-mail.

The RADD, or Remedial Action Decision Document, was first released in October after months of discussions between the appliance maker and ADEQ on how best to clean up the TCE contamination. ADEQ recommended a variety of methods for cleanup, all of which were explained at a public forum ADEQ hosted in Fort Smith in November.

The primary method of clean up will consist of the use of chemicals to neutralize the TCE.

"ADEQ has determined containment of the soils and In-Situ Chemical Oxidation/Reduction coupled with Monitored Natural Attenuation (MNA) for the groundwater are the most effective remedial approaches at the Whirlpool facility," the document states.

The RADD also recommends covering part of the contaminated Whirlpool site with asphalt at a cost of $600,000.

"The cover will be designed to prevent the water from migrating through the contaminated soils. The cover will be coupled with an institutional control to prevent excavation of the on-site impacted soils. In addition, Whirlpool will implement a soil gas monitoring program to be sampled on a quarterly basis."

The RADD also calls for institutional controls to be put into place, such as bans on drilling groundwater wells in the contaminated area, generally in and around the Whirlpool site and immediately north of the facility. A previous attempt by Whirlpool to have the Fort Smith Board of Directors impose a ban on groundwater wells was defeated.
www.thecitywire.com/node/27060

In addition to ENVIRON conducting pre-design testing, ADEQ was at the contamination site Tuesday (Dec. 17) conducting their own sampling, according to Benenati. She went on to say the agency conducted "advancement and sampling of soil borings using Geoprobe. Soil samples were screened using PID and select samples were sent to laboratory for analysis. A grab groundwater sample was also collected for laboratory analysis."

Residents may have also noticed crews and large equipment digging into the ground. Benenati said ADEQ was using a "Membrane Interface Probe (MIP). This device detects the presence of VOCs (volatile organic compounds) using a probe pushed into the soils."

Once ENVIRON begins to fully implement the RADD, it is estimated that the company will have spent about $5.4 million on chemicals associated with the in-situ chemical oxidation. That is in addition to the $600,000 spent on the asphalting of the contamination on site at Whirlpool's former manufacturing plant, bringing the total cost of cleanup to $6 million.

All the cleanup will be in addition to a restriction placed on the deed of the Whirlpool site, restricting some activities that can be performed at the site.

"A deed notification will be filed with appropriate land records office. The deed notification would identify the kinds of contaminants present, and describe activities that should not be conducted at the facility and grant site access to ADEQ. During the performance of routine groundwater monitoring at the facility, a facility evaluation will be conducted to ensure that there is no on-site use of the contaminated groundwater."

For anyone with a dream of being the next city councilman, senator or even dog catcher, the University of Arkansas at Fort Smith is planning a workshop to teach novice candidates the ins and outs of running for public office.

"So You Want to Get Elected" will take place Jan. 24 - 25 at the Blue Lion at UAFS Downtown.

According to Dr. Robert Willoughby, chair of the Department of Political Science at UAFS, the new workshop will feature more than just academic information on how to run for office.

"The main reason is to provide a novice who is wanting to get into politics the opportunity to learn from not only academics who are in the political science department, but to learn from a variety of speakers who hold a wide variety of offices across the state."

Among the speakers are former Arkansas House Speaker Shane Broadway, Sen. Joyce Elliott of Little Rock, UAFS Political Science Professor Williams Yamkam and Clint Reed, a partner at Impact Management Group in Little Rock.

"(There will be) a wide range of speakers to help someone who is interested in getting into politics but doesn't want to hire a high dollar consultant a two-day workshop to provide an outreach for their campaign."

While the group of speakers and panel participants, which will also include Michael Tilley of The City Wire, may come from political backgrounds, the workshops spread over the two-day period will not espouse any political leanings.

"It's completely non-partisan," Willoughby said, adding that the workshop will be "more of a how-to."

The workshop is among a select few offered through the United States, according to Willoughby, who said Yamkam had participated in another workshop at The George Washington University in Washington, D.C.

"Dr. Yamkam actually did a survey or a poll of universities that offer these types of workshops and he thought there were only two or three right now," he said. "(He knows about GWU's workshop) in the nation's capitol because he's been going to them for a number of years. It was part of the stimulus for getting this done. But no, it's not widely done. A lot of candidates just have to go out on their own or hire a political consultant to get them going or figure out how to do it by trial and error. But this is a much better approach for local or state candidates who want to find out what it takes to put something together."

Fort Smith City Director Keith Lau, who ran for public office for the first time in 2012, said having a workshop like this would have been of great benefit to him.

"For me, the first and foremost is the expense you could save by knowing the processes," he said.

Among the processes and topics to be discussed include campaign and issues management, get-out-the-vote methods, media relations, financing a campaign and advertising strategies.

Lau said in the area of advertising and get-out-the-vote methods, he had to rely on the advice of friends who had previous experience instead of getting professional advise through a program like the upcoming UAFS workshop.

The fee for the workshop is $125, which Lau said would be well worth any candidate or potential candidate's time.

"Write it off as a campaign expense. That's what I would do," he said. "And (finding out) how to account for and how to find the information about your campaign financing would be worth that $125."

The workshop's inaugural event has been timed to coincide with UAFS' new political science major, Willoughby said. The major was first made available during the Fall semester.

"This workshop and any future workshops are designed to give awareness that this campus now has a political science major."

Registration for the workshop runs through Jan. 10. Individuals may sign up for the workshop by contacting the Center for Lifelong Learning at 479-788-7220.

A new hotel is coming to the corner of Phoenix Avenue and McKennon Boulevard, bringing with it both an increase in occupancy and about 30 new jobs.

The Home 2 Suites will be part of the Hilton brand and will add a second hotel at the intersection for hotel developer Driscoll Properties.

President and CEO Marion Driscoll said adding the additional hotel will allow him to meet the increased demand he is seeing at his other hotel at the intersection, Homewood Suites.

"We're seeing our occupancy rise every year. Our demand ratio versus rooms ratio is stronger, to where I'm not able to fulfill all of my guests' needs at the Homewood. That will help the overflow."

The four story, 88 suite, 55,000 square foot hotel will be LEED certified, Driscoll said, and will be built on land owned by the Fort Smith Regional Airport.

Airport Executive Director John Parker said the lease was structured for 50 years, bringing in annual revenue for the airport of $27,000 for the first five years. The rate paid by Driscoll in future years will increase, with the airport netting $2.5 million in proceeds as a result of the lease agreement.

The lease, which does not include provisions for profit sharing, would be good for all airport patrons, Parker said.

"Any development that occurs on the airport (property), whether aeronautical or not, is actually good news for the airport itself. But a hotel development is very good because it stabilizes rates for non-aeronautical users of the airport."

While the new development will allow Driscoll to address his capacity issues at Homewood Suites, it also allows him "to market to a different clientele that I'm not able to market to right now."

"Made to be customized, our stylish suites are packed with perks and high-tech amenities that are just your style," is the message you see on the hotel brand's website. The types of amenities include a kitchen area, media hub, cook tops, saline pools, integrated laundry and fitness facilities, outdoor areas that include walking paths, and a business services area.

The final designs for the multi-million dollar hotel are not yet complete, but Driscoll expects a ground breaking sometime in February or March 2014 with a grand opening by February 2015.

The Federal Reserve affirmed its outlook for stronger GDP growth in 2014, and said Wednesday it will reduce – or “taper” – its injection of $40 billion into the U.S. economy through securities purchases.

The December GDP forecast of 2.9% to 3.1% is marginally better than the 2.8% to 3.2% estimate given in September by the Federal Open Market Committee (FOMC).

Wells Fargo economists project a 2.5% growth, not quite as optimistic as the Fed expectation, according to a brief note published by the bank’s economic team on Wednesday (Dec. 18) following release of the FOMC meeting.

However, the FOMC announced that in January tapering will begin as the committee will reduce its holdings of mortgage-backed securities from $40 billion per month down to $35 billion. Another $5 billion will be shaved from the Treasury notes purchased each month as well.

As for the unemployment rate, the FOMC members lowered their outlook for the to 6.3% to 6.6% for 2014 in December from 6.4% to 6.8% in September. This adjustment in the unemployment rate outlook was far greater that for made for economic growth, while the top end of the inflation outlook for 2014 was actually lowered.

Wells Fargo noted this suggests the lower unemployment rate was a key factor in shifting the balance toward tapering. The Fed’s statement suggests that the “cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions” was a basis for deciding to taper.

Also factoring into the FOMC’s decision was the extent to which fiscal “restraint may be diminishing.” As expected, the inflation outlook remains below the 2% long run target throughout the 2013 to 2015 period, with the 2014 outlook adjusted to 1.4% to 1.6%, down slightly.

Wells Fargo notes that while 1.4% inflation is still well below target, this marks a significant pickup from the 0.9% rate at which members expect inflation to register in 2013.

The FOMC strengthened its commitment to keep short-term rates low, 4% stating a rise in the fed funds target would not come until the 3.5% unemployment rate was “well past” the current threshold of 6.5%.

Wall Street reacted favorably to the taping announcement with the Dow Jones Industrials advancing 1.84% closing at 16,167 at the close of business Wednesday (Dec. 18). The S&P 500 also picked up 1.66% to close at 1,810. The NASDAQ followed suit rising 1.15% to 4,070.

The bond market yields also edged higher with 10-year Treasury Note yielding 2.87% as prices declined slightly. Gold, Crude Oil and the U.S. dollar slipped lower on the taper news.

It’s every shopper and retailer’s nightmare just ahead of the holidays, to find out customer name, credit or debit card number, and the expiration date plus three-digit security code of their cards are all potentially part of the data breach from hackers.

But that’s what has happened for shopper’s at Target during the busiest time of the year — pre-Thanksgiving through Black Friday out to Dec. 15.

Target sent a letter to its customers explaining the unauthorized access to its payment data, apologizing for any inconvenience the breach might cause.

“The privacy and protection of our guests’ information is a matter we take very seriously and we have worked swiftly to resolve the incident. We began investigating the incident as soon as we learned of it.,” Target noted in the letter.

The retail giant said it’s partnering with a leading third-party forensics firm to conduct a thorough investigation of the incident and to examine additional measures we can take that would be designed to help prevent incidents of this kind in the future.

Target said it also alerted authorities and financial institutions immediately after the breach was discovered and confirmed the unauthorized access.

“We are putting our full resources behind these efforts,” Target said.


The breach affects some 40 million credit and debit card accounts used during the two-week period at Target Stores across the U.S.

Target said it has resolved the threat so that its consumers can shop with confidence.

But the retailer urges anyone who shopped at Target between Nov. 27 and Dec. 15, paying with credit or debit cards should monitor those accounts very closely as well as order a copy of their credit report, which can be done once a year for free.

Target has not revealed exactly what happened to cause the unauthorized access but it is believed that the theft may have occurred through software installed at machines customers use to swipe their cards when paying.

Spokeswoman Molly Snyder said the company has been reaching out to customers via emails and social media with the news of the breach.

“This is a sophisticated crime,” she said, declining to be more specific. The intrusion didn’t affect Target.com or its Canada operations, she said.

Analysts said while this search for the truth is happening, the issue damages the trust Target has gained. 

Brian Sozzi, CEO of Belus Capital Advisors said more importantly it calls into question how sales will trend in January.

Target shares were down more than 2% Thursday trading around $62.28.

Slight but continued improvements in economic trends for the Fort Smith region during the third quarter of 2013 has resulted in the best quarterly grade for the economy since the first quarter 2009 launch of The Compass Report.

A third quarter 2013 grade of C+ was improved over the C in the second quarter and the C- in the third quarter of 2012.

The quarterly Compass Report is managed by The City Wire and presented by Fort Smith-based Benefit Bank. The report is the only independent analysis of economic conditions in the metro area.

Joe Edwards, president of Benefit Bank, said it’s nice to finally see the region’s key economic metrics moving in the right direction.

“It was really encouraging. I find myself mainly looking at trend lines and you always hope they will go up dramatically. Obviously I don’t see that happening here, but what I do see is that we are moving in a positive direction,” Edwards said of The Compass Report.

Edwards also said the report mirrors what he sees and hears in the business community’s served by Benefit Bank.

“By and large, they (bank customers) are optimistic, but everybody seems to be guarded somewhat. It is improving, but we all know of the issues out there for 2014 that remain unsettled and uncertain. No one is going to throw a party, but what we are hearing is encouraging,” Edwards explained.

Economist Jeff Collins, who conducts the data collection and analysis for The Compass Report, said employment and other data indicate that the Fort Smith region “has performed reasonably well” during the first three quarters of 2013.

“Nonfarm employment was up a respectable 2.0 percent year-on-year (2,400 new jobs), with total nonfarm employment of 120,200 jobs in September. This marks the ninth straight month of positive employment growth. The statistical evidence suggests that the local labor market has stabilized after a prolonged period of decline,” Collins wrote in his analysis. “Data for the Fort Smith regional economy had been mixed for some time but now a clear trend appears to be emerging that the local economy is growing.”

However, Collins said the improvements will need to continue if the region is to return to employment levels seen prior to the recession.

“In September the total number of employed in the MSA was an estimated 123,871. By contrast, total employment in September 2006, prior to the recession, was 130,736,” Collins wrote.

He also noted that the regional manufacturing sector continues to lose jobs.

“Strong overall non-farm employment growth did not carry over to the manufacturing sector. September-to-September the sector lost 700 jobs or roughly -3.6 percent. In September an estimated 18,500 people worked in the sector,” he wrote.

Data collected for The Compass Report also suggest that state and national economic trends have been positive in the back half of 2013 – even with relative dysfunction within the federal government.

“Economic data, both at the local and national level in the third quarter was very encouraging, particularly the surprising growth in output. Even more encouraging was the rate of growth despite the lack of clear policy direction regarding federal spending. The primary concern continues to be weak labor markets,” Collins said.

Collins also provided an economic health summary of the state’s three largest metro areas.
• The Central Arkansas economy continues to underperform, in many ways reflecting the national economy.
• For the Northwest Arkansas economy, despite the rapid rate of growth there is no reason to believe that current growth rates are unsustainable. Look for momentum to continue for at least the four to six quarters.
• Despite continued erosion of manufacturing, the Fort Smith regional economy has been amazingly resilient. The uptick in growth bodes well for the regional economy.  Look for growth to continue through the next four quarters barring an unforeseen shock to the Fort Smith regional economy.

The 2013 third quarter economy in the central Arkansas area received a grade of C- meaning that economic conditions declined slightly compared to the third quarter of 2012 but were unchanged compared to the second quarter of 2013.

The third quarter 2013 grade of B+ in Northwest Arkansas was an improvement compared to the second quarter and unchanged compared to the third quarter of 2012.

Continued growth in Northwest Arkansas has the potential to alter the state’s political landscape, according to Collins.

“The geographic differences in economic performance have very real implications for the distribution of population and wealth in the state. The Northwest Arkansas economy is quickly approaching two-thirds of the Central Arkansas economy. The implications for relative population are obvious,” Collins wrote. “Moreover, population correlates with political power. Should the current differential growth rates continue, the 2020 Census will lead to significant changes in relative representation in state government.”

FORT SMITH REGION
OVERALL GRADES — Fort Smith regional economy (per quarter)
3Q 2013: C+
2Q 2013: C
1Q 2013: C-
4Q 2012: C
3Q 2012: C-
2Q 2012: C-
1Q 2012: C-
4Q 2011: C-
3Q 2011: C
2Q 2011: C
1Q 2011: C-
4Q 2010: C-/D+
3Q 2010: C-
2Q 2010: C-
1Q 2010: C-
4Q 2009: D
3Q 2009: D
2Q 2009: D-
1Q 2009: D+

DATA AND REPORT DOCUMENTS
Link here for the raw data used to prepare The Compass Report for the Fort Smith area, Northwest Arkansas and central Arkansas.

Link here for more narrative about regional and national economic conditions.

SECTOR DATA
CURRENT INDICATORS
Non-farm employment — C
Non-farm employment in the area has stabilized, with employment in the metro area at 120,200 in September compared to 117,800 in September 2012.

Goods-producing employment — C+
The decrease in manufacturing jobs as a percentage of the overall workforce helps diversify the economy. The percentage of manufacturing jobs in the overall workforce was 21.4% in September 2013, down from the 22.1% in September 2012.

This measure tells us about the risk to the local economy from being heavily weighted toward sectors that have been under economic pressure.

One of the fundamental principles of reducing risk is diversification. The Fort Smith economy has been based on manufacturing for decades, but this heavy reliance on one sector for employment and wealth creation has left the region vulnerable. For several years the manufacturing sector in the U.S. has shed employment as technology and international trade have redefined the production process.

As the economy of Fort Smith becomes more diversified the risk of a downturn in any one sector causing a catastrophic loss of employment diminishes.

Metro area Unemployment rate — B-
The area unemployment rate, an important gauge in the health of the metro labor market, posted a decline to end the third quarter. Unemployment in September was estimated at 7.2%, compared to 7.5% in September 2012.

Sales and Use tax collections — C
Sales tax collections in the region and the city of Fort Smith began to show weakness in the fourth quarter of 2009. That weakness began to improve in the fourth quarter of 2010, was on a stable pace, but began to cool in the third half of 2012 and has continued to show weakness in 2013. The tax collections, which are good indicators of regional consumer confidence, were down in Crawford, Franklin, Logan and Sebastian counties to $3.342 million during August 2013 — compared to $3.35 million in August 2012. However, during the June 2013 to August 2013 period, overall collections in the counties were up 4.6% compared to the same period in the previous year.

LEADING INDICATORS
Building Permit (housing) valuation — C
The total value of permits issued in the third quarter (measured in a three-month rolling average) were down 1.4% compared to the third quarter of 2012.

As new households are created they induce growth in retail, education services, health care services and other types of businesses that provide goods and services to households. Also, new construction provides employment and tax revenues.

Hospitality employment — B
Hospitality employment, which began trending downward in the third quarter of 2012, leveled off during the fourth quarter of 2012 and improved during the first quarter of 2013. September 2013 saw 9,400 jobs in the regional hospitality sector, up 300 jobs from September 2012.

Manufacturing employment — C-
Manufacturing employment in the Fort Smith region showed signs of stability in 2012, but began to dip again during the first quarter of 2013. Sector employment in September 2013 was 18,500, down an estimated 700 jobs from September 2012 employment.

For better or worse, Fort Smith remains a manufacturing town. That implies the near-term economy rises and falls on the performance of the sector. Growth in employment or even stable employment in the sector bodes well for the near-term outlook for the local economy.

Construction employment — B+
This sector, which includes mining/natural resources employment, saw employment reach 7,200 in September, up from 6,800 in September 2012.

The rationale for including construction employment is similar to that for building permits. The employment measure is influenced by changes in both the residential and commercial real estate markets.

Obviously, new space implies new residents and new businesses.

One the most widely successful research ventures out of the University of Arkansas was recently honored by R&D Magazine as its 2013 technology product of the year. On Thursday (Dec. 19), NanoMech execs unveiled the R&D 100 plaque which puts the Springdale-based nano technology firm in elite company.

NanoMech CEO Jim Phillips said the award ranks just beneath a Nobel Prize in the science world and signifies the firm’s TuffTek product is considered one of the country’s top technological innovations. The Tufftek product is a special coating that is used in industrial manufacturing applications. This patented coating reduces wear, heat resistance and improves precision for cutting tools.

UA Chancellor David Gearhart told the small crowd at the unveiling ceremony the R&D 100 award is considered the “Oscar of Innovation” and other past winners include the flash cube, the fax machine and High Definition television

“I think you all are in good company here,” Gearhart said to the NanoMech team.

Dr. Ajay Malshe, founder of NanoMech and the inventor of TuffTek technology, said this award brings honor and significance to decades of work and sacrifice of several individuals.

“For me, I go back to when I told my wife I wanted to mortgage our futures, come to this country (from India) to teach and explore nano technology. She was behind me,” Malshe said.

Years later he told his story to Jim Phillips who came on board to invest. Together, he said they approached the cities of Fayetteville and Springdale and the governor who all came on board to help this entrepreneurial venture flourish.

NanoMech was founded in 2002, from Malshe’s research at the UA, where he is professor of mechanical engineering. He thanked his mentor Dr. Wenping Jiang, the National Science Foundation and the Environmental Protection Agency for their contributions to the university research and Nanomech over the years. Gearhart said the university has received more than $575,000 in royalty payments from the profits generated at NanoMech since they licensed the products and acquired the patents in 2005.

NanoMech employs 35 professionals at its manufacturing labs in Springdale. These are high-paying jobs averaging $80,000 ,and 80% are UA graduates. Phillips said the company plans to add 10 more employees in the near future and routinely hires interns from the UA engineering and technology schools.

In July, when NanoMech first heard of this honor, Gov. Mike Beebe said nano technology is important for the state’s economic growth because of the impact it can have on manufacturing.

Phillips echoed those statements during his speech on Thursday. He said nano technology has the power to impact many areas, from pharmaceuticals to artillery, but the biggest winner is likely the manufacturing segment which produces durable goods and helps move the GDP needle in the right direction.

The third quarter of 2013 was positive for the Fort Smith regional economy, but Fort Smith and Van Buren hospitality tax collections began to slow for the first time in several years.

“Overall, growth has been relatively flat over the last couple of quarters based on tax collections. The data for fourth quarter should provide insight as to whether the most recent data was an anomaly or whether the sector is slowing in the Fort Smith metro,” said Jeff Collins, an economist who provides analysis for The City Wire.

Collections in Van Buren during the first 10 months of 2013 total $357,694, up just 0.16% from the $357,115 in the same period of 2012.

October collections were $35,425, up 1.6% from the $34,859 in October 2012. The city collects a 1% tax on lodging and a 1% prepared food tax.

Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, continues to project flat revenue for the 2013 and 2014 budget based on the 10-month trend line.

“As this trend continues I think we will end the year dead even with last year. I'm projecting revenue to be flat for 2014. I don't see anything in the economic indicators to lead me to believe that there will be a substantial increase in consumer spending,” Koeth explained.

Collins noted that third-quarter Van Buren collections were down 1.5% compared to the same quarter in 2012.

During 2012, Van Buren hospitality tax collections totaled $425,554, up 5.2% compared to the 2011 collections. Hospitality tax collections in Van Buren during 2011 totaled $429,561, up 2.34% compared to 2010. The 2011 collections ended a two-year skid in Van Buren.

FORT SMITH
Collections in Fort Smith for the first 10 months of 2013 totals $624,764, down 3.1% compared to the same period in 2012. Fort Smith hospitality tax collections have improved during each quarter. Collections were down 6.4% in the first quarter, down 1.6% during the second quarter, and down just 0.5% in the third quarter.

October collections were $63,828, down 5.8% compared to October 2012. The city collects a 3% tax on lodging.

Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said October occupancy was down 5%.

“Overall Fort Smith saw a decline in occupancy for the month of 5%, however our average daily rate saw an increase of 3%. Arkansas overall for the month saw a decline of 2% in occupancy but an increase of 1.7% in average daily rate. Little Rock saw a decline for the month of 7.9% but their average daily rate was also up 3.4%. So while we are all seeing less occupancy, our rate is holding nicely and even increasing,” Legris explained.

Legris said the Fort Smith Convention Center held more events in October

However, Collins noted that Fort Smith hospitality tax collections during the third quarter of 2013 were down 0.55% compared to the same quarter in 2012.

“Until recently, the hospitality industry in Fort Smith, as measured by hospitality related tax collections, had shown continual improvement since Q2 2009 (based on a quarter-on-quarter comparison). Tax collection data for the last two quarters indicate the sector has slowed,” Collins wrote in his analysis.

During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period.

REGIONAL, STATE DATA
Employment in the Fort Smith regional tourism industry was 9,400 during October, unchanged compared to October and above the 9,000 in October 2012. The sector reached an employment high of 9,800 in August 2008.

Arkansas’ tourism sector (leisure & hospitality) employed 102,600 during October, up from 101,900 during October, but below the 103,400 during October 2012. At a revised 103,700, January 2013 marked a new employment high in the sector.

Arkansas’ 2% tourism tax receipts totaled $9.943 million for the first nine reporting months of 2013, up 3.12% compared to the $9.641 million during the same period of 2012.

Arkansas’ 2% tourism tax receipts totaled $12.405 million during 2012, up 3.16% compared to the $12.025 million during 2011. The gains marked the third consecutive year of improving tourism tax revenue.

The passing of esteemed lawyer Eddie Christian Sr., the potential for a medical school in Fort Smith and learning the rules when running for elected office are part of the Dec. 20 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• A potential big deal
The folks at the Fort Smith Regional Healthcare Foundation dropped some big news this week about their plans to land a osteopathy medical school in Fort Smith. Priming the financial pump for the proposed project would be Some of the revenue from the 2009 purchase of Fort Smith-based Sparks Health System. If built, the medical school could generate an up to $100 million a year economic impact.

Several hurdles face the project, but none appear too high. Barring any procedural or financial surprises, such a school could see its first group of students by the fall of 2015.

It sure would be nice to see such a school – with up to 600 students once fully operational – locate somewhere in downtown Fort Smith.

• Learn the rules
One of the frustrating aspects of covering Arkansas politics is watching candidates for legislative or local seats get in trouble with simple financial reporting rules and other aspects of running for office. Arkansas’ rules are not complicated, but each year several candidates around the state find a way to color outside the lines, so to speak.

To help with that process, the University of Arkansas at Fort Smith is planning to hold a “So You Want to Get Elected” workshop on Jan. 24-25. Among the speakers are former Arkansas House Speaker Shane Broadway, Sen. Joyce Elliott of Little Rock, UAFS Political Science Professor Williams Yamkam and Clint Reed, a partner at Impact Management Group in Little Rock.

When it comes to following basic election rules in Arkansas, ignorance is no excuse.

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 ...

• Foundation seeks to build medical school in Fort Smith
Some of the revenue from the 2009 purchase of Fort Smith-based Sparks Health System could be used to help build and operate a medical school in Fort Smith and generate an up to $100 million a year economic impact.

• Van Buren pay raises
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.

• Tourism award nominees
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.

NUMBERS ON THE WIRE
45: The number of years Eddie Christian Sr. practiced law in Fort Smith. Christian, a Fort Smith-based attorney known in wide legal circles as one of the best defense attorneys in the nation, died following a fight with cancer. He was 72.

$10.9 million: The approved budget of the Ben Geren Aquatics Center, nearly $3 million over original estimates presented to Fort Smith voters when they went to the polls in May 2012 to approve funding the city's $4 million half of the project.

$44,000: The total amount of misspending allegedly committed by Lt. Gov. Mark Darr, R-Ark., according to an Ethics Commission report released Wednesday (Dec. 18). Darr told reporters as he left a hearing on the matter in Little Rock that he would not resign from the state's No. 2 Constitutional office.

40%: Percentage of Arkansas business leaders in the inaugural Talk Business “Business Leaders Confidence Survey" who expect significant or slight employee hiring. 35% see no change, while 24% expect a slight decline in headcount.

OUTSIDE THE WIRE
• What will Wal-Mart do with Phil Robertson?
The big box giant is responsible for about 50% of this year’s incredible $400 million in Duck Dynasty-related retail sales, with Phil Robertson’s mug (along with his bearded relatives) gracing its bestselling t-shirt in both men’s and women’s apparel. Some Walmart stores in the south feature entire aisles devoted to the Louisiana duck hunters, selling everything from bedding to prayer devotionals adorned with their trademark camouflage and folksy catchphrases.

• Why Al Jazeera America Doesn’t Care About Its Low Ratings
In the five months since its August 2013 debut, Al Jazeera America has already lost more than half the viewers of its notoriously low-rated predecessor, Current TV. The network’s ratings crested at a measly 18,000 average daily viewers and have since fallen to just 13,000, a number the media has gleefully and repeatedly pointed out as pathetic.

WORD ON THE WIRE
"Write it off as a campaign expense. That's what I would do. And (finding out) how to account for and how to find the information about your campaign financing would be worth that $125."
– Fort Smith City Director Keith Lau, speaking about how a "How to" workshop such as the University of Arkansas at Fort Smith's upcoming "So You Want to Get Elected" would be beneficial to any interested person thinking about entering the political arena.

"My performance is based on actual accomplishments. 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."
– Ivy Owen, executive director of the Fort Chaffee Redevelopment Authority, explaining why he had requested a $25,000 bonus

“By and large, they (bank customers) are optimistic, but everybody seems to be guarded somewhat. It is improving, but we all know of the issues out there for 2014 that remain unsettled and uncertain. No one is going to throw a party, but what we are hearing is encouraging.”
Joe Edwards, president of Fort Smith-based Benefit Bank, about what bank customers are saying about their economic expectations for 2014

Arkansas’ jobless rate was 7.5% in November, unchanged compared to October, but above the 7.2% in November 2012. Arkansas was one of just seven states to post a year-over-year jobless rate increase.

The report issued Friday (Dec. 20) by the U.S. Bureau of Labor Statistics also shows the continuance of three negative economic trends for Arkansas: a decline in the size of the workforce, a decline in the number of employed, and an increase in the number of unemployed.

Arkansas’ labor force was an estimated 1.325 million in November, up slightly compared to October, but down 1.69% compared to November 20102. The year-over-year comparison shows almost 23,000 fewer in the Arkansas labor force.

The number of employed in Arkansas during November was 1.226 million, above October employment of 1.221 million, but down 2.02% compared to the 1.251 million in November 2012. The number of employed in Arkansas has dropped by 25,369 between November 2012 and November 2013.

The number of unemployed was an estimated 99,064 during November, down from the 99,760 in October, but up  2.67% compared to the 96,486 in November 2012.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to 7.3% during 2012. Also, November marked the 58th consecutive month that Arkansas’ jobless rate has been at or above 7%.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during November was an estimated 252,300, down from 254,100 in October and well ahead of the 248,500 during November 2012.

Manufacturing jobs in Arkansas during November totaled 154,700, down from the 155,100 in October and below the 155,200 in November 2012. Employment in the manufacturing sector fell in 2012 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during November was 215,200, up from 215,000 in October and below the 216,300 during November 2012.

The state’s Education and Health Services sector during November had 176,600 jobs, up from the 176,200 during October and up from 173,300 during November 2012. Employment in the sector is up more than 25% compared to November 2003.

Arkansas’ tourism sector (leisure & hospitality) employed 103,600 during November, up from 103,000 during October, and above the 103,200 during November 2012. At a revised 103,700, January 2013 marked a new employment high in the sector.

NATIONAL DATA
The BLS report also noted that 42 states had unemployment rate decreases from a year earlier, 7 states had increases, and one state had no change. The national jobless rate during November was at 7%, and was down from the 7.8% in November 2012.

Nevada and Rhode Island had the highest unemployment rate among the states in November at 9%. The next highest rate was in Michigan with 8.8%, followed by Illinois at 8.7%. North Dakota again had the lowest jobless rate at 2.6%.

The November jobless rate in Oklahoma was 5.4%, down from 5.5% in October and up from 5.1% in November 2012.

Missouri’s jobless rate during November was 6.1%, down from 6.5% in October and down compared to 6.6% in November 2012.

It's not every day that Fort Smith, Ark., is in the national spotlight. It's not every day that a film crew from a world-renowned publication makes a visit to this community to shed light on one of the country's most startling epidemics, either.

What does happen every day though, is that nearly one in four seniors in Arkansas struggle to put food on the table. Many don't know from where there their next meal will come and often are forced to choose between buying groceries or buying medications.

National Geographic Magazine is tackling the subject of hunger, and in doing so, made its way to Fort Smith. In collaboration with a feature on "Hunger in America" in its magazine, the publisher is making a video for its website focusing on the issue of hunger in senior adults.

"The original plan was to do a periodical story about 'Hunger in America.' I was approached to offer some story angles and was selected," said Ken Kupchick, director of marketing and development for the River Valley Regional Food Bank. "However, when the editors met, they felt that going to Arkansas was too easy a go-to story. It was generally thought that Arkansas, being ranked as first in low food security hunger, was the obvious go-to location. Surely, if there is hunger in America, it would be found in more unconventional places."

With that in mind, the editors chose to omit Arkansas from the piece.

However, Kupchick believed there was a story that needed to be told and persisted that the magazine take another look at the state and region.

"As the days went forward, just too many compelling stories continued to land on the food bank's doorstep, and so I continued to pitch these stories back to the editor," explained Kupchick.

His persistence paid off. Although the editors opted to exclude Arkansas from the printed piece, they did decide to make a video for their website focusing specifically on the growing threat of senior hunger.

A film crew was dispatched to Fort Smith to work with Kupchick, the food bank, and some of its agencies.

"The film shoot will overview the food bank and the work we do in west central Arkansas," said Kupchick. "The filmmaker will focus on Charlotte Tidwell and her organization, Antioch Consolidated Association for Youth and Family, and shadow her as she selects food from the food bank, loads and unloads it at her place of mission, employs volunteers to create grocery bags full of food for seniors, reloads the bags and distributes that food to seniors in low income housing domiciles in Fort Smith. The film will follow some of the senior homes to discuss their individual struggles with food insecurity."

The issue of senior hunger is not a new problem, but one that has been on the rise in recent years. According to a study conducted by the National Foundation to End Senior Hunger (NFESH), " In the aftermath of the Great Recession, as of 2011, nearly one in six seniors faced the threat of hunger"— a significant increase from 2007 when the rate was one in eight seniors.

The rate of senior hunger in Arkansas is even more alarming.

"In Arkansas, more than 160,000 seniors face hunger, according to a press release issued by Gov. Beebe and a study released by the Arkansas Department of Human Services Division of Aging and Adult Services," stated Kupchick. "They estimate the senior food insecurity rate at one in three.  NFESH estimates the threat of hunger at 24.23% in Arkansas, the highest in the nation."

One contributing factor to the state's food insecurity level is that poverty in Arkansas has been a long standing generational problem.

"Across the country, your chances are one in three to be food insecure if you live at twice the federal poverty definition or below," explained Kupchick. "The odds are against many in Arkansas. If you're southern, divorced, a high school drop-out, a minority, a renter, unemployed or disabled, and are raising your children's children, the likelihood of food insecurity grows phenomenally against you. If you are a married Northern white college graduate without a grandchild living with you and you own your own home and have a retirement income, you are virtually assured at being food secure."

In its 2012 Annual Report, the River Valley Regional Food Bank noted it finds its seniors "to have a chronic need. ... they now rely upon the food they receive from food pantries to make it from month to month. The USDA tells us that there are actual ‘food deserts’ in our service area with little to no access to healthy and affordable foods."

Another contributor to senior hunger in Arkansas is the challenge that many face in applying for food assistance.

"There are about 3,000 seniors on food stamps (SNAP) in Sebastian County, or about 17% of our elderly population. The stigma associated with food stamps, the myths that the food stamp application process is tedious, and that seniors only receive about $10 in food stamp benefits keep many seniors from applying," said Kupchick.

He also said the move of food stamps from a tear-out coupon format to an EBT card system has proven daunting for some seniors.

"Many seniors don't use debit cards," Kupchick explained. "They still write personal checks, so moving them towards EBT SNAP benefits remains complicated by technology."

The River Valley Regional Food Bank hopes that the video, and its participation in it, will help bring attention to one of the nation's ever-growing, and most troubling problems.

"As our nation ages and as the effects of the 2008 recession continue to take hold, we realize more attention needs to be drawn to the issue of senior hunger as it will have a tremendous impact as our aging populace becomes increasingly vulnerable due to a lack of adequate nutrition," said Kupchick.

The "Hunger in America" feature is scheduled to appear in National Geographic's May issue. The video will debut on the magazine's website in conjunction with the printed piece.

Lowell-based J.B. Hunt Transport Services has morphed into a widely diversified logistics provider in recent years with calculated expansions in its intermodal division and substantial investments last year in the dedicated contract services division.

But as 2013 winds to a close, the transport giant announced management shifts and a $130 million investment to its laggard truckload division in 2014.

TALENT SHIFT

Hunt said last week that Shelley Simpson, chief marketing officer and president of Integrated Capacity Solutions, has been placed into a strategic leadership role of its truckload division as she maintains her current responsibilities.

Greg Breeden also was recently hired as the senior vice president of the division’s marketing and network operation. Breeden returns to J.B. Hunt after leading Crete Carrier Corporation’s national sales, marketing and customer service team for over 20 years. His responsibilities will include establishing network pricing, lane density and geographical customer network development.

Steve Rogers, vice president of operations, has transferred from the dedicated contract services business unit to assist in establishing the operational discipline necessary to turn the truckload unit into a consistently profitable business, according the recent company release.

Chief operating officer Craig Harper will focus his efforts on operational service levels across all business units, overall driver recruiting and retention, further developing the safety culture as well as remain responsible for fuel purchasing.

Analysts generally approve of this shift in management.

“The company is increasingly becoming a provider of logistics solutions for its customers. Shelly Simpson is driving the effort and is providing strong leadership in sales and marketing plus the integrated capacity solutions unit,” said John Larkin, analyst with Stifel Nicolaus. (Stifel conducts investment banking services with J.B.Hunt and is compensated accordingly for those services.)

Larkin said it makes sense for Simpson to lead Hunt’s “long suffering truck unit as some ICS customers prefer JB Hunt to provide its own truckload services as a component of integrated solutions."

“While the truck unit, at its reduced size, will never be all things to all people, it can be a valuable arrow in Simpson’s quiver as she and her teams work to continuously optimize the supply chains of the company's customers,” Larkin, who is neutral on these shares shares, noted in a email.

Ben Hearnsberger with Stephens Inc. noted in an email, “We like Shelley Simpson, the new head of the TL division and think she will do a good job.”


FUNDING GROWTH
Aside from the added talent, Hunt said the $130 million it plans to spend in its truckload division next year will be used to support what it believes will be a 2-year turnaround in this laggard division. The expenditure will “support our strategic vision while expecting to reduce operating costs’ throughout 2014 with more operational discipline," the company said.

Overall, J.B. Hunt has planned a robust capital expenditure plan for 2014 nearing $700 million which is a 15% increase in the firm’s annual interest expense. The company has earmarked $304 million in replacement cost expenditures, with a $100 million going to the truckload division this year. Another $33 million will be channeled into the truckload division to support its growth objectives which include a 100 basis point uptick in the division’s operating margins in 2014, while maintaining flat truck count, flat revenue per truck and a 10% improvement in utilization, according to the company’s 2014 outlook.

As of September 30, J.B.Hunt reported assets worth $161 million in its truckload division, shrinking from $185 million as the end of 2012. The other three divisions within Hunt each grew assets by an average 13% during the same period.

Hunt said it will dole out $65 million in intermodal container replacements and ante up $212 million to support the division’s growth to some 6,500 containers. This division is expected to see a 10% to 14% load growth in 2014.

The dedicated contract services division will get $139 million in replacement capital expenditures and $103 million to support the growth this division which is expected to range between 10% and 12% from new contract and its growing Final Mile services.

The integrated brokerage division continues its growth with 2014 expectations of an 18% to 20% revenue bump driven by 11 new branches and the hiring of 150 to 180 new people and will benefit from the $48 million the firms spends on technology and facilities in 2014.

TRUCKING TURNAROUND
J.B. Hunt’s recent focus to turnaround its laggard truckload division is an about face for the firm that has de-emphasized its legacy operation for past several years.

In the most recent quarter at the end of September the firm’s truckload business continued its retreat as revenues dropped 17% year-over-year and operating income fell 84% from the year-ago period. The unit contributed just 7% of the company’s overall revenue in the third quarter and just a meager 1% of the company’s operating income. Comparable pricing dropped 1.7% year over year while utilization dropped about 0.5% when measured in terms of total miles per average number of trucks in the fleet, according to Stifel Nicolas.

The empty mile percentage stood at 14.2% in the third quarter and the size of the fleet shrunk 18% from the year-ago period.

“One has to wonder if the company would shut down or sell off its underperforming truck division at some point, especially as integrated capacity solutions grows its capabilities to provide a broader range of comprehensive truckload services to customers,” Stifel analysts noted following the dismal quarter results on Oct. 15.

Stephens Inc. noted Oct. 15 that J.B. Hunt’s truckload division was facing several issues negatively impacting its revenue. Brad Delco, analyst with Stephens, said the truckload segment was suffering from two primary issues – it’s volumes were being cannibalized by the company’s intermodal segment, as well as significant costs related to driver recruitment and retention issues a soft rate environment.

“Looking ahead, we do not expect the current pressures facing truckload to abate and we have tempered our expectations for the segment. Our new full year revenue estimate of $397.5 million is now 17.8% below fiscal 2012 for this segment,” Delco notes. Stephens Inc. gives J.B. Hunt an “overweight” or “buy” ranking at this time.

However, Delco downsized the truckload segment’s earnings before interest and taxes estimates to $5 million for this year, shaving $6 million from the firm’s predictions prior to the third quarter results.

Shares of J.B. Hunt Transport Services rose nearly 1% by noon on Monday, (Dec. 23). The shares were trading at $77.18, up 74 on light volume. The stock is up 4.87% during this fourth quarter. For the past 52 weeks shares have ranged from $58.12 to $78.65.

November data from two prominent transportation trackers continue to show a national economy that is improving but not with impressive gains.

The American Trucking Associations’ Truck Tonnage Index was up 2.7% in November after a 1.9% dip in October. The October decline was revised from an initial estimate of 2.8%. Year-to-date, the index is up 5.8% compared to the same period in 2012.

The not-seasonally adjusted index, which represents the real change in tonnage hauled by the fleets, equaled 122.4 in November, which was 8.8% below the previous month.

“Tonnage snapped back in November, which fits with several other economic indicators,” ATA Chief Economist Bob Costello said in his report. “Assuming that December isn’t weak, tonnage growth this year will be more than twice the gain in 2012.” 

Tonnage, as measured by the ATA, increased 2.3% in 2012.

Costello said strong tonnage gains in the second half of the year suggest the economy is better than some may believe.

“Still, truck tonnage continues to be supported by fast growing sectors of the economy that generate heavy freight loads, like residential construction, fracking for oil and natural gas, and auto production,” Costello said.

Trucking serves as a barometer of the U.S. economy, representing 68.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, according to the ATA. Trucks hauled 9.4 billion tons of freight in 2012. Motor carriers collected $642.1 billion, or 80.7% of total revenue earned by all transport modes.

North American shipments in November measured by the Cass Freight Index were down 1% compared to October, but were 1.1% above November 2012 and 4.6% higher than November 2011.

“Stronger–than-expected manufacturing activity and shipments of seasonal goods offset a general slowing of freight movements to temper the drop in shipment levels,” noted Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., who provides economic analysis for the Cass Freight Index. “Expenditures rose just slightly, largely because of a surge in spot market rates the last week of the month.”

The Cass report also provided the following points about shipments in November.
• The weekly railroad traffic reports from the Association of American Railroads showed carload shipments up 2.7%, but inconsistently – up two weeks and down two weeks.

• Intermodal shipments slowed over the month, posting a 1% year‐over‐year gain in November after rising 2.5% in October.

• Refrigerated loads surged in the final week of the month due to the Thanksgiving holiday

• Given the current high levels of inventory, it is not surprising that the number of shipments is not growing – even in spite of the anticipated 3.9% rise in holiday sales over last year.

Cass uses data from $22 billion in annual freight transactions processed by its information processing division to create the Index. The data comes from a Cass client base of 350 large shippers.

Cass uses data from $22 billion in annual freight transactions processed by its information processing division to create the Index. The data comes from a Cass client base of 350 large shippers.

Wilson is not as optimistic as Costello about economic conditions.

Wilson noted in her report: “We’re seeing mixed economic signals as we approach the end of the year. Many indicators have improved during the last several months, including new home sales, new jobs, new export orders, and manufacturing production, new orders and backlog. Exports rose in recent months, but largely based on the strength of oil product exports. Container exports and imports, largely aimed at the consumer market, have trended downward. Despite the better than expected third quarter GDP, the fourth quarter will not be as strong. December is likely to provide a weak finish to a relatively weak 2013 for the freight industry.”

National political writers are eyeing Arkansas politics taking a look from the influence of Bill Clinton in the 2014 races to the prospects of Democrats to hold or take Congressional seats next year.

Jonathan Martin with the New York Times was in town a week ago and wrote about the Clinton factor in the 2014 election cycle. Democrats Mike Ross, Mark Pryor, James Lee Witt, and Pat Hays have connections to Clinton that suggest he will help with fundraising, campaigning and strategy in all of the races where these gentlemen are candidates.

Writes Martin:
Both the former president and his wife are expected to take to the campaign trail here in the months ahead, and if they help Democrats win, it could underscore their enduring influence in Arkansas and suggest that she could be competitive in a state Democrats have lost ever since Mr. Clinton left the White House. However, a string of Democratic losses next year could indicate that Arkansas is joining its Southern neighbors in becoming a Republican-dominated state and could raise questions about the currency of the Clinton legacy.

In Martin’s interview with U.S. Sen. Mark Pryor, D-Ark., who is facing a strong challenge from first-term U.S. Rep. Tom Cotton, R-Dardanelle, Pryor had this to say about Clinton.
Mr. Pryor argued that the legacy of Mr. Clinton’s policies is what is most powerful.

“People are very proud in our state that President Clinton balanced the budget,” he said. “President Bush didn’t, President Obama hasn’t.”

But even Mr. Pryor acknowledged that he was uncertain what campaign appearances by Mr. Clinton would mean.

“I don’t know if that translates into votes in our state,” he said, noting that Arkansas was “very independent-minded.”

You can read the full article here.

Also, Roll Call’s Stuart Rothenberg dives into Arkansas’ two-cycle GOP shift and ponders if a third cycle is in the works.

While Democrats see Arkansas as a place to mount a counterattack after a series of defeats, Republicans believe that it will be the Democrats’ Waterloo. Eleven months from now we will know who is right.

Four races are worth watching, and if Democrats can’t win with the candidates they have, they will have every reason to write off the state in the future.

Those four races include Governor, Senate and the Second and Fourth Congressional District contests.

Read Rothenberg’s analysis, “Is Arkansas Really the Land of Opportunity for Democrats?” at this link.

U.S. consumers continue to shift their purchases to online venues with comScore reporting that online sales were up more than 10% through Dec. 22. And while the online volume caught retailers and shippers off guard, the level is below what some expected.

Reston, Va.-based comScore, one of the top global companies in digital measurement and Internet analytics, reported Thursday (Dec. 26) that online sales for the period between Thanksgiving and Dec. 22 totaled $42.75 billion, up 9.86% compared to the $38.912 billion during the same period in 2012.

IBM Digital Analytics estimated that online sales were up 37% during the full final shopping weekend before Christmas. Forrester Research had estimated that online sales for the 2013 holiday season would be up 15%. According to the U.S. Department of Commerce, online sales are about 6% of overall U.S. retail sales, with the National Retail Federation estimating that online sales are about 14% of holiday sales.

DOUBLE-DIGIT GAINS
comScore Chairman Gian Fulgoni said he was surprised by softer-than-expected sales in the final holiday shopping week.

“Our expectations for the online holiday shopping season anticipated that consumers would spend heavily later into the season out of necessity to make up for the highly compressed holiday shopping calendar this year,” Fulgoni said in a statement. “Unfortunately that was not in the cards, as the final online shopping week saw considerably softer sales than anticipated, including zero billion dollar spending days – although Monday and Tuesday came close.”

Despite missing expectations, comScore’s comparison showed double-digit gains on the four notable shopping days of the season.
• Thanksgiving Day (Nov. 28): $766 million in online sales, up 21% compared to 2012
• Black Friday (Nov. 29): $1.199 billion, up 15% compared to Black Friday 2012
• Cyber Monday (Dec. 2): $1.735 billion, up 18% compared to Cyber Monday 2012
• Green Monday (Dec. 9): $1.401 billion, up 10% compared to Green Monday 2012.

Wal-Mart Stores, the largest global retailer, said its Cyber Monday online sales were the most in company history. The company said it processed more than 1 billion pageviews between Thanksgiving and Cyber Monday (Dec. 2).

Business for Amazon – the biggest competitor for Wal-Mart Stores and other traditional retailers – said more than 36.8 million items were ordered on Cyber Monday, or more than 426 items per second. Amazon officials said it was a record for the company.

Interest in the company’s Amazon Prime membership – a program that offers unlimited and free two-day shipping for an annual fee of around $79 – was so robust that at times Amazon limited access to the program so as to not negatively impact service to existing Prime members.

SHORTER SALES PERIOD
The 2013 holiday season, according to comScore, had 10 days with more than $1 billion spending, which was down from last year's total of 12 individual days. The comScore statement noted that there were six fewer days of online shopping in 2013 compared to 2012.

“In the end, I think we'll look back at this online holiday season as one where absolute dollar sales gains in consumer spending were held back by heavy retailer price discounting that occurred in an attempt to stimulate consumer demand, while at the same time, consumers weren't willing or able to increase their spending rate to fully compensate for the six-day shorter shopping period between Thanksgiving and Christmas,” Fulgoni said in the statement.

Sales between Nov. 1 and Dec. 24 were up 2.3%, according to a MasterCard Advisors' SpendingPulse report. The report, released Thursday (Dec. 26), noted that sales during a similar period in 2012 were up just 0.7%.

Sarah Quinlan, senior vice president at MasterCard Advisors, said in this Reuters report that jewelry was the best-performing category. SpendingPulse tracks customer spending on apparel, electronics, jewelry, luxury and home furniture & furnishings categories during the holiday season.

The comScore statement listed the top five retail categories for online purchases. The top category was video game consoles and accessories, followed by apparel and accessories; consumer electronics; computer hardware; and home and garden.

SHIPMENT DELAYS, GIFT CARD SALES
While the sales were below comScore’s expectations, the volume of goods purchased online proved more than many retailers and shippers expected.

UPS, which reportedly delivers about 45% of all U.S. packages, said its Monday air network volume exceeded the 7.75 million units the company expected. The company noted in a statement: "The volume of air packages in the UPS system did exceed capacity as demand was much greater than our forecast.”

Wal-Mart Stores, Amazon, Target and many retailers were unable to meet all shipment promises as a result of the surge of last-minute online purchases. Amazon offered a $20 gift card and refunded shipping costs for customers who did not get packages before Chirstmas. Kohls said it would pay the full cost of products not shipped in time.

In addition to an increase in online sales, consumers also are continuing the trend of buying gift cards.

The Corporate Executive Board predicted that gift card sales will top $118 billion in 2013, up 8% compared to 2012. Sales of so called “open network branded” cards like American Express or MasterCard were expected to grow from $41 billion in 2012 to $44 billion in 2013.

“The e-gifting trend will help propel continued growth in the gift card market in excess of $140 billion in sales by 2016,” noted the CEB report. “E-gifting is expected to top $10 billion during the same period, filling a niche for customers seeking to simultaneously buy and send their gifts to recipients they may not see in person over the holidays.”

BRICK-AND-MORTAR DECLINE
With online sales growing, it’s no surprise that brick-and-mortar sales and traffic struggled during the holiday season.

ShopperTrak, one of the world's largest counter and analyzer of retail shopper traffic, reported that for the Dec. 16 - Dec. 22 period that in-store retail sales fell by 3.1% from the same period in 2012. Retail brick-and-mortar shopper traffic plummeted by 21.2% compared to the same period in 2012.

“Bad weather throughout the country kept some shoppers away from stores," Bill Martin, ShopperTrak founder, said in a statement "This past week was their final opportunity to complete their holiday shopping before Christmas – and though many did finish making their purchases, retailers did not see as many shoppers as last year."

ShopperTrak said retail sales fell 0.7% and traffic was down 18.1% on the final Saturday before Christmas.

“ShopperTrak predicts after-holiday markdowns to drive robust retail sales and store traffic in the days to come, particularly the day after Christmas (Dec. 26) and the following Saturday (Dec. 28),” noted the statement.

Clinical informatics is the first new medical specialty created during the last two decades, according to Mercy Fort Smith, and it can now tout one of its own as among the only four in Arkansas to be certified in the field.

According to Stanford University's School of Medicine, clinical informatics"is the scientific discipline that seeks to enhance human health by implementing novel information technology, computer science and knowledge management methodologies to prevent disease, deliver more efficient and safer patient care, increase the effectiveness of translational research, and improve biomedical knowledge access."

And according to a press release from Mercy, Dr. Todd Stewart, a physician at Mercy Clinic, passed the first ever board certification exam in the field, joining just more than 400 physicians nationwide and only three others in Arkansas.

Two physicians at the University of Arkansas for Medical Sciences, Dr. Joseph Jensen and Dr. Donnal Walter, are also receiving certification. As of this posting, no other hospital system identified the fourth recipient.

Mercy said moving its records from paper charts to electronic health records was why Stewart's certification was important. Stewart elaborated, explaining that his interest in technology has been part of his drive to use computers to increase patient safety and productivity in the medical field.

"I've been interested in computers in medicine since medical school and residency training in the mid-1990s," he said. "I've enjoyed working with multiple companies to develop new products and technologies designed to make care both safer and more efficient for patients."

Part of the drive for certifying physicians in clinical informatics is not only streamlining medical records, but complying with new laws that are on the books, according to Stanford.

"Important health information about individuals is scattered across many systems that do not, and cannot, communicate with each other," Stanford's medical school said on its website. "New national and international initiatives aim to define and implement a secure, patient-centric, longitudinal electronic health record that will store an individual's past and present health status, care received and plan of care, and that can be appropriately shared to improve health outcomes and enhance patient safety."

UAMS' Jensen said clinical informatics improved "how people in medicine communicate."

"Clinical informatics touches everything in health care. For many years in health care, we have understood the importance of keeping a good record and describing and communicating patient care," he said. "Clinical informatics provides us tools to do this much more efficiently, over remote distances and with data standardized so that we can learn from the experiences of large groups of patients."

UAMS said the American Board of Medical Specialties approved the subspecialty of clinical informatics to establish "a standardized educational certification process for physicians in the field and enabling physicians to transform the health care into a system that taps the power of computer-bases to support all facets of health care delivery."

Mercy said the federal legislation moving medical facilities to invest in improved technologies is known as the HITECH Act, which passed in 2009. The bill provided funding for hospitals to improve technologies as part of the 2009 stimulus package.

The benefits to electronic records, according to Mercy, are four-fold:
• Having a more complete medical record instead of a disjointed paper record;
• Having a medical record available after hours or in an emergency situation;
• Being able to use medical data to better care for chronic disease; and
• Preventing medical errors such as repeating unnecessary tests or prescribing drugs with known problems or interactions.

As part of Mercy's push to improve electronic health records, the hospital and its associated clinics now make available the MyMercy online portal. Other features available to patients include the ability "to make appointments with their physicians, view test results, request refills and other conveniences."

Stewart will receive his formal certification in clinical informatics in January 2014.

The Arkansas Department of Environmental Quality released its final Remedial Action Decision Document (RADD) for Corrective Action on Friday (Dec. 27) that requires Whirlpool to spend at least $6 million to clean up pollution at its shuttered Fort Smith plant.

ADEQ’s plan also informs Whirlpool and residents affected by the company's spill of potentially cancer-causing trichloroethylene (TCE) of the final cleanup plan that has been the subject of public discussion for much of 2013.

The final RADD document does not vary in remediation approach from the draft RADD document first made public in October, implementing a three-pronged approach to remediation — asphalting the Whirlpool site, using chemical injection wells to dilute the TCE and implementing institutional controls. Several members of the Fort Smith Board of Directors opposed the remediation plan when it was proposed in October.

TCE EXPOSURE RISKS
ADEQ begins by outlining near the beginning of the document how TCE, a degreaser Whirlpool used until the 1980s at its now-shuttered plant on the south side of Fort Smith, could pose danger to individuals impacted by the plume, which extends from the former Whirlpool manufacturing facility to the north, across Ingersol Road.

The state agency tasked with environmental protection and cleanup said three types of individuals are at risk for TCE exposure on the Whirlpool site itself — routine workers, maintenance workers, and construction workers.

"Exposure routes for on-site routine workers from COCs in surface soil include ingestion, dermal contact, inhalation of soil-derived vapors and airborne particulates in outdoor air, and inhalation of soil-derived vapors that migrate through building foundations to indoor air," the document reads.

The ingestion route is very similar to what has already been discussed when Whirlpool lobbied the Fort Smith Board of Directors for a ban on the drilling of new groundwater wells both on the Whirlpool site and in the TCE-contaminated neighborhood directly north of the facility. The request for the ban was defeated.

ADEQ also addressed exposure routes for residents living over the TCE plume, stating that soil-derived and groundwater-derived vapors are exposure routes for anyone living in the affected area as well as "community workers" in the area.

Even with the concern, ADEQ advises that "vapor intrusion pathway from chemicals in soil does not result in an unacceptable exposure in the workplace for on-site routine workers," adding that there are no cancer risks based on measurements taken and compared to EPA-recommended guidelines.

REQUIRED REMEDIATION STEPS
As previously outlined in a draft RADD document, ADEQ said in the final RADD that the entire impacted area "will be covered with asphalt and an impermeable coating. The cover is designed to prevent the water from migrating through the contaminated soils."

In addition to the asphalt cover, a deed will be placed on the property to "prevent unauthorized excavation of the on-site impacted soils." Whirlpool will also be required to implement a soil gas monitoring program at the site for five years. The cost of the asphalting and soil gas monitoring will total $600,000.

In addition to the asphalting, ADEQ is requiring Whirlpool to invest $5.4 million in chemical treatment of the TCE contamination at three different sites, both on the Whirlpool site and elsewhere within the plume.

"Injection points may be added or removed depending upon the hydraulic conductivity and lithology identified during the pre-design phase of work and resulting design. Based on subsequent monitoring results it may be necessary to expand the treatment areas and/or re-treat these areas until a satisfactory trend in TCE concentrations is achieved."

Some of the design work is already taking place at the site, according to Katherine Benenati, ADEQ's public outreach and assistance division chief.

"Whirlpool’s consultants are in the field doing pre-design testing of the soils in preparation for implementing the RADD after the first of the year,"she said in a Dec. 18 e-mail.

The final action will be a deed notification on the Whirlpool site.

"The deed notification would identify the kinds of contaminants present, and describe activities that should not be conducted at the facility and grant site access to ADEQ," the RADD states, further adding that the deed restriction must be in place within 60 days of the RADD's effective date.

The RADD states that Whirlpool must begin remediation within 60 days of the effective date (Dec. 27) of the RADD and file quarterly reports every February 15, May 15, August 15, and November 15 as well as annual progress reports on January 15.

City of Fort Smith Communications Manager Tracy Winchell said the final RADD document arrived late in the day and city staff did not have an opportunity to evaluate its contents and recommendations during regular office hours.

Link here for a PDF of the ADEQ final RADD.